Quote:
Originally Posted by Barefootsies
I call bullshit for headlines. Many states cap the limit that can be charged. For example, in Michigan it's like 20 something percent. While other states may not have this law, that is an issue for their legislature.  |
State interest caps do NOT apply to nationally chartered banks - they can pick and choose to operate from a state, such as South Dakota, that has no interest usury limit for such financial institutions.
http://en.wikipedia.org/wiki/Marquet...a_Service_Corp.
On a related topic, individuals / small business are often far more restricted in what they can legally charge in interest than financial institutions. In many states, even possibly including those with no usury limits for banks, limit rates to around 6-10% for individuals and 18-21% or so for small businesses.
In short, credit card companies, effectively, operate under a separate set of laws that allows them to charge interest rates as high as they want, as well as, engage in other abuses.
Ron