Who has to follow usury laws?

It seems like many banks and credit card companies charge high interest rates. Are they not subject to usury law?

Answer
“The businesses or companies that are subject to usury law depend on the state. However, banks and credit card companies are business-savvy. Over 50% of these companies operate in Delaware, which is notoriously lax on the enforcement or regulation of usury law.
In other states, usury law doesn’t apply to contracts that a consumer willingly signs with the interest rate clearly stated. This is just one of the exemptions that make usury law confusing for the average person. Plus, many consumers unwittingly sign documents such as car loans without reading the contract, inadvertently entering into a rate that would normally fall under predatory lending practices.
As every state is different, you should contact your state’s Department of Finance to find out how usury law is enacted, its regulations, and its maximum interest rate.
If you’re in the market for a new car, get pre-approval so you know what a fair interest rate is. Once you have a pre-approval, you car-buying experience should go much more smoothly. Don’t forget to check out the Jerry app, which provides you dozens of car insurance quotes to protect your new vehicle.”
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Emily Maracle
Answered on Jul 30, 2021
Emily Maracle is a car insurance specialist living in New York. Originally from the Pacific Northwest, she has a degree in English Literature and a background in customer service. She enjoys cooking, gardening, and living sustainably. In the future, she can't wait to upgrade to a hybrid or electric car.
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