Charging interest rates in excess of the state maximum allowed is known as?

The term "usury" specifically refers to the act of charging interest rates that exceed the legally established maximum allowable rate set by state law. Each state in the U.S., including Arizona, has regulations that define what constitutes usurious interest rates. When a lender charges interest above these limits, it is considered illegal, as it takes advantage of borrowers and can lead to significant financial distress.

Usury laws are designed to protect consumers from predatory lending practices, ensuring that interest rates remain fair and manageable. By penalizing lenders who charge excessive rates, these laws help maintain the integrity of the lending system and promote responsible lending practices.

The other terms listed do not relate directly to the concept of charging excessive interest. "Escrow" typically refers to a financial arrangement where a third party holds funds or documents until certain conditions are met. "Defeasance" is a legal term often related to the cancellation of a debt obligation when the borrower pays it off, while "hypothecation" refers to the practice of using an asset as collateral for a loan without transferring ownership. None of these terms involve interest rates or usury.