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High court: Interest on some personal loans can be illegal

Posted at 12:57 PM, Aug 14, 2018
and last updated 2018-08-14 15:57:36-04

SAN FRANCISCO (AP) – In a win for consumers, the California Supreme Court says interest rates on some personal loans may be so high that they are illegal under state law.
    
The court in its decision on Monday did not define exactly what interest rate would qualify as unconscionable.
    
At issue in the case before the state Supreme Court were consumer loans of $2,500 and higher. California does not cap interest rates that lenders can charge on those loans.

Writing for a unanimous court, Associate Justice Mariano-Florentino Cuellar said the lack of a cap did not mean that courts must allow any interest rate.
    
The decision came in a lawsuit against lender CashCall. An email to an attorney for the company was not immediately returned.

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