Zager v. Lara

SNEED, Circuit Judge:

The bankruptcy court held that a loan made by Gary Zager, a licensed real estate broker, and Richard Pion to Francisco and Maria Lara violates the usury prohibitions of Article XV of the California Constitution. The bankruptcy appellate panel affirmed. We affirm in part and reverse in part.

I

FACTS

Appellees Francisco and Maria Lara, husband and wife, wished to borrow money to refinance an existing loan. They sought the assistance of Mrs. Lara’s brother, Henry Molinar, who in turn approached appellant Gary Zager. Zager agreed to lend money to the Laras on two conditions:…