Quote from JamesL:
Check out the interest rates for a credit card that preys on the less fortunate:
https://www.applyformypremier.com/CardDetails.aspx?appid=ME1110181005UAQ3S
49.9%!!
What ever happened to the old usurer fee cutoff of 25%?
Deregulated out of existence.
From wiki:
Each U.S. state has its own statute which dictates how much interest can be charged before it is considered usurious or unlawful.
If a lender charges above the lawful interest rate, a court will not allow the lender to sue to recover the debt because the interest rate was illegal anyway. In some states (such as New York) such loans are voided ab initio[36]
However, there are separate rules applied to most banks. The U.S. Supreme Court held unanimously in the 1978 Marquette Nat. Bank of Minneapolis v. First of Omaha Service Corp. case that the National Banking Act of 1863 allowed nationally chartered banks to charge the legal rate of interest in their state regardless of the borrower's state of residence.[37] In 1980, because of inflation, Congress passed the Depository Institutions Deregulation and Monetary Control Act exempting federally chartered savings banks, installment plan sellers and chartered loan companies from state usury limits. This effectively overrode all state and local usury laws.[38][39] The 1968 Truth in Lending Act does not regulate rates, except in the cases of some mortgages, but it does require uniform or standardized disclosure of costs and charges.[40]
In the 1996 Smiley v. Citibank case, the Supreme Court further limited states' power to regulate credit card fees, extending the reach of the Marquette decision. The court held that the word "interest" used in the 1863 banking law included fees, and, therefore, that states could not regulate fees.[41]
Some members of Congress have tried to create a federal usury statute that would limit the maximum allowable interest rate, but the measures have not progressed. In July, 2010, the DoddâFrank Wall Street Reform and Consumer Protection Act, was signed into law by President Obama. The act provides for a Consumer Financial Protection Agency to regulate some credit practices, but does not have an interest rate limit.[42]
