Hurting Poor Borrowers (New York Times)
January 31, 2012
New York has some of the strongest anti-usury laws in the nation. But that could change if a deeply flawed bill pending in the State Legislature goes forward. The bill would allow check-cashing businesses, which are common in impoverished areas, to charge higher interest rates and to enter the lending business.
Usurious lending is a national problem that Richard Cordray, the director of the Consumer Financial Protection Bureau, has promised to address. He has said the agency would give special attention to largely unregulated financial institutions like payday lenders, whose loans can carry yearly interest rates as high as 400 percent.
The bill in Albany would exempt check-cashing stores from a 1976 statute that makes it a felony for lenders to charge in excess of 25 percent interest. The measure does not set a new interest limit, requiring only that state banking officials take the lender’s profitability and business costs into account in determining the rate.
Read full article
Copyright © Empire Justice Center. All rights reserved. Articles may be reprinted only with permission of the authors.
