47-14 Loans of Money
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<![CDATA[CHAPTER 47-14LOANS OF MONEY47-14-01. Loan of money defined. A loan of money is a contract by which one deliversa sum of money to another and the latter agrees to return at a future time a sum equivalent to<br>that which the person borrowed. A loan for mere use is governed by chapter 47-12.47-14-02. Repayment in current funds. A borrower of money must pay the amountdue in such money as is current at the time when the loan becomes due, whether such money is<br>worth more or less than the actual money lent.47-14-03. Loan presumes interest. Whenever a loan of money is made, it is presumedto be made upon interest unless it is expressly stipulated otherwise in writing at the time it is<br>made.47-14-04.Interest defined.Interest is the compensation allowed for the use, orforbearance, or detention of money, or its equivalent.47-14-05.Legal rate of interest - Interest after maturity.Interest for any legalindebtedness must be at the rate of six percent per annum unless a different rate not to exceed<br>the rate specified in section 47-14-09 is contracted for in writing. All contracts must bear the<br>same rate of interest after maturity as they bear before maturity, and any contract attempting to<br>make the rate of interest higher after maturity is void as to the increase of interest, except for a<br>charge for late payment penalty charged in addition to interest which may not exceed fifteen<br>dollars or fifteen percent of the late payment, whichever is less, unless otherwise agreed to in<br>any commercial, agricultural, or real estate note or mortgage.47-14-06. Annual rate when not specified. When a rate of interest is prescribed by alaw or contract without specifying the period of time by which such rate is to be calculated, it shall<br>be deemed an annual rate.47-14-07. Interest rate - Before and after breach. Any legal rate of interest stipulatedby a contract remains chargeable after a breach thereof, as before, until the contract is<br>superseded by a verdict or other new obligation.47-14-08. Interest on loans may be deducted in advance - Limitation. The interestwhich would become due at the end of the term for which a loan is made, not exceeding one<br>year's interest in all, may be deducted from the loan in advance if the parties thus agree.47-14-09. Usury - Definition - Maximum contract rate - Prohibition - Exclusions.1.Except as otherwise provided by the laws of this state, a person, either directly or<br>indirectly, may not take or receive, or agree to take or receive, in money, goods, or<br>things in action, or in any other way, any greater sum or greater value for the loan or<br>forbearance of money, goods, or things in action than five and one-half percent per<br>annum higher than the current cost of money as reflected by the average rate of<br>interest payable on United States treasury bills maturing in six months in effect for<br>North Dakota for the six months immediately preceding the month in which the<br>transaction occurs, as computed and declared on the last day of each month by the<br>state banking commissioner, but that in any event the maximum allowable interest<br>rate ceiling may not be less than seven percent, and in the computation of interest<br>the same may not be compounded; provided, however, that a minimum interest<br>charge of fifteen dollars may be made. A contract may not provide for the payment<br>of interest on interest overdue, but this section does not apply to a contract to pay<br>interest at a lawful rate on interest that is overdue at the time such contract is made.<br>Any violation of this section is deemed usury.2.This section does not apply to a:Page No. 1a.Bona fide pawnbroking transaction in an amount not exceeding one thousand<br>dollars which is made by a bona fide pawnbroking business transacted under a<br>pawnbroker's license;b.Loan made to a foreign or domestic corporation, foreign or domestic limited<br>liability company, cooperative corporation or association, or trust;c.Loan made to a partnership, limited partnership, or association that files a state<br>or federal partnership income tax return;d.Loan or forbearance of money, goods, or things in action the principal amount<br>of which amounts to more than thirty-five thousand dollars; ande.Loan made by a lending institution which is regulated or funded by an agency<br>of a state or of the federal government.3.Notwithstanding the interest rate limit set under this section, state-chartered banks<br>and the Bank of North Dakota may charge interest at a rate equal to the maximum<br>allowable rate which lawfully may be charged for a particular type of loan by national<br>banking associations or state or federally chartered savings and loan associations<br>operating out of facilities located in this state.4.As used in this section, "bona fide pawnbroking transaction" means a transaction<br>with a licensed pawnbroker which includes both possession and a pledge of tangible<br>personal property.47-14-10.Civil liability for usury - Forfeiture of interest.The taking, receiving,reserving, or charging of a rate of interest greater than is allowed by the laws of this state relative<br>to usury shall be deemed a forfeiture of the entire interest which the note, bill, or other evidence<br>of debt carries with it or which has been agreed to be paid thereon, and in addition thereto, a<br>forfeiture of twenty-five percent of the principal thereof. In case the greater rate of interest has<br>been paid, the person by whom it has been paid, or that person's legal representative may:1.Recover back twice the amount of interest thus paid, together with twenty-five<br>percent of the principal from the person taking or receiving the same, but an action<br>must be commenced for such purpose within four years after the time when the<br>usurious transaction occurred; or2.Offset twice the amount of such interest against any indebtedness which the person<br>who paid the same owes to the party or parties receiving such usurious interest.47-14-11. Criminal penalty for usury. Any person who shall take, receive, reserve, orcharge a usurious rate of interest, in addition to being liable for the penalties and forfeitures<br>specified in section 47-14-10, shall be guilty of a class B misdemeanor.Page No. 2Document Outlinechapter 47-14 loans of money]]>