Category Archives: Usury Exceptions

U.S. District Court Holds that Purchase of Future Settlement Proceeds Violates Kansas Usury Law

A litigation finance firm advanced funds to an individual that was pursuing a personal injury case against a gas can manufacturer. After receiving a series of cash advances, the individual filed suit against the financing firm in U.S. District Court alleging that the … Continue reading

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Citing Madden v. Midland Funding, Colorado Regulator Challenges Bank Partnership Model

The Colorado Administrator of the Uniform Consumer Credit Code (UCCC”) has filed complaints against two UCCC licensees alleging violations of Colorado’s usury cap. Both licensees utilize bank partnerships to originate their loans. Citing Madden v. Midland Funding, the Administrator, represented … Continue reading

Posted in Assignor-Assignee, Attorney General, Colorado, Federal Court, National Bank Act, Preemption, Usury Cap, Usury Exceptions | Comments Off on Citing Madden v. Midland Funding, Colorado Regulator Challenges Bank Partnership Model

Excessive Interest Caused By Contingency Under Debtor’s Control Not Usurious

A horse owner provided a loan to a horse trainer. The promissory note required simple interest payments of 4% per annum. The trainer had the option of providing free training for two of the owner’s horses in lieu of paying … Continue reading

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Despite Violation of Usury Statute, Lender Still Entitled to Full Contractual Interest Rate

A recent federal appellate decision highlights the discretion often afforded judges when deciding usury cases. The case involved a Massachusetts state court judgment that a lender had obtained against the guarantor of multiple business loans. When the guarantor failed to … Continue reading

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When it Comes to Usury Law, Be Careful What You Ask For

In a previous post, Creditor Fails to Navigate Usury Law “Minefield”, Ordered to Refund $1.3 Million to Debtor, I discussed a recent bankruptcy case in California. In the case, a lender had filed a claim in the borrower-debtor’s bankruptcy case. The … Continue reading

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Estoppel Argument Successfully Counters Usury Defense

The plaintiff made a loan to the defendant, a family friend, using funds that were to pay her daughter’s college tuition. The plaintiff alleged the defendant was a real estate expert that needed the funds to develop an affordable housing project. The … Continue reading

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The Many Hurdles of a Successful Usury Defense

A recent Texas state court decision highlights the many challenges a defendant may face when alleging usury as a defense to a breach of contract action. In the case, the defendant argued that the 30% interest rate the plaintiff charged pursuant to … Continue reading

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Business Loan Enforceable Even Though Rate Exceeds Criminal Usury Cap

Last October, a Pennsylvania trial court found a business loan contract to be enforceable even though the interest rate charged on the loan exceeded Pennsylvania’s criminal usury statute. The court found that because the civil usury cap provided an exception … Continue reading

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Creditor Fails to Navigate Usury Law “Minefield”, Ordered to Refund $1.3 Million to Debtor

A recent court decision demonstrates the complexity and dangers faced by creditors attempting to navigate California’s usury laws. In the case, a lender agreed to purchase a debtor’s promissory note from a bank and refinance it for a lower amount. The entity that … Continue reading

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Court Acknowledges Benefit of Usurious Business Loan

Lauderdale v. Lauderdale, 2015 Minn. App. Unpub. LEXIS 485 (Minn. Ct. App. May 26, 2015) A couple decided to divorce. The husband was an investor that owned a number of real estate businesses. In the course of valuing the marital property, the trial court deducted … Continue reading

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