Difference between revisions of "Usury"
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| − | + | '''Usury''' is the historical term for the lending of money at interest. In modern usage, usury means the extraction of interest on a loan above the maximum rate permitted by statute. | |
| − | + | In the United States, most states have usury laws limiting interest rates. This area of law is complex, particularly since, during the period of high inflation in the 1970s, the Federal government passed a law exempting national banks from state usury laws. Every state has its own usury law setting a maximum rate of interest that may be lawfully charged.<ref>http://www.lectlaw.com/files/ban02.htm</ref> | |
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| + | In many states the "legal rate of interest" may be 6%, but this only applies to rare situations and certainly does not mean that home mortgages at higher rates, or credit card finance charges (often as high as 18%, and even higher for dealings between companies), are illegal. | ||
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| + | == Usury in History == | ||
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| + | [[Islam]] prohibits usury or interest on loans, as do certain passages in the [[Old Testament]]: | ||
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(If he beget a son that) ''Hath given forth upon usury, and hath taken increase: shall he then live? he shall not live: he hath done all these abominations; he shall surely die; his blood shall be upon him.'' Ezekiel 18:13 (KJV) | (If he beget a son that) ''Hath given forth upon usury, and hath taken increase: shall he then live? he shall not live: he hath done all these abominations; he shall surely die; his blood shall be upon him.'' Ezekiel 18:13 (KJV) | ||
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== References == | == References == | ||
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[[Category:Law]] | [[Category:Law]] | ||
| + | [[category:legal terms]] | ||
Revision as of 01:22, July 15, 2007
Usury is the historical term for the lending of money at interest. In modern usage, usury means the extraction of interest on a loan above the maximum rate permitted by statute.
In the United States, most states have usury laws limiting interest rates. This area of law is complex, particularly since, during the period of high inflation in the 1970s, the Federal government passed a law exempting national banks from state usury laws. Every state has its own usury law setting a maximum rate of interest that may be lawfully charged.[1]
In many states the "legal rate of interest" may be 6%, but this only applies to rare situations and certainly does not mean that home mortgages at higher rates, or credit card finance charges (often as high as 18%, and even higher for dealings between companies), are illegal.
Usury in History
Islam prohibits usury or interest on loans, as do certain passages in the Old Testament:
Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury: Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury: that the LORD thy God may bless thee in all that thou settest thine hand to in the land whither thou goest to possess it. Deuteronomy 23:19-20 (KJV)
(If he beget a son that) Hath given forth upon usury, and hath taken increase: shall he then live? he shall not live: he hath done all these abominations; he shall surely die; his blood shall be upon him. Ezekiel 18:13 (KJV)