The Ca legislature is poised to cap prices on bigger customer installment loans. Assembly Bill 539 has passed away the state Construction therefore the state Senate Committee on Banking and finance institutions. Although directed just to California Financing Law (CFL) licensees, the bill has wider implications for customer installment financing in California.
AB 539’s Key Provisions for Consumer Installment Loans
The bill would amend the CFL and impose price caps on all consumer-purpose installment loans, including signature loans, car and truck loans, and car name loans, in addition to open-end credit lines, in which the quantity of credit is $2,500 or higher but not as much as $10,000 (“covered loans”). The CFL currently caps the rates and imposes consumer that is additional on consumer-purpose loans of significantly less than $2,500.[1]
The July 1 st type of AB 539 would need Ca finance loan providers to:
In addition, the bill would prohibit the imposition of prepayment charges on customer loans of any quantity, apart from loans guaranteed by genuine home.
AB 539’s sponsors, Assembly customers Monique Limón (D-Santa Barbara), and Tim Grayson (D‑Concord), contend that AB 539 will stop the expansion of larger installment loans with triple-digit prices geared to susceptible consumers.[2] Nonetheless, other people are involved that AB 539 would damage subprime consumers, reducing much needed use of credit.[3]
