In a case where a New Jersey resident and a California
lender agreed that the lender finance litigation between
the New Jersey resident and a third party in exchange for
a division of the final proceeds, the New Jersey District
Court held that although New Jersey law governed the
transaction, New Jersey’s criminal usury statute did not
apply because the collection of the entire interest was at
risk, depending on the outcome of the litigation, and
because the agreement was entered in good faith and
without intent to evade usury law. Dopp v. Yari, 927
F.Supp. 814, 823-24 (D.N.J. 1996).
B. Business of Usury
It is a second degree crime to engage in the business
of usury. N.J.S.A. 2C:21-19b. The offender convicted
of this offense is subject to a fine of up to $250,000, in
addition to any other disposition at sentencing. Id. The
material elements for this crime are the same as those for
the offense of criminal usury, except that the state must
prove the additional element that the offender is in the
business of making loans or forbearances at the
unauthorized rates. Id.
“Engaged in the business” means one who carries on
an enterprise or a business for profit or improvement over
time in contrast to a person who commits a single act or
participates in an occasional transaction. State v. Tillem,
127 N.J. Super. 421, 425 (App. Div.), certif. denied, 66
N.J. 335, cert. denied, 419 U.S. 900 (1974). Since
criminal usury is a lesser included offense of being in the
business of criminal usury, the two convictions would
merge. Id. at 428.
C. Possession of usurious loan records
It is a third degree crime for a person to possess, with
knowledge of the nature thereof, any writing, paper,
instrument or article used to record criminally usurious
transactions prohibited under this section. N.J.S.A.
2C:21-19c.
D. Unlawful collection practices
It is a disorderly persons offense to use improper
means to enforce a claim or judgment. N.J.S.A. 2C:21-
19d. The prohibited conduct involves the person who,
with the purpose to enforce a claim or judgment for
money or property, sends, mails, or delivers to another
person a notice, document or other instrument which has
no judicial or official sanction and which in its format or
appearance simulates a summons, complaint, court order
or process or an insignia, seal, or printed form of a federal,
State or local government or an instrumentality thereof,
or is otherwise calculated to induce a belief that such
notice, document or instrument has a judicial or official
sanction. N.J.S.A. 2C:21-19d.
E. Making false statement of credit terms
It is a disorderly persons offense for a person to
understate or fail to state the interest rate, or make a false
or inaccurate or incomplete statement of any other credit
terms. N.J.S.A. 2C:21-19e. While this statutory
language does not set forth a culpability requirement, a
presumptive culpability of knowledge should be
imputed. See N.J.S.A. 2C:2-2c(3).
F. Debt adjusters
It is a fourth degree crime to act or offer to act as a debt
adjuster. N.J.S.A. 2C:21-19f.
“Debt adjuster” is defined as a person who either (1)
acts or offers to act for a consideration as an intermediary
between a debtor and his creditors for the purpose of
settling, compounding or otherwise altering the terms of
payment of the debts of the debtor, or (2) who, to that
end, receives money or other property from the debtor, or
on behalf of the debtor for payment to, or distribution
among, the creditors of the debtor. Id.
“Debtor” is defined as an individual or two or more
individuals who are jointly and severally, or jointly or
severally indebted. Id.
The following persons cannot be prosecuted as debt
adjusters: attorneys licensed to practice in New Jersey
who are not principally engaged as debt adjusters;
licensed, nonprofit social service or consumer credit
counseling agencies; a person who is a regular, full-time
employee of a debtor who acts as an adjuster for the
employer’s debts; persons acting pursuant to court orders
or the laws of New Jersey or the United States; creditors
or agents of creditors of the debtor and whose services are
rendered without cost to the debtor; persons who, at the
request of the debtor, arrange for or make loans to the
debtor and/or who act as an adjuster for the debtor at his
authorization in the disbursement of the proceeds of a
loan without compensation being received for adjusting
the debts. Id.
This section is derived from pre-Code law, N.J.S.A.
2A:99A-1, et seq. (repealed), which was upheld as
constitutional. See American Budget Corp. v. Furman, 67