What is the statute of limitations for a borrower to bring a usury claim under California law?
Correct Answer
A) Two years from the date the usurious interest was paid
Under California law, the statute of limitations for a usury claim is two years from the date the usurious interest was paid. This applies to the borrower's action to recover interest paid and treble damages.
Why This Is the Correct Answer
Under California law, the statute of limitations for a usury claim is two years from the date the usurious interest was paid. This applies to the borrower's action to recover interest paid and treble damages.
Why the Other Options Are Wrong
Option B: One year from the date the usurious interest was paid
One year is the period for calculating treble damages (interest paid in the prior year), not the overall statute of limitations.
Option C: Three years from the loan origination date
Three years from origination is not the correct period; the statute runs from interest payment, not origination.
Option D: Five years from the loan origination date
Five years is not the applicable limitations period for usury claims in California.
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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