In a recent case the California Supreme Court had occasion to consider the effect of the California usury law in the control of a variable interest rate loan involving a non-exempt lender. The failure of the court to properly analyze the question of intent has led to the creation of a new exception to the traditional presumption of intent in usury cases. Dictum in McConnell has potentially increased the plaintiff-borrower's difficulty in proving his case and has created a possibility that the constitutional protection afforded by the usury law has been significantly reduced.
Vincent Keith Schubert,
McConnell v. Merrill Lynch, Pierce, Fenner & Smith, Inc.: New Tests for Variable-Interest Loans,
30 Hastings L.J. 1843
Available at: https://repository.uchastings.edu/hastings_law_journal/vol30/iss6/7