However, these limitations do not apply in the event the loans exceed specified amounts – for instance, $2,500 or more for loans by licensed pawn broker, $5,000 for industrial loans, loans secured by first mortgages of $30,000 or more and loans secured by second mortgages of $20,000 or more. The statute exempting loans secured by real property also contain detailed provisions for maximum charges on such loans. Industrial loans are limited to 2% a month on loans up to $1,000 and 1% a month on the balance in excess of $1,000. Many of the usury exemption laws place a cap on the interest rate which may be charged under the statute providing the exemption.Īs an example, a licensed pawnbroker may not charge or receive compensation at a rate exceeding the sum of 3% per month on the unpaid balance and a charge of $3 a month if the 3% a month charge is less than $3. The fact that certain loans are exempt from the general usury law does not necessarily mean that the lender may charge whatever interest rate he or she wishes. (5) Loans made by specified institutions who are authorized to act as trustees in a fiduciary capacity. (4) A loan to a borrower who has total assets of at least $2 million. (3) An evidence of indebtedness of $300,000 or more issued under a Corporate Securities Law qualification. ![]() However, a loan made or arranged by licensed real estate agent is not exempt. ![]() The real estate broker need not be acting in his licensed capacity on behalf of a buyer or seller of real property he is exempt, even if he is acting only in the capacity of a principal in the transaction. (2) Loans made or arranged by a licensed real estate broker, which are secured in whole or in part by a lien on real property. These include banks, loan associations, credit unions, licensed pawnbrokers, personal property brokers and industrial loan companies. ![]() (1) Institutions in the business of lending money. However, there are numerous exemptions, some of which are specifically set forth in the Constitution, Article XV, section 1, and some of which the Constitution has authorized the Legislature to promulgate. It further provides that for any other non-personal, family or household purposes, the maximum rate which may be charged is 10% or 5% plus the Federal Reserve Bank of San Francisco’s rate on the 25 th day of the month preceding the date the contract was executed. Since 1979, the California Constitution, Article XV, section 1 has provided that the maximum rate which may be charged for money or goods which are for use primarily for personal, family or household purposes is 10%.
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