Bill Would Give D.C. Council Control Over City Usury Laws
The House District Committee yesterday approved a bill that woura give the D.C. City Council authority over local usury lawsÛÓa move that could result in higher interest rates and more easily available housing mortgates.</br></br>The move to transfer authority from Congnss to local officials came a.-, an amendment by Hep.Thomas M. Hccs (IM'alif.) to a hi 11.that would exempt the Capital Yacht Club from the District's 8 per cent interest ceiling.</br></br>A transfer of authority over usury laws to the City Council would not guarantee that the interest rate ceiling on home mortgages would he raised, but Rees and other committee members, as well as city officials, indicted that they believe the Council would he able to respond more rapidly to the changing money market.</br></br>The prime rate interestÛÓthe rale banks charge their most favored customers for short term loansÛÓis generally at about 9:,i per cent. Savings and loan institutions, which provide the majority of housing mortgages in the District, must therefore borrow money at rates higher I ban the 8 per cent ceiling on home loans to cover existing obligations. As; a result, they are reluctant to | make loans for that amount or j loss, which has resulted in the "If weÛªre going to free up' any mortgage money, weÛªre going to have to do something' about the interest rates,Û Sterling Tucker, Council vice chairman said. If the hill becomes law, he said, he expects the Council to hold early hear-1 ings to determine whether the maximum interest rate needs to he raised.</br></br>The hill, which as approved includes the exemption from the usury laws for the Capital Yacht Club, which wanted to contract for a $350,000 loan at 0 per cent, still must pass the House, be adopted by the Senate and signed by the Prcsi-i deni, in order to become law.