Usury

New: Usury information by state. Also, our improved legal and financial links.

Definition: Usury is defined as the act of lending money at an unreasonably high interest rate, this rate is defined at the state level. Repayment of loans at a usurious rate makes repayment excessively difficult to impossible for borrowers. This is also called "loan sharking" or "predatory lending".

Usury has recently come back into legal conversations due to the emergence of payday loans and sub-prime lending. These types of loans are aimed at those who are at greater risk of defaulting, those with lower incomes. Payday loans are supposed to be used as short term loan to help people make it to their next paychecks by paying bills that are due before they receive it. Unfortunately these get abused and the lendees can get into further financial trouble.

Sub-prime loans, again, are for lower income individuals that are more at risk of not being able to fulfill their obligation in payments. These loans have higher rates, but obviously fall just below their state's usury level to be legal.

Many are now asking for changes in how we define usury to eliminate these types of loans.

History of Usury

Usury is a very old notion that is almost as old as banking itself. It was first simple the charging of a fee for a loan, something obviously accepted today. As the notion of interest, or a flat-rate fee, for loans became common, the definition change to charging a rate perceived as excessive. More usury information will be added, including texts referencing the practice.

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