Ky. Rev. Stat. » Chapter 360
Kentucky Revised Statutes

Ky. Rev. Stat. § 360.025 (2026)

Excess rate of interest prohibited as defense of corporation

✓ current as of May 2026
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(1) No corporation shall hereafter plead or set up the taking of more than the legal rate of interest, as a defense to any action brought against it to recover damages on, or enforce payment of, or other remedy on, any mortgage, bond, note or other obligation, executed or assumed by such corporation: provided, that this section shall not apply to any action which is now pending or to any suit or action instituted subsequent to June 16, 1960, upon any mortgage, bond, note or other obligation executed or assumed by such corporation prior to June 16, 1960. (2) The provisions of subsection (1) of this section shall not apply to a corporation, the principal asset of which shall be the ownership of a one (1) or two (2) family dwelling. Effective: June 16, 1960 History: Created 1960 Ky. Acts ch. 221, secs 1 and 2, effective June 16, 1960.

Notes of Decisions
Cited in 6 cases (1 in the last 5 years), 1969–2024 · leading case: Comm'r v. Bollinger, 485 U.S. 340 (1988).
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Comm'r v. Bollinger, 485 U.S. 340 (1988). “That the statute positively envisioned corporate nominees is suggested by a provision which forbids charging the higher corporate interest rates “to a corporation, the principal asset of which shall be the ownership of a one (1) or two (2) family dwelling,” Ky. Rev. Stat.…”
First Chicago Corp. v. Comm'r, 96 T.C. 421 (Tax Ct. 1991). “We have made this finding to distinguish this situation from one where the transfer of ownership was motivated solely or primarily for purposes of tax benefit. Here petitioner was not seeking some double benefit and was not involved in any type of scheme or device concerning the…”
Credit All. Corp. v. Adams Constr. Corp., 570 S.W.2d 283 (Ky. 1978). “Various policy reasons have been advanced to justify these decisions denying the recovery of unearned interest. If we were confined to the view that the sole reason to disallow recovery is to prevent usury, there would be no bar imposed to movant’s claim because respondents are…”
E'Town Shopping Ctr., Inc. v. Lexington Fin. Co., 436 S.W.2d 267 (Ky. Ct. App. 1969). “They contend that KRS 360.025, which denies the defense of usury to corporations (including E’town), does not apply to them.”
A & G Coal Corp. v. Commonwealth of Kentucky, Energy & Env't Cabinet (Ky. Ct. App. 2024). “-14- With respect to usury, the Cabinet is correct that Kentucky’s applicable statutes would not invalidate this aspect of its bargain with appellants.”
Whitaker v. Comm'r, 37 T.C.M. 310 (Tax Ct. 1978). “His testimony that payment to the Corporation was made in order to circumvent the usury laws (which did not apply to loans to corporations, Ky.”
— Ky. Rev. Stat. § 360.025(2) — 1 case
Comm'r v. Bollinger, 485 U.S. 340 (1988). “That the statute positively envisioned corporate nominees is suggested by a provision which forbids charging the higher corporate interest rates “to a corporation, the principal asset of which shall be the ownership of a one (1) or two (2) family dwelling,” Ky. Rev. Stat.…”
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