Amendment to Usury Law on Interest Rates

Pawnbrokers or their agents are restricted to charging the following interest rates:
- Two and one-half percent per month for loans under one hundred pesos.
- Two percent per month for loans between one hundred and five hundred pesos.
- Fourteen percent per annum for loans exceeding five hundred pesos.
A pawnbroker is defined as a person or entity duly licensed and operating an establishment open to the public.
Prohibitions include:
- Dividing a pawn into fractions to unlawfully increase interest.
- Charging additional insurance premiums for safekeeping pawned articles.

Borrowers who have paid amounts exceeding the lawful interest rates may recover the full amount of interest, commissions, premiums, penalties, and surcharges with costs and attorney’s fees.
Such actions must be commenced within two years of payment.
Creditors may retain interest, commissions, and premiums collected in advance for up to one year if the debtor pays before maturity and if rates are within the law’s limits.

Any contract, covenant, or stipulation charging interest or taking sums exceeding the legal rates is void.
Clerical errors in interest computation without intent to evade the law do not void contracts.
Innocent purchasers of negotiable mercantile paper for value before maturity are protected, provided there is no intent to evade this Act.
The maker of such notes may recover interest paid from the original holder, along with costs and attorney’s fees.

Violators are subject to criminal prosecution in addition to civil actions.
Penalties include:
- Fines from fifty to five hundred pesos.
- Imprisonment from thirty days to one year.
- Both fines and imprisonment at the court’s discretion.
- Restitution of all interest received to the aggrieved party.
- Subsidiary imprisonment for nonpayment at one day per two pesos.
Corporate responsibility extends criminal liability to managers or persons in charge.