Usury

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Usury is finance a usurious transaction , which significantly inflated interest rates compared to the current standard market interest for content has and therefore null and void is.

etymology

The Latin expression for interest ( Latin usura from Latin usus , "use") indicates the remuneration of the lender for the use of the capital . The word usury comes from the Germanic root wokaraz , which means something like "to develop yield, to increase". It described any kind of yield , namely crops or fruits of human labor. In Middle High German , the meaning for "interest" gained recognizably in weight with usury. In Martin Luther's translation of the Bible ( Luther Bible ) of September 1522, interest and usury are equated.

General

The German Civil Code (BGB) does not contain any provisions on the permissible amount of the agreed interest, e.g. the contractual interest for loans . In this way, German civil law has opted for freedom from interest within the framework of freedom of contract . This fundamental freedom of design of contracts is restricted by the general clause of Section 138 (1) BGB (“immorality”). Also, credit agreements are subject to judicial content control . The legal regulation on immorality is a general clause that has to be filled in by the courts, under which excessive interest claims are subsumed . Usury, on the other hand, is a particularly serious special case of immorality. If there is no usury, however, immorality cannot be ruled out.

history

The usury is as old as the interest. First laws and then religions dealt with usury. The Codex Hammurapi from the 18th century BC Chr. Allowed the interest, with non-payment threatened bondage . In the law of Hammurabi I , however, there were no provisions on usury; The documents only show a general maximum interest rate of 20%, for grain it is 33%, with speculation the interest rates rose to 66%.

Usurers brought about Solon in 550 BC. In Greece to limit the maximum interest rate to 12%. Before the Twelve Tables Act around 450 BC Roman law hardly knew any references to maximum interest rates. In 347 BC The maximum interest in the Twelve Tables law was halved to 6% ( Latin: fenus uniciarium ). Of the Twelve Tables Act, Tacitus reported in his Annales that the maximum interest rate was set “by the ounce”. By this he understood 1/12 of the capital. Lucius Genucius Aventinensis set 342 BC. A first ban on interest . Cicero thought a maximum interest rate of 12% was "somewhat usurious".

In the year 528 AD under Justinian I there was a maximum interest rate for senators ( Latin personae illustriales ) of 4%, for merchants 8% and for all others 6%. While the older Roman law punished usury ( Latin usura mordens ) with the reimbursement of four times the amount ( Latin poena quadrupli ), the newer Roman law knew the slander ( Latin infamia iuris ) of the usurer as a punishment . Infringements did not render the usury ineffective, the fight against usury took place through personal punishment ( Latin poenale sanctiones ). In 698 a. u. c. Two Cypriot MPs from the city of Salamis came to Rome to borrow 1000 talents on behalf of their city . Marcus Iunius Brutus arranged two lenders for them, but they charged 48% interest. When the city refused to pay the high interest after 6 years because of an existing legal maximum interest rate of 12%, Marcus Tullius Cicero decided that the city only had to pay the 12% plus Anatocism .

The experience with interest was not always positive, because its exponential growth - especially with compound interest - could exploit the debtors and drive them to bankruptcy. With maximum interest rates, the governments tried to limit this interest rate risk for the debtor or to exclude it entirely by prohibiting interest. Where there was a general ban on interest rates, usury was not an issue. In 1179, the Christians were threatened with failure of confession and the Lord's Supper , and from 1274 even excommunication . Around 1256 in France Louis IX. 150 usurious money changers from Asti arrested and confiscated 800,000 livres from them . The church condemned usury as a special form of robbery because it declared work alone to create value, but money to be sterile. The canon law prohibited any interest as usury, but this was initially not included in the German law. Rather, it was based on Roman law and designated any excess of the statutory maximum interest rate as usury.

The translation for Dtn 23.20  EU “You shall not grow rampant, neither with money nor with food” comes from the translation of the Bible by Martin Luther in September 1522 at the time of the prohibition of interest , so that at that time the term “usury” meant interest itself. The prophet Ezekiel forbids usury and equates it with other crimes: “With you, people allow themselves to be bribed and thereby shed blood. You take interest and do usury and blackmail your neighbor ” Ez 22.12  EU . Therefore, for the first time, the Reich Police Order (RPO) from 1530 declared loan interest for prohibited usury (Title 26 RPO). After that, the RPO of 1548 fixed a maximum interest rate of 5%, the RPO of 1577 threatened the loss of 25% of the credit (Art. 1577 Title 17, § 8 / § 9 RPO). When the interest ban fell in England under Elizabeth I in 1571 , the colloquial language distinguished for the first time between normal interest ( English interest ) and usury ( English usury ). The Englishman Thomas Wilson wrote a discourse against usury in 1572 because it "dries up the sources of charity and justice". He was responding to his unsuccessful attempts before parliament to tighten the planned usury law. In 1571 the parliament passed an usury law ( English An Act against Usury ), which criminalized usury if the interest rate was higher than 10%. Another usury law of 1624 replaced the old law and was in effect until 1822.

