I just recently heard that Gary Coleman had done commercials for “cashcall.com”.  I was not too surprised, but then bothered to watch the ad.  I was horrified.  The fine print mentions that “the APR for a typical $2600 loan is 99.25%”.  99%.  So to borrow $2600 I’d need to pay $5200 in one year.  I wasn’t even sure this was legal – I thought states had usury laws to prevent such things.  However, a bit of digging turned up a reference to a law which exempts national banks from rate limits.  From wikipedia:

However, there are separate rules applied to most banks. In 1980, due to inflation, national banks (banks that generally include N.A. in their name), federally chartered savings banks, installment plan sellers and chartered loan companies were exempted from state usury limits by the federal government through a special law. This effectively overrode all state and local usury laws.

99% APR is just horrific, and I’m not sure why anyone would ever use a service like that.  What’s even more disturbing is that on their “rates” page, cashcall states that some people will still not qualify.  If you don’t qualify for a loan at 99%, what’s wrong with you?  Perhaps you’re in prison?  Or dead?

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