What is the defining feature of usury laws?

The defining feature of usury laws is that they are designed to cap the interest rate that can be charged on loans. These laws protect consumers by establishing maximum allowable interest rates, which prevents lenders from charging exorbitant rates that can lead to financial hardship for borrowers. By providing this regulation, usury laws aim to promote fair lending practices and prevent abuse in the lending market.

The other options do not accurately capture the core purpose of usury laws. While service fees may be regulated under different lending regulations, usury laws specifically focus on interest rates. Usury laws do not inherently encourage short-term lending practices nor do they promote high-risk lending activities; instead, they seek to provide a safeguard against predatory lending practices that can arise in high-interest scenarios.