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Dwayne B.
Dwayne B., Lawyer
Category: Consumer Protection Law
Satisfied Customers: 33555
Experience:  Practicing for over 20 years and handled many cases and trials for consumers.
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What is the maximum interest rate on consumer debt in Colorado

Customer Question

What is the maximum interest rate on consumer debt in Colorado according to Usury law? This is for a credit card debt from a bank that was sold to a junk debt buyer and sold again to another junk debt buyer.
Submitted: 2 years ago.
Category: Consumer Protection Law
Expert:  Dwayne B. replied 2 years ago.
Hello and thank you for contacting us. This is Dwayne B. and I’m an expert here and looking forward to assisting you today. If at any point any of my answers aren’t clear please don’t hesitate to ask for clarification. Also, I can only answer the questions you specifically ask and based on the facts that you give so please be sure that you ask the questions you want to ask and provide all necessary facts.
Colorado law is strange on this topic. The maximum interest rate is 8% if there is no agreement (§5-12-101) but the law allows you to contract for a maximum interest rate of up to 45% (§5-12-103).
In addition, you also have to look at the credit card agreement. By signing up for a credit card in many of those agreements you agree that the laws of another state may apply and some states don't cap interest rates at all.
Customer: replied 2 years ago.

My understanding was that if there wasn't a stated interest rate then the max rate was 8%, 45% on non-consumer loans and 12% if the lender was not a national bank. My question is, once the loan is bought by debt collector, are the limited to 12% no matter what the bank agreement said?

Expert:  Dwayne B. replied 2 years ago.
No, the original amount contracted for or stated is the amount that will be in place throughout the entire term regardless of who is trying to collect. Also, as I mentioned, those are the CO laws but almost never do the local state laws apply to credit card debt unless that is the state specified in the original agreement. Most agreements use Utah as the default state although there are a few others that use other states, I've never seen one that uses Colorado.
This is because credit card agreements fall under federal laws and the state usury laws don't apply due to preemption in 99% of the cases.
Customer: replied 2 years ago.

I'm looking at the recent ruling in Madden v. Midland and wondering if there are any other cases that would be a little more controlling in CO (10th circuit or federal). The c/c was issued by Wells Fargo but sold to a debt collector , who re-sold it to another debt collector, who sold it to another debt collector who, in a very questionable decision, got a judgement and has now sold it to yet another debt collector. I am looking for anything to challenge the judgment.

Expert:  Dwayne B. replied 2 years ago.
Unfortunately, you would have to open a new question thread to get case law since it is really outside the scope of the original question.
Unless they happen to have done the research already, the expert who responds is probably going to send an "additional services" request since case law research is both time consuming and expensive under the plans most of us have.
Customer: replied 2 years ago.
Relist: Incomplete answer.