Keywords
Interest rates of illegal usury private loans
Abstract
Because usury has dispersed entities , personal value orientation and weak risk control capabilities, some illegal loan sharks with extremely high interest rates often have situations where the borrower's income growth is not enough to pay the loan interest. In recent years, criminals have tempted some college students with incorrect consumption concepts to borrow money at high interest rates, and "campus loans" have become a persistent problem on campus. When loans are overdue or not repaid, lenders often use illegal debt collection channels, disrupting normal financial and social order. In response to the issue of usury that has been strongly reported by all sectors of society, the Civil Code clearly stipulates that usury is prohibited and the lending interest rate must not violate relevant national regulations.
Situation
Wang borrowed 654.38 million yuan from Li and issued an IOU with an agreed monthly interest of 2.5. On the same day, Li paid the amount to Wang, and then Wang paid Li an interest of 4,000 yuan per month, and * * * paid 40,000 yuan. Li later sued the court, requiring Wang to repay the principal of the loan and the outstanding interest. After review, the court held that the monthly interest rate of 2.5% agreed by the parties, that is, the annual interest rate was 30%, exceeded the scope of judicial protection, so it did not support Li's request to pay interest at a monthly interest rate of 2.5%.
Law
Lending at high interest rates is prohibited, and the lending rate must not violate relevant national regulations.
If the loan contract does not stipulate the payment of interest, it will be deemed that there is no interest.
If the loan contract does not specify the method of interest payment, and the parties cannot reach a supplementary agreement, the interest will be determined based on local or party transaction methods, trading habits, market interest rates and other factors; loans between natural persons are deemed to be interest-free. (Article 680)
Experts say
Li Dan (lawyer at Zhejiang Gaoying Law Firm)
An effective crackdown on loan sharking requires a combination of criminal and civil crimes.
In recent years, “campus loans”, “routine loans”, black online loans, underground banks, etc. , under the guise of small loans, double the debt collection through "beheading interest", rolling interest and other means, turning small money into huge debts that will never be repaid. What’s more, underground banks and “shadow banks” actually evade financial supervision or engage in institutional arbitrage in the name of financial innovation. Private lending is intertwined with financial phenomena such as peer-to-peer lending, asset management plans, over-the-counter capital allocation, asset securitization, equity crowdfunding, private equity funds, etc. It involves a wide range of areas and complex links, making it more difficult to manage private lending disputes. Private lending activities must be regulated from a legal perspective to ensure the stable and healthy development of private lending.
Article 680 of the "Civil Code" means that the "Civil Code" clearly says "no" in the form of law to the chaotic usury in private lending. The upper limit of judicial protection of loan interest rates has also been adjusted accordingly.
The "Regulations of the Supreme People's Court on Revising Several Issues concerning the Application of Laws in the Trial of Private Lending Cases" (hereinafter referred to as the "New Regulations"), which came into effect on August 20, 2020, adjusted the upper limit of judicial protection of private lending interest rates - —The upper limit of judicial protection of private lending interest rates is determined based on the one-year loan market price (LPR) authorized by the National Interbank Funding Center issued by the People's Bank of China.
In judicial practice, before the new regulations came out, the lending rules were two lines with annual interest rates of 24 and 36. There was no unified judicial judgment standard for courts in various places.
Judging from the literal interpretation of the new regulations, the lender’s receipt and occupation of interest exceeding four times the LPR constitutes unjust enrichment. If the borrower claims the return of the interest previously paid in excess of four times the LPR, the lender should return.
In addition, the “new regulations” also impose restrictions on professional lending practices. Among the five situations in which a loan contract is deemed invalid, "a lender who has not obtained loan qualifications in accordance with the law provides loans to unspecified social objects for the purpose of profit" should be deemed invalid.
Driven by high profits, loan sharking is also an important inducement for criminal crimes. Cases of illegally absorbing public deposits, fund-raising fraud, gang-related crimes, and gang-related crimes occur frequently. Effectively cracking down on illegal loan sharking requires a combination of criminal and civilian measures, and the use of criminal means fully reflects the determination to govern according to law.