AG issues opinion in proposed “informed consent in lending” Constitutional Amendment.

Looks like Steve & Steve have competition.

An “informed consent in lending” Constitutional Amendment has been filed with the Attorney General and an opinion on same has been issued today with regards to capping loan rates, but allowing a higher rate upon specific disclosure of the rate. As noted in the measure:

No lender may charge interest for the loan or use of money in excess of eighteen per cent per annum unless the borrower agrees to another rate in writing. No law fixing an annual percentage rate of interest for the loan or use of money is valid unless the law provides borrowers the right to contract at interest rates as may be agreed to by the parties.

Read that here.

Should a person have the right to contract for a certain service at a certain rate if they’re made fully aware of the ramifications and the charges?

In the traditional sense of the word, Informed consent is a process for getting permission before a healthcare intervention on a person. Why or why not would an informed consent in lending be appropriate is a person wishes to seek the service?

5 thoughts on “AG issues opinion in proposed “informed consent in lending” Constitutional Amendment.”

  1. It is hard to imagine that people borrow money without realizing it.
    But a Brookings Institute survey recently revealed that 28% of students with student loans don’t know they have them, and another 25% know they have loans but think they owe less than they do.
    And those are the people who got into college.
    So I guess the payday loan clientele doesn’t know what they are doing, either.
    On the other hand, expecting the lenders to fix stupid might be unrealistic.

    1. Anne says: “expecting the lenders to fix stupid might be unrealistic”.

      Oh, I think that these “lenders” will be teaching their borrowers a lesson that they won’t soon forget. Unfortunately.

  2. Every high school student should have to take a semester long class on basic finance – credit cards and their dangers and how to wisely use them, student loans, what it costs to eat, own a house, insurance, what it costs to own and operate a car, etc – and how to get a good paying job to support yourself and your family. This IMO is as important as learning English literature or science – actually more important. Why isn’t this done?

    1. Because that kind of education would turn them into conservatives, and then they wouldn’t vote for socialists.

  3. Usury laws have been around for a long time for a reason. Poor people get these loans when they are desperate.

    They always sign the paperwork too… making the proposed unlimited interest charges the law of the land for each of the loans. Its an abuse of the poor which greatly benefits a few people. In this case, a couple of guys who apparently get very rich doing it.

    To top it off, this effort looks to be an attempt by the petitioners to confuse the voters. And it does the exact opposite of what it appears to do. Wow. These guys are something.

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