Under California's Article XV, which of the following transactions is NOT exempt from the constitutional usury limit?
Correct Answer
D) A private consumer loan made by an individual who is not acting through an exempt lender or licensed real estate broker arrangement
California usury exemptions include specified regulated institutions and real-estate-secured loans made or arranged by licensed real estate brokers. A private individual making a consumer loan outside an exemption remains the best non-exempt example in these choices.
Why This Is the Correct Answer
California usury exemptions include specified regulated institutions and real-estate-secured loans made or arranged by licensed real estate brokers. A private individual making a consumer loan outside an exemption remains the best non-exempt example in these choices.
Why the Other Options Are Wrong
Option A: A loan made by a state-chartered savings association
State-chartered savings associations are exempt institutional lenders under California usury law.
Option B: A loan arranged by a licensed real estate broker secured by real property
A loan arranged by a licensed real estate broker and secured by real property is covered by California’s broker-arranged loan exemption.
Option C: A loan made by a federally chartered credit union
Federally chartered credit unions are exempt from state usury limits.
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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