In California one can’t lend money to more than one person a year without getting a license from the state. So if I lend $10 to my brother and $15 to my sister, a month apart I have broken the law.
And despite the fact that banks can charge (with plenty of state and federal regulation) over 20% a year on their credit cards, unless I am a favored institution (like a bank) I can only charge a maximum interest rate of 10%. This is typical of the regulation that protects the big institutions and hurts small business. And these kind of state usury laws exist in many states.
What will the proposed financial reform do about this kind of restriction on competition? Not a thing. What the legislation will do is give a bigger competitive advantage to the large financial institutions and reduce the amount of lending to small businesses by other small businesses.
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