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    Entries in interest rates (2)

    Friday
    Dec162016

    The Week in Public Finance: What the Rate Hike Means, a Legal Win for Online Sales Taxes and More

    A roundup of money (and other) news governments can use.
    BY  DECEMBER 16, 2016

    Movin' On Up

    The Federal Reserve announced a short-term interest rate hike on Wednesday, the first one in a year and a move that was largely expected. But what wasn’t on the radar was the Fed's announcement that it plans to raise rates three more times in 2017, up from previous expectations of two rate hikes.

    Given the reticence to move rates for most of the last decade, the faster pace for next year has municipal analyst Chris Mauro calling the decision a “rather splashy hawkish surprise.”

    The rate hike will move the target interest rate on short-term debt up one-quarter of a percent -- to a range of 0.5 to 0.75 percent. The Fed's previous rate hike was a year ago, and that was the first one in nine years.

    The Takeaway: The Fed's plan to raise rates signals that economic growth is accelerating.

    Click to read more ...

    Wednesday
    Nov092016

    Facing 652% Interest Rates, South Dakota Voters Regulate Payday Lending

    They joined the growing number of states that regulate the industry that critics say traps poor people in a cycle of debt.
    BY  NOVEMBER 9, 2016

    In South Dakota, where payday loan interest rates average a whopping 652 percent and are among the highest in the nation, voters have struck back by approving a 36 percent rate cap.

    With more than half of precincts reporting Tuesday night, results showed voters approved the move to regulate the industry by a margin of three to one. More than a dozen other states have enacted a similar cap on loan interest rates.

    Critics of the payday industry say lenders prey upon low-income borrowers who are unable to access financing from mainstream banks. These borrowers, they claim, easily get trapped in a cycle of debt. Payday lenders, however, argue that they fill a critical hole in the economy by allowing people with poor credit to get emergency loans.

    The push for the rate cap was led by South Dakotans for Responsible Lending, which also fended off a rival measure placed on the ballot more recently and backed by the payday lending industry. That measure proposed an 18 percent cap -- unless the borrower agreed to a higher rate. Opponents said the measure was intentionally misleading and would have essentially legalized sky-high interest rates for payday borrowers in South Dakota.

    Click to read more ...