Home > West's Encyclopedia of American Law > Usury

The crime of charging higher interest on a loan than the law permits.

State laws set the maximum amount of interest that can be charged for a loan of money. A lender that charges higher than the maximum amount of interest is guilty of the crime of usury. In addition, courts may modify contracts that contain usurious rates of interest by reducing the interest to the legal maximum.

The charging of excessive interest in exchange for a monetary loan has been considered reprehensible from the earliest times. Chinese and Hindu law prohibited it, while the Athenians scorned persons who charged more than a moderate rate of interest for a loan. The Romans at one time abolished the practice of charging interest. Although they later revived it, the rates were strictly regulated.

During the Middle Ages in western Europe, the Catholic Church censured usurers, and when they died, the Crown confiscated their lands and property. In...