Unless Idaho state government wants to step in and offer short-term loans, which I would be against for many reasons, they should stay out of this. Interfering by dictating maximum interest rates would drive out viable loan businesses from Idaho.
It is surprising that a short-term lending company hasn't cropped up to charge lower rates and steal business from MoneyTree. It makes me think that the risk and/or default rate is too high, meaning that the high interest charged by MoneyTree reflects actual market forces. That's the main reason I don't think that Idaho state government should step into the breach when MoneyTree leaves as a reaction to any future state usury law. We've seen what happens when state governments drive out businesses like insurance--look at California as an example.
Based on Money Tree’s own literature, shown in this article, their CEO lied through his teeth during his testimony yesterday. Several Republican members of the committee had been prepared to tee up softball questions for him.
Idaho is one of only three states that don’t regulate these companies. IMO they should be in jail, rather than allowed to pillage the most vulnerable people in our state. Montana has essentially put them out on business recently due to unscrupulous practices.
The House bill is a perfect example of what Republicans look like when they're imitating Democrats. The Idaho Freedom Foundation is right to pan the bill. On the other hand, IFF is wrong to argue high rates cannot be usurious if both parties are informed. Usury, like pornography, is ultimately in the eye of the beholder, but at a certain point a high rate is usurious. For example, credit card companies regularly charge outrageous and obviously usurious rates.
Wells Fargo currently charges between 17.49% and 28.24%. Where's the House bill against that?
Of course that's usury. But if a borrower is aware of the rate and signs anyway, that's up to him or her.
A sounder approach than the House bill would be to require the lender to provide an example of how much would be owed after 1 year if the borrower made no payments during that time. Require the borrower to read and sign the example in front of a witness. Information, not diktats and thou-shalt-not regulation, is the proper remedy.
Unless Idaho state government wants to step in and offer short-term loans, which I would be against for many reasons, they should stay out of this. Interfering by dictating maximum interest rates would drive out viable loan businesses from Idaho.
It is surprising that a short-term lending company hasn't cropped up to charge lower rates and steal business from MoneyTree. It makes me think that the risk and/or default rate is too high, meaning that the high interest charged by MoneyTree reflects actual market forces. That's the main reason I don't think that Idaho state government should step into the breach when MoneyTree leaves as a reaction to any future state usury law. We've seen what happens when state governments drive out businesses like insurance--look at California as an example.
Based on Money Tree’s own literature, shown in this article, their CEO lied through his teeth during his testimony yesterday. Several Republican members of the committee had been prepared to tee up softball questions for him.
Idaho is one of only three states that don’t regulate these companies. IMO they should be in jail, rather than allowed to pillage the most vulnerable people in our state. Montana has essentially put them out on business recently due to unscrupulous practices.
The House bill is a perfect example of what Republicans look like when they're imitating Democrats. The Idaho Freedom Foundation is right to pan the bill. On the other hand, IFF is wrong to argue high rates cannot be usurious if both parties are informed. Usury, like pornography, is ultimately in the eye of the beholder, but at a certain point a high rate is usurious. For example, credit card companies regularly charge outrageous and obviously usurious rates.
Wells Fargo currently charges between 17.49% and 28.24%. Where's the House bill against that?
Of course that's usury. But if a borrower is aware of the rate and signs anyway, that's up to him or her.
A sounder approach than the House bill would be to require the lender to provide an example of how much would be owed after 1 year if the borrower made no payments during that time. Require the borrower to read and sign the example in front of a witness. Information, not diktats and thou-shalt-not regulation, is the proper remedy.
Not saying this isn't important, but it seems like there are higher priorities right now for our legislators.