News & Analysis as of

Usury Interest Rates

Sheppard Mullin Richter & Hampton LLP

Texas Supreme Court Issues New Interpretation of Texas Usury Law

On May 23, the Texas Supreme Court issued an opinion holding that in determining whether a commercial loan is usurious under Texas state law, the “actuarial method” must be employed. This requires the applicable amount of...more

Orrick, Herrington & Sutcliffe LLP

Texas Supreme Court answers Fifth Circuit’s question on loans in ruling

On May 23, the Supreme Court of Texas ruled that the maximum permissible interest on a loan must be calculated using the declining principal balance rather than the initial total principal amount. This decision was in...more

Katten Muchin Rosenman LLP

Maximum Interest Must Be Calculated Using the Actuarial Method Resulting in Lower Interest Charges as Principal Balance Declines

Commercial lenders in Texas should be made aware of the Texas Supreme Court’s new decision in American Pearl Group, LLC v. National Payment Systems, LLC, No. 24-0758. In that case, the Court clarified the “actuarial method”...more

Ballard Spahr LLP

New York AG sues payday lenders MoneyLion and DailyPay

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New York Attorney General Letitia James has sued payday lenders MoneyLion Inc. and DailyPay Inc. in New York state court, alleging that the two companies took advantage of tens of thousands of New Yorkers....more

Orrick, Herrington & Sutcliffe LLP

Philadelphia court receives usury claim against payday loan company

On March 11, a class action lawsuit was filed in the Philadelphia County Court of Common Pleas against a financial technology company offering cash advances up to $200 through a lending app. The lawsuit alleged the company...more

Ballard Spahr LLP

Oregon Considering DIDMCA Opt-Out Legislation

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Oregon may become the latest state attempting to stop out-of-state banks from “exporting” home-state interest rates on loans made to Oregon consumers. Like similar legislation adopted by Colorado in 2023, House Bill 2561...more

Awatif Mohammad Shoqi Advocates & Legal...

The Implication Of Imposing Interest In The UAE

In the current world, where trade ties are vital in strengthening the economy of a country, it is often necessary to enter into legal contracts with various entities around the world. It is also necessary that these contracts...more

King & Spalding

Southern District of California Determines That a Convertible Note With an Original Issue Discount Is Subject to California Usury...

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In 2019, LGH Investments, LLC loaned $100,000 to Social Life Network, Inc., a software licensing company, in exchange for a convertible note, common stock, and stock warrant for 412,500 shares at a strike price of $0.20. The...more

Goodwin

Minnesota AG Enters into Consent Order Over High-Cost Online Lenders, Discharging Over $1 Million in Loans

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On Tuesday, November 26, the Minnesota Attorney General’s office (AG) announced it filed a consent order to resolve allegations that online lenders were charging interest on loans in excess of the amounts prescribed under...more

Troutman Pepper Locke

States Join Colorado in Defense of Interest Rate Opt-Out Law

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On September 20, 13 states and Washington, D.C. joined Colorado in its appeal asking the Tenth Circuit to uphold a state law imposing more restrictive interest rate caps on loans from out-of-state banks to residents, arguing...more

Orrick, Herrington & Sutcliffe LLP

Massachusetts’ Attorney General settles with lender for alleged usury claims

On May 21, the Massachusetts Attorney General (AG) released an Assurance of Discontinuance against a lender for allegedly violating the state’s Consumer Protection Act (CPA) provision on unfair and deceptive acts and...more

Hudson Cook, LLP

New York Financing Arrangements Bill Would Have Major Implications for Commercial Financing

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A bill before the New York State Assembly would, if passed, have major implications for a variety of financing transactions in the Empire State. Titled the End Loan Sharking Act, Assembly Bill 9585 would subject a variety of...more

