tim's journal

Federal Reserve discount rate

The discount rate at the Federal Reserve Bank of San Francisco effective 6-30-2004 is 2.25%. This means that the maximum interest you can charge someone per year without being usurious is 10%. So how do those money advance places work? My understanding is that the annualized rate ends up being hundreds of percent. Here's more information from the Attorney General. Apparently, pawn brokers are exempt from such laws... as are banks, credit unions, etc.