I'm getting so many conflicting opinions concerning this statute, which basically limits the loan fee to $50 or 2% of the principal balance for loans $50,000 or less. The Fl Department of Banking and Finance sent me a legal opinion. The compliance officer for a large bank in FL told me how they did it which didn't seem to match the legal opinion from the FL DBF. How do you interpret this rule and have you ever been examined for compliance with it?

Do you charge more than $50 if your interest rate is less than 18%?

Do you charge more than $50 if your APR is less than 18%?

Do you only stick with the $50 if your interest rate is 18%?

I've heard all of these and also that you always only charge $50 regardless of your interest rate. Help!

I feel your pain Waldensouth...our understanding is you don't charge more than the limit on anything $50,000 or less. regarless of IR/APR. I haven't had much luck in getting plain simple answers out of anyone at the FL Dept of Banking either...so that doesn't help. I doubt very seriously if we will ever be examined by them either...your biggest worry would be the out-of-the-blue lawsuit. That was their contention too...btw!

I did get a legal opinion out of them. It seems clear enough to me, but you know those loan officers!

It actually seems pretty clear in the book (imagine that!)...if it's different than how it reads, I'd be very interested to know that as well.

Can you tell me what the legal opinion was on the post below




I'm getting so many conflicting opinions concerning this statute, which basically limits the loan fee to $50 or 2% of the principal balance for loans $50,000 or less. The Fl Department of Banking and Finance sent me a legal opinion. The compliance officer for a large bank in FL told me how they did it which didn't seem to match the legal opinion from the FL DBF. How do you interpret this rule and have you ever been examined for compliance with it?

Do you charge more than $50 if your interest rate is less than 18%?

Do you charge more than $50 if your APR is less than 18%?

Do you only stick with the $50 if your interest rate is 18%?

I've heard all of these and also that you always only charge $50 regardless of your interest rate. Help!

_________________________
The first duty of love is to listen.

My employer is not responsible for my opinions.

Thou shalt not charge more than $50 on loans of $50,000 or less. If you would like a copy of the legal - PM me with your email address.

The first bank I was ever with followed this rule for loans under $50,000. We charged $50 and could also charge 18%. The APR would be over 18% but that was OK as the $50 was not calculated for usury purposes. Most banks do not use this rule anymore because they charge over $50, and then they have to be sure the APR is not more than 18%. We charge $50 here but do not take advantage of this special rule, on small short term loans we adjust the fee and rate to be sure the APR is less than 18%. You can charge more than $50 on loans less than $50,000, you just have to watch the for usury.

Not according to the Florida department of banking. I've spoken with several folks there and they all stated the same thing - absolutely cannot charge more than $50 on loans under $50,000 regardless of interest rate or APR. You might ask them. I got your response from most bankers in Florida but when I went straight to the horses mouth (so to speak) I received a different answer.

I'm with waldensouth on this one...the literal interpretation is very clear..so is the florida banking legal counsel opinion letter waldensouth referred to above. I had outside legal try to interpret it differently (oh horrors!), but when I pointed areas out that he 'overlooked' he completely changed his opinion...ha!

Certainly this only applies to consumer loans, correct? There is no limit on commercial/business loan fees is there?

No, usury is not a consumer law. Sometimes you will have parts that only apply to specific circumstances, but the law, in general, does not play favorites.

The reg reads any LOAN $50,000 and under - so yes, it does apply to small commercial loans.