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Consumer Credit Regulation: 1.6.3 Security Taken in Credit Transactions

The law commonly distinguishes between secured and unsecured credit and among secured credit by the type of collateral. Collateral may be either the debtor’s real or personal property. The security interest, given by contract, grants the creditor the right to seize the collateral to satisfy the remaining debt if the debtor defaults. For example, credit sales contracts usually give the seller and its assignees a security interest in the goods purchased.

Consumer Credit Regulation: Introduction to Summary of State Lending Laws

This appendix compiles citations to state statutes that regulate non-mortgage consumer credit. A citation appearing in parentheses represents the specific section of the law that addresses caps on interest, fees, or finance charges, but different caps may apply to different types of lending arrangements within the same state.

Consumer Credit Regulation: Alabama

Legal Interest Rate: Ala. Code § 8-8-1

Contract: Ala. Code § 8-8-1 or Ala. Code § 8-8-14 or Ala. Code § 8-8-5

Judgment: Ala. Code § 8-8-10

Small Loans: Ala. Code §§ 5-18-1 to 5-18-23 (§ 5-18-15), Small Loan Act

Installment Loans & Credit: Ala. Code §§ 5-19-1 to 5-19-33 (§ 5-19-3), Consumer Finance

Insurance Premium Finance: Ala. Code §§ 27-40-1 to 27-40-18 (§ 27-40-9)

Consumer Credit Regulation: Alaska

Legal Interest Rate: Alaska Stat. § 45.45.010

Contract: Alaska Stat. § 45.45.010

Judgment: Alaska Stat. § 09.30.070

Small Loans: Alaska Stat. §§ 06.20.010 to 06.20.920

Installment Loan Law: Alaska Stat. § 45.45.080

Sales Finance Act: Alaska Stat. §§ 45.10.010 to 45.10.230 (§ 45.10.120), Retail Installment Sales Act

Insurance Premium Finance: Alaska Stat. §§ 06.40.010 to 06.40.190 (§ 06.40.120), Premium Financing Act

Consumer Credit Regulation: Arizona

Legal Interest Rate: Ariz. Rev. Stat. Ann. § 44-1201

Contract: Ariz. Rev. Stat. Ann. § 44-1201

Judgment: Ariz. Rev. Stat. Ann. § 44-1201, except on a condemnation, then interest, including interest payable pursuant to § 12-1123 (sub. B) is payable at rate prescribed by § 9-409 (if instituted by city or town), § 11-269.04 (if instituted by a county), § 28-7101 (if instituted by the department of transportation) and § 48-3628 (if instituted by county flood control district, power district, or agricultural improvement district)

Consumer Credit Regulation: Arkansas

Legal Interest Rate: Ark. Const. amend. 89, § 2 (for federally insured depository institutions), § 3 (for all others)

Contract: Ark. Code Ann. §§ 4-57-101 to 4-57-105

Judgment: Ark. Code Ann. § 16-65-114

Consumer Loans & Credit Sales: Ark. Code Ann. §§ 4-57-101 to 4-57-105

Life Insurance and Annuity Policy Loans: Ark. Code Ann. § 23-81-109

Industrial Loans: Ark Code Ann. §§ 23-36-101 to 23-36-117

Consumer Credit Regulation: California

Legal Interest Rate: Cal. Const. art. XV, § 1; Cal. Civ. Code § 1916-1 (West)

Contract: Cal. Const. art. XV, § 1; Usury Law of 1919: Cal. Uncodified Initiative Measures and Statutes 1919-1 Ann. § 2 (Deering); Cal. Civ. Code § 1916-1 (West)

Usury Law of 1919: Cal. Gen. Laws Ann. act 3757, § 2 (Deering) (uncodified); Cal. Civ. Code §§ 1916-1 to 1916-5 (West)

Judgment: Cal. Const. art. XV, § 1; Cal. Civ. Proc. Code § 685.010 (West)

Consumer Credit Regulation: Colorado

Legal Interest Rate: Colo. Rev. Stat. § 5-12-101

Contract: Colo. Rev. Stat. § 5-12-103

Judgment: Colo. Rev. Stat. § 5-12-102

Criminal Usury Cap: Colo. Rev. Stat. §§ 18-15-101, 18-15-104

Personal Injury Judgments: Colo. Rev. Stat. § 13-21-101

Appealed Judgments: Colo. Rev. Stat. § 5-12-106

Consumer Supervised Loans—Licensed Lenders: Colo. Rev. Stat. § 5-2-201(2). Colo. UCCC also includes revolving loan provision

Consumer Credit Regulation: Connecticut

Legal Interest Rate: Conn. Gen. Stat. § 37-1

Contract: Conn. Gen. Stat. § 37-4

Judgment: Conn. Gen. Stat. §§ 37-3a and 37-3b

Criminal Usury Cap: Conn. Gen. Stat. §§ 37-4, 37-7

Small Loans: Conn. Gen. Stat. §§ 36a-555 to 573, Small Loan Law

Auto Finance: Conn. Gen. Stat. §§ 36a-770 to 36a-788 (§ 36a-772) (retail installment sales financing)

