Usury : the case for legal reform

Abstract

Usury the charging of high interest rates on loans is an insidious financial offence that is generally not adequately acknowledged nor seriously addressed. Despite its criminalisation in 2002, usury remains a widespread though covert phenomenon within the Maltese Islands. Moreover, the synergy between money lending, money laundering, and other criminal offences is being overlooked at the cost of legal and social justice. The scope of this paper is that of examining the offence of usury within the Maltese Islands from a socio-legal perspective. The paper studies current legal frameworks related to usury and undertakes a case review analysis of civil and criminal cases related to usury. On the basis of this analysis. Following a critique on the nature, prevalence, and impact of usury within the local context as well as a brief overview of existing legal frameworks and limitations arising therefrom, the paper proposes a number of recommendations for further legislative and administrative reform in the area. These contextualised and evidence-based proposals primarily focus on provisions which provide for harsher punishments and the inclusion of aggravating circumstances, extension of the period of prescription, measures which facilitate the collation of evidence and a shift in the onus of proof, provisions which provide for greater victim protection, and the execution of ex officio action as well as enforcement of confiscation orders. Furthermore, the paper calls for more administrative and law enforcement action, including the consolidation of structures and better regulation.