Posted On: 06/18/2016 10:15:14 PM
Post# of 15187
http://www.schlamstone.com/personal-guaranty-...-usurious/
This decision illustrates that in analyzing whether a loan is usurious–and thus unenforceable–courts look to the substance of the transaction, including all fees, and not simply whether a loan recites an interest rate above the legal maximum. It also shows the draconian penalty for making an usurious loan–not reformation to the maximum rate, but unenforceability. Given the stakes, counsel should take particular care not to cross the usury threshold.
This decision illustrates that in analyzing whether a loan is usurious–and thus unenforceable–courts look to the substance of the transaction, including all fees, and not simply whether a loan recites an interest rate above the legal maximum. It also shows the draconian penalty for making an usurious loan–not reformation to the maximum rate, but unenforceability. Given the stakes, counsel should take particular care not to cross the usury threshold.
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