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With Assemblymember Monique Limon’s anti-predatory lending bill reportedly headed towards Senate action next week, scrutiny of the measure is increasing. But something smells fishy here. From the Sacramento Bee: For California borrowers trapped in loans with triple-digit interest rates, a proposed bill to impose a 36% cap might seem like a godsend.If passed, Assembly Bill 539 would end a decades-long practice of allowing installment loans of $2,500 to $10,000 to carry such high interest rates by limiting that number to 36%.But in striking a deal on the legislation with loan companies, Assemblywoman Monique Limón, D-Goleta, and consumer advocates decided the bill would apply only to interest on the loan itself.It now leaves state agencies to continue oversight of other practices critics consider “predatory,” including credit insurance and additional fees that the Pew Charitable Trust says can unnecessarily increase borrowing by more than a third.“We have found in our research that…

California legislators have since the middle of last month been weighing a proposal from Assemblywoman Monique Limon to cap interest rates on loans between $2,500 and $10,000– colloquially known as “anti-payday loan” legislation. The legislation is attracting mixed reviews from the financial services sector. Not surprisingly, a lot of payday lenders hate it. But the quiet word is that a lot of banks love it, since if passed, it would push consumers towards banks who– some studies allege– charge proportionally much higher costs for bounced checks and unauthorized overdrafts than the effective APR on a high-interest payday loan. The bill may also face skepticism from millennials, who have limited ability to take out conventional loans due to a lack of assets, and who often need to borrow smaller amounts than traditional banks will lend (usually banks want borrowers to take out a minimum of $3,000). In any event, as the…