Retail Installment Sales (Other Goods): Conn. Gen. Stat. §§ 36a-770 to 36a-788 (§ 36a-772) (retail installment sales financing)

Consumer Credit Regulation: Delaware

Legal Interest Rate: Del. Code Ann. tit. 6, § 2301

Contract: Del. Code Ann. tit. 6, § 2301

Judgment: Del. Code Ann. tit. 6, § 2301

Auto Finance: Del. Code Ann. tit. 5, §§ 2901-2914 (§ 2908), Motor Vehicle Sales Finance Act

Other Goods: Del. Code Ann. tit. 6, §§ 4301–4351 (§ 4315), Retail Installment Sales Law

Insurance Premium Finance: Del. Code Ann. tit. 18, §§ 4801-4812 (§ 4807)

Revolving Sales Credit: Del. Code Ann. tit. 5, §§ 2214–2226 (licensed lenders)

Consumer Credit Regulation: District of Columbia

Legal Interest Rate: D.C. Code § 28-3302(a)

Contract: D.C. Code § 28-3301

Judgment: D.C. Code §§ 28-3302(b), (c), 15-108 (liquidated debts), 15-109 (other contracts), 15-110 (foreign contracts)

Consumer Credit Sales and Direct Installment Loans: D.C. Code §§ 28-3801 to 28-3816

Small Loans: D.C. Code §§ 26-901 to 26-912 (§ 26-905), 28-3301

Auto Finance: D.C. Code §§ 50-601 to 50-610 (§ 50-602); D.C. Code §§ 28-3601 to 28-3603 (§ 28-3602) (direct motor vehicle installment loans)

Consumer Credit Regulation: Florida

Legal Interest Rate: Fla. Stat. § 687.01

Contract: Fla. Stat. § 687.01, 687.02

Judgment: Fla. Stat. § 55.03

Criminal Usury Cap: Fla. Stat. §§ 687.03, 687.031, 687.071, 687.146

Small Loans: Fla. Stat. §§ 516.001 to 516.36 (§§ 516.031 and 516.035), Consumer Finance Act

Insurance Premium Finance: Fla. Stat. §§ 627.826 to 627.849 (§ 627.840); Fla. Stat. §§ 627.901 to 627.903

Auto Finance: Fla. Stat. §§ 520.01 to 520.14 (§ 520.08), Motor Vehicle Retail Sales Finance Act

Consumer Credit Regulation: Georgia

Legal Interest Rate: Ga. Code Ann. § 7-4-2

Contract: Ga. Code Ann. § 7-4-2

Judgment: Ga. Code Ann. § 7-4-12

Criminal Usury Cap: Ga. Code Ann. § 7-4-18

Small Loans: Ga. Code Ann. §§ 7-3-1 to 7-3-29 (§ 7-3-14), Installment Loan Act

Auto Finance: Ga. Code Ann. §§ 10-1-30 to 10-1-42 (§ 10-1-33), Motor Vehicle Sales Finance Act; Ga. Code Ann. § 7-4-3 (retail installment contracts and mobile homes and motor vehicles)

Consumer Credit Regulation: Hawaii

Legal Interest Rate: Haw. Rev. Stat. § 478-2

Contract: Haw. Rev. Stat. § 478-4

Judgment: Haw. Rev. Stat. § 478-3

Criminal Usury Cap: Haw. Rev. Stat. § 478-6

Consumer Loans in General: Haw. Rev. Stat. §§ 412:9-100 to 412:9-501 (§ 412:9-302) (financial services loan companies)

Consumer Sales Credit: Haw. Rev. Stat. §§ 476-1 to 476-32 (§ 476-28), Credit Sales Act

Open-End Consumer Loans: Haw. Rev. Stat. §§ 412:9-302, 412:9-305 (financial services loan companies)

Consumer Credit Regulation: Idaho

Legal Interest Rate: Idaho Code § 28-22-104(1)

Contract: Idaho Code § 28-42-201

Judgment: Idaho Code § 28-22-104(2)

Consumer Sales Credit: Idaho Code §§ 28-41-101 to 28-49-107 (§ 28-42-201), Idaho UCCC

Life Insurance and Annuity Policy Loans: Idaho Code §§ 41-1901 to 41-1941 (§ 41-1909)

Auto Title Loans: Idaho Code §§ 28-46-501 to 28-46-509, Title Loan Act

Payday Loans: Idaho Code §§ 28-46-401 to 28-46-415 (§ 28-46-412, lender can charge any fee per $100 that borrower agrees to pay)

