Description
The Law Reform Commission (the “Commission”) undertook a review of the law relating to usury in the Cayman Islands following queries from legal practitioners regarding the existence of usury laws within the jurisdiction
Terms of Reference
The Commission’s review was aimed at determining the legal status of usury in the Cayman Islands, with focus on both the common law and statutory position. The Commission adopted a two-pronged approach, as follows –
1. common law – an assessment of whether any common law rules prohibiting usury were received into Cayman Islands law upon settlement and, if so, whether such rules remain in force or have been expressly abrogated.
2. statute law – a review of whether any enactments relating to usury are applicable to the Cayman Islands by way of either an extension to the Cayman Islands by Order in Council, the Jamaica Parliament or by enactment by the Legislature of the Cayman Islands
Outcomes
On 1st November, 2021, the Commission published a Discussion Paper titled “Usury: The Common Law and Statutory Position in the Cayman Islands”, which was subsequently forwarded to key institutional stakeholders. The consultation period commenced on 1st November, 2021 and concluded on 6th
December, 2021 and submissions were received from the Cayman Islands Monetary Authority and the Ministry of Financial Services and Commerce.
Following its review of stakeholder responses, the Commission prepared its Final Report dated 3 October 2022, in which it concluded that there is a strong basis to argue that the common law prohibition against usury remains applicable in the Cayman Islands.
To provide legal certainty and clarity to the financial services and commercial sectors, the Commission recommended the formal abrogation of any common law rule that prohibits usury. The recommendation was accompanied by the Usury (Common Law Abrogation) Bill, 2022, which was submitted to the Honourable Attorney General for consideration.
The Bill seeks to:
Publications