Usury laws vary significantly across state jurisdictions. Over 20 states enforce strict 36% APR caps to protect consumers from runaway compound debt.
1. Key Consumer Protection Statutes
- Military Lending Act (MLA): Federal law capping APR at 36% for active-duty servicemembers and their dependents.
- State 36% Rate Caps: Enacted in states like California (AB 539), Illinois (PLPA), and New York to prevent predatory consumer lending.
- State NMLS Licensing: Legitimate direct lenders maintain active registration with the Nationwide Multistate Licensing System (NMLS).