Interest & Usury

"It shall be usury and unlawful for any person, or for any agent, officer, or other representative of any person, to reserve, charge, or take for any loan, advance of money, line of credit, forbearance to enforce the collection of any sum of money, or other obligation a rate of interest greater than the equivalent of 18 percent per annum simple interest, either directly or indirectly, by way of commission for advances, discounts, or exchange, or by any contract, contrivance, or device whatever whereby the debtor is required or obligated to pay a sum of money greater than the actual principal sum received, together with interest at the rate of the equivalent of 18 percent per annum simple interest. This applies to loans up to $500,000. (West's F.S.A. § 687.03) For loans more than $500,000 in amount or value, the interest rate cannot exceed 25%. In addition, a lender, which makes or negotiates a usurious loan, may be guilty of loan-sharking, which provides for a variety of criminal penalties depending upon the amounts of interest charged and or taken. (West's F.S.A. § 687.071)

In all cases where interest shall accrue without a special contract for the rate thereof, the rate is the rate provided for by the state's the Chief Financial Officer. (West's F.S.A. § 687.01) On December 1, March 1, June 1, and September 1 of each year, the Chief Financial Officer shall set the rate of interest that shall be payable on judgments or decrees for the calendar quarter beginning January 1 and adjust the rate quarterly on April 1, July 1, and October 1 by averaging the discount rate of the Federal Reserve Bank of New York for the preceding 12 months, then adding 400 basis points to the averaged federal discount rate. (West's F.S.A. § 55.03) The current interst rate set in October 2024 is 9.50%.

Any person, or any agent, officer, or other representative of any person, willfully violating theses provisions shall forfeit the entire interest so charged, or contracted to be charged or reserved, and only the actual principal sum of such usurious contract can be enforced in any court in this state, either at law or in equity; and when said usurious interest is taken or reserved, or has been paid, then and in that event the person who has taken or reserved, or has been paid, either directly or indirectly, such usurious interest shall forfeit to the party from whom such usurious interest has been reserved, taken, or exacted in any way double the amount of interest so reserved, taken, or exacted. (West's F.S.A. § 687.04) Attorney fees may be collected in cases brought before the court found to be reasonable and just for legal services rendered in enforcing nonusurious contracts, either at law or in equity. (West's F.S.A. § 687.06)"

" Feemster v. Schurkman, 291 So.2d 622 (Fla. 3d DCA 1974) (holding where loan is usurious, borrower is entitled to recover all interest received by the lender and only actual principal sum could be enforced at law or in equity);

Jersey Palm-Gross, Inc. v. Paper, 639 So.2d 664 (Fla. 4th 1994) (holding penalties for civil usury include forfeiture of all interest charged)"

It's important to ensure the interest rates charged within any lease or finance agreement are within the statutory limits, or that the agreement contains some form of savings clause that provides if the interest set forth is above the legal limit, the interest amount enforced on the agreement will be reduced to the maximum amount allowed by law.