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#1162 - 03/30/01 04:43 PM usury limits
LaMarlowe Weldon Offline
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Joined: Mar 2001
Posts: 1
Wetumpka, Alabama, US
I have read the Bankers' Hotline that I received today and have a question about the usury limits that was mentioned in the questions and answers. My Bank also imposes a daily overdraft charge. I would like more information concerning the usury limits and any violations that might occur because of this daily charge.

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#1163 - 03/30/01 07:34 PM Re: usury limits
A D Virr Offline
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Joined: Oct 2000
Posts: 398
Derry, NH
Usury is defined as the lending of money at an unreasonable rate of interest. The limits vary from state to state. I would check state laws on this issue. However, I don't see how usury applies to overdraft charges on deposit accounts. Maybe someone out there can make the connection.

This is my opinion.

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Allan D. Virr, CRCM,CRP
Compliance Audit Solutions, LLC

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#1164 - 04/01/01 01:45 AM Re: usury limits
Andy_Z Offline
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Andy_Z
Joined: Oct 2000
Posts: 27,542
On the Net
I haven't read the article yet, but as to AD's question, the state law you referred to will not only determine the usury rate, but also what constitutes a "loan" subject to those rates.

In some cases you may find that an overdraft with a flat fee for processing is not a loan, but if there is a daily fee, it could be determined that it is a time-price differential and therefore interest, subject to usury.

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Andy Zavoina
Opinions stated are not necessarily that of my employer.

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My opinions are not necessarily my employers.
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