Usury Laws

AAA

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.

RELATED TERMS
  1. Usury Rate

    A rate of interest that is usually considerably above current ...
  2. Payday Loan

    A type of short-term borrowing where an individual borrows a ...
  3. Loan

    The act of giving money, property or other material goods to ...
  4. Interest

    1. The charge for the privilege of borrowing money, typically ...
  5. Usury

    The act of lending money at an interest rate that is considered ...
  6. Loan Shark

    A person or entity that charges borrowers interest above an established ...
RELATED FAQS
  1. When did people first start using collateral to secure loans?

    The history of lending, particularly non-money lending, is not well documented. It is widely believed among financial historians ... Read Full Answer >>
  2. How did Nathan Rothschild attain his wealth?

    Nathan Rothschild's father, Mayer Rothschild, was a prominent Jewish banker in Germany during the 1700s. The elder Rothschild ... Read Full Answer >>
  3. What is the difference between an in-store and an online payday loan?

    There are several differences between in-store and online payday loans. They include: Interaction between borrower and lender. When ... Read Full Answer >>
  4. Why are credit cards able to charge such high interest rates compared to other lenders?

    A true financial horror story began on Halloween in 1978. On that date, the Supreme Court began hearing Marquette National ... Read Full Answer >>
  5. How do I find a good personal bankruptcy lawyer?

    While it is not necessary to hire an attorney to file bankruptcy, the rules that govern bankruptcy can be extremely complex, ... Read Full Answer >>
  6. What are unregistered securities or stocks?

    Before securities, like stocks, bonds and notes, can be offered for sale to the public, they first must be registered with ... Read Full Answer >>
Related Articles
  1. Credit & Loans

    How Credit Cards Built A Plastic Empire

    A decade before Mastercard or Visa existed, the first credit card company was introduced.
  2. Options & Futures

    Payday Loans Don't Pay

    Hold too tightly to this rescue line and you'll soon be drowning in debt.
  3. Retirement

    Working With Islamic Finance

    There is no division between the spiritual and the secular in this type of socially responsible investing.
  4. Options & Futures

    Different Needs, Different Loans

    Find out what options are available when it comes to borrowing money.
  5. Economics

    Explaining the Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment banking business.
  6. Investing

    Who's Banning Facebook Now?

    Facebook may have over one billion monthly users, but there are many countries, including China, where the social media giant is banned.
  7. Investing

    Why Facebook is Banned in China

    Tight controls imposed by China have resulted in the ban of several foreign social media sites, like Facebook, but how did this come about?
  8. Investing

    REITs 101: How They're Regulated

    Here's everything you need to know about REITs in less than five minutes.
  9. Mutual Funds & ETFs

    How To Start a Hedge Fund In the United States

    A general overview of how to start a hedge fund firm in the United States, including complying with state and federal regulations.
  10. Mutual Funds & ETFs

    How To Start A Hedge Fund In The UK

    Starting a new hedge fund in the United Kingdom is more complex than in the United States. We discuss UK laws and regulations for starting a new hedge fund.

You May Also Like

Hot Definitions
  1. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  2. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  3. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  4. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  5. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center