Usury Laws

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DEFINITION of 'Usury Laws'

Regulations governing the amount of interest that can be charged on a loan. Usury laws specifically target the practice of charging excessively high rates on loans by setting caps on the maximum amount of interest that can be levied. These laws are designed to protect consumers.

INVESTOPEDIA EXPLAINS 'Usury Laws'

In the United States, individual states are responsible for setting their own usury laws. Though this type of financial activity could fall under the Constitution's commerce clause, Congress hasn't traditionally focused on usury. The government does consider the collection of usury through violent means a federal offense.

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