(105) Newly admitted states, in turn, generally copied their usury laws
from existing states.
Use of a liquidated damages clause in such a context might run afoul of usury laws
and would likely not be as accurate in reflecting the damages incurred by the party attempting to collect the money.
At its December meeting, the committee asked for more time, noting that an intermediate Ohio appellate court had held that advance funding schemes were indeed loans and violated that state's usury laws
. In the meantime, they asked that Florida lawyers seeking advice on the issue be told of the pending advisory opinion and the Ohio court decision.
Rothbard also faults Smith for not having been a consistent advocate of laissez-faire policies, alleging that Smith advocated various forms of state intervention in the economy, including the establishment of a government post office, and that he supported rigid usury laws
. His overall assessment of Smith's scholarship is that Smith "originated nothing that was true, and whatever he originated was wrong; that [Smith] was a shameless plagiarist, acknowledging little or nothing and stealing large chunks, for example, from Cantillon" (435).
To wit, his chapter on local banking - as distinct from the international financial empires of families like the Medici - illustrates the active local banking scene of money-changing, high-level pawnbroking via jewels, current accounts, and time deposits that helped free capital while sidestepping usury laws
. The next chapter on the Medici bank is a fitting companion to the previous one, for both contest conclusions of Raymond De Roover, the premier historian of the Medici bank.
Still Smith thought that European countries that enforced usury laws
were only furthering the "evil of usury":
Finally, we turn to the case of a note-issuing private bank that is constrained by usury laws
that impose a maximum nominal rate of interest that banks can charge on loans, say
In Bollinger, a corporation (which was wholly owned by a partner in some partnerships) held title to apartment complexes in order to avoid restrictions imposed upon noncorporate borrowers under a state's usury laws
. The partnerships were held to be the owners of the complexes since, in substance and in form, the corporation was an agent.
But theres a problem with this state-by-state approachmost of these state laws are riddled with loopholes and out of state lenders are able to evade state usury laws
. My bill would require all consumer lending to conform to the 36 percent APR limit, effectively eliminating the many loopholes that have allowed predatory practices to flourish in states around the country.
This lawsuit alleges that the Defendants intentionally offered loans and collected payments in Virginia despite knowing that those loans would be illegal under Virginia's usury laws
. The loans were subject to an APR much higher than 12 percent, though neither the Tribe nor any of the Defendants had a consumer finance license permitting them to charge interest at such a high rate.
Therefore, an FDIC-insured commercial bank or savings institution that engages in lending activities in more than one state is not burdened with the dilemma of addressing and resolving the differences in state usury laws
and the need to decide which law it needs to obey, because it need only observe the usury limits of the state where it is located.
In any of the foregoing cases, any money, fruits, or other benefit to be received by the vendee as rent or otherwise shall be considered as interest which shall be subject to the usury laws