In the Mutual Loan Company v. Martell case of 1911, the U.S. Supreme Court ruled in favor of a pawnbroker who was accused by a customer of charging excessive interest rates that violated Massachusetts state law. The plaintiff, Martell, had argued that the defendant's practice constituted usury and sought to recover twice the amount he paid as per state statute provisions for such violations. However, Justice Oliver Wendell Holmes Jr., writing for the majority court opinion held that while it might seem like an exorbitant rate when calculated annually (520%), considering it on a weekly basis (10%) made it reasonable given risks associated with this type of lending business model where loans are small and short-term with high default risk. Therefore, they concluded that these charges were not penalties but compensation for services rendered under legal contracts between willing parties hence did not violate any laws.

In the dissenting opinion for Mutual Loan Company v. Martell, Justice Oliver Wendell Holmes Jr. argued that the majority's decision was based on an overly narrow interpretation of Massachusetts' usury laws and failed to consider their broader intent: protecting borrowers from exploitative lending practices. He contended that while the contract in question may not have technically violated these laws due to its structure as a pawnbroking transaction rather than a loan, it clearly contravened their spirit by charging excessive interest rates under another name. Furthermore, he criticized his colleagues for ignoring relevant precedents which supported this more expansive view of usury regulations and suggested they were prioritizing formalistic legal definitions over substantive justice for vulnerable consumers.