Louisiana Revised Statutes 9:3312 – Interest rate charges; financed leases
Terms Used In Louisiana Revised Statutes 9:3312
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Usury: Charging an illegally high interest rate on a loan. Source: OCC
A. Maximum interest rate charges capitalized into consumer purpose financed leases shall be limited as follows:
(1) The total of:
(a) Twenty-four percent per year on that part of the adjusted capitalized cost under the lease which is not in excess of one thousand seven hundred fifty dollars; and
(b) Eighteen percent per year on that part of the adjusted capitalized cost under the lease which is more than one thousand seven hundred fifty dollars but not in excess of five thousand dollars; and
(c) Twelve percent per year on that part of the adjusted capitalized cost under the lease which is more than five thousand dollars; or
(2) Eighteen percent per year on the adjusted capitalized cost under the lease; or
(3) Any other method of computation which would not yield greater interest rate charges than those computed under Paragraphs (1) or (2) of this Subsection.
B. Interest rate charges capitalized into commercial purpose financed leases are unregulated and are not subject to conventional interest rate or usury limitations.
C. This Section does not limit or restrict the manner of contracting for interest rate charges, whether by way of add-on or otherwise, so long as the rate in connection with consumer purpose financed leases does not exceed that permitted by La. Rev. Stat. 9:3312(A). Interest rates may be calculated on the assumption that all scheduled rental payments will be made when due and the effects of prepayment are governed under the provisions of rebate as provided under La. Rev. Stat. 9:3319(B).
D. For purposes of this Section, the term of a consumer financed lease commences on the date the lease agreement is executed. Differences in lengths of months may be disregarded and a day may be counted as one-thirtieth of a month. Subject to classifications and differentiations, the lessor may reasonably establish a part of a month in excess of fifteen days to be treated as a full month if periods of fifteen days or less are disregarded and if that procedure is not consistently used to obtain a greater yield than would otherwise be permitted under La. Rev. Stat. 9:3312(A).
E. A lessor shall not divide a consumer financed lease into multiple agreements for the purpose of obtaining higher interest rate charges than would otherwise be permitted by La. Rev. Stat. 9:3312(A).
Acts 1985, No. 592, §1, eff. July 13, 1985; Acts 1986, No. 213, §1.