A usurer is a person who lends money at an excessively high interest rate. This term typically refers to lenders who charge interest rates that are considered exorbitant or illegal. In the United States, each state has laws that set maximum legal interest rates, which can vary significantly. If a lender charges more than the allowed rate, they may be committing the crime of usury.
The term "usurer" is primarily used in the context of financial and lending laws. It is relevant in civil law, particularly in cases involving loans and interest rates. Usury laws are designed to protect borrowers from predatory lending practices. Users may encounter this term when dealing with loan agreements, credit contracts, or disputes over interest rates. Legal templates available through US Legal Forms can assist individuals in drafting compliant loan agreements or understanding their rights as borrowers.
Here are a couple of examples of abatement:
Example 1: A lender in a state with a maximum interest rate of 30 percent charges a borrower 50 percent interest on a personal loan. This lender could be prosecuted for usury.
Example 2: A payday loan company advertises a loan with an interest rate of 45 percent, which is legal in some states but may be considered usurious in others if it exceeds state limits. (hypothetical example)
Usury laws are governed by state statutes, which vary widely. For instance, some states allow interest rates up to 45 percent, while others may set lower limits. Notable cases include Dikeou v. Dikeou, which established a precedent regarding reasonable interest rates in Colorado.
| State | Maximum Legal Interest Rate |
|---|---|
| California | 10 percent |
| Texas | 18 percent |
| Colorado | 45 percent |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition |
|---|---|
| Usurer | A lender who charges excessively high interest rates. |
| Predatory lending | Unethical practices by lenders to deceive borrowers into unfavorable loan terms. |
| Loan shark | An illegal lender who charges extremely high interest rates, often using threats or violence. |
If you believe you are being charged usurious rates, consider the following steps:
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A usurious interest rate is any rate that exceeds the maximum legal limit set by state law.