The defendant conducted a small loan office which advertised extensively in the community. The loans ranged from $5 to $50 in amount, and were originally made for terms ranging from one to six months. The borrowers were predominantly wage earners and they were required to give promissory notes far in excess of the sums received. The interest rates of 590 loans made by the defendant averaged well over three hundred per cent per annum, making the business almost exclusively usurious. The Minnesota statute set the maximum interest rate at six per cent with a provision allowing a maximum of eight per cent for agreements that had been put in writing. No express criminal penalties were provided. Payments in excess of the statutory maximum were recoverable at the suit of the borrower but half of the recovery was alloted to the county school fund. Courts were also empowered by statute to declare void and cancel any contract with interest provided for in excess of the maximum rate. Held, that the violations of the usury laws constituted a public nuisance and were properly enjoined as such; and further, that the appointment of a receiver for the assets and business premises of the defendant was justified. State ex rel. Goff v. O'Neil, (Minn. 1939) 286 N. W. 316.
Michigan Law Review,
USURY - NUISANCES - INJUNCTIONS - REPEATED VIOLATIONS OF THE USURY LAWS ENJOINABLE AS PUBLIC NUISANCE,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol38/iss2/32