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In E-Z Cashing, LLC v. Chery, 2026 Mass. App. Unpub. LEXIS 606 (Mass. App. Ct. Aug. 11, 2026), the Massachusetts Appeals Court, with the exception of damages, affirmed judgment for lender E-Z Cashing, LLC on the borrowers’ Chapter 93A counterclaim, notwithstanding that E-Z Cashing had demanded default interest at an unlawful rate.
The dispute arose from a $900,000 mortgage loan providing for a default interest rate of 25% or the maximum rate permitted by law, whichever was lower. Because Massachusetts law capped the permissible rate at 20%, the 25% rate violated G.L. c. 271, § 49. E-Z Cashing acquired the loan from the original lender in 2020 and subsequently demanded payment based on the 25% default rate. The motion judge declined to void the loan and instead reformed it to impose the lawful 20% rate.
The borrowers argued that E-Z Cashing’s demand for default interest at the unlawful rate independently constituted an unfair or deceptive business practice under Chapter 93A. Following a bench trial, however, the trial judge found no evidence that E-Z Cashing’s principal knew when E-Z Cashing purchased the note that the 25% rate was usurious. The judge credited the principal’s testimony that he believed E-Z Cashing could charge the rate because it appeared in the loan documents acquired from the prior lender. Based on that finding, the judge concluded that his conduct did not rise to the level of a Chapter 93A violation. The Appeals Court upheld both the factual finding and the resulting legal conclusion.
The surrounding factual findings also favored the defense. Although E-Z Cashing provided payoff amounts incorporating the unlawful rate, the trial judge found that the borrowers were not prejudiced because the prospective sale of the property failed for reasons unrelated to the payoff figures. The court also upheld findings that E-Z Cashing complied with the statutory foreclosure requirements and that its principal did not know, at the time of foreclosure, that the City of Brockton later would take the property by eminent domain. These findings undermined an effort to characterize the unlawful interest demand as part of a broader course of unfair or deceptive conduct.
The Appeals Court reached this result even though the final judgment mistakenly included interest calculated at the unlawful 25% rate. E-Z Cashing conceded that the $1,406,750 judgment was overstated by approximately $393,000. The court remanded for recalculation of damages but otherwise affirmed the judgment, including the rejection of the Chapter 93A counterclaim.
E-Z Cashing may provide authority for the proposition that a statutory or contractual violation does not automatically establish Chapter 93A liability. The case should be used cautiously, however, because it is a nonbinding Rule 23.0 decision and its Chapter 93A holding depends substantially on the trial judge’s credibility and factual findings.
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