On April 26, 2023, the Second Department issued a decision in Bono v. Stim & Warmuth, P.C., 2023 NY Slip Op. 02099, holding that a criminal usury defense does not apply if the excessive rate applies only after default, explaining:
The claim of legal malpractice was predicated on the plaintiffs’ allegations that the court would have ruled in their favor in the underlying action had the defendants asserted the affirmative defense of criminal usury. However, the evidence indisputably demonstrated that the annual interest rate imposed under the loan documents was 6.5%, and, therefore, was not criminally usurious. Moreover, contrary to the plaintiffs’ contention, the defense of usury does not apply where the terms of the note impose a rate of interest in excess of the statutory maximum only after default or maturity.
(Internal quotations and citations omitted).