Future Business Leaders of America (FBLA) Personal Finance Practice Test

Who is responsible for enforcing Usury Laws?

1. The Federal Government

2. The State Government

3. The Local Authorities

4. The Businesses Involved

The correct answer is: The State Government

Usury laws are designed to protect consumers from excessively high-interest rates on loans. These laws are primarily governed and enforced at the state level, which means that individual state governments create and implement their own regulations regarding the maximum allowable interest rates lenders can charge. This allows for a range of different laws across various states, reflecting local economic conditions and consumer protections tailored to their specific populations. State governments typically have the authority to enforce these regulations through their financial regulatory agencies. This enforcement can include overseeing lenders' practices, investigating complaints, and taking legal action against those who violate usury laws. While the federal government has some overarching regulations regarding loans and credit, it is the state governments that hold the direct responsibility for usury law enforcement. Because of this structure, local authorities or businesses involved do not play a primary role in enforcing these laws, making state government the correct answer.