Recent Jurisprudence – Penalty Interest and Usury in Promissory Notes, by Adrian Salgado


Recently, the First Chamber of the Supreme Court of Justice of the Nation issued legal opinion by contradiction number 1a./J. 54/2016(10a.) titled: “Usury. Its prohibition applies to ordinary and penalty interest in a promissory note.” Legal opinion number XVI.3o.C. J/1 (10a.) titled: “Usury.  Its prohibition applies to penalty interest,” issued by the Third Collegiate Court on Civil Matters of the Sixth Circuit and previously discussed in a prior edition of the CCN MexicoReport®, was part of the contradiction resolved by the legal opinion discussed in this article and pursuant to which the highest Court has determined that given the prohibition against usury established in the American Convention on Human Rights, the law, based on the principle of contractual freedom, should not allow a person to receive a personal benefit in an abusive manner, i.e. excessive interest derived from a loan.  As a result, the First Chamber has ruled that the prohibition against usury applies to both ordinary and penalty interest agreed to in a promissory note documenting a loan, even when such interest obligations have different legal origins, because both derive from a loan and, when generated, represent a benefit to the creditor, which has a direct and proportional impact on the debtor’s property