A CFL licensee asks whether the 36 percent plus federal funds cap applies to a $1,900 loan and to a $14,000 loan. Does the specific section 22304.5 rate band apply to either loan amount?
Correct Answer
B) Neither: the cap runs from $2,500 up to but not including the $10,000
The cap in section 22304.5 applies to a bona fide principal amount of at least $2,500 but less than $10,000, so both of these fall outside it and are governed by other provisions. Other choices: the cap is a band rather than a universal rule, and each of the single-loan answers takes one end of the band and reverses it. Source: Cal. Fin. Code § 22304.5
Why This Is the Correct Answer
The cap in section 22304.5 applies to a bona fide principal amount of at least $2,500 but less than $10,000, so both of these fall outside it and are governed by other provisions. Other choices: the cap is a band rather than a universal rule, and each of the single-loan answers takes one end of the band and reverses it. Source: Cal. Fin. Code § 22304.5
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