Congress may try and regulate payday loans….out of business

The House of Representatives are putting together a bill that would effectively cap interest rates at 36%. The AP News reports that several shares of publicly held payday and pawn lenders stock price took a hit for a second straight day. Anecdotally, most of the stock market has been taking a hit, so this news could be completely incidental.

The truth be told, even if this bill never sees the light of day, the impact this will have on public opinion will be felt.

I would love to get a clarification on this point. You can still charge 36% interest and product a triple digit APR, if you’re able to charge fees on top of the loan. Payday lenders have claimed from the beginning that their fees are not interest.

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