October 21, 2019

October 21, 2019

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California Senate to hold June 26 hearing on bill capping consumer loan interest rates

The California Senate’s Banking and Financial Institutions Committee will hold a hearing on AB 539 on June 26, 2019.  The hearing was previously scheduled for today.

AB 539 was cleared by the California Assembly on May 23.  The bill would change several aspects of the California Financing Law (CFL), including by setting new interest rate caps, imposing new rules governing loan duration, and prohibiting prepayment penalties.  For example, while the CFL does not set a maximum interest rate on loans of $2,500 or more, AB 539 would cap the interest rate at 36% plus the federal funds rate on loans of $2,500 or more but less than $10,000.

Observers believe that the June 26 hearing will play a key role in determining the bill’s future.

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About this Author

Michael Guerrero, Ballard Spahr Law Firm, Los Angeles, Finance Law Attorney
Associate

Michael R. Guerrero’s practice is focused on helping clients navigate the requirements of highly regulated, consumer-focused industries including consumer financial services, telemarketing, residential solar and home improvement contracting, charitable fundraising and e-commerce.

He advises clients on federal and state compliance matters including issues relating to the Fair Credit Reporting Act (FCRA), Truth in Lending Act (TILA), Equal Credit Opportunity Act (ECOA), Electronic Funds Transfer Act (EFTA), Electronic Signatures in Global and...

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