How is it bridge loan companies working with ind film makers are able to receive such a high interest rate? Isn't Usury an issue
Does the issue of usury come into play? Or is it avoided in California via charging a "fee" and a smaller interset rate on the funds. Or am I completely off base.
Attorney answers (2)
Pamela Koslyn
Reputation Level 20
Answered over 2 years ago.
Business Attorney in Los Angeles, CA.
Generally, CA's usury laws apply to people, but not to most lending institutions. Those usury laws don't apply to loans made by CA licensed financial institutions and lenders, including banks, savings and loans, credit unions, credit cards, businesses licensed to make consumer loans, pawnbrokers, time payment contracts where the seller finances the purchase of goods by extending the payment over a period of time, etc... The usury laws also don't apply to loans made by a CA licensed real estate broker when the loan is secured (in whole or in part) by real estate.
Some of the federal lending laws are changing as a result of financial law reform, but there's still plenty of campaign donations flowing to legislators from banks and credit card companies, so don't expect their advantageous legal treatment to end anytime soon.
Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.
1 person marked this answer as good
Steven Alan Fink
Reputation Level 20
Answered over 2 years ago.
Contracts / Agreements Lawyer in Newport Beach, CA.
There are many exceptions to usury, particularly on commercial loans, loans arranged by attorneys, and loans arranged by brokers. In addition, if the loan is for more than $300,000 or to a company with $2 million in assets, it is exempt.
The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change.
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