Usury Caps on Commercial Loans in Massachusetts, New York, New Jersey, and Rhode Island

Connecticut General Assembly

OFFICE OF LEGISLATIVE RESEARCH

D’Ann Mazzocca, Ph.D. (860) 240-8400 Room 5300 FAX (860) 240-8881 Legislative Office Building [email protected] Hartford, CT 06106-1591

September 18, 1998 98-R-1122

FROM: Helga Niesz, Principal Analyst

RE: Usury Caps on Commercial Loans in Massachusetts, New York, New Jersey, and Rhode Island

You asked whether there are any limits on the interest rates that nonlicensed lenders who are not banks can charge on business (commercial) loans to individuals in Massachusetts, New York, New Jersey, and Rhode Island.

The Office of Legislative Research is not authorized to give legal opinions and the following should not be considered one.

Massachusetts has no limit for such loans except a 20% criminal usury law, which lenders can exceed if they notify the attorney general. New York’s maximum is 16% on loans up to $250,000. New Jersey’s is 16% for loans under $50,000 and 30% for loans over $50,000. Rhode Island’s limit is 21%.

Our source is the Commerce Clearing House Interest-Usury Chart for the 50 states, supplemented by phone calls to the state banking departments. We have concentrated specifically on limits for business loans to individuals made by nonlicensed lenders. Other states, like Connecticut, often have complex interest rate laws that vary depending on the specific types of loans, lenders or types of borrowers.

HN:tjo