Failings
of California’s anti-usury laws
Date:
Mon, 23 Dec 2013 11:24:50 -0800 (PST)
From:
Archer Frey <archerc@sbcglobal.net>
Subject:
Failings of California’s anti-usury laws
In
this morning's Sacramento Bee print copy, page A9
"Nice
Work If You Can Get It"* Notice how they hide in the Indian
reservation. Then say that they are exempt from Federal Law, charging
annual percentage rates ranged from 89.7 percent to 342.9
percent.
Check
out Neil Barofsky on Wikipedia:
http://en.wikipedia.org/wiki/Neil_Barofsky
*"Nice
Work If You Can Get It" A popular song, music was written by
George Gershwin, the lyrics by Ira Gershwin.
Speculation:
I wonder if the Barofsky family knew the Gershwin family back in the
day?
-30-
Archer
Editorial:
High-interest lenders fight any regulation hard, understandably
By
the Editorial Board
Published:
Monday, Dec. 23, 2013 - 12:00
am
http://www.sacbee.com/2013/12/23/6020651/editorial-high-interest-lenders.html
In
yet another reminder of the failings of California’s anti-usury
laws, the federal Consumer Financial Protection Bureau – and
not California – has sued an Anaheim-based lender that charges
borrowers annual interest of as much as 343 percent.
The
Consumer Financial Protection Bureau, created by President Barack
Obama and Congress in the wake of the 2008 crash, sued CashCall Inc.,
alleging that the online lender engaged in unfair practices,
including debiting consumer checking accounts for loans that were
void.
The
suit names CashCall and a subsidiary, WS Funding LLC, and a Nevada
collection agency, Delbert Services Corporation, a Nevada collection
agency.
The
suit says the loans violated anti-usury laws in at least eight
states: Arizona, Arkansas, Colorado, Indiana, Massachusetts, New
Hampshire, New York and North Carolina.
California
is not one of the eight.
In
2009, CashCall entered into an arrangement with a South Dakota-based
online lender, Western Sky Financial, which was based on an Indian
reservation and owned by a Cheyenne River Sioux tribal member.
Western Sky claimed its status as a tribal business exempted its
loans from state laws – a claim the feds contest.
CashCall
and Western Sky made hundreds of thousands of loans nationwide in
amounts of between $850 and $10,000. The annual percentage rates
ranged from 89.7 percent to 342.9 percent.
California
law limits interest on loans of $300 or less. But the state’s
law imposes no interest-rate cap on loans by licensed lenders of
$2,500 or more, a result of lenders’ shrewd lobbying and
<http://topics.sacbee.com/campaign+donations/>
campaign donations.
In
an indication of the industry’s clout, one of CashCall’s
lawyers is Neil Barofsky, a former federal prosecutor.
Barofsky
went through the revolving door to a Manhattan law firm in September,
after serving as the Treasury Department’s inspector general
for the Troubled Asset Relief Program from 2008 to 2011. Barofsky
says
the
suit violates a provision of the Dodd-Frank law that created the
Consumer Financial Protection Bureau.
The
industry fights any regulation. It’s not hard to see why.
The
federal lawsuit points out that a consumer borrowing $2,600 would pay
$13,840 over a 47-month term of the loan. A consumer
borrowing
$10,000
would pay $62,453 over the 84-month term.
The
eight states cited in the suit limit high-interest loans in one way
or another. Arkansas, for example, has a constitutional provision
barring all contracts with interest rates of more than 17 percent.
California leads the nation in many areas. On the question of usury,
however, California could take a lesson from Arkansas.
--
Peter
Myers
381
Goodwood Rd
Childers
Qld 4660
Australia
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in Australia: 07 41170125
from
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website: http://mailstar.net/index.html
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