What Is the Maximum Interest Rate Allowed by Law in Massachusetts

But if a creditor informs the Attorney General under section 49(d) of his intention to charge a usurious interest rate, is he free to charge whatever he wants? After all, usury law isn`t the only reason a default provision can be repealed. For example, the courts have held that default interest and late fees are „liquidated damages” provisions and that not all lump sum damages provisions are enforceable. On the contrary, a contractual penalty is declared void unless (1) „at the time of entering into the contract. The actual harm resulting from a breach was difficult to determine” and (2) „The amount agreed to as a contractual penalty represents a reasonable estimate of the harm to be expected in the event of a breach.” NPS, LLC v. Minihane, 451 Mass. 417, 420 (2008) (inner quotation marks omitted). Otherwise, a contractual penalty will be qualified as an unenforceable „penalty”. The provisions on failures therefore appear vulnerable if they do not reflect a reasonable prediction of uncertain damage, and many provisions on failures have been deleted precisely on this basis. See, for example, De Cordova v. Weeks, 246 Mass.

100, 104 (1923) (default interest rate of 36% deemed unenforceable as a penalty); SMS Fin. V, LLC v. Conti, 68 Mass. App. Ct. 738, 751 (Mass. App. Ct. 2007) („A provision requiring double refund of a promissory note with a principal amount greater than $300,000 was unenforceable); Fleet Bank of Mass. N.A. v One-O-Six Realty, Inc., Civ. A.

No. 94-3392-G, 1995 WL 389862, at *3 (Mass. Super. January 17, 1995) (Mass. Super. January 31, 1995) (concluding that „a 5% [monthly] late fee on a multi-million dollar balloon payment at maturity” was inapplicable). Unfortunately, Massachusetts state courts have given little guidance on the interaction between usury law and contract law. The SJC came closest to this in Begelfer v. Najarian, 381 Mass.

177 (1980). In Begelfer, the creditor imposed a default interest rate of more than 20 per cent and, as he had not informed the Attorney General under section 49(d), the Court upheld the Supreme Court`s decision to lower the default interest rate as usury. However, the Court then concluded that „[it] would treat the late charges in [this] case as `liquidated damages` and would also designate the default provision as an unlawful sanction. The court`s wording was unclear in this case; The SJC may have said that suppletive provisions must exist under both usury law and the common law liquidated damages framework, or it may have said that the lump sum damages inquiry would only have applied if the usury law had not applied. However, since the creditor in Begelfer did not comply with article 49(d), the court never had to deal directly with this issue. 12 CFR 7.4001 charging interest by domestic banks at interest rates allowed to competing institutions; Interest on corporate borrowers The general usury limit shown is the interest rate that can be charged by one person or company to another. In other words, if you lend $100.00 to your neighbor, the listed price is the limit. If you want to charge more than the advertised price, you will need a special license such as a banking license or pawnshop license. This also means that special types of loans, such as those from pawnshops or small credit companies, are not specified. Anyone who receives or charges usurious interest in excess of twenty percent (20%) per annum on the amount borrowed is guilty of criminal usury and is liable to imprisonment for a term not exceeding ten years, a fine not exceeding ten thousand dollars, or a fine and imprisonment. This provision on usury and its punishment is contained in section 49 of chapter 271. The person to whom the loan is granted may apply to the Supreme Court or the higher court to declare the loan null and void.

(c) Any loan at an interest rate prohibited by clause (a) may be declared null and void by the Supreme Court or the higher court on the application of the person to whom the loan was granted. Section 49 (a) Any person who, in exchange for a loan of money or other property, knowingly concludes, charges, takes or receives interest and charges in excess of twenty per cent per annum on the sum borrowed or the corresponding rate of interest for a more or less long period, is guilty of criminal usury and is liable to imprisonment in a State prison for a period not exceeding ten years. years or by a fine of not more than ten thousand dollars, or by such fine and imprisonment. For the purposes of this division, the amount payable on a loan for interest or expenses includes all amounts paid or payable by or on behalf of the borrower as interest, brokerage fees, record keeping, commissions, services, loan renewal, waiver of payment and any other amount charged to the borrower for the direct or indirect granting or security of the loan; or be paid or be paid. and includes all amounts paid by or on behalf of or against the borrower, directly or indirectly, to or through any person other than the creditor, for or on behalf of the granting or guarantee of the loan, if such payment or charge was known to the creditor at the time the loan was granted; or may have been established by reasonable investigations. Service or interest charges for bank credit cards as wear and tear under the National Bank Act (12 U.S.C.A.