Assembly Gets Bill to Uncap Store Interest
Legislation allowing major California department stores and other business firms to levy unlimited finance charges on customer credit accounts breezed through the state Senate Wednesday without debate.
In the past, similar measures have kicked up a firestorm of opposition from consumer advocates in the Legislature. Last year, Gov. George Deukmejian vetoed a similar bill.
This time around, however, Sen. Ralph Dills (D-Gardena), who authored the bill for the California Retailers Assn., briefly outlined contents of the bill and asked for a favorable vote. No one challenged the proposal and it went to the Assembly, 26 to 12.
The proposal is supported by such major department stores as May Co., Bullock’s, the Broadway, J. W. Robinson’s, Montgomery Ward and Buffum’s. It is opposed by organized labor, Atty. Gen. John K. Van de Kamp, Consumers Union and the Consumer Federation of California.
Under current law, retailers are restricted to charging a maximum 18% annual rate on unpaid balances up to $1,000 and 12% on higher balances. The Dills bill would lift the limit Jan. 1, 1992, when it would take further legislation to again suspend or eliminate the ceiling on finance charges.
As a trade-off for unlimited finance rates, the bill would prohibit annual fees or charges in retail installment payment contracts.
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