Johnson, J.
Defendant Wolf Run Resort, Inc. defaulted on an agreement with plaintiff lender and appeals from a decision of the Franklin Superior Court declaring that plaintiff could recover the principal amount of the loan, despite plaintiff’s noncompliance with Vermont’s Licensed Lenders Law (8 V.S.A. § 2201). We affirm.
Plaintiff lent defendant $120,000 for two years, secured by two parcels of land in Bakersfield and a security interest in certain personal property. Only interest was due until maturity, but early in 1989 defendant defaulted, after paying $4,789.04 in interest, as well as a $2,400 commitment fee. Plaintiff commenced a foreclosure action, [508] and defendant raised as an affirmative defense plaintiff’s failure to obtain a lender’s license from the Vermont Commissioner of Banking and Insurance pursuant to 8 V.S.A. § 2201* before making the loan, subjecting plaintiff to the penalty provisions of 8 V.S.A. § 2233. At the time of the loan and the commencement of the suit, § 2233 stated as follows:
(a) Any person, partnership, association or corporation and the several members, officers, directors, agents and employees thereof, who shall violate or participate in the violation of any of the provisions of this chapter shall be imprisoned not more than two years or fined not more than $500.00, or both.
(b) Any contract of loan not invalid for any other reason, in the making or collection of which any act shall have been done which constitutes an offense under this section, shall be void and the lender shall have no right to collect or receive any principal, interest, or charges whatsoever; provided, however, in the case of any loan or extension of credit described in 9 V.SA. § 46(1), (2) or (4) and made for the purpose of financing inventory acquired or held for resale by a dealer in goods, the making or collection of which shall involve any violation of the provisions of this chapter, the lender shall have no right to collect or receive any interest or charges whatsoever, but shall have a right to collect and receive principal.
(Emphasis supplied.) Plaintiff conceded that this provision precludes recovery of any portion of the loan, principal or interest, but had two responses: first, that he was not “engag[ed] in the business of making loans,” and second, even if he had been, § 2233(b) was amended in 1990 to include the subject loan within the provision allowing recovery of the principal.
[509] In 1990, the Legislature replaced the phrase “in the case of any loan or extension of credit described in 9 V.S.A. § 46(1), (2) or (4) and made for the purpose of financing inventory acquired or held for resale by a dealer in goods” with the phrase “in the case of commercial loans,” leaving the balance of the subsection unaltered. There is no dispute that the amended language, if applicable, would allow plaintiff recovery of the loan principal.
The court ruled that the outcome was controlled by 1 V.S.A. § 214(c), which states:
If the penalty or punishment for any offense is reduced by the amendment of an act or statutory provision, the same shall be imposed in accordance with the act or provision as amended unless imposed prior to the date of amendment.
The court reasoned that § 214(c) was not by its terms limited to criminal penalties or punishments, and that the “forfeiture imposed by 8 V.S.A. § 2233 is a penalty, albeit civil.” On cross-motions for summary judgment, the court entered judgment in plaintiff’s favor in the principal amount of the loan, less interest and other charges already paid. Defendant appeals arguing that the amended provision does not apply retroactively, leaving the bar to recovery of principal or interest in place.
