FILE PHOTO: Two groups of money stacked on top of one anotherTALLAHASSEE, Fla. — The Florida Senate on Monday gave final approval to a bill that would allow interest rates as high as 36% on consumer-finance loans. The Senate voted 22-9 to pass the bill , which the House approved last week.Senate sponsor Joe Gruters, R-Sarasota, said the bill will “expand credit opportunities” for consumers.
According to Gruters and other advocates, this measure would offer more options to borrowers who currently resort to high-interest online loans. But Sen. Lori Berman, D-Boca Raton, described a maximum 36% interest rate as “predatory” and said people can get caught up in a cycle of taking out loans. In Florida, there is a three-tier system in place for interest rates on consumer-finance loans. The first $3,000 of principal amounts can be charged at 30% annual interest, while amounts between $3,000 and $4,000 can be charged at 24%. For amounts between $4,000 and $25,000, the interest rate is 18%.
The proposed legislation aims to establish a uniform 36% maximum annual interest rate. Additionally, consumer-finance companies will face stricter regulations, such as the obligation to submit yearly reports to the state containing loan information.