CHAPTER 949a
EXTORTIONATE CREDIT TRANSACTIONS

Table of Contents

Sec. 53-389. Definitions.
Sec. 53-390. Extortionate extension of credit. Conspiracy.
Sec. 53-391. Advances of money or property to be used in extortionate extension of credit.
Sec. 53-392. Participation or conspiracy in use of extortionate means. Evidence.

      Sec. 53-389. Definitions. (a) As used in this chapter:

      (1) "To extend credit" means to make or renew any loans, or to enter into any agreement, tacit or express, whereby the repayment or satisfaction of any debt or claim, whether acknowledged or disputed, valid or invalid, and however arising, may or will be deferred;

      (2) "Creditor", with reference to any given extension of credit, refers to any person making such extension of credit, or to any person claiming by, under or through such person;

      (3) "Debtor", with reference to any given extension of credit, refers to any person to whom such extension of credit is made, or to any person who guarantees the repayment of that extension of credit, or in any manner undertakes to indemnify the creditor against loss resulting from the failure of any person to whom that extension of credit is made to repay the same;

      (4) "Repayment" of any extension of credit includes the repayment, satisfaction or discharge, in whole or in part, of any debt or claim, acknowledged or disputed, valid or invalid, resulting from or in connection with such extension of credit;

      (5) "To collect an extension of credit" means to induce in any way any person to make repayment thereof;

      (6) An "extortionate extension of credit" is any extension of credit with respect to which it is the understanding of the creditor and the debtor, at the time such extension of credit is made, that delay in making repayment or failure to make repayment could result in the use of violence or other criminal means to cause harm to the person, reputation or property of any person;

      (7) An "extortionate means" is any means which involves the use, or an express or implicit threat of use, of violence or other criminal means to cause harm to the person, reputation or property of any person.

      (b) State law, including conflict of laws rules, governing the enforceability through civil judicial processes of repayment of any extension of credit or the performance of any promise given in consideration thereof, shall be judicially noticed. This subsection shall not impair any authority which any court would otherwise have to take judicial notice of any matter of state law.

      (1971, P.A. 239, S. 1; May 25 Sp. Sess. P.A. 94-1, S. 97, 130.)

      History: May 25 Sp. Sess. P.A. 94-1 made technical change, effective July 1, 1994.

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      Sec. 53-390. Extortionate extension of credit. Conspiracy. (a) Any person who makes any extortionate extension of credit, or conspires to do so, shall be guilty of a class B felony.

      (b) In any prosecution under this section, if it is shown that all of the following factors were present in connection with the extension of credit in question, there is prima facie evidence that the extension of credit was extortionate; but this subsection is nonexclusive and in no way limits the effect or applicability of subsection (a): (1) The repayment of the extension of credit, or the performance of any promise given in consideration thereof, would be unenforceable, through civil judicial processes against the debtor (A) in the jurisdiction within which the debtor, if a natural person, resided or (B) in every jurisdiction within which the debtor, if other than a natural person, was incorporated or qualified to do business at the time the extension of credit was made; (2) the extension of credit was made at a rate of interest in excess of the rate permitted under title 37 calculated according to the actuarial method of allocating payments made on a debt between principal and interest, pursuant to which a payment is applied first to the accumulated interest and the balance is applied to the unpaid principal; (3) at the time the extension of credit was made, the debtor reasonably believed that either (A) one or more extensions of credit by the creditor had been collected or attempted to be collected by extortionate means, or the nonrepayment thereof had been punished by extortionate means; or (B) the creditor had a reputation for the use of extortionate means to collect extensions of credit or to punish the nonrepayment thereof; (4) upon the making of the extension of credit, the total of the extensions of credit by the creditor to the debtor then outstanding, including any unpaid interest or similar charges, exceeded ten dollars.

      (c) In any prosecution under this section, if evidence has been introduced tending to show the existence of any of the circumstances described in subdivision (1) or (2) of subsection (b), and direct evidence of the actual belief of the debtor as to the creditor's collection practices is not available, then, for the purpose of showing the understanding of the debtor and the creditor at the time the extension of credit was made, the court may, in its discretion, allow evidence to be introduced tending to show the reputation as to collection practices of the creditor in any community of which the debtor was a member at the time of the extension.

      (1971, P.A. 239, S. 2.)

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      Sec. 53-391. Advances of money or property to be used in extortionate extension of credit. Any person who wilfully advances money or property, whether as a gift, as a loan, as an investment, pursuant to a partnership or profit sharing agreement, or otherwise, to any person, with reasonable grounds to believe that it is the intention of such person to use the money or property so advanced directly or indirectly for the purpose of making extortionate extensions of credit, shall be guilty of a class B felony and fined not more than ten thousand dollars or an amount not exceeding twice the value of the money or property so advanced, whichever is greater, or shall be imprisoned not more than twenty years, or both.

      (1971, P.A. 239, S. 3.)

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      Sec. 53-392. Participation or conspiracy in use of extortionate means. Evidence. (a) Any person who knowingly participates in any way, or conspires to do so, in the use of any extortionate means (1) to collect or attempt to collect any extension of credit, or (2) to punish any person for the nonrepayment thereof, shall be guilty of a class B felony.

      (b) In any prosecution under this section, for the purpose of showing an implicit threat as a means of collection, evidence may be introduced tending to show that one or more extensions of credit by the creditor were, to the knowledge of the person against whom the implicit threat was alleged to have been made, collected or attempted to be collected by extortionate means or that the nonrepayment thereof was punished by extortionate means.

      (c) In any prosecution under this section, if evidence has been introduced tending to show the existence, at the time the extension of credit was made, of the circumstances described in subdivision (b)(1) or (b)(2) of section 53-390, and direct evidence of the actual belief of the debtor as to the creditor's collection practices is not available, then, for the purpose of showing that words or other means of communication, shown to have been employed as a means of collection, in fact carried an express or implicit threat, the court may in its discretion allow evidence to be introduced tending to show the reputation of the defendant in any community of which the person against whom the alleged threat was made was a member at the time of the collection or attempt at collection.

      (1971, P.A. 239, S. 4.)

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