See H. H. L. Bellot, Legal Principles and Practice of Bargains with (1906) ; G. Stone and D. Meston, Law Relating to (3rd edit. 1936). (H. H. L. B.) United States.—In the United States each State may pre scribe its own maximum rate of interest, although a few do not fix any. National banks conform to the legal interest rate of the State in which they are located, and if in a State where no legal rate is established they may not charge more than 7%. A charge of interest above the legal rate constitutes usury, for which offence various penalties are prescribed by the laws of different States. In Maryland, New York and New Jersey corporations, when borrowing money at rates in excess of the legal rate, are precluded from setting up the defence of usury, and hence are legally bound by any contract they may make to pay interest at any rate. The laws of the State of New York permit demand loans of $5,000 or more, for which stock or bonds or other ne gotiable instruments have been pledged as security, to be made at any interest rate. A time loan, however, with stock exchange collateral, at a rate higher than 6%, is usurious. In many States where a regular legal rate is fixed there is permitted a higher rate by special contract. Lenders often evade the legal rate of interest law by charging the borrower a "commission" in addition to the interest.
The legal rates of the various States and Alaska and some of the particular provisions are as follows : Alabama-8%; by contract 8%; lender forfeits interest as penalty for usury. Alaska-8 % ; by contract 12%. Arizona 6%; by contract io% ; penalty as in Alabama. Arkansas-6 io%; by contract 6–io%; lender forfeits principal and interest as penalty for usury. California-7%; by contract 12%. Colo rado-8%; by contract 12%. Connecticut-6%; by contract 12%; penalty for usury of imprisonment or fine or both and no action may be brought for recovery of either principal or interest. Delaware-6% ; by contract 6% ; but parties may agree in writing on any rate where the loan exceeds $5,000 on accepted collateral security and is payable on demand. No penalty for usury, but action at law may be had for recovery of interest over 6%. District of Columbia-6% ; by contract 8% ; penalty as in Ala bama. Florida-8%; by contract io%; penalty as in Alabama. Georgia-7% ; by contract 8%; penalty as in Alabama. Idaho 7%; by contract io%; penalty as in Alabama. Illinois-5%; by contract 7%; penalty as in Alabama. Indiana-6% ; by contract 8%; lender forfeits excess interest as penalty for usury. Iowa
6%; by contract 8%. Kansas-6%; by contract io%. Ken tucky-6% ; by contract 6%. Louisiana-5%; by contract 8%. Maine-6% ; by contract any rate. Maryland-6% ; by contract 6% ; but 32% per month may be charged on petty loans of $3oo or less made by specially licensed loan agencies. Corporations are precluded from setting up usury as a defence. Massachusetts —6%; by contract any rate. Michigan-5%; by contract 7%. Minnesota-6%; by contract 8%. Mississippi-6%; by con tract 8%. Missouri-6%; by contract 8%. Montana-8%; by contract io%. Nebraska-7%; by contract io%. Nevada-7%; by contract 12%. New Hampshire-6% ; by contract any rate; lender forfeits three times the excess interest as penalty for usury. New Jersey-6%; by contract 6%; lender forfeits all interest as penalty for usury. Corporations are precluded from setting up usury as a defence. New Mexico-6%; by contract io% if there be collateral security for the loan, 12% if there be no collateral security. Lender forfeits double the interest as penalty for usury; usury is also a misdemeanour punishable by fine. New York-6% ; by contract 6% ; demand loans of $5,000 or more secured by negotiable collateral, any rate; corporations are precluded from setting up usury as a defence. Contract is void as to both principal and interest as penalty for usury; usury is also a misdemeanour. North Carolina-6%; by contract 6%; penalty as in Alabama. North Dakota-6% ; by contract io%; penalty as in Alabama. Ohio-6% ; by contract 8% ; penalty as in Indiana. Oklahoma-6% ; by contract To%; lender forfeits double the interest as penalty for usury. Oregon-6% ; by contract io%; lender forfeits both principal and interest as penalty for usury. Pennsylvania-6% ; by contract 6% ; special pro visions for licensed money-lenders; penalty as in Indiana. Rhode Island-6%; by contract 3o%. South Carolina-7%; by con tract 8%. South Dakota-7%; by contract 12%. Tennessee 6%; by contract io%. Texas-6%; by contract io%. Utah 8%; by contract 12%. Vermont-6%. Virginia-6%; by con tract 6% ; bankers, brokers and moneyed corporations may loan money or discount at not exceeding of i% for 3o days, minimum fee 5o cents. Exceptions in favour of insurance companies loaning money on insurance policies. Washington-6% ; by contract 12%. West Virginia-6%; by contract Wisconsin-6%; by contract io%. Wyoming-7%; by contract io%; lender forfeits interest as penalty for usury. (J. H. B.) See F. W. Ryan, Usury and Usury Law (Boston, 1924).