Tuesday, May 8, 2007

Comments On Rate Changes

Has Prosper been violating Texas law?

It clearly states in Chapter 302 that interest rates for personal loans are limited to a maximum of 10% and rates for business loans are limited to 18%. Chapter 305 addresses penalties and remedies for violations. There are some listed exceptions to the 10% rule but I'm not sure Prosper would fall under any of these.

I think Prosper is worried they have been violating the law, otherwise why have they changed the interest rate limits to match those listed in Chapter 302?

Chapter 305 states anyone being charged in excess of these rates must write to the lender and request relief before filing the case in court, where triple the damages can result.

Have I misinterpreted the statute, or are we looking at a potentially huge legal mess for Prosper?

Disclaimer: I have an outstanding Prosper loan (current in payments) at 18% and I reside in Texas.
Texas Prosper.com borrowers
Please contact the Texas Attorney General & prosper.com if you have borrowed money at greater than 10% interest rate.You may get a rate reduction.
Hawaii Borrowers take a blow w/new rate cap, Messge from Malama Ohana (Reg required)
I've just been alerted to the impact of the new state rate cap for Hawaii that went into effect in the latest site update.

Hawaii's state cap is still 12% which means that our Borrowers have been able to list rates at 11% max in the past. But going forward, it appears that the state cap is now imposed as a max APR rate.

This means that the max rate we can offer lenders is now less than 11%. Those that are more math inclined can let me know if that rate is affected by the requested loan amount. But for illustrative purposes, a Borrower requesting 25k can only offer a max rate of 10.30% (regardless of credit grade).

Malama Ohana which is primarily a region-based Group of Island Borrowers will be challenged by this latest policy implementation. Thus, we are taking this opportunity to let our supporters be aware of this change.

1 comment:

Payday Loan Advocate said...

Ted Strickland, the Governor of Ohio, is in the process of trying to convince people in his state to vote in favor of House Bill 545. Enacted unethically, without the voice of the people earlier this year, support of the bill would put a cap on the annual interest rates that no fax payday loan companies can charge to 36 percent. This would mean that for every $100 that a lender issues to a customer, they can only make a measly dollar and change. Considering that no business can survive by making just over a dollar per transaction, House Bill 545 would drive this entire industry out of the state. What’s worse, is that democratic presidential candidate Barack Obama now is trying to do Strickland one better, as per his campaign promises. Should he win the White House, Obama has gone on record stating that he wishes to impose Strickland’s interest rate cap nationally. What this will definitely mean is that people will be much more hard-pressed to make ends meet in tough times. Therefore, if their job pays them a lot less than they’re used to, or life throws them one of its little surprises, hitting rock bottom is almost inevitable. Such measures illustrate the importance of voting and having your voice heard.

Post Courtesy of Personal Money Store
Professional Blogging Team
Feed Back: 1-866-641-3406
Home: http://personalmoneystore.com/NoFaxPaydayLoans.html
Blog: http://personalmoneystore.com/moneyblog/