On Monday, the Florida Senate granted its final assent to a measure that, if passed, would enable interest rates on consumer-finance loans to reach as high as 36%.
The law (HB 1267), which was passed by the House of Representatives the previous week, was passed by the Senate by a vote of 22-9.
The measure has been completed and Governor Ron DeSantis is preparing to sign it into law as soon as possible.
The sponsor of the measure in the Senate, Republican Joe Gruters of Sarasota, said that it would “expand credit opportunities” for customers.
Borrowers who now turn to high-interest online loans would have more alternatives available to them if this proposal were passed, as stated by Gruters and other champions for the measure.
But Senator Lori Berman, a Democrat from Boca Raton, called a maximum interest rate of 36% “predatory” and said that individuals can get stuck in a cycle of taking out loans if they are not careful.
There is a three-tiered structure in place in the state of Florida for determining the interest rates that apply to consumer-finance loans.
The first $3,000 in principal amounts may have an annual interest rate of 30% applied to them, while the next $3,000 to $4,000 can have an interest rate of 24% applied to them. The interest rate of 18% applies to sums ranging from $4,000 to $25,000 in total.
The goal of the law that is now being considered is to set a standard maximum annual interest rate of 36%. In addition, consumer-finance businesses would be subject to harsher rules, such as the need to submit annual reports to the state providing information about loans.