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The interest rate on these loans can top 100% in California. Does a 36% cap solve the problem?

Thursday, June 13, 2019
HANNAH WILEY | Sacramento Bee
Graciela Aponte-Diaz

For California borrowers trapped in loans with triple-digit interest rates, a proposed bill to impose a 36% cap might seem like a godsend.

If passed, Assembly Bill 539 would end a decades-long practice of allowing installment loans of $2,500 to $10,000 to carry such high interest rates by limiting that number to 36%.

But in striking a deal on the legislation with loan companies, Assemblywoman Monique Limón, D-Goleta, and consumer advocates decided the bill would apply only to interest on the loan itself.