CML Guidance 2020-1: Historical Usury Rates for First Mortgage Loans

700 S. W. Jackson Suite 300 Topeka, KS 66603-3796 Phone: (785) 296-2266 Fax: (785) 296-6037 www.osbckansas.org David L. Herndon, Bank Commissioner Laura Kelly, Governor Office of the State Bank Commissioner CML Guidance 2020-1 Historical Usury Rates for First Mortgage Loans March 18, 2020 Usury Rate for First Mortgage Loans Prior to July 1, 2013 Prior to July 1, 2013, Kansas law defined a floating usury cap in K.S.A. 16-207(b) for interest rates on first mortgage loans.1 This subsection also required the Secretary of State to periodically publish notice of this maximum interest rate. Effective July 1, 2013, that subsection was repealed. The floating cap was removed, and the secretary of state was no longer required to publish notice of the maximum interest rate. On and after July 1, 2013, all first mortgage loans are subject to K.S.A. 16-207(a), which continues to provide a general usury cap of 15% per annum, unless otherwise specifically authorized by other provisions of law. This guidance document contains the historical text of 16-207(b) prior to July 1, 2013, and the relevant historical rates as published by the Secretary of State from January 1993 up to June 2013. This historical data remains relevant for first mortgage loans entered into prior to July 1, 2013. Historical Text of K.S.A. 16-207(b) Prior to July 1, 2013, K.S.A. 16-207(b) stated: The interest rate limitation set forth in this subsection applies to all first mortgage loans and contracts for deed to real estate, unless the parties agree in writing to make the transaction subject to the uniform consumer credit code, K.S.A. 16a-1- 101 to 16a-9-102, and amendments thereto. The interest rate limitation set forth in this subsection does not apply to a second mortgage loan governed by the uniform consumer credit code, K.S.A. 16a-1-101 to 16a-9-102, and amendments thereto, unless the lender and the borrower agree in writing that the interest rate for the loan is to be governed by this subsection. The maximum rate of interest per annum for notes secured by real estate mortgages and contracts for deed to real estate governed by this subsection shall be at an amount equal to 1 ½ percentage points above the yield of thirty-year fixed rate conventional home 1 In this guidance document, “first mortgage loans” refers to consumer, first-lien, fixed-rate, real-estate mortgage loans and contracts for deed to real estate.

2 mortgages committed for delivery within 61 to 90 days accepted under the federal home loan mortgage corporation’s daily offerings for sale on the last day on which commitments for such mortgages were received in the preceding month unless otherwise specifically authorized by law. Such interest rate shall be computed for each calendar month and be effective on the first day thereof. The secretary of state shall publish notice of such maximum interest rate not later than the second issue of the Kansas register published each month. Chart of Historical Usury Rates for First Mortgage Loans See the following page for a chart of maximum interest rates for first mortgage loans as published by the Secretary of State from January 1993 through June 2013.

3 Historical Kansas Usury Rates for First Mortgage Loans from January 1993 to June 2013 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 January 4.42% 5.02% 6.11% 6.47% 6.30% 7.41% 7.57% 7.56% 7.13% 7.20% 7.07% February 4.60% 4.93% 6.09% 6.33% 6.51% 7.04% 7.72% 7.57% 6.97% 7.15% 7.16% March 4.59% 4.96% 6.16% 6.25% 6.53% 7.36% 7.48% 7.58% 7.07% 6.95% 6.98% April 4.60% 5.11% 6.16% 6.37% 5.92% 7.16% 7.55% 7.82% 7.42% 6.91% 7.02% May 4.43% 4.90% 6.01% 6.36% 6.09% 7.42% 7.58% 7.96% 7.13% 7.50% 6.94% June 4.93% 4.74% 5.85% 6.12% 6.53% 7.59% 7.79% 8.05% 7.01% 7.72% 6.38% July NA 4.49% 5.87% 5.74% 6.58% 7.72% 8.07% 8.22% 6.99% 7.61% 6.62% August NA 4.30% 5.77% 5.58% 6.57% 7.82% 8.06% 7.97% 7.16% 7.46% 7.48% September NA 4.32% 5.30% 5.37% 6.47% 7.68% 7.83% 7.78% 7.12% 7.13% 7.58% October NA 4.10% 5.03% 5.57% 6.21% 7.40% 7.70% 7.58% 7.31% 7.09% 7.02% November NA 4.34% 5.18% 5.46% 6.33% 7.93% 7.59% 7.63% 7.63% 7.02% 7.33% December NA 4.25% 5.12% 5.69% 5.96% 6.87% 7.31% 7.47% 7.64% 7.15% 7.28% 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 January 8.64% 8.78% 9.71% 8.29% 8.75% 9.54% 8.74% 10.95% 8.76% 9.62% February 8.36% 8.50% 10.09% 8.21% 8.60% 9.54% 8.65% 10.66% 8.47% 9.20% March 7.91% 8.48% 9.73% 8.67% 8.64% 9.55% 9.21% 10.15% 8.95% 8.97% April 8.59% 8.51% 9.88% 8.63% 8.69% 9.87% 9.59% 10.22% 9.78% 8.99% May 8.21% 8.71% 9.87% 8.62% 8.55% 9.79% 9.80% 10.06% 10.17% 8.98% June 8.10% 8.63% 10.08% 8.97% 8.57% 9.64% 10.01% 9.40% 10.24% 9.06% July 8.05% 8.78% 9.70% 9.24% 8.56% 9.44% 9.80% 9.42% 10.32% 8.65% August 7.93% 8.42% 9.70% 9.55% 8.56% 9.05% 9.88% 9.52% 10.12% 8.64% September 7.51% 8.30% 9.51% 9.69% 8.31% 9.21% 9.94% 9.38% 10.17% 8.31% October 7.24% 8.02% 9.34% 9.44% 8.01% 9.03% 9.78% 9.39% 10.50% 8.38% November 7.24% 7.62% 9.35% 9.43% 8.09% 8.94% 9.44% 9.18% 10.68% 8.34% December 7.43% 8.23% 9.06% 9.56% 8.24% 8.91% 9.22% 8.93% 10.97% 8.79%