Saxony's Johann Georg I increased the penalty for complete loss of credit, inquisition and expulsion from the country in 1626 . In Austria meanwhile the first law against usury came out on July 15, 1589 and a second on September 11, 1628, both made it clear that "all and every usurious contracts and actions are seriously prohibited and subject to high punishment". In 1654, the German Imperial Court ruled that taking moderate interest rates was permissible. In Lorraine , an ordinance of 1724 punished the usury with double the amount of capital payable to the debtor.

It was not until Pope Benedict XIV in 1745 that the canonical interest ban was significantly relaxed. Maria Theresa submitted the first comprehensive patent against usury in 1751. The General Prussian Land Law (APL) of June 1794 dealt in detail with questions of usury and made it clear that "higher interest rates than permitted by law can neither be legally promised nor given" (II 20, § 1271 APL). In Austria, a usury patent came into effect on December 2, 1803, so that the Austrian ABGB of June 1811 could refer to the existing usury laws in § 1000 ABGB. But in 1866 the usury patent was revoked again. In 1881 the law made "credit usury" a criminal offense. The French Code Napoléon (Art. 1382, 1383 CC) and Art. 3 of the Usury Act of September 1807 gave debtors the right to reclaim usurious interest.

The lawyer Friedrich Adolph Schilling defined in 1846: "Any violation of the legal restrictions on interest is called usury". However, as early as 1848, all interest rate restrictions ceased to apply in Germany, so that there was no longer a fixed usury limit. In June 1880, German criminal law introduced the criminal offense of usury with Section 302a of the Criminal Code and for the first time presented a material term of usury, namely “conspicuous disproportion ” and “ exploitation of distress , carelessness or inexperience ”. The motives for the planned BGB in 1888 advocated freedom from interest: “(Almost) in all European countries ... nowadays the principle of the interest tax [maximum interest rate; d. Ed.] Interchanged with the principle of freedom from interest ... There is no reason to change this principle ... ". The BGB, which came into force in January 1900, opted for freedom of contract and thus freedom from interest. The latter means the absence of mandatory interest rate limits and ceilings. Therefore, the BGB only knows a few interest barriers ( base rate as reference value , general ban on compound interest except for banks and current accounts ). The usury here is legally a subspecies of usury. The English usury law ( English Money-lenders Act ) came into force in 1900 and made commercial usury a punishable offense; it was valid until 1927.

Since 1915, Section 879 of the Austrian Civil Code has again contained a usury provision. Since January 1937 there has been a state interest rate regulation in Germany which, with the help of the "Interest Ordinance", prescribed maximum interest rates for the banks in the "Debit Interest Agreement", which may not be exceeded in the lending business and which may be remunerated as a maximum in the " Credit Interest Agreement " for the deposit business , but may also be below. This Interest Ordinance ended in April 1967. In August 1983 there was a “Draft of a law amending the Civil Code” in the Bundestag, which, with Section 138 (3) BGB , was supposed to introduce a separate nullity for usurious loan agreements ; it has not been implemented.

Legal issues

In Germany usury is not in laws occurring legal concept . Rather, it is a subspecies of usury from Section 138 (2) BGB, an indefinite legal term . Usury of interest must also meet the requirements that generally apply to usury. Usury of interest is a loan that stipulates usurious interest . When an interest rate is usurious is always determined by the individual case. Usury of interest can be either a case of immorality (Section 138 (1) BGB) or usury (Section 138 (2) BGB).

