Permissible lender's expenses, which would not be considered in determining the rate of interest under usury statutes, include all but which of the following?
A) Cost of title examination.
B) Reasonable cost of drawing up the necessary documents.
C) A charge to the borrower of $500 to investigate the borrower's credit, when it actually cost the lender $75.
D) All of these charges would be considered in determining the rate of interest under usury statutes.

Question

Quizplus · Accepted Answer

Charging the borrower $500 for a credit investigation that actually cost the lender $75 is not permissible as it significantly exceeds the actual cost incurred by the lender. This would likely be considered in determining the rate of interest under usury statutes, as it could be seen as an attempt to circumvent interest rate limits by disguising additional interest charges as fees.

Permissible Lender's Expenses, Which Would Not Be Considered in Determining