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Under this doctrine, debt buyers may purchase loans from national banks and collect interest at the same rate as the original lender, regardless of the usury laws of the state they operate in. The doctrine entered common law during the 19th century and was codified in a final rule by the Office of the Comptroller of the Currency in 2020. [1]
Usury laws are state laws that specify the maximum legal interest rate at which loans can be made. In the United States, the primary legal power to regulate usury rests primarily with the states. Each U.S. state has its own statute that dictates how much interest can be charged before it is considered usurious or unlawful. [77]
State anti-usury laws cannot be enforced on nationally chartered banks based in other states; only laws of state in which banks are located apply, and regulation of interest rates on national banks making interstate loans can only be enacted by Congress or the appropriate state legislature: Court membership; Chief Justice Warren E. Burger
Usury laws protect borrowers in many states and some borrowers nationwide from being charged excessively high interest rates. However, state standards for excessive interest vary widely, and ...
Truth in Lending Act; Long title: An Act to safeguard the consumer in connection with the utilization of credit by requiring full disclosure of the terms and conditions of finance charges in credit transactions or in offers to extend credit; by restricting the garnishment of wages; and by creating the National Commission on Consumer Finance to study and make recommendations on the need for ...
When the Office of the Comptroller of the Currency ruled that interstate banks established under the Riegle–Neal Interstate Banking and Branching Efficiency Act of 1994 could use their home state's usury law for all branches nationwide with minimal restrictions, [31] Arkansas-based banks were placed at a severe competitive disadvantage to ...
Articles relating to usury, the practice of making unethical or immoral monetary loans that unfairly enrich the lender. The term may be used in a moral sense—condemning, taking advantage of others' misfortunes—or in a legal sense, where an interest rate is charged in excess of the maximum rate that is allowed by law.
Vix pervenit is an encyclical, promulgated by Pope Benedict XIV on November 1, 1745, which condemned the practice of charging interest on loans as usury.Because the encyclical was addressed to the bishops of Italy, it is generally not considered ex cathedra.