The “Usury Permit” – Fact Or Fiction?

The California Constitution covers many things – everything from the right of privacy (Art. I, Sec. 1) to the rate of interest that may be imposed on a loan or forbearance (Art. XV).

Occasionally, I’m asked about how to obtain a “usury permit” from the Department of Corporations. In fact, the legislature has inserted several exemptions from the constitutional usury limitations into the Corporate Securities Law of 1968. This is possible because the Constitution’s usury limitations don’t apply to any class of persons authorized by statute. The CSL’s usury exemptions can be found in Corporations Code Sections 25116, 25117 and 25118.

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