Many state laws prohibit the lending of money or extension of credit involving interest exceeding a certain annual percentage rate. For instance, in Florida, with limited exceptions, the annual percentage rate of interest for a loan may not exceed 18%. Interest rates exceeding this amount are declared usurious. Lenders in Florida charging interest exceeding 18% are required to forfeit the entire interest amount charged, or contracted to be charged, and only the actual principal sum of the usurious contract can be enforced.

Furthermore, in Florida, with limited exceptions, a rate of interest exceeding 25% constitutes criminal usury, which is a second degree misdemeanor (or in the case of interest exceeding 45%, a third degree felony), which renders the entire contract unenforceable by the lender.

Many times, lenders will hide usurious interest by imposing charges that are otherwise permitted under state statues, such as credit insurance and lien recording fees, but do not issue any such insurance policies or even pay to record the liens. As a result, these companies are able to charge hundreds or thousands of dollars of undisclosed unlawful interest, in violation of usury statutes, veiled as permitted charges. Unfortunately, consumers are frequently unaware of these violations and find themselves having difficulty paying, at which point lenders offer to “renew” the agreements in order to provide relief, resulting in the compounding of the unlawful and undisclosed interest. Common perpetrators of such predatory lending and usury schemes include payday loan companies, title loan companies, and subprime auto lenders.

An example of this scheme is described in the below article:

Insta-Loophole: In Florida, High-Cost Lender Skirts the Law


Despite a ban on high-interest car title loans, the nation’s largest title lender has opened 26 Instaloan stores in Florida, offering a refashioned version of the loans that effectively charge the same sky-high rates the law was designed to stop

In addition to the above listed remedies, state laws often provide for recovery of damages for those that have been victimized by predatory lending and usurious contracts, including statutory damages, actual damages and punitive damages.

If you believe you have been the subject of predatory lending which violates state usury laws, contact Maney | Gordon for a free consultation at 1-866-344-LAWS (5297).