Consumer Credit Regulation: Illinois

Legal Interest Rate: 815 Ill. Comp. Stat. 205/1

Contract: 815 Ill. Comp. Stat. 205/4

Judgment: 735 Ill. Comp. Stat. 5/2-1303

Criminal Usury Cap: 720 Ill. Comp. Stat. 5/17-59

Small Loans: 815 Ill. Comp. Stat. 205/4a, Interest Act; 205 Ill. Comp. Stat. 670/1 to 670/27 (670/15), Consumer Installment Loan Act

Revolving Loans: 815 Ill. Comp. Stat. 205/4.2, Interest Act; 205 Ill. Comp. Stat. 675/1 to 675/11 (675/3, 675/4, 675/6), Illinois Financial Services Development Act

Consumer Credit Regulation: Indiana

Legal Interest Rate: Ind. Code § 24-4.6-1-102

Contract: See rates specified in consumer sections of UCCC. See Ind. Code §§ 24-4.5-3-601 to 24-4.5-3-605.

Judgment: Ind. Code § 24-4.6-1-101

Criminal Usury Cap: Ind. Code §§ 24-4.5-5-107, 35-45-7-2

Consumer Supervised Loans—Licensed Lenders: Ind. Code § 24-4.5-3-508, Ind. UCCC

Consumer Loans In General: Ind. Code § 24-4.5-3-201, Ind. UCCC

Revolving Loan Accounts: Ind. Code § 24-4.5-3-201(5), Ind. UCCC

Consumer Credit Regulation: Iowa

Legal Interest Rate: Iowa Code § 535.2

Contract: Iowa Code § 535.2

Judgment: Iowa Code § 535.3

Small Loans: Iowa Code §§ 536.1 to 536.30 (§ 536.13), Iowa Regulated Loan Act

Industrial Loans: Iowa Code §§ 536A.1 to 536A.32 (§ 536A.23), Iowa Industrial Loan Law, Iowa Code §§ 537.1101 to 537.8101, Iowa UCCC

Consumer Credit Sales: Iowa Code §§ 537.2101 to 537.2601 (§ 537.2201), Iowa UCCC

Revolving Sales Accounts: Iowa Code §§ 537.2101 to 537.2601 (§ 537.2202), Iowa UCCC

Consumer Credit Regulation: Kansas

Legal Interest Rate: Kan. Stat. Ann. § 16-201

Contract: Kan. Stat. Ann. § 16-207

Judgment: Kan. Stat. Ann. § 16-204

Consumer Loans: Kan. Stat. Ann. §§ 16a-2-101 to 16a-2-510 (§ 16a-2-401, finance charges), (§ 16a-2-301, consumer loan licensees), Kan. UCCC

Consumer Credit Sales: Kan. Stat. Ann. §§ 16a-2-101 to 16a-2-510 (§ 16a-2-201), Kan. UCCC

Revolving Sales Accounts: Kan. Stat. Ann. §§ 16a-2-101 to 16a-2-510 (§ 16a-2-202), Kan. UCCC

Consumer Credit Regulation: Kentucky

Legal Interest Rate: Ky. Rev. Stat. Ann. § 360.010 (West)

Contract: Ky. Rev. Stat. Ann. § 360.010 (West)

Judgment: Ky. Rev. Stat. Ann. § 360.040 (West)

Small Loans: Ky. Rev. Stat. Ann. §§ 286.4-410 to 286.4-991 (§ 286.4-530) (West)

Industrial Loans: Ky. Rev. Stat. Ann. §§ 286.7-410 to 286.7-990 (§ 286.7-460) (West)

Bank Installment Loans: Ky. Rev. Stat. Ann. § 286.3-215 (West)

Credit Discrimination: 15(a)(3) Other privileges.

1. A creditor may assert the privilege established under this section in addition to asserting any other privilege that may apply, such as the attorney-client privilege or the work-product privilege. Self-testing data may be privileged under this section whether or not the creditor’s assertion of another privilege is upheld.

Credit Discrimination: 15(b)(3) Types of information not privileged.

Paragraph 15(b)(3)(i).

1. The information listed in this paragraph is not privileged and may be used to determine whether the prerequisites for the privilege have been satisfied. Accordingly, a creditor might be asked to identify the self-testing method, for example, whether preapplication testers were used or data were compiled by surveying loan applicants. Information about the scope of the self-test (such as the types of credit transactions examined, or the geographic area covered by the test) also is not privileged.

Credit Discrimination: 1002.15(c)-1

1. The rule only addresses the corrective actions required for a creditor to take advantage of the privilege in this section. A creditor may be required to take other actions or provide additional relief if a formal finding of discrimination is made.

Credit Discrimination: 15(c)(1) General requirement.

1. Appropriate corrective action is required even though no violation has been formally adjudicated or admitted by the creditor. In determining whether it is more likely than not that a violation occurred, a creditor must treat testers as if they are actual applicants for credit. A creditor may not refuse to take appropriate corrective action under this section because the self-test used fictitious loan applicants.