For a spreading like lending business after is established case of the Federal (BGH) requires that the overall assessment of the loan agreement results in a immoral exploitation business. The following objective and subjective requirements must be met cumulatively:

  • There must be a noticeable mismatch between the overall performance of the lender and the overall burden on the borrower (objective characteristic) and
  • the contract design must be suitable to unilaterally burden the borrower in a special way; this applies in particular to the credit conditions imposed (objective feature) and
  • the borrower only accepts the contract, which is excessively burdensome, because of his economically weaker situation, legal ignorance or lack of business fluency; the lender recognizes this or ignores this knowledge lightly (subjective characteristic).

Mismatch and drafting of contracts

In § 138 para. 2 BGB is initially a "clearly disproportionate" of performance (lending) and return (interest payment) of the question. This vague legal term has been clarified by the case law of the BGH. According to this, there is usury of interest if the required interest rate is twice as high as the comparable market interest rate (e.g. 8% compared to a market interest rate of 4%; the relative interest rate difference is 100%). Since in phases of high interest rates the relative excess decreases the higher the market interest rate, but on the other hand the refinancing costs of the credit institution do not rise to the same extent, this regulation is unsatisfactory; because the absolute interest difference can already be usurious if the relative interest difference has not yet doubled (for example 29% compared to 16%; relative interest difference here 81.25%). Therefore the BGH decided in March 1990 that a difference between the agreed interest rate and the market interest rate of at least 12% p. a. is usurious. Accordingly, a conspicuous disproportion between performance and consideration is generally to be affirmed if the effective contractual interest rate exceeds the effective comparative interest rate relatively by around 100% or in absolute terms by 12 percentage points. This applies not only to consumer credit , but also to corporate finance .

A comparison between the effective annual interest rate and the market interest rate is necessary to determine usurious interest rates. If it emerges from all of this that there is usury of interest and a particularly one-sided burden for the borrower would arise, then it is dubious offers that lead to void contracts. Usury of interest is also a criminal offense ( Section 291 (1) No. 2 StGB ; usury of credit).

Business inexperience

In addition to usurious interest and the drafting of contracts, the so-called subjective exploitation must be fulfilled. This group of cases of void loan brokerage and loan agreements include loan applicants who are inexperienced in business or have no legal knowledge. They are often unable to survey and assess the credit options available on the credit market . It is a non-commercial group of people who cannot grasp the unfavorable credit conditions in their full meaning or at least cannot adequately consider them. If a loan applicant is unable to assess that a repayment-free loan in combination with life insurance is economically less favorable than a standard installment loan with residual debt insurance , then he is particularly inexperienced in business. From the surety jurisprudence of the BGH it can be deduced that business inexperience can arise from the level of training as well as from the professional sphere. Learn business are therefore managing director , majority shareholder of a GmbH and Complementary and mostly involved limited partners of a KG because they are professionally responsible for commercial questions. This also applies to commercial employees who are professionally concerned with money or interest issues. Consumers are legally ignorant if they are not familiar with individual legal provisions or if their meaning in individual cases cannot be determined. The legally ignorant and inexperienced borrower cannot assess the risks and burdens assumed with a loan agreement.

If credit institutions or credit intermediaries ruthlessly exploit this business inexperience or lack of legal knowledge of their credit applicants for their own benefit or recklessly ignore knowledge, the contracts are void due to immorality ( Section 138 (2) BGB). This also applies if a bank has deliberately exploited the borrower's weaker economic situation to its advantage when determining the contractual conditions, or in any case has recklessly refrained from recognizing that the borrower only accepted the conditions because of his weaker economic situation.

Interest and Fees

The tax base plays an important role in assessing the question of whether there is usurious interest. In the case of usury issues, the focus is on the effective interest rate, which also includes all price-determining costs and ancillary services in accordance with Section 6 (3) of the Price Indication Ordinance , including loan brokerage costs , insofar as these are not exclusively in the interest of the borrower. This includes in addition to the nominal interest rate and disbursement rate ( discount ), processing fees , repayment rate , -beginn and height, as well as interest and principal accounting dates but not about commitment interest . The basis of assessment for usury of interest is thus the “effective annual interest rate”, which quantifies the annual costs of loans related to the nominal loan amount.

Comparison to the market interest rate

The large number of types of interest, types of credit and loan terms makes it difficult to determine a standard market interest rate . For this reason, the BGH had identified and used the priority interest rate published by the Deutsche Bundesbank in its monthly reports as an important benchmark for questions of usury. According to this, the focus interest rate is a suitable benchmark, even for installment loans . Since then, the contractually agreed effective interest rates have been compared to the key interest rate, which the courts of first instance had to collect ex officio .

