AK State House Maj. Caucus press release: House Ups Max Interest Rate Cap for $25k & Under Loands (HB188)
HB 188 updates 1981 standard with percent cap or cap tied to fed rate
Wednesday, March 30, 2011, Juneau, Alaska – The Alaska State House of Representatives today unanimously passed a bill that allows for better financing terms on the sale of personal property under $25,000. House Bill 188, sponsored by the Labor & Commerce Committee, updates the maximum interest rate allowed under statute on those loans to the greatest of 10-percent or five-percent above the current Federal Reserve rate.
“The last time this statute was addressed was in 1981, when the Fed’s rate was 14-percent. Today’s Fed rate is three-quarters of a percent, which is a significant difference and deterrent to many with small property to sell,” House Labor & Commerce Committee Chair Kurt Olson, R-Kenai, said. “The current low rate of 5.75-percent is a disincentive to owner-financing.”
HB 188 now moves to the Alaska Senate for consideration.