A pawnbroker, a licensed CFL lender and a credit union each make a California loan at 18%, above the constitutional ceiling. Are these regulated lender classes subject to the ordinary constitutional ceiling or their own applicable rate schemes?
Correct Answer
D) All 3 sit in exempt classes, each with its own rate rules to follow
Article XV exempts a list of regulated lenders that includes pawnbrokers, licensed finance lenders and credit unions among others, each of which then answers to the rate rules of its own scheme. Other choices: the exemptions go well beyond banks and credit unions; being non-depository does not remove an exemption; and the CFL licensee is not alone. Source: Cal. Const. art. XV, § 1
Why This Is the Correct Answer
Article XV exempts a list of regulated lenders that includes pawnbrokers, licensed finance lenders and credit unions among others, each of which then answers to the rate rules of its own scheme. Other choices: the exemptions go well beyond banks and credit unions; being non-depository does not remove an exemption; and the CFL licensee is not alone. Source: Cal. Const. art. XV, § 1
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