With the transfer of competencies to the European Central Bank , which no longer calculates this key interest rate, an important reference interest rate for judicial determination of usurious interest rates is no longer applicable. The EMU interest rate statistics have been kept since January 2003. This offers an average interest rate for “consumer loans to private households with an initial fixed interest rate of over one to five years” as a benchmark. However, it no longer includes processing fees (as was the case with the special interest rate) and is around 40% below the special interest rate. Unadjusted, the new basis of comparison is not suitable to take on the function of the former key interest rate as a reference for interest rates customary in the market.

Not only the actual interest burden but also additional costs are included in the determination by the BGH. With residual debt insurance, the repayment risk is protected against death or disability. The conclusion of such an insurance brings an advantage to both contracting parties, because they reduce their respective economic risks of a contractual failure. The BGH therefore considers it appropriate to include half of the borrower's premiums in the total burden. In addition, “non-performance” costs such as the application fee are also taken into account. They do not in themselves represent any interest or other payments for the provision of capital; For the BGH, however, it is crucial that they burden the borrower in the same way as interest and that the lender could also include them in the remuneration for the use of capital (i.e. the interest). Since it ultimately depends on the contract design how these costs are shown, the BGH describes them as “exchangeable”. The loan brokerage costs are also included in the overall assessment because they are in the predominant interest of the credit institutions granting the loan.

Legal consequences

The legal consequence of immorality or usury is the nullity of the loan agreement. The loan agreement in question has no legal effect. The borrower can invoke the nullity at any time and does not need to pay any loan interest for the time the capital is used , in particular no loan interest at the market rate and also no statutory interest rate; the capital received is to be repaid, but only within the contractual repayment deadlines. If residual debt insurance has been taken out, the bank is entitled to reimbursement of half of the residual debt insurance premium, since residual debt insurance brings an asset for the borrower even if the contract is null and void.

International

In Austria the usury of interest falls under the general usury regulation of § 879 Abs. 2 Nr. 4 ABGB . According to § 1 Usury Act of October 1914, all usury contracts are void, including usury. Usury is punishable there according to § 155 ÖStGB . In Switzerland , abuse in the interest system should be prevented solely by cantonal law. Therefore, the cantons partially implemented the reservation of Art. 83 Para. 2a OR in cantonal usury. In the case of abusive interest rates, immorality (Art. 20 OR) and a challenge due to overreaching (Art. 21 OR) may come into consideration. The overreaching was not included in the OR until 1911. The usury limit for consumer credit has been 15% since 2003, and has been 10% since July 2016 (Art. 14 KKG ). Higher effective interest rates invalidate the loan agreement. For mortgage loans , Art. 795 ZGB also states that the cantons can set maximum interest rates on their own.

In France , the Code civil (CC) knows the cheating ( French lésion ; Art. 1118 CC). The interest-bearing loan is regulated in Art. 1905 ff. CC. The interest can be owed by law or contract. The statutory interest rate is also determined by law (Art. 1907 CC). However, the contractual interest rate may exceed the statutory rate (Art. 1907 CC). The Consumer Credit Act ( French Code de la Consommation , Livre III: Endettement) contains special provisions . Italy declares exorbitant interest according to Art. 1815 Para. 2cc Codice civile null and void, the borrower thereby receives an interest-free loan. In England , the Law on unfair contract terms ( English Unfair Contract Terms Act ) of 1977 only exemption clauses , two special provisions combat usury as immoral business and usurious consumer credit .

Usury of interest is not a criminal offense in Great Britain . For example, the Bright House department store chain offers its customers an interest rate of 99.9%. However, this practice has attracted international attention within the framework of the Paradise Papers , as, among other things, the British Queen Elizabeth II is involved in this company through letterbox companies.

literature

  • Roy Lämmel: Interest and Usury in the Middle Ages , Munich 2007, ISBN 3-638-67264-6 .
  • Thomas Langenmaier: Question of conscience about usury , Kempten, 1625.
  • Katrin Liebner: Usury and State: The Theory of Usury in Germany in the 18th and 19th Centuries , Simultaneously: Bayreuth, University, Dissertation, 2009, Duncker & Humblot, Berlin 2010, ISBN 978-3-428-13245-4 .
  • Edgar Mintz: Sozialwucher , dissertation Heidelberg, 1926.

