subprime loans
2007-01-06 17:47:31 · 6 answers · asked by Anonymous in Politics & Government ➔ Other - Politics & Government
There used to be usury laws, but then Reagan happened.
Now that the US doesn't really do anything of value, we have to give free rein to the financial industry.
Banks now charge interest rates Tony Soprano wouldn't consider for his money on the street.
2007-01-06 19:30:58 · answer #1 · answered by bettysdad 5 · 0⤊ 0⤋
First of all that doesn't work because the prime rate is the rate that banks pay to borrow from the Federal reserve. In order to turn a profit, since banks are a for-profit business, they must loan money at a rate higher than the prime rate.
Secondly, Congress has restricted the rate of interest a bank or creditor can charge through usuary laws. If I tried to give you a loan with 75% APR interest, that would be illegal.
2007-01-07 02:24:29 · answer #2 · answered by msi_cord 7 · 0⤊ 1⤋
Many states have usery laws for all loans. Lenders may charge interest rates within statutory limits even for subprime loans.
The rates for such loans are higher because of the risk to the lender and because people with bad credit have few alternatives.
2007-01-07 01:57:39 · answer #3 · answered by Treadstone 7 · 0⤊ 1⤋
They have, highest legal to collect payment is 24.99%
anything above 25% they collect only the payment with no intrest..
anything above (I think) 50% the wont collect anything..
2007-01-07 01:51:57 · answer #4 · answered by Ethernaut 6 · 0⤊ 1⤋
they do it all the time. only the banks decide how much you should pay. they have no limits on what they charge, just on what they pay you.
2007-01-07 01:52:30 · answer #5 · answered by de bossy one 6 · 0⤊ 1⤋
It's not their job!
2007-01-07 01:53:16 · answer #6 · answered by Anonymous · 0⤊ 1⤋