Final answer:
Charging a rate of interest in excess of that permitted by state law is considered usury, and it is illegal in many states. Usury laws limit interest rates to protect consumers from predatory lending practices.
Step-by-step explanation:
If a lender charges a rate of interest in excess of that permitted by state law, they may be guilty of usury. Usury refers to the practice of charging excessively high interest rates on loans. In many states, usury is considered illegal and lenders who engage in usurious practices can face penalties.
When a usury law limits interest rates to no more than 35%, the likely impact would be a decrease in the amount of loans made and a decrease in interest rates paid. This is because lenders would be required to lower their interest rates to comply with the legal limit, and borrowers may also be less inclined to take out loans if the interest rates are still considered high. Overall, the goal of usury laws is to protect consumers from predatory lending practices.
A lender charging interest rates above the legal maximum set by state law may be guilty of usury. Usury laws cap interest rates to protect consumers; a high usury limit like 35% often has no impact if market rates are lower, only affecting loans if market rates exceed the cap.
A lender that charges a rate of interest in excess of that permitted by state law may be guilty of usury. Usury laws are designed to protect consumers from excessively high interest rates by setting a legal maximum that lenders cannot exceed. When a lender charges more than the interest allowed under these laws, it infringes upon the usury statutes.
Regarding the impact of usury laws on the banking and lending industry, if a usury law limits interest rates to no more than 35%, it sets a ceiling on how much lenders can charge for interest on a loan. This could affect both the amount of loans made and the interest rates paid. A high usury limit, such as 35%, may not have a significant impact on the market if it is well above the normal market rates. However, if market rates are below this limit, the usury law would be considered non-binding and wouldn't have a practical impact unless market rates rise above this ceiling.