A borrower seeks treble damages for usurious interest paid on a non-exempt California loan. What payment-based time limit and judicial standard apply to this remedy under the California usury law?
Correct Answer
C) The action must be brought within one year after payment; a treble award is within the trial court’s discretion
The treble-interest remedy under the usury law uses a one-year period after payment. A timely claim does not compel trebling: the trial court has broad discretion, as explained in Burr v. Capital Reserve Corp. and applied in Development Acquisition Group v. eaConsulting. This remedy should not be conflated with other claims or defenses involving interest, and mere allegations that the lender knew the rate was unlawful do not make treble damages automatic. Source: California usury law § 3 (commonly cited as Civ. Code § 1916-3); Burr v. Capital Reserve Corp., 71 Cal.2d 983, 994 (1969)
Why This Is the Correct Answer
The treble-interest remedy under the usury law uses a one-year period after payment. A timely claim does not compel trebling: the trial court has broad discretion, as explained in Burr v. Capital Reserve Corp. and applied in Development Acquisition Group v. eaConsulting. This remedy should not be conflated with other claims or defenses involving interest, and mere allegations that the lender knew the rate was unlawful do not make treble damages automatic. Source: California usury law § 3 (commonly cited as Civ. Code § 1916-3); Burr v. Capital Reserve Corp., 71 Cal.2d 983, 994 (1969)
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