Ninth Circuit Declines To Aggregate Loans For Usury Exemption

California limits the amount of interest that may be charged on loans and forbearances. While that is the general rule, there are numerous statutory exemptions. One of those exemptions can be found in California Corporations Code § 25118(b) which provides that the "purchasers or holders" of "[a]ny one or more evidences of indebtedness . . . shall be exempt from the usury provisions of the California Constitution if . . . [t]he evidences of indebtedness aggregate at the time of issuance at least three hundred thousand dollars ($300,000) in original face amount . . . ". [Note that the statute includes several other requirements not discussed in this post.]

In Social Life Network, Inc. v. LGH Investments, LLC, 2023 WL 3641791 (9th Cir. May 25, 2023), U.S. District Court Judge M. James Lorenz concluded that the lender was exempt under Section 25118(b) because the borrower had received several loans from different lenders that, in aggregate," exceeded $300,000 by the