How To Prove A Florida Usury Defense
In Florida, a defense of Usury is defined as:
Usury is the charging of an illegal rate of interest as a condition to lending money.
It simply means:
Charging an interest rate that is illegally high.
There are 4 elements of the defense:
- Element 1. There was a loan, express or implied. A usury defense involves showing that a loan existed, either clearly stated or suggested, which is crucial in arguing against excessive interest rates charged on that loan.
Facts that might support this element look like:
* The defendant provided the plaintiff with a sum of money, which the plaintiff agreed to repay at a later date.
* The parties engaged in discussions that indicated a mutual understanding of a loan arrangement, including terms of repayment.
* The plaintiff made regular payments to the defendant, demonstrating an acknowledgment of the loan’s existence.
* The defendant documented the transaction in writing, outlining the amount lent and the repayment schedule.
* The plaintiff’s financial records reflect a distinct entry for the loan received from the defendant, indicating a formal borrowing relationship. - Element 2. There was an understanding between the parties that the money lent shall be repaid. The two parties agreed that the borrowed money would be paid back, which is an important part of a legal defense against claims of usury, or charging excessively high interest rates.
Facts that might support this element look like:
* The borrower and lender discussed the repayment terms in detail before the loan was finalized.
* Both parties signed a written agreement that explicitly stated the repayment schedule and amount.
* The lender provided documentation showing that the borrower made partial payments according to the agreed-upon terms.
* The borrower acknowledged the debt in multiple communications, indicating an understanding of the repayment obligation.
* The lender and borrower had a history of previous loans that were repaid as agreed, establishing a pattern of understanding. - Element 3. For such a loan, there was a greater rate of interest than is allowed by law to be paid or agreed to be paid. A usury defense argues that a loan has an interest rate higher than what the law permits, meaning the lender charged too much for borrowing money, which is illegal and can make the loan unenforceable in court.
Facts that might support this element look like:
* The loan agreement specified an interest rate of 25%, which exceeds the maximum allowable rate of 15% set by state law.
* The borrower was not informed of the legal interest rate limits prior to signing the loan agreement.
* The lender charged additional fees disguised as “service charges,” effectively increasing the overall interest rate beyond legal limits.
* The loan documents included a clause that allowed for compounding interest, resulting in a total interest rate that surpassed statutory limits.
* The lender has a history of charging usurious rates on similar loans, indicating a pattern of illegal lending practices. - Element 4. There was a corrupt intent to take more than the legal rate for the use of the money loaned. Corrupt intent in a usury defense means that the lender knowingly tried to charge more interest than allowed by law, aiming to unfairly profit from the borrowed money.
Facts that might support this element look like:
* The lender knowingly charged an interest rate significantly above the legal limit, despite being aware of the applicable usury laws.
* The lender provided misleading information about the terms of the loan, intending to obscure the true cost of borrowing.
* The lender had a history of charging excessive interest rates on loans, indicating a pattern of corrupt intent.
* The loan agreement included hidden fees that effectively increased the interest rate beyond the legal limit.
* The lender pressured the borrower into accepting unfavorable terms, demonstrating a clear intent to exploit the borrower’s financial situation.
(See Rebman v. Flagship First National Bank of Highlands County, 472 So.2d 1360, 1363 (Fla. 2d DCA 1985). Rollins v. Odom, 519 So. 2d 652 – Fla: Dist. Court of Appeals, 1st Dist. 1988. Dixon v. Sharp, 276 So.2d 817, 819 (Fla. 1973). Stewart v. Nangle, 103 So.2d 649 (Fla App. 1958). Clark v. Grey, 101 Fla. 1058, 132 So. 832 (1931).)
If you’re in court without a lawyer and plan to assert a Defense of Usury, having a Personal Practice of Law at Courtroom5 is essential. You’ll need to make informed decisions about what to file at each phase of your case and prepare legal documents that are supported by thorough legal research and a strong analysis of the facts. Equip yourself with the tools and knowledge necessary to effectively present your Defense of Usury.
U.S. Civil Cases Only