Man charged with usury acquitted as borrower wasn't in distress

A man accused of usury has been acquitted by a court in Taiwan, despite charging an annual interest rate of 53.75% on a loan. The court found that while the interest rate significantly exceeded the legal limit, the borrower was not in a state of urgency, desperation, inexperience, or difficulty seeking help when he took out the loan. The accused, referred to as "Ah Zhi," lent NT$960,000 (approximately $31,000 USD) to another man, identified only by his surname Dai, who was facing financial difficulties. The agreement stipulated a monthly interest payment of NT$43,000, resulting in the high annual rate. Dai and his wife signed promissory notes totaling NT$2 million as collateral.

Dai eventually reported "Ah Zhi" to the police due to his inability to repay the loan. Prosecutors charged "Ah Zhi" with usury. However, the Pingtung District Court ruled that the crime of usury under Taiwan's Criminal Code requires the lender to exploit the borrower's urgent, careless, inexperienced, or helpless situation. The court noted that Dai sought the loan specifically to consolidate his existing debts, including credit card payments and a car loan. Evidence suggested Dai discussed the amounts owed and payment schedules with "Ah Zhi" before agreeing to the loan terms. This indicated Dai was not acting out of immediate distress but rather making a calculated decision to manage his finances.

"Ah Zhi's" defense argued that Dai borrowed the money for car purchases to build credit, not for essential living expenses, and was therefore not in a state of urgency. The court accepted this reasoning, concluding that Dai's circumstances did not meet the legal threshold for usury. Consequently, "Ah Zhi" was acquitted, though the verdict can be appealed. The ruling highlights the specific legal requirements for proving usury in Taiwan, emphasizing the borrower's state of mind and circumstances at the time of the loan agreement.