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usury

Usury is interest that a lender charges a borrower at a rate above the lawful ceiling on such charges; a contract upon the loan of money with an illegally high interest rate as a condition of the loan . Usury is also the act of making a loan at such an interest rate; making a loan at a usurious rate. The agreement , and not necessarily its performance , is what renders a debt usurious.

The three essential elements of usury are: 

1. A loan or forbearance of money, 
2. An agreement for a return of the money in all events; and 
3. An agreement to pay more than the legal rate of interest for its use.

Usury is usually defined and enforced by state statutes . For example, Washington State has a law that limits the maximum rate of interest that a lender can charge (see: RCW 19.52.020 ). The limitations of interest rates may be different from one state to another. Yet, some states do not have any usury law, such as Nevada.

Yet, federal laws may also be applicable, such as the Racketeer Influenced and Corrupt Organizations Act (RICO) . While it does not specifically address usury, it indirectly prohibits usurious interest, and violation could result in civil and criminal penalties.

[Last reviewed in March of 2025 by the Wex Definitions Team
]

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