Individual evidence

  1. ↑ Ulrike Köbler, Werden, Wandel und Wesen des German private law vocabulary , 2010, p. 120
  2. ↑ Otto Palandt / Jürgen Ellenberger, Commentary on the BGB , 73rd edition, 2014, § 138 Rn. 65 ff.
  3. ↑ Principles of collective investment , Dirk Zetzsche , 2015, p. 228
  4. ↑ Johannes Irmscher, Das Altertum , Volumes 1–2, 1964, p. 99
  5. ^ Smith Homans (Ed.), The Bankers Magazine and Statistical Register , Volume 9, 1855, p. 250
  6. ↑ Max Wirth, The Interest-Usury Laws from the Standpoint of Economics, Jurisprudence and Legislative Politics , 1856, p. 102
  7. ↑ Max Wirth, The Interest-Usury Laws from the Standpoint of Economics, Jurisprudence and Legislative Politics , 1856, p. 110
  8. ↑ Cicero, ad. Att. I. 12
  9. ^ Justinian 26, § 1 code IV. De usuris
  10. ^ Johann Christian Daniel Salchow, Presentation of the doctrine of punishments and crimes according to common rights , Volume 2, 1805, p. 613
  11. ^ Friedrich Karl von Savigny, Ueber den Zinswucher des M. Brutus , 1820, p. 389
  12. ↑ Johannes Janssen, History of the German People since the End of the Middle Ages. , Volume 1, 1876, p. 405
  13. ^ Theodor Marezoll, The common German criminal law as the basis of the newer German penal legislation , 1841, p. 420
  14. ↑ David Hume , The History of England , Volume 1-2, 1762, Chapter 44, Appendix 3
  15. ^ Thomas Wilson, Discourse upon Usury , 1572; quoted from Jody Greene, You Must Eat Men , in: GLQ I, 1994, p. 174
  16. ^ Eduard Herbst, Handbook of General Austrian Criminal Law , Volume 2, 1855, p. 310
  17. ^ Verlag des Bibliographisches Institut, Meyers Konversations-Lexikon: Eine Encyklopädie des Allgemeine Wissens , Volume 16, 1890, p. 757
  18. ^ Eduard Herbst, Handbook of General Austrian Criminal Law , Volume 2, 1855, p. 310
  19. ^ Friedrich Adolph Schilling, Textbook for Institutions and History of Roman Private Law , Volume 3, 1846, p. 126
  20. ↑ Ulrike Köbler, Werden, Wandel und Wesen des German private law vocabulary , 2010, p. 179
  21. ^ Motives for the draft of a BGB , Volume II, 1888, p. 195
  22. ↑ BT-Drs. 10/307 BT-Drucksache 10/307, draft of a law amending the civil code of August 18, 1983 , p. 3
  23. ↑ Joseföffelholz / Gerhard Müller, Bank-Lexikon: Concise dictionary for banking and savings banks , 1983, Sp. 2070
  24. ↑ Decisions of the Federal Court of Justice in civil matters BGHZ , 159.
  25. ↑ BGH, judgment of March 13, 1990, Neue Juristische Wochenschrift BGH NJW 1990, 1595 : The judgment was based on the disproportion mentioned in the above example: 29.3% versus 16.6%.
  26. ↑ BGH NJW 1991, 1810 , 1811.
  27. ↑ BGH NJW 1989, 1667 .
  28. ↑ BGH WM 1994, 680 .
  29. ↑ BGH ZIP 2000, 65 .
  30. ↑ BGH NJW 1980, 445 , 446.
  31. ↑ BGH NJW 1986, 2568 .
  32. ↑ BGHZ 101, 380 , 391.
  33. ↑ BGH NJW-RR 1989, 303.
  34. ↑ BGH NJW 1987, 181
  35. ^ University of Cologne, Institute for Banking, Newsletter II / 2006 , p. 1. ( Memento from May 4, 2006 in the Internet Archive )
  36. ↑ BGHZ NJW 1981, 1206
  37. ↑ Otto Palandt / Jürgen Ellenberger, Commentary on the BGB , 73rd edition, 2014, § 138 Rn. 19th
  38. ↑ a b BGH NJW 1987, 181 , 182.
  39. ^ Süddeutsche.de GmbH, Munich, Germany: The Queen benefits from usury vacuum cleaners . In: Süddeutsche.de . ( sueddeutsche.de [accessed on November 6, 2017]).