The main issue is whether the 1990 amendment to § 2233 applies retroactively. In general, absent specific legislative intent to the contrary, “a statute affecting legally existing rights should not be construed to operate retrospectively.” Curran v. Marcille, 152 Vt. 247, 250, 565 A.2d 1362, 1364 (1989); 1 V.S.A. § 214(b). Many jurisdictions, however, have recognized an exception to this general rule when a usury statute is amended or repealed. Orden v. Crawshaw Mortgage & Investment Co., 167 Cal. Rptr. 62, 63-64 (Ct. App. 1980) (“statutes which repeal or modify usury laws are to be given retrospective effect to determine the scope of liability with respect to transactions entered into prior to such repeal or modification”); Paul v. United States Mutual Fin. Corp., 389 N.W.2d 487, 492 (Mich. Ct. App. 1986) (usury is a statutory penalty and “is ineffective if removed before judgment”); First Fed. Savings & Loan Ass’n v. Guildner, 295 N.W.2d 501, 503 (Minn. 1980) (“usury laws [are] penal in nature, and ... an amendment or repeal of such a usury law, removing the penalty under certain situations, should be presumed retroactive in the absence of a legislative indication to the contrary”); Vaughan v. Kalyvas, 342 S.E.2d 617, 619 (S.C. Ct. App. 1986) (“repeal of usury [510] laws, absent a savings clause, operates retrospectively to cut off the defense of usury”); see also Ewell v. Daggs, 108 U.S. 143, 150-51 (1883) (repeal of usury law operates retrospectively because statutory right to avoid contract can be taken away by legislature as long as transaction not yet completed); 6A A. Corbin, Corbin on Contracts § 1532, at 803 (1962) (“Under most usury statutes,. . . it is held that the repealing statute validates, expressly or by implication, an antecedently unenforceable bargain.”). These courts consider the forfeiture provisions of usury statutes a penalty to the lender. See, e.g., Orden, 167 Cal. Rptr. at 64 (remedies are in nature of a penalty); see also Allied Chemical Corp. v. MacKay, 695 F.2d 854, 857 (5th Cir. 1983) (usury statute is “highly penal,” especially when calling for forfeiture of both principal and interest). Arguing that a borrower’s right to forfeiture is not a vested interest, these courts have opted to apply amendments to usury statutes retroactively as long as the dispute has not reached final judgment. See Krause v. Griffis, 443 N.W.2d 444, 445 (Mich. Ct. App. 1989) (“defense of usury is not a vested right [and] may be extinguished by subsequent legislative action”).
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Johnson, J.
Defendant Wolf Run Resort, Inc. defaulted on an agreement with plaintiff lender and appeals from a decision of the Franklin Superior Court declaring that plaintiff could recover the principal amount of the loan, despite plaintiff’s noncompliance with Vermont’s Licensed Lenders Law (8 V.S.A. § 2201). We affirm.
Plaintiff lent defendant $120,000 for two years, secured by two parcels of land in Bakersfield and a security interest in certain personal property. Only interest was due until maturity, but early in 1989 defendant defaulted, after paying $4,789.04 in interest, as well as a $2,400 commitment fee. Plaintiff commenced a foreclosure action, [508] and defendant raised as an affirmative defense plaintiff’s failure to obtain a lender’s license from the Vermont Commissioner of Banking and Insurance pursuant to 8 V.S.A. § 2201* before making the loan, subjecting plaintiff to the penalty provisions of 8 V.S.A. § 2233. At the time of the loan and the commencement of the suit, § 2233 stated as follows:
(a) Any person, partnership, association or corporation and the several members, officers, directors, agents and employees thereof, who shall violate or participate in the violation of any of the provisions of this chapter shall be imprisoned not more than two years or fined not more than $500.00, or both.
(b) Any contract of loan not invalid for any other reason, in the making or collection of which any act shall have been done which constitutes an offense under this section, shall be void and the lender shall have no right to collect or receive any principal, interest, or charges whatsoever; provided, however, in the case of any loan or extension of credit described in 9 V.SA. § 46(1), (2) or (4) and made for the purpose of financing inventory acquired or held for resale by a dealer in goods, the making or collection of which shall involve any violation of the provisions of this chapter, the lender shall have no right to collect or receive any interest or charges whatsoever, but shall have a right to collect and receive principal.
(Emphasis supplied.) Plaintiff conceded that this provision precludes recovery of any portion of the loan, principal or interest, but had two responses: first, that he was not “engag[ed] in the business of making loans,” and second, even if he had been, § 2233(b) was amended in 1990 to include the subject loan within the provision allowing recovery of the principal.
[509] In 1990, the Legislature replaced the phrase “in the case of any loan or extension of credit described in 9 V.S.A. § 46(1), (2) or (4) and made for the purpose of financing inventory acquired or held for resale by a dealer in goods” with the phrase “in the case of commercial loans,” leaving the balance of the subsection unaltered. There is no dispute that the amended language, if applicable, would allow plaintiff recovery of the loan principal.
The court ruled that the outcome was controlled by 1