Banking Law News

Courts Can Deem Loans ‘Unconscionable,’ Calif. High Court Says

Aug. 13, 2018, 8:02 PM

California courts can determine that installment loans of $2,500 or more come with “unconscionable” interest rates and other terms, the state’s highest court ruled Aug. 13 in a decision that could reshape the state’s lending market.

The California Supreme Court rejected arguments from CashCall Inc. that a 1985 state law that exempted loans of $2,500 or more from the state’s interest rate cap also barred courts from determining that interest rates and other repayment terms on those loans are “unconscionable.”

Lenders who offer loans of $2,500 or more are going to have to review whether their products meet state standards,...

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