Understanding California’s Usury Laws: Key Regulations for Business Owners and Lenders
As a business owner or lender in California, it’s important to understand California’s usury laws to ensure compliance and avoid legal trouble. Usury is the practice of charging excessive interest rates on loans. Article 15 of the California state Constitution sets the maximum rate of interest that California usury law can charge. It states that no person may charge a higher rate of interest than 10% per year on any loan or forbearance of money, goods, or things in action. However, there are some exemptions to this rule. Some loans and lenders are not subject to California’s usury laws.
Who is Exempt from California Usury Laws? | california constitution
Under California law, there are several exemptions to the usury law. These include:
1. National banks – National banks are exempt from California’s usury laws due to federal preemption. They can charge interest rates that are legal in the state where they are based.
2. Federal credit unions – Federal credit unions are also exempt from California usury laws due to federal preemption. They can charge interest rates that are legal in the state where they are based.
3. Licensed lenders – The state of California licenses some lenders, enabling them to charge higher interest rates. These include banks, credit unions, finance lenders, and payday lenders. However, the Department of Business Oversight must license and regulate these lenders.
4. Small loans – Small loans of $2,500 or less may be subject to different usury laws. The amount of interest these loans can charge depends on the size of the loan.
What is Article 15 of the California Constitution? | california constitution
Article 15 of the California Constitution addresses California’s usury law. It sets a maximum interest rate of 10% per year that lenders can charge on loans. This law applies to all loans and forbearances of money, goods, or things in action.
California’s usury laws aim to protect consumers from predatory lending practices. However, it’s important for businesses to understand the law to ensure compliance. Violations of the usury law can result in penalties or even criminal charges.
Stay Compliant with California’s Usury Laws: Important Insights for Lenders and Business Owners. Contact Rokita Law, P.C. for Legal Assistance
In conclusion, if you are a lender or business owner in California, it’s essential to be informed about the state’s usury laws. Understanding who is exempt from these laws and what Article 15 entails can help you avoid legal issues and maintain compliance. For more information on California usury law or assistance with legal matters, contact Rokita Law, P.C. – a Los Angeles-based law firm with experience in financial services
TRUSTED BUSINESS LAWYER IN LOS ANGELES
Amanda Rokita’s expertise, knowledge, and experience in business litigation assure you that she handles your legal matters with the utmost care. At Rokita Law, our experienced team commits to offering you the best possible service, assuring you that your case is in good hands and allowing you to rest assured. As an experienced litigator, Amanda has a dynamic approach to representing clients and handling her cases. If you’re looking for help navigating through any legal disputes involving your business or property, call upon the trusted name of Rokita Law today! Our team will be more than willing to assist you every step of the way. Don’t take on tough business litigation alone – involve the help of an attorney who knows how to get results. Involved in a business dispute? Call Rokita Law! Schedule a consultation today to see how our team can help you navigate the complex world of business litigation.
Attorney Advertising Material by Rokita Law, P.C. 11340 W. Olympic Bl. Suite 266 Los Angeles, CA 90064 (888) 765-4825. Rokita Law, P.C. provides the content on this post for informational purposes only. The information should not be construed as, nor is intended to be, legal advice. Results may vary. This is not a guarantee, warranty, or prediction regarding the outcome of your case. Posts are for educational purposes only and are based on California law only, except for trademarks and copyrights filed with the US Patent and Trademark Office (USPTO).