What is the criminal and civil usury rates in New Jersey?
The criminal usury limitations (N.J.S.A. 2C:21-19) apply to all loans subject to State of New Jersey law. The maximum permissible rate is 50% for corporations and 30% for non-corporate borrowers. The civil usury rates are governed by N.J.S.A. 31:1-1 et. Seq. (Title 31 – Interest and Usury). Those loans that fall into the category of N.J.S.A. 31:1-1(b) are determined the Department of Banking & Insurance according to the formula set forth therein. However, it should be noted that federal law preempts State usury law (see Depository Institution Deregulation and Monetary Control Act “DIDAMCA” – 12 U.S.C. 3803). As a result, financial institutions may make loans at any rate of interest up to the criminal usury limits, and other lenders, such as mortgage companies who are funded by federal programs, also are not subject to the New Jersey caps.
