Licensed Lender Exception to Usury Laws in Florida

Florida Statute 687.12 provides a usury exception to any loans, advances of money, lines of credit, forbearances to enforce collection of debts, or other kinds of obligations that exceed the amount in value of $500,000.

What is Usury?

Usury occurs when an individual or corporation lends money at an interest rate that is considered to be unreasonably high or at a rate that is higher than what is permitted by law.

What is the Maximum Legal Rate of Interest?

Usury rates vary state by state, and in the state of Florida, any interest rate that is greater than 18 percent per annum is considered usurious.

What Type of Loans Does Usury Apply to?

Florida law provides that any loan, advance of money, line of credit, forbearance to enforce the collection of any sum of money, or other obligations are subject to usury laws. The exception, however, lies within any loans, advances of money, lines of credit, forbearances to enforce collection of debts, or other kinds of obligations that exceed the amount in value of $500,000. Any obligation amount that exceeds the amount of $500,000 shall not be subject to usury laws, thus, a lender may legally charge a higher interest rate, up to 25 percent per annum interest.

The other exception applies to national banks. Usury laws have no effect on most banks and credit card companies, especially national banks that are headquartered in states that have no defined usury laws. The National Bank Act (“NBA”) was enacted over 150 years ago, created to facilitate a national banking system and protect national banks from intrusive regulation by the States. The NBA authorizes national banks to charge interest at the greater of the rate allowed by laws of the bank’s home state or a rate based on the Federal Reserve’s discount rate.

Fourth District in Florida Determines Licensed Lenders Not Subject to Usury Statute

Florida Statute 687.12. mandates the parity exception among licensed lenders or creditors. Any lender or creditor licensed or chartered under the laws of the United States and authorized to conduct a lending business is authorized to charge interest on loans or extensions of credit to any person, or to any firm or corporation, at the maximum rate of interest permitted by law to be charged on similar loans or extensions of credit made by any lender or creditor in this state. In Nolden v. Summit Financial Corp., the Court determined that the lender at question was a “motor vehicle retail installment seller,” which is “a person engaged in the business of selling motor vehicles to retail buyers in retail installment transactions,” and within the meaning of 687.12. Thus, the exception applied excluding the lender from following Florida’s usury law.


If you may be subject to paying high interest on loans, and would like to learn more about usurious rates and if they apply to your loan, do not hesitate to contact one of our experienced attorneys at EPGD Business Law. EPGD Business Law is located in beautiful Coral Gables, West Palm Beach and historic Washington D.C. Call us at (786) 837-6787, or contact us through the website to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*

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