Interest rates

A negative Federal Reserve policy rate is still improbable, but if it were to happen it could be a net benefit, according to a note from JPMorgan Chase.

The group that worked with the Fed to devise an alternative rate to Libor rejects criticism that the index favors megabanks.

If Capitol Hill plans another round of stimulus, Democrats could have more leverage to demand steps such as suspending overdraft fees or placing a temporary cap on consumer lending rates.

Most states have some kind of pricing limit on consumer loans. But proposals for a national usury law divide even Democrats, some of whom are concerned about restricting credit.

The Federal Reserve has voted unanimously to cut the interest rate 50 basis points to 1.10% effective March 4, in the first emergency rate cut since 2008.

Regulators' oversight of the industry's switch to a new interest rate benchmark is expected to intensify as a key deadline approaches.

The state has proposed a law to cap the interest rate on certain consumer loans, but nonbanks aim to skirt it by seeking a rent-a-charter.

Federal and state policymakers wagged their fingers this week at high-cost lenders that might be looking to team with banks to evade a 36% ceiling on interest rates.

Concerns over banks’ level of preparation have led to worries about disruptions in the lending market, and some financial institutions warn that a new interest rate benchmark could cause lenders to pull back on credit.

Moody’s said the Fed’s cuts – the first in a decade by the central bank – will boost real estate and consumer ABS collateral by helping lenders uphold underwriting standards and provide affordable debt options to borrowers.