Florida Courts Should Apply New York's Adar Bays Analysis To Determine Usury

Usurious loans have been the scourge of finance since early times. Despite being condemned as wrong and sinful for over 4000 years, usurious interest rates always seem to find their way into modern financial transactions. Less than a century ago, the Florida Supreme Court stated that the "purpose of the statute prohibiting usury is to bind the power of creditors over necessitous debtors and prevent them from extorting harsh and undue terms in the making of loans." Chandler v. Kendrick, 146 So. 551, 552 (Fla. 1933). Unlike New York's well developed body of usury laws, today, Florida courts provide little guidance as to what constitutes interest on a loan. Nevertheless, Florida, like many other states, has imposed a cap on the amount of interest a lender can charge.¹ Personally, I don't believe interest changes its shape just because you cross a state's border.