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ARIZONA STATE SENATE
Fifty-Sixth Legislature, Second Regular Session
judgments; interest rates
Purpose
Background
Statute governs interest rates on loans, indebtedness, obligations and
judgments. For any loan, indebtedness or obligation,
excluding medical debt, the interest rate is 10 percent per year, unless a
different rate is contractually agreed upon in writing. The interest rate on
judgments, excluding judgments on medical debt, is the lesser of either
10 percent per year or 1 percent plus the prime rate as published by the
Federal Reserve on the date the judgment is entered, unless
specified in statute or a different rate is contracted for in writing.
The judgment must state the applicable interest rate and the rate may not
change after the judgment is entered. For any
judgments made on a written agreement evidencing a loan, indebtedness or
obligation with an interest rate within the statutory
limit, excluding judgments on medical debt, statute requires the rate provided
in the agreement to apply to the interest and to be specified in the judgment
(A.R.S.
§ 44-1201).
Published by the Federal Reserve every business day in Statistical Release H.15, the prime rate is a benchmark interest rate determined using the rate posted by a majority of the top 25, by assets held in domestic offices, insured U.S.-chartered commercial banks. The prime rate on January 17, 2024, is 8.5 percent (Federal Reserve).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Specifies the effective date of the prime rate as the business day following publication by the Federal Reserve.
2. Makes technical changes.
3. Becomes effective on the general effective date.
Prepared by Senate Research
January 18, 2024
MG/JC/cs