Court Overturns State Law Protecting Borrowers From High Interest Loans
by Barbara Jones, Sr. Attorney, AARP Foundation Litigation/p>
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A appeals that are federal hit straight straight down an Indiana consumer-protection legislation that sought to manage out-of-state loans geared towards Indiana residents. The language for the viewpoint had been grounded on U.S. constitutional concepts, that makes it an opinion that is problematic may bolster challenges to comparable customer security rules in other states.
AARP Indiana worked using the Indiana Department of Financial Institutions (DFI) supporting passage through of 2007 legislation that mandates that out-of-state lenders who obtain Indiana borrowers adhere to Indiana law. Their state legislation imposes Indiana licensing and regulatory demands on out-of-state lenders who get (through adverts, mail or other means) borrowers when you look at the state of Indiana and limits loan providers from charging significantly more than 36 % yearly interest.
Following the legislation had been passed away, DFI delivered letters to different loan providers, including Illinois automobile name lenders, threatening these with enforcement action should they proceeded to produce loans to Indiana customers more than 36 per cent.