Usury

### What is usury? - [x] Charging an interest rate higher than that permitted by state law. - [ ] Lending money without a license. - [ ] Operating a financial institution without state approval. - [ ] Avoiding interest payments on a loan. > **Explanation:** Usury is the practice of charging an interest rate on loans that exceeds the legal limit set by state laws. ### Federal laws on usury can do what? - [x] Preempt state laws under certain conditions. - [ ] Completely invalidate state usury laws. - [ ] Only protect businesses, not consumers. - [ ] Apply only to large national banks. > **Explanation:** Federal laws can sometimes preempt state usury laws, particularly in cases involving national banks and certain loan products. ### What does APR stand for? - [ ] Annual Payment Rate - [x] Annual Percentage Rate - [ ] Annual Personal Rate - [ ] Adjusted Payment Rate > **Explanation:** APR stands for Annual Percentage Rate, which reflects the annual interest rate charged for borrowing. ### Who is protected under consumer protection laws from usury? - [x] Consumers - [ ] Only businesses - [ ] Only financial institutions - [ ] Tax regulators > **Explanation:** Consumer protection laws are primarily designed to protect consumers from unfair practices like usury. ### Are payday loan providers often exempt from usury laws? - [x] Yes, through certain loopholes and lenient regulations. - [ ] No, they are heavily regulated without exceptions. - [ ] Only in federal jurisdictions. - [ ] Only for loans under $100. > **Explanation:** Payday loan providers can sometimes charge rates above traditional usury limits due to regulatory exceptions and loopholes. ### What action should you take if you suspect a lender is practicing usury? - [ ] Ignore it as a minor infraction. - [ ] Report the lender to the IRS. - [ ] File a report to the state's financial regulatory body or seek legal advice. - [ ] Demand immediate repayment without legal recourse. > **Explanation:** Suspected usury should be reported to the state's financial regulatory body or handled legally with the assistance of counsel. ### How can one avoid being a victim of usury? - [x] By understanding state usury laws and seeking clarification about loan terms. - [ ] By borrowing only from personal friends. - [ ] By avoiding any kind of loan or credit use. - [ ] Always choosing the lowest loan amount regardless of terms. > **Explanation:** Knowing the state regulations and ensuring the interest rate does not exceed legal limits can help avoid being a victim of usury. ### What must a lender have to charge interest legally? - [x] Comply with state and federal usury laws. - [ ] Only charge interest in small amounts. - [ ] Avoid charging interest altogether. - [ ] Operate under the exemption of state laws. > **Explanation:** Lenders need to comply with applicable state and federal usury laws to legally charge interest on loans. ### Which term refers to deceptive or fraudulent lending practices? - [x] Predatory Lending - [ ] Consumer Advocacy - [ ] Competitive Borrowing - [ ] Regulatory Exemption > **Explanation:** Predatory lending refers to unfair, deceptive, or fraudulent practices used by lenders to extract higher profits from borrowers. ### What is the role of the Consumer Financial Protection Bureau (CFPB)? - [ ] To collect taxes. - [ ] To authorize state budgets. - [x] To protect consumers from unfair, deceptive, or abusive practices. - [ ] To regulate stock exchanges. > **Explanation:** The CFPB works to protect consumers from unfair, deceptive, or abusive lending practices, including usury.