Thus, only a few States have borders, which can be expressly agreed in a treaty. For example, Alaska limits express contract terms to 5% above the legal rate, while the District of Columbia has the highest reported cap at 24%. A number of states allow the limit to be linked to the interest rate set by the Federal Reserve Board; Most of these states have limits of 5% above the Federal Reserve. Potentially, these could be much higher than the 24% of the District of Columbia. Overall, it seems that the more rural the state, the lower the borders. Presumably, farmers are protected and more secure with lower interest rates than citizens of generally urban states with larger economies. Exceptions are also worth watching out for, as credit card loans may not be tied to usury laws. For example, in California, the maximum interest rate is set at 10%, but the law states that banks and similar institutions are exempt. This is also the case in Florida, Minnesota and New Jersey, among others. Wear and tear is a very complicated area of law. Transactions that a person would not consider to be affected by wear and tear, such as . B repurchase agreements are often subject to these limits. A word of warning: Before you try to lend money to someone or invest with a guaranteed return, contact a lawyer to make sure you don`t come into conflict with usury laws.
* Indicates that the evaluation rate applies unless another rate specified in the contract applies. If “No special rate” applies to businesses, the legal or contractual rate applies. The legal interest rate is the highest interest rate that can legally be levied on any type of debt and that a lender must meet. The legal interest rate applies to all types of debt, although some types of debt may have a higher legal interest rate than another – for example, the legal limit for a payday lender may be higher than the legal limit for a student loan. The limit is designed to prevent lenders from charging borrowers excessive interest rates. Footnote 3. Minnesota`s interest rate on judgments is based on the current average yield on one-year U.S. Treasuries. The administrator of the State court shall fix the annual rate no later than 20 December of each year. In the United States, individual states are responsible for establishing their own interest laws. While these types of financial activities may fall under the constitution`s trade clause, Congress has not traditionally focused on usury. The government considers the recovery of interest payments by violent means to be a federal offence.
In most cases, there are countless exceptions to the legal interest rate, which may be related to the character of the lender, the borrower, the amount of the loan, the type of contract or the issue that is the subject of the contract. In fact, legal interest rates are nothing more than general guidelines for all transactions and not the specific limits imposed on them. In many states, there are so many exceptions that it is often necessary to find a different rate for every conceivable situation. Footnote 10. Oregon The interest rate is that agreed between the parties, except (a) for loans under $50,000, the interest rate may not exceed 12% or 5% above the discount rate for 90-day commercial paper with the Federal Reserve Bank, and (b) unless the parties have agreed otherwise, the interest rate on the following transactions will be 9%: (i) all funds, after they have become due (accounts opened bear interest from the date of the last position), (ii) money received for the use of another and kept for a reasonable period of time without consent, and (iii) money due if there is a contract to pay interest and no interest rate is set. Footnote 13. Washington`s valuation rate is as contractually expected, if not higher than 12% or 4% of the yield on the 26-week Treasury bill coupon. And then there`s Colorado, where an interest rate above 45% on non-consumer loans is considered usurious. However, the interest rate on consumer credit is capped at 12%, unless it is “supervised loans,” which include credit card debt incurred by a “supervised lender.” There are also laws that protect those who serve in the armed forces and their loved ones from high interest rates.
The Military Loans Act limits credit card interest rates to 36% for those who benefit from the protection of this law. The pending legislation, dubbed the “Fair Credit for Veterans and Consumers Act,” aims to extend this protection to all consumers. And the Military Civil Assistance Act limits interest rates on credit card debt that an active military officer incurs to 6%. .
