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District of Columbia Interest Rate Laws

District of Columbia interest rate laws are stated in District of Columbia Code, Title 28(Commercial Instruments and Transactions), Subtitle II (Other Commercial Transactions), and Chapter 33 (Interest and Usury).

According to Section 28-3302 the state legal maximum interest rate on a loan, forbearance of goods, or money is six percent per annum in the absence of a contract.  Under Section 28-3301, rate of interest upon a written contract can be 24 percent per annum.

Usury: Section 28-3303 the creditor should forfeit the interest, if the creditor entered into a contract involving greater payment of interest than six percent per annum.  Additionally, Section 28-3304, permits suit for recovery of unlawful interest against a person or corporation who accepts rate of interest above the prescribed limit.

Under Section 28-3302, in a judgment passed against District of Columbia, its officers, employees acting within scope of employment, the prescribed rate of interest will not be more than four percent per annum.  However, the rate of interest will be 70 percent of the rate set by the Secretary of Treasury, if the judgment is not against District of Columbia, its officers, employees acting within scope of employment, or fixed by a contract.

Certain types of transactions and entities are exempt from the state law on usury and interest rates.  Section 28-3308 has exempted federally insured banks, and savings and loan associations from the state prescribed interest rate.  The interest rate fixed should not exceed 24 percent per annum.  Direct motor vehicles installment loans are also exempted under Section 28-3601 and the interest rate for such loans should not exceed 21 percent per annum.

D.C. Code § 28-3304

Ҥ 28-3304. Action to recover usury paid
   If a person or corporation in the District directly or indirectly takes or receives a greater amount of interest than is declared by this chapter to be lawful, whether in advance or not, the person or corporation paying the same may within one year after the date of payment sue for and recover the amount of the unlawful interest so paid.”

D.C. Code § 28-3308 reads in part:

Ҥ 28-3308. Finance charge on direct installment loans
   (a) On a loan (other than a loan directly secured on real estate or a direct motor vehicle installment loan covered by Chapter 36 of this subtitle) to be repaid in equal or substantially equal monthly or other periodic installments, including a loan obtained by using a check, credit card, or other device to access a line of credit, any federally insured bank or savings and loan association doing business in the District of Columbia may contract for and receive interest at the rate permitted under this chapter or, in lieu of such interest, a finance charge, which if expressed as an annual percentage rate, does not exceed a rate of 24% per annum on the unpaid balances of the principal. This section does not limit or restrict the manner of contracting for the finance charge, whether by way of discount, add-on, or simple interest, so long as the annual percentage rate of the finance charge does not exceed that permitted by this section.”

D.C. Code § 28-3601 reads:

Ҥ 28-3601. Direct motor vehicle installment loans
   The provisions of the Act approved April 22, 1960 (Public Law 86-431, 74 Stat. 69; D.C. Code, 1967 ed., Chapter 9 of Title 40, [Chapter 6 of Title 50, 2001 Ed.]), covering installment sales of motor vehicles, as amended, and the regulations issued thereunder, shall apply to the extent appropriate to, a direct installment loan, secured by a security interest in a motor vehicle, made by a federally insured bank or savings and loan association doing business in the District of Columbia, subject to section 28-3602.”

Inside District of Columbia Interest Rate Laws