Troutman Pepper Locke

Opportunity Financial Scores Big Win in CA DFPI’s “True Lender” Lawsuit

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A California state court recently denied a preliminary injunction sought by the California Department of Financial Protection and Innovation (the DFPI) in its long-running litigation against Opportunity Financial (OppFi)...more

Orrick, Herrington & Sutcliffe LLP

Minnesota AG files complaint against a tribal company for steep rates

On October 30, the Minnesota Attorney General’s office filed a complaint against a Montana tribal economic development entity claiming that the entity’s lending subsidiaries violated state and federal usury laws through...more

King & Spalding

New York Trial Court Holds that Strong Public Policy Commitment to Fair Lending Practices Defeats Loan Agreement’s Choice of Law...

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On September 5, 2023, a New York state court invalidated a loan agreement’s choice of law provision, ruling that the loan agreement was void and depriving the lender of both principal and interest payments. The lender, Samson...more

Lowenstein Sandler LLP

Drafter Beware: Recent New York Decision Reaffirms the Continuing Vitality of Public Policy in Enforcing Choice-of-Law Provisions

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Every day, attorneys act as advisors to parties negotiating and drafting contracts. Among those terms often left to the lawyers are choice-of-law provisions. Which state’s law governs a dispute, in theory, should not...more

Freiberger Haber LLP

Is it A Usurious Loan or The Sale of a Receivable?

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By: Jeffrey M. Haber In our last article (here), we examined a choice-of-law provision that, if applied, would violate New York public policy concerning usurious loans. In that case, Virginia law, which does not prohibit...more

Orrick, Herrington & Sutcliffe LLP

Michigan Supreme Court limits applicability of “usury savings clauses”

On June 23, the Michigan Supreme Court reversed a circuit court’s decision on a case involving Michigan’s “longstanding prohibition on excessive interest rates for certain loans.” The case involved a “usury savings clause,”...more

Troutman Pepper Locke

Michigan Supreme Court Refuses to Enforce Usury Savings Clause in a Commercial Mortgage

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In Soaring Pine Capital Real Estate & Debt Fund II, LLC v. Park Street Group Realty Services, LLC, the Michigan Supreme Court considered whether a court may enforce a usury savings clause in a mortgage agreement. A usury...more

Lowndes

Know Your Rights: 5 Facts About Usury Laws in Florida

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Usury is the unlawful lending of money at unreasonably high rates of interest. So, what is unreasonable? And what happens if your loan goes beyond that amount?...more

Ballard Spahr LLP

California DFPI is Wrong on Both Law and Facts, per OppFi

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In its April 2023 Opposition to the California Department of Financial Protection and Innovation (DFPI) motion for preliminary injunction, Opportunity Financial, LLC (OppFi) presents a spirited riposte, drilling down into the...more

Allen Matkins

Ninth Circuit Declines To Aggregate Loans For Usury Exemption

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California limits the amount of interest that may be charged on loans and forbearances.  While that is the general rule, there are numerous statutory exemptions.  One of those exemptions can be found in California...more

Allen Matkins

California Court Of Appeal Says Forum Selection Clause Should Not Be Enforced In Usury Case

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Does California's usury limitations constitute a "strong public policy"?  Seemingly, that question was decided over a half-century ago by the First District Court of Appeal in Ury v. Jewelers Acceptance Corp., 227 Cal. App....more

Orrick, Herrington & Sutcliffe LLP

4th Circuit affirms certification of class action in tribal lending case

On January 24, the U.S. Court of Appeals for the Fourth Circuit concluded that a district court did not abuse its discretion when certifying a class action. The lawsuit alleges an individual who orchestrated an online payday...more

Mayer Brown

Iowa Targets Out-of-State Bank Partner for Usury, Shedding Light on State’s Interpretation of DIDMCA Opt-Out

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In December, the State of Iowa and the Iowa Division of Banking entered into an Assurance of Discontinuance (“AOD”) with Transportation Alliance Bank, Inc. (the “Bank”) settling claims that the Bank charged usurious rates of...more

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