About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

127 Banking L.J. 581 (2010)
History Repeats Itself: Why Interest Rate Caps Pave the Way for the Return of the Loan Sharks

handle is hein.journals/blj127 and id is 595 raw text is: HISTORY REPEATS ITSELF: WHY INTEREST RATE CAPS PAVE THE WAY FOR THE RETURN OF THE LOAN SHARKS JUSTICE DAVID BAKER AND MACKENZIE BREITENSTEIN There is never any misunderstanding between the loan-shark and the borrower about their relationship or the collateral for the loan. Seldom does any paper pass between borrower and lender; a handshake usually confirms the bargain. The borrower realizes that he is offering his body and his family's well being as collateral... In some cases the underlying threat is communicated subrly; in other cases it is made explicitly clear' Due to the current economic recession, legislators are taking a closer look at credit regulation in the United States. Many consumer ad- vocate groups are calling for more stringent interest rate caps, es- pecially for credit card companies and payday lenders. Unfortunately, for many borrowers in the United States, interest rate caps do not remedy debt problems. While it is true that high interest rates make it more difficult for borrowers to repay large accumulations of debt, it is equally true that interest rate caps do not prevent excessively high interest lending. Interest rate caps instead have a tendency to force low-income individuals out of the market for legal lending because lenders cannot charge high enough interest rates to Following graduation from law school, the Honorable Justice David Baker worked in the private practice of law for 25 years. In 2005, he was appointed as a district court judge for the Sixth Judicial District in Iowa. Justice Baker was appointed to the Iowa Court of Appeals in 2006, where he served until his appointment to the Iowa Supreme Court in 2008. MacKenzie Breitenstein is a 2010 graduate of Drake University Law School. 581

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most