Washington DC Usury Laws
Being a Federal District, the laws governing usurious interest rates in the District of Columbia are established by the Congress of the United States. In other words, unlike the fifty states, there is not more localized authority that establishes statutes and regulations pertaining to usurious interest rates and other usury-related provisions.
In the District of Columbia, the general usury limitation is rather “generous,” particularly when contrasted with the usury laws, regulations and restrictions that can be found in many of the other states in the country. Presently, Federal law generally governs all commercial and consumer financial transaction that take place and occur within the District of Columbia. While there is some local authority over some matters within the District, commercial and consumer financial transactions generally are beyond the scope of local control by the nature of the District of Columbia itself.
Pursuant to the applicable Federal law, the general usury limitation is any interest rate that is charged on a personal loan in excess of 24%. Keep in mind that these usury restrictions pertain only to personal, non-commercial, consumer loans.
There are two schools of prevailing thought when it comes to the current statutory scheme involving usury limitations associated with personal loans in the District of Columbia. First, there are those that argue that these “liberal” limitations on interest rates that can be charged in regard to personal loans are necessary to allow people who otherwise might not be able to obtain a loan the ability to access personal financing. Indeed, some sectors within the District of Columbia are some of the most economically disadvantaged areas in all of the United States.
On the other hand, there are those that argue that the 24% cap on permissible interest rates for personal loans by definition is predatory. These individuals maintain that certain unscrupulous lenders are being permitted to prey on particularly vulnerable individuals by offering personal financing at a rate of interest set at 25% per annum.
Of course, you need to bear in mind that the statutes pertaining to usury laws in the District of Columbia are subject to change. Indeed, some have argued that the entire statutory scheme established Congress within the District of Columbia particularly is far from static. Therefore, while we strive to keep the information contained in this article up to date, the underlying laws can change.
Finally, we are not attempting to provide you with legal advice. If you’ve any questions pertaining to the usury laws in the District of Columbia, seek professional legal assistance from an experienced and qualified lawyer.