Most of us don’t begrudge banks making a profit – they’re in business, that’s what you do. But on day, if practices like this continue, there will be infuriated revolt against them:
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The Washington State Department of Financial Institutions issued an emergency rule yesterday, providing stronger protection for consumers taking small loans. The rule went into effect immediately upon filing, Tuesday, Dec. 22, 2009.
“This rule is a result of our learning a consumer had been charged a $1,950 participation fee for a $600 loan,” DFI Director of Consumer Services Deb Bortner explained. “That’s the equivalent of more than 4,000 percent interest – it’s simply unconscionable to charge such outrageous fees.”
This emergency rule was made effective immediately in an effort to protect consumers and prevent lenders from circumventing the will of the legislature. DFI does, however, intend to begin a notice and negotiated rulemaking within 120 days from the filing of this emergency rulemaking. DFI may also seek a statutory remedy to this situation.