Wrap: Columbia Republican Senator Kurt Schaefer's bill puts a 21 percent cap on interest rates for lending institutions to prevent them from cheating people out of their money.

He said with no caps on the interest rates, consumers end up paying rates as high as 80 to 100 percent on loans.

Schaefer mocked the idea that lending companies would charge fair interest rates to desparate consumers.

Actuality:	JUSTICE.WAV
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Description: "Because I do think that nothing says justice like an unlimited amount on what can be charged on interest to people who are in a very vulnerable position."

St. Joseph Republican Senator Rob Schaaf said the cap on interest rates should be determined by the market, rather than by the government.

 

Reporting from the state Capitol, I'm Madeline Odle.

Wrap: Columbia Republican Senator Kurt Schaefer argued in favor of putting an interest rate cap on lenders to people with civil suits.

Schaefer said funding the lawsuits is a predatory lending practice because the people who apply for these loans are generally desparate and vulnerable.

He said lenders can charge 80 to 100 percent in interest on the civil suit loans, and so lending institutions often seek out these cases.  

Actuality:	LAWSUIT1.WAV
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Description: "It basically, it makes lawsuits a commodity. It find's people with lawsuits, funds them so they can keep that lawsuit going, which they otherwise might not have even done. It incentivized that lawsuit, and then it turns that lawsuit into a commodity."

Farmington Republican Senator Gary Romine argued that the cap on interest rates should not be set by what he called an arbitrary standard, and rather decided by market forces.

 

Reporting from the state Capitol, I'm Madeline Odle.

Wrap: Columbia Senator Kurt Schaefer's bill aims to protect the consumer from predatory lending practices by imposing an interest rate cap of 21 percent.

St. Joseph Senator Rob Schaaf said businesses should be able to set different interest rates based on the risk they are taking with the loan.

Actuality:	MARKET.WAV
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Description: "This kind of risk absolutely justifies a higher interest rate, and if you buy into that argument, the next argument is how do we decide what interest rate to allow them to charge."

Schaaf and Farmington Senator Gary Romine agreed the best way to decide the interest rate was through the free market.

 

Reporting from the state Capitol, I'm Madeline Odle.