18 U.S.C. § 892: Making extortionate…

Summary

Making a loan or credit in a way that uses threats, force, or other illegal pressure — or planning to do that — is a crime. A person who does it can be fined, sentenced to up to 20 years in prison, or both. If these things were true when the loan was made, that is strong evidence the loan was extortionate: the debt could not be enforced in court where the borrower lived (or where a business was incorporated or did business); the interest rate was over 45% per year using a method that applies each payment first to interest then to principal; the borrower reasonably thought the lender had used or was known for using illegal pressure to collect; and the total owed to the lender then was more than $100. If there is proof about the first or second point but no direct proof of what the borrower believed, a judge may allow evidence about the lender’s reputation in the borrower’s community to show what they understood.

Title 18, §892

Crimes and Criminal Procedure, Source: USLM XML via OLRC

(a)Whoever makes any extortionate extension of credit, or conspires to do so, shall be fined under this title or imprisoned not more than 20 years, or both.

(b)In any prosecution under this section, if it is shown that all of the following factors were present in connection with the extension of credit in question, there is prima facie evidence that the extension of credit was extortionate, but this subsection is nonexclusive and in no way limits the effect or applicability of subsection (a):

(1)The repayment of the extension of credit, or the performance of any promise given in consideration thereof, would be unenforceable, through civil judicial processes against the debtor

(A)in the jurisdiction within which the debtor, if a natural person, resided or

(B)in every jurisdiction within which the debtor, if other than a natural person, was incorporated or qualified to do business

at the time the extension of credit was made.

(2)The extension of credit was made at a rate of interest in excess of an annual rate of 45 per centum calculated according to the actuarial method of allocating payments made on a debt between principal and interest, pursuant to which a payment is applied first to the accumulated interest and the balance is applied to the unpaid principal.

(3)At the time the extension of credit was made, the debtor reasonably believed that either

(A)one or more extensions of credit by the creditor had been collected or attempted to be collected by extortionate means, or the nonrepayment thereof had been punished by extortionate means; or

(B)the creditor had a reputation for the use of extortionate means to collect extensions of credit or to punish the nonrepayment thereof.

(4)Upon the making of the extension of credit, the total of the extensions of credit by the creditor to the debtor then outstanding, including any unpaid interest or similar charges, exceeded $100.

(c)In any prosecution under this section, if evidence has been introduced tending to show the existence of any of the circumstances described in subsection (b)(1) or (b)(2), and direct evidence of the actual belief of the debtor as to the creditor’s collection practices is not available, then for the purpose of showing the understanding of the debtor and the creditor at the time the extension of credit was made, the court may in its discretion allow evidence to be introduced tending to show the reputation as to collection practices of the creditor in any community of which the debtor was a member at the time of the extension.

Editorial Notes

Amendments

1994—Subsec. (a). Pub. L. 103–322 substituted “fined under this title” for “fined not more than $10,000”.

§892 Making Extortionate Extensions of Credit

Summary

Title 18, §892

Notes & Related Subsidiaries

Editorial Notes

Amendments

Citations & Metadata