Should the pamphlet distributed with consumer loans be revised to provide more balanced information?
YES. The pamphlet circulated by the Department of Consumer Affairs is misleading because it provides substantially more information about how the consumer can avoid payment of debts incurred without presenting a sufficient amount of information about the consumer’s responsibility to pay debts incurred. B. Should the threshold at which supervised lenders must lend at restricted lender rates be increased or indexed to inflation? YES. Currently, for loans less than $600, “supervised lenders” (whose rates are ordinarily not restricted) must lend at the legally allowed rate for “restricted lenders.” This requirement is easily avoided by simply making a loan for an amount slightly greater than $600, without any limit on the amount of the finance charge. This reality places restricted lenders at a competitive disadvantage. The average loan amount by restricted lenders was $510 in 1996, up more than 12% from the average amount of $455 in 1994. Therefore, the $600 threshold should be raised to
