Final answer:
A usury law limiting interest rates to 35% would likely increase loan accessibility due to lower costs but might decrease the amount of loans to high-risk borrowers. The 35% cap sets a maximum on interest rates paid, possibly benefiting borrowers but limiting lender profits and lending inclination.
Step-by-step explanation:
Usury laws set the maximum interest rates that can be charged on loans to prevent lenders from charging excessive interest. If a usury law is enacted limiting interest rates to no more than 35%, it can have several impacts on lending practices and the economy.
Firstly, capping interest rates might encourage more people to take out loans as the cost of borrowing is not excessively high, potentially increasing the amount of loans made. On the other hand, if the cap is set significantly below market rate, lenders may be less willing to lend, especially to high-risk borrowers, which could decrease the total amount of loans made.
Secondly, a usury cap at 35% would set a ceiling for the interest rates paid. This could benefit borrowers who might otherwise have to pay higher rates but could also mean that those with poor credit may not secure a loan if the cap is below the lenders' threshold for risk.
If the federal government changes bank regulations to make it cheaper and easier for banks to make home loans, this could result in lower interest rates and/or reduced qualifying criteria, thus potentially increasing the availability of home loans to borrowers.