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Second, the floor is probably a soft one because the eventual prospect of higher interest rates limits the potential profit from a large investment in cash management.
Laws vary by state in reference to interest rates limits and compounding of interest.
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The cost of this penalty would be passed along to the hedge fund in higher interest rates, limiting its borrowing.
China had already experienced a dangerous bubble in its residential housing market, but in that case the government had succeeded in engineering a relatively soft landing by raising interest rates, limiting the number of residences one owner could buy in such cities as Beijing and Shanghai and levying a new tax.
In the push for these customers, banks often have an advantage over payday loan companies and other storefront lenders because, even though banks are regulated, they typically are not subject to interest rate limits on payday loans and other alternative products.
In Utah, home to WebBank, which originates loans for Lending Club and Prosper, there are no interest rate limits.
In the same sense that interest rate limits on credit cards no longer exist, coverage standards and rate regulation in the health insurance industry would no longer exist.
But Lauren Saunders, associate director of the National Consumer Law Center, warned that allowing financial firms to avoid interest rate limits "could open the floodgates" to predatory lending.
And if Moore's bill passes, Enova won't have to worry about state interest rate limits standing in the way of charging 300percentt or more for their products.
Australia has an interest rate limit of 4% per month, after a maximum up-front fee of 20%.
Consumer loans above $2,500 have no interest rate limit.
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