Vanderbilt Law Review


Mark B. Riley

First Page



This Note examines both the original and current purposes of general usury ceilings and evaluates the success of the ceilings in achieving these purposes. In addition, the Note considers the impact of the present form of usury legislation on the economy of those states that have such ceilings and proposes a model usury statute that attempts to accomplish the social policy objectives of the current legislation while also minimizing detrimental and unintentional effects on the economy...

This Note suggests that the proposal outlined above would solve the majority of the problems created by the present statutory form. The proposal recognizes that in order to prevent contraction of credit supply, the market must be allowed to set the market cost of credit to provide lenders with an incentive to lend. Within this framework, the best protection for the high risk borrower is for the system to insure legitimate lenders who are competing for his business. This competition would provide lawful sources of credit to these borrowers while minimizing the costs to them.