Florida House Panel Approves Interest Rate Hikes Up To 36% For Consumer Loans

The Republican sponsored legislation could have a severe impact on people in financial trouble, or who have poor credit histories.

Since it convened March 7, a slew of bills has been put before the Florida Legislature and some, like the controversial open carry gun bill that Gov. Ron DeSantis is pushing to pass, may have gotten more attention than others. 

For this reason, a bill that has the potential to impact people in financial trouble, or who have poor credit histories, mostly flew under the radar. 

Last week, without much fanfare, a House panel approved a bill that would increase the maximum interest rate on consumer finance loans. The legislation (House Bill 1267) sponsored by Rep. Juan Alfonso Fernandez-Barquin, R-Miami-Dade County, was unanimously backed by the House Insurance & Banking Subcommittee.

The bill would set an across-the-board maximum 36 percent rate. To put the hike in perspective: Under current law, consumer-finance loan companies can charge 30 percent annual interest on the first $3,000 of principal amounts, 24 percent on amounts between $3,000 and $4,000 and 18 percent on amounts between $4,000 and $25,000.

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Due to the higher maximum interest rate, the bill drew opposition from the Florida Center for Fiscal & Economic Policy, a non-profit organization that seeks social and economic justice throughout Florida by facilitating and providing training in civic engagement at the state capitol.

The Senate Banking and Insurance Committee’s version of the bill (Senate Bill 580) is now in the Appropriations Committee on Agriculture, Environment, and General Government.