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Massachusetts Law About Interest Rates

Massachusetts Laws

MGL c.271, s.49 Criminal Usury

Federal Laws

12 USC 85 Rate of Interest on Loans, Discounts and Purchases.

PL 111-024 Credit Card Accountability Responsibility and Disclosure Act of 2009, or the Credit CARD Act of 2009.

Selected Case Law

Marquette National Bank v. First of Omaha Service Corp., 439 US 299 (1978). Decision allowed a national bank to charge interest on credit cards at the rate allowed by the state where it was located, regardless of legal limits in the customers' home states.

Other Web Sources

Credit Card Fees Curbed, Wall Street Journal, May 21, 2009.

Interest Rates Applicable to Consumer Installment Loans, Mass. Division of Banks Opinion 01-097.

Limitations on Interest Rates and Late Charges (for credit cards), Mass. Attorney General. "National banks may charge all their credit card customers under the interest and late charge laws of the bank's home state, regardless of where their customers live. For example, Massachusetts law generally limits credit card annual interest rates to 18% and late charge penalties to $10 per payment. However, Massachusetts credit card customers of national banks located in South Dakota, Delaware, or other states may pay considerably higher interest rates and late penalties, because those states allow the higher rates and penalties. Therefore, make sure you are aware of which state the lender is located in and that you understand the credit terms before you take on a new credit card."

President Obama signs Credit Card Accountability, Responsibility, and Disclosure Act, The White House, May 22, 2009. Summarizes key elements of the act.

Usury Laws Offer Diminishing Protection for Credit Card Holders, Bankrate.com. Very important information presented very clearly. "It's a popular misconception that state usury laws protect borrowers from high interest rates on their credit card debt." "There are 26 states that have no limit on what bank credit card issuers can charge for interest rates, according to the American Bankers Association. Issuers in 27 states have no limit on what they can charge for annual fees. California, Delaware, South Dakota and Tennessee are among the states offering the least protection. These four states currently have no maximums on the following: delinquency fees, cash advance fees, over-the-limit fees, transaction fees, stop payment fees, ATM fees, mandatory grace period."