Alert

January 6, 2025

Massachusetts Attorney General Launches Usury Notice Filing Portal

Lenders who submit Usury Notice Filings to the Massachusetts Attorney General's Office should consult with counsel regarding a new portal for filing notices that raises questions regarding the required timing and content of filings.

Massachusetts's criminal usury statute prohibits knowingly contracting for, charging, taking or receiving (either directly or indirectly) interest and expenses that exceed an amount greater than 20% per annum.[1] Absent an exception, this limit applies to both consumer and business/commercial purpose transactions.

A notable exemption applies to a person who provides notice to the Attorney General of that person's intent to enter into a "transaction or transactions" that - but for the notice - would violate the 20% per annum rate limit.[2] Parties who provide such notice before a loan is disbursed to the borrower(s), and who maintain certain records specified by the statute, can immunize such "transaction or transactions" from potential usury claims.

The criminal usury statute is frustratingly thin on details regarding the proper form and method for filing this notice. However, in mid-November, the Attorney General launched - with no apparent public notice - an online portal to submit notices. This is a notable development as it provides, for the first time, an online method to submit these notices. The portal will also provide a confirmation of receipt for successful filings.

However, the materials surrounding the launch of this portal raise more questions than answers. For example:

  • The online portal website appears to suggest that the Attorney General expects a notice to be filed before each otherwise usurious transaction. For example, the information discussing the portal states that "[e]ach submission shall contain a copy of the notice from a single loan filing..." and instructs parties not to "batch notices from multiple loan transactions into a single filing."
  • The portal seeks to collect borrower and transaction specific details. Some of these elements appear to be required (such as the date of the note), while others are not and are referred to in the portal instructions as "preferred but not required." Much of this content is listed in the statute as informational elements that must be maintained by the party providing notice and provided to the Attorney General upon her request, rather than information that must be provided with the filing.[3]
  • The portal highlights certain fields for a party providing notice with a red asterisk (*), which customarily connotes that the field in question must be populated. However, the portal does not specify this in its instructions so it is ultimately unclear what information must be provided.

It is unclear how the Attorney General's Office will use information submitted through the portal. Hopefully, there will be much more to come regarding this portal and how the Attorney General expects it to be correctly utilized. For now, it raises a number of questions with no clear answers.

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[1] 271 M.G.L.A. § 49(a).

[2] 271 M.G.L.A. § 49(d).

[3] 271 M.G.L.A. § 49(d). Moreover, the information regarding discussing the portal launch states that the information filed will be a public record and subject to public information requests, despite the fact that the statute prohibits lenders from publicly advertising such a filing - although lenders are required to provide information regarding a filing to an individual upon his/her request. Id.