Massachusetts law about interest rates

A compilation of laws, regulations, cases, and web sources on interest rates law.

Massachusetts laws

MGL c.271, s.49 Criminal Usury

MGL c.184, s.17B-1/2 Variable or adjustable subprime loans for first-time home loan borrowers

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

Federal regulations

12 CFR 7.4001 Charging interest by national banks at rates permitted competing institutions; charging interest to corporate borrowers

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.

Web sources

  • Credit Card Rules and the CARD Act, Findlaw.
    A variety of protections for credit card holders and applicants.
  • Interest Rates Applicable to Consumer Installment Loans, Mass. Division of Banks Opinion 01-097
  • Usury Laws and Limits on Credit Card Interest Rates, Findlaw.com.
    Explains why credit card interest rates can be very high, despite state laws that limit interest rates.
  • Limitations on Interest Rates and Late Charges (for credit cards), Mass. Attorney General (see additional resources below)
    "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."

Additional Resources

Computation of service or interest charge on bank credit cards as usurious under National Bank Act (12 U.S.C.A. § 85), 38 A.L.R. Fed. 805.

Mass. Practice v.35A, Chapter 15 Consumer Credit Loans

Last update: July 14, 2017

Feedback

Tell us what you think