Over the past few years, numerous states have imposed interest rate caps on consumer credit. In recent blog posts, we discussed the efforts of both Michigan and New Mexico to impose a 36% annual interest rate cap. Last year, Congress took up the discussion of a national 36% annual interest rate cap.
A recent study by J. Brandon Bolen, Mississippi College, Gregory Elliehausen, Board of Governors, Federal Reserve System, and Thomas W. Miller Jr., Mississippi State University examined the effects of the rate cap imposed by the Illinois Predatory Loan Prevention Act (PLPA) nearly two years after becoming law. In 2021, the PLPA became effective, imposing a 36% “all-in” annual interest rate cap on consumer loans made or offered by any person or entity, excluding banks and credit unions, to a consumer in Illinois.