Usury

"The rate of interest upon the loan or forbearance of any money, goods, or things in action is 16% per year with few exceptions. NY Banking §14-a; NY General Obligations §5-501

Contracts that exceed the 5-501 rate are void. NY General Obligations §5-511

Interest paid above the permissible amount may be recovered in an action. NY General Obligations §5-513

Interest charged on loans or forbearances made to corporations for business or commercial purposes of $100,000 or more and secured in compliance with the uniform commercial code are exempt if on the date when the interest is charged or accrued, it is not greater than 8% over the prime rate. NY General Obligations §5-526

A person is guilty of criminal usury in the second degree when, not being authorized or permitted by law to do so, he knowingly charges, takes or receives any money or other property as interest over 25% per year. NY Penal Law §190.4 If such individual has already been convicted of usury, then they are guilty of usury in the first degree. NY Penal Law §190.42

Interest, for the purposes of New York State civil and criminal usury statutes, includes origination fees, points and other discounts and all other amounts paid or payable, directly or indirectly, by any person, to or for the account of the lender in consideration for making the loan or forbearance. 3 N.Y.C.R.R. §4.2. However, 3 N.Y.C.R.R. §4.3 excludes certain home mortgage loans."

It is a fundamental principle governing the law of usury that there can be no usury in the absence of a loan or forbearance of money. If the transaction is not a loan, there can be no usury, however unconscionable the contract may be. Jimenez v. Acheson, 840 N.Y.S.2d 648 (3d Dept. 2007). Thus, because a lease does not constitute a loan or forbearance of money, it does not fall within the definition of usury. Orix Credit All. v. Ne. Tech Excavating Corp., 634 N.Y.S.2d 841 (App. Div. 3d Dept. 1995). However, to determine whether a transaction constitutes a usurious loan, it must be considered in its totality and judged by its real character, rather than by the name, color, or form which the parties have seen fit to give it. LG Funding, LLC v. United Senior Properties of Olathe, LLC, 122 N.Y.S.3d 309 (App. Div. 2d Dept. 2020).