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N FLA | Has anyone ever heard of a loan like this or know why a borrower would be so foolish?
The Gibsons had generally paid reasonable interest rates on their many loans. But in June of 2014, Gibson signed a memorandum of understanding to buy a small herd of 271 Black Angus cow-calf pairs on credit from Boswell Livestock Commissions Co Inc, according to court records.
After putting $50,000 down, Gibson owed the balance - $771,000 - to Boswell in 90 days. He agreed to pay 7 percent simple interest per day - a 2,555 percent annual rate. With interest and principal charges, payments would total $5.63 million for the 90-day loan.
An interest rate that high would be illegal on a credit card or a car loan, according to Indiana’s usury statute, but agricultural loans are not covered by state or federal regulations that protect most consumers.
Gibson still has not repaid the cattle debt in full, according to a lawsuit filed last month by Boswell and its bank against Matt Gibson and BMO Harris. Boswell officials and its attorneys declined to comment on the case, citing the ongoing litigation.
From this story, it's a year old. But I don't remember us discussing it here.
http://www.reuters.com/investigates/special-report/usa-farm-debt/?_...
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Loan shark
