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Why the CFPB’s Sweet Spot for Installment Loan APR is 36%

Wednesday, June 8, 2016
Kate Berry | American Banker
Michael Calhoun

"From a broad policy standpoint, looking at the economics of lending, there is a trade-off between interest rates and costs to have a profitable model," said Mike Calhoun, president of the Center for Responsible Lending, who cited the "congressional recognized standard" of 36% in the Military Lending Act. "High interest rates means a large percentage of your loans are unaffordable."