Title 12, Banks and BankingRelease 119-102
§86 Usurious Interest; Penalty for Taking; Limitations
Title 12 › CHAPTER 2 — NATIONAL BANKS › SUBCHAPTER IV — REGULATION OF THE BANKING BUSINESS; POWERS AND DUTIES OF NATIONAL BANKS › § 86
Summary
Lenders who knowingly charge interest above the limit in section 85 lose the right to collect any interest. If the borrower or their legal rep paid the extra interest, they can sue for twice the amount, but must start the suit within two years of the illegal loan.
Full Legal Text
Title 12, §86
Banks and Banking, Source: USLM XML via OLRC
The taking, receiving, reserving, or charging a rate of interest greater than is allowed by section 85 of this title, when knowingly done, shall be deemed a forfeiture of the entire interest which the note, bill, or other evidence of debt carries with it, or which has been agreed to be paid thereon. In case the greater rate of interest has been paid, the person by whom it has been paid, or his legal representatives, may recover back, in an action in the nature of an action of debt, twice the amount of the interest thus paid from the association taking or receiving the same: Provided, That such action is commenced within two years from the time the usurious transaction occurred.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Codification R.S. § 5198 (less last sentence) derived from act June 3, 1864, ch. 106, § 30, 13 Stat. 108, which was the National Bank Act. See section 38 of this title. Section is based on R.S. § 5198, less last sentence as added by act Feb. 18, 1875, ch. 80, § 1, 18 Stat. 320, which is classified to section 94 of this title.
Reference
Citations & Metadata
Citation
12 U.S.C. § 86
Title 12, Banks and Banking
Last Updated
Aug 21, 2026
Release point: 119-102