What is usury?

Usury is a term used when talking about banking law in California. Usury is the practice of charging a lender an excessive interest rate on a loan or other type of credit. The excessive interest rate is often much higher than the amount that would typically be charged in the same area. This practice is illegal and can be considered unethical as it takes advantage of the borrower. The state of California has strict regulations on usury, as do many other states. The maximum rate of interest that can be charged on a loan or credit is governed by the California Usury Law. This law sets a limit on the amount of interest that can be charged, which is usually set at 10% above the federal funds rate. This means that a lender cannot legally charge more than 10% more than the federal funds rate, which is the rate that the Federal Reserve charges its member banks. Usury can be a serious issue in California, as the outrageous interest rates can put consumers further in debt and can even result in legal action being taken if the lender is found to be in violation of the law. Any consumer that is considering taking out a loan should always make sure to check the interest rate to be sure it is not too high before signing the agreement. Additionally, borrowers should be aware of the potential legal action that can be taken if a lender is found to be in violation of the usury laws in California.

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What is usury?

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