Alaska Trade Practices
Title 45 Trade and Commerce
Chapter 45.45 Trade Practices
Article 1 Interest
(a) The rate of interest in the state is 10.5 percent a year and no more on money after it is due except as provided in (b) of this section.
(b) Interest may not be charged by express agreement of the parties in a contract or loan commitment that is more than five percentage points above the annual rate charged member banks for advances by the 12th Federal Reserve District on the day on which the contract or loan commitment is made. A contract or loan commitment in which the principal amount exceeds $25,000 is exempt from the limitation of this subsection.
(c) [Repealed, Sec. 3 ch 84 SLA 1973].
(d) [Repealed, Sec. 2 ch 94 SLA 1981].
(e) [Repealed, Sec. 4 ch 146 SLA 1974].
(f) A bank, credit union, savings and loan institution, pension fund, insurance company, or mortgage company may not require or accept any percent of ownership or profits above its interest rate. This subsection does not apply to a loan if the principal amount of the loan is $1,000,000 or more and the term of the loan is five years or more, or to a negatively amortizing loan secured by owner-occupied real property originated under a program approved or sponsored by
(1) the federal government, including congressionally chartered national corporations; or
(2) the state if
(A) the real property that secures the loan is not subject to forced sale provided the owner has not violated the terms of the loan agreement including terms regarding
(i) payment of property taxes;
(ii) payment of hazard or fire insurance premiums;
(iii) keeping the property in reasonable repair;
(iv) not vacating the property for a period longer than 12 months;
(B) the owner may not be evicted from the real property that secures the loan unless a term of the loan agreement regarding a matter listed in (A)(i) - (iv) of this paragraph has been violated;
(C) neither the estate nor any heir of the former owner may be compelled to pay a deficiency judgment related to the loan; and
(D) the estate or an heir of the former owner has a right of first refusal and may either pay off the loan balance in full, if the former owner had equity in the property, or pay a sum not to exceed 95 percent of the value of the property at the time of exercise of the right of first refusal as determined by an independent real estate appraiser licensed under AS 08.87.
(g) Loan contracts and commitments covering one- to four-family dwellings may be prepaid without penalty, except federally insured loans that require a prepayment penalty.
(h) If the limitations on interest rates provided for in this section are inconsistent with the provisions of any other statute covering maximum interest, service charges or discount rates then the provisions of the other statute prevail.
A person may not, directly or indirectly, receive in money, goods, or things in action, or in any other manner, a greater sum or value for the loan or use of money, or upon contract founded upon a bargain, sale, or loan of wares, merchandise, goods, chattels, lands, and tenements, than is prescribed in AS 45.45.010 - 45.45.070.
If interest greater than that prescribed in AS 45.45.010 and 45.45.020 is received or collected, the person paying it may, by action brought within two years after the payment, recover from the person receiving the payment double the amount of the interest received or collected.
If, in an action brought on a contract, the court determines that a rate of interest has been contracted for greater than is authorized by AS 45.45.010 - 45.45.070, either directly or indirectly, in money, property, or other valuable thing, or that a gift or donation of money, property, or other valuable thing has been made or promised to be made to a lender or creditor, or to a person for the lender or creditor, directly or indirectly, by the borrower or debtor, or a person for the borrower or debtor, the design of which is to obtain for money so loaned, or for debts due or to become due, a rate of interest greater than that specified by AS 45.45.010 - 45.45.070, the rate of interest is usurious and works a forfeiture of the entire interest on the debt. The court shall give judgment for the amount due, without interest, on the sum loaned or the debt contracted, against the defendant and in favor of the plaintiff and against the plaintiff for costs of action, whether the action is contested or not.
AS 45.45.010 - 45.45.070 do not prevent the bona fide assignee of a usurious contract from recovering against the immediate assignor, or the original usurer, the full amount paid by the assignee for the contract if the assignee did not have notice of the usury affecting the contract.
A contract made in the state between borrower and lender, debtor and creditor, or mortgagor and mortgagee, on which the rate of interest is the legal rate of interest specified in AS 45.45.010 or less, by which one party agrees to pay the taxes on the debt, credit, or mortgage existing or entered into between the parties, is legal and valid and is not usurious.
A contract entered into under AS 45.45.060 may be enforced by the parties to it. However in making an assessment of a credit loan or mortgage, it shall be assessed to the holder of the contract.
AK Alaska Official State Statutes
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