Interest Rate Caps, State Legislation, and Public Opinion: Does the Law Reflect the Public's Desires?

27 Pages Posted: 23 Mar 2014 Last revised: 21 Oct 2014

See all articles by Timothy E. Goldsmith

Timothy E. Goldsmith

University of New Mexico - Dept. of Psychology

Nathalie Martin

University of New Mexico - School of Law

Date Written: 2014

Abstract

In scholarly circles, debates about the benefits and burdens of high-costs lending are prevalent, as are debates about whether to cap interest on certain kinds of consumer loans. Despite this scholarly interest, few scholars actually know what the general public thinks or knows about interest rates on common consumer credit products. This article tries to close this gap through an empirical study of consumer attitudes about interest rates in the state of New Mexico, a state in which high-cost loans such as payday loans and title loans are ubiquitous. Our data show that the general public overwhelmingly supports interest rate caps both in general and for certain types of loans. We also found that many consumers are unaware that there are no interest rate caps on many forms of consumer loans. These data could be useful in explaining why consumers do not do more to change the law on interest rate caps.

Suggested Citation

Goldsmith, Timothy E. and Martin, Nathalie, Interest Rate Caps, State Legislation, and Public Opinion: Does the Law Reflect the Public's Desires? (2014). Chicago-Kent Law Review, Vol. 89, No. 1, 2014, Available at SSRN: https://ssrn.com/abstract=2412789

Timothy E. Goldsmith

University of New Mexico - Dept. of Psychology ( email )

1 University of New Mexico
MSC03 2220
Albuquerque, NM 87131-1161
United States

Nathalie Martin (Contact Author)

University of New Mexico - School of Law ( email )

1117 Stanford, N.E.
Albuquerque, NM 87131
United States

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