Which provision of the California Constitution contains the state's usury law?
Correct Answer
C) Article XV
Article XV of the California Constitution contains the state's usury provisions, including the interest rate formula, exemptions, and penalties for usurious lending. This is unique because most states address usury through statutes rather than constitutional provisions.
Why This Is the Correct Answer
Article XV of the California Constitution contains the state's usury provisions, including the interest rate formula, exemptions, and penalties for usurious lending. This is unique because most states address usury through statutes rather than constitutional provisions.
Why the Other Options Are Wrong
Option A: Article I, Section 1
Article I, Section 1 of the California Constitution deals with inalienable rights such as liberty and privacy, not usury.
Option B: Article XX, Section 22
Article XX deals with miscellaneous constitutional provisions and does not contain usury law.
Option D: Article XIII
Article XIII covers taxation and revenue, not interest rate regulation or usury.
Memory Technique
CA -> ca-usury-real-estate-broker-exemptions-interest-penalties
Exam Tip
Usury questions require separating personal-purpose loans, other-use loans, regulated-lender exemptions, real estate broker arranged real-property loans, and nonexempt private-lender scenarios.
Common Mistakes to Avoid
- -Using a national baseline answer when California has agency-specific DFPI or DRE requirements
- -Confusing CFL, CRMLA, covered-loan, usury, servicing, and DRE endorsement rules
- -Relying on legacy California state-exam or education assumptions instead of current NMLS source pages
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