Usury

News & Analysis as of

Manhattan District Attorney Indicts Payday Lenders

On August 12, Manhattan District Attorney (DA) Cyrus Vance, Jr. announced the indictment of twelve payday lending companies and related individuals for allegedly engaging in criminal usury by making high interest payday loans...more

New York Grand Jury Indicts 12 Online Payday Lenders and 3 Individuals

In a shot across the bow of online payday lenders who allegedly disregard state law where their borrowers reside, a New York County grand jury recently voted a criminal usury and conspiracy indictment against 12 companies...more

Usury in Florida: Are Late Fees Usurious?

When borrowers default under the terms of their loans, lenders often, in accordance with the loan documents, can assess late fees against the borrower. When lenders assess late fees around the time of or after a loan matures...more

Rhode Island Usury: Interest By Any Other Name Is Still Interest

In LaBonte v. New England Development R.I., LLC et al., No 12-328, the Rhode Island Supreme Court recently clarified the state’s usury law by holding that a fee could be included in the calculation of interest even though it...more

West Virginia Supreme Court Upholds $14 Million Award In Finance Company “True Lender” Case

On May 30, the West Virginia Supreme Court of Appeals affirmed a series of trial court orders requiring a nonbank consumer finance company to pay $14 million in penalties and restitution for allegedly violating the state’s...more

Utah Federal Court Dismisses Putative Class’s “True Lender” Claims Against Online Merchant

On May 23, the U.S. District Court for the District of Utah dismissed a putative class action filed against an ecommerce merchant for allegedly operating a financing program that violated various California laws, including...more

Georgia Carves Overdraft, Other Fees Out Of Usury Limit Applicable To State Banks

On April 15, Georgia Governor Nathan Deal signed HB 824, which amends state law to clarify that certain banking fees are not “interest” subject to the state’s usury cap applicable to state-chartered institutions. ...more

New York AG Action Targets Out-Of-State Retail Installment Obligation Finance Companies

On April 30, New York Attorney General (AG) Eric Schneiderman announced that four out-of-state companies alleged to have financed retail installment obligations (RIOs) at rates in excess of the state’s usury cap agreed to...more

California Appeals Court Holds Judgment Creditor’s Forbearance Fees Not Subject To State Usury Law

On April 25, the California Court of Appeal, First District, held that California’s usury law does not prohibit a judgment creditor from accepting a forbearance fee to delay collecting on a judgment. Bisno v. Kahn, No....more

Illinois AG Sues To Enforce Dodd-Frank “Abusive” Prohibition

On March 19, Illinois Attorney General (AG) Lisa Madigan announced a suit against a lender for allegedly offering a short-term credit product designed to evade the state’s usury cap. The AG claims the lender offers a...more

Usury Savings Clauses No Longer Save Lenders

Commercial lenders in Rhode Island may no longer rely upon a Usury Savings Clause in loan documents. Most commercial loan documents contain such a clause, which usually states that any payments made by a borrower in excess...more

Fast Five: Rhode Island Appellate Practice - March 2014: Lenders Beware! Usury Savings Clause Does Not Validate Usurious...

In a case of first impression that has important implications for lenders in Rhode Island, the Rhode Island Supreme Court held this term that a usury savings clause in a commercial loan document does not validate an otherwise...more

Supreme Court of Rhode Island Declares Usury Savings Clauses Void

For public policy reasons, the Rhode Island Supreme Court recently held that usury savings clauses are void and unenforceable. In NV One, LLC v. Potomac Home Capital, LLC, borrowers who had defaulted on their note filed a...more

New York Attorney General Announces Settlement with Large Payday Lender

On January 24, 2014, New York Attorney General Eric Schneiderman announced that a settlement had been reached with Western Sky Financial, LLC, Cash Call, Inc., WS Funding, LLC, and their principals for alleged violations of...more

Former Colorado regulator and consumer advocate Laura Udis to join CFPB as manager for payday lending program

We have learned that, starting Monday, Laura Udis will join the CFPB as the Payday and Small Dollar Lending Program Manager in Research, Markets and Regulations. Ms. Udis comes to the CFPB from the Consumer Federation of...more

New York AG Settles With Payday Loan Debt Collectors

On September 30, the NY AG announced settlements with five companies that collected debts on allegedly illegal payday loans. The AG alleged that the companies collected on behalf of payday lenders who allegedly made illegal...more

Federal District Court Denies Tribal Lenders’ Attempt To Block New York Internet Lending Investigation

On September 30, the U.S. District Court for the Southern District of New York denied a motion filed by two Native American tribes and related entities seeking to enjoin the New York Department of Financial Services (NY DFS)...more

Rogers Towers: Usury in Florida: Using the 365/360 Method to Calculate Interest

Many lending institutions use the 365/360 method of calculating interest on their loans. This method involves applying the ratio of the annual interest over a year of 360 days, multiplied by the outstanding principal balance,...more

Rogers Towers: Usury in Florida: The Limited Application of the Savings Clause

A usury savings clause is a provision in a loan document that attempts to negate any other provisions therein that might result in the extraction of an illegal interest rate....more

Court Explicates Scope of Usury Exemption For Real Estate Brokers

Artistotle didn’t think much of the idea of paying interest: (“As this is so, usury is most reasonably hated, because its gain comes from money itself and not from that for the sake of which money was invented. For...more

Rogers Towers: Usury in Florida: Intent is Key

Usury under Florida law is largely a matter of intent. It is not fully determined by the fact that the lender actually received more than law permits but by the existence of a corrupt purpose in the lender’s mind to charge...more

Update On Tribal Loans To State Residents

Native American tribes increasingly are engaging in consumer lending over the Internet. These “tribal loans” present unique legal questions and issues, including whether tribal sovereign immunity shields tribes and their...more

Usury in Florida; Generally

Under Florida law, usury is defined as the willful and knowing charge or receipt of interest in excess of 18% per year for credit transactions involving less than $500,000 or between 25% and 45% per year in a credit...more

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