36% interest?!?!?!

[LDB415]

I've considered Daniel Defense to be a top shelf brand and thought I'd like to have one some day. Until today. I read the fine print at the bottom of their email.

"**Term length ranges from 12-36 months, resulting in, for example, a customer borrows $1500 with an APR of 36% with a monthly payment of $88 over a term of 24 months."

Yeah, they're a business and they can conduct it how they want, but somehow 36% doesn't seem in keeping with the spirit of the Second Amendment. So they are no longer on my list.

[philip964]

Texas used to have usury laws.

If I remember correctly, the Republicans took over the govt after a long absence a while back and I think that was the first thing that was passed, repealing usury laws.

[Vol Texan]

I've considered Daniel Defense to be a top shelf brand and thought I'd like to have one some day. Until today. I read the fine print at the bottom of their email.

"**Term length ranges from 12-36 months, resulting in, for example, a customer borrows $1500 with an APR of 36% with a monthly payment of $88 over a term of 24 months."

Yeah, they're a business and they can conduct it how they want, but somehow 36% doesn't seem in keeping with the spirit of the Second Amendment. So they are no longer on my list.

That's $612 in interest on a principal of 1500, leading to a total payback amount of $2,112.

That's a good number for a Rush album, but not for a $1500 loan payback.

[flechero]

The lesson here is a good one, and is pretty simple- buy a gun with cash, take out a mortgage on a house.

People who decide whether or not they can "afford" something based on monthly installments CAN'T afford the item they are contemplating.

No offense intended to anyone.

[Tex1961]

It’s not just them. I’ve seen a few other online popular firearm sites that offer financing and their interest rates are just as bad.

[jerry_r60]

Texas used to have usury laws.

If I remember correctly, the Republicans took over the govt after a long absence a while back and I think that was the first thing that was passed, repealing usury laws.

Texas still has Usery laws. Not sure which bill you are refering to but Usery laws are still on the books.

I'm no expert in this field however a quick read of the info in the link and looking at a few related government docs it doesn't look like 36% is allowed in Texas. There may be some fine print in an actual contract with DD that we are not seeing here or I just didn't understand what I read, that's possible.

https://ghristlaw.com/blogs/a-basic-pri ... -in-texas/

[Don T]

Texas used to have usury laws.

If I remember correctly, the Republicans took over the govt after a long absence a while back and I think that was the first thing that was passed, repealing usury laws.

The applicable usury law is usually determined under the state law applicable to a contract, which is usually the state in which the party who drafted the contract is located. That is why so many bank credit card issuers are located in South Dakota, which allows much higher interest rates than under the usury laws of Texas and other states.

I believe that Daniel Defense is located in Georgia and is therefore not a Texas company, so Texas usury laws would not apply to them.

If I recall, modernization of the Texas usury laws probably took place in the 1980's, after the disastrous presidency of Jimmy Carter, when inflation and sky-rocketing interest rates in the late 1970's made it impossible for banks and S&L's to make loans which complied with Texas usury laws. In 1980, Congress passed federal legislation preempting state usury laws then in effect for loans made by many financial institutions. Texas laws were updated to allow state chartered financial institutions to engage in activities which federally chartered institutions could engage in.

We have had Republican governors in Texas since 1987 (except for 4 years of Ann Richards).

[srothstein]

Texas still has Usery laws. Not sure which bill you are refering to but Usery laws are still on the books.

I'm no expert in this field however a quick read of the info in the link and looking at a few related government docs it doesn't look like 36% is allowed in Texas. There may be some fine print in an actual contract with DD that we are not seeing here or I just didn't understand what I read, that's possible.

https://ghristlaw.com/blogs/a-basic-pri ... -in-texas/

It would take someone a lot better at finance and finance law than me to interpret our usury laws. But I found that the basic maximum interest rate in Texas is 10%. But, as with many laws, that is confused by saying "unless authorized by law", meaning that it has no real affect, IMO. As near as I can tell, the maximum rate for a loan to purchase an item (such as a car or a rifle) is to use the weekly ceiling, which is defined as twice the average bank discount interest rate on 26 week treasury bills. If I am reading this correctly, and reading the discount rate charts correctly, the current 26 week t-bill rate is between 16% and 19%. That makes 36% a non-usurious interest rate right now.

WARNING: I may very well be wrong because it sounds ridiculous to me that a 26 week t-bill would pay 16%. There is no way I thought it was that high.

But I do have to agree with Flechero, and it took me a long time to realize this. If you are asking if I can afford the monthly payments, you most likely should not be buying whatever it is. I still do this with major purchases (mortgages, etc.) but it is getting harder and harder for me to buy if I can only afford it by payments.

[Don T]

WARNING: I may very well be wrong because it sounds ridiculous to me that a 26 week t-bill would pay 16%. There is no way I thought it was that high.

Steve, you are misreading the decimal point on the 26 week t-bill rates. The current rates are not in the 16% to 19% range, but they are instead in the 0.16% to 0.19% range -- much less than 1%. So using the t-bill rate doesn't get the allowable interest rate above the general 10% rate, and 36% would definitely be usurious under Texas law.

[srothstein]

WARNING: I may very well be wrong because it sounds ridiculous to me that a 26 week t-bill would pay 16%. There is no way I thought it was that high.

Steve, you are misreading the decimal point on the 26 week t-bill rates. The current rates are not in the 16% to 19% range, but they are instead in the 0.16% to 0.19% range -- much less than 1%. So using the t-bill rate doesn't get the allowable interest rate above the general 10% rate, and 36% would definitely be usurious under Texas law.

Thanks Don, I kept trying to verify how to read them and nothing said what the figure in the chart was. Unfortunately, that brings the other part of the law and my understanding of it into more confusion as that would make the max interest rate on a purchase loan in the 3.5% range. I have seen car loans and home mortgages offered at that rate for people with good credit, but no other loan that I know of. And it makes no sense to me that most loans would be at illegal rates.

As I said, this is a very confusing area of the law to try to track down for me. I am going to have to guess that most lower loans would be from interstate lenders and under federal law instead of Texas, as you pointed out earlier.

[MadMonkey]

Sounds like pro-2A and pro-capitalism to me, sooo...

[LDB415]

My reply from DD.

Credova is entirely separate from us, and the interest rates that they offer vary from person to person. Unfortunately we have absolutely no control over that or what their interest rates are calculated at.

[Grayling813]

Daniel Defense has been off my "wish list" since they came out in support of the "FixNICS" bill.

As far as 36% interest...it may be considered "low interest" by 2023.

[rtschl]

Curious if they are having to self finance? Obama admin started and finance companies continued with Operation Choke Point even though the government couldn't. We keep seeing this where leftist companies in conjunction with leftists administrations implement what the government tried but couldn't do. So it's no longer an infringement of rights. Take censorship - it's only a first amendment issue if the government prohibits speech. But if corporations do it, it's there platform and they can do what they want. Funny how the government get others to do what they cannot.

I'm not saying it's right to charge that much interest, but who would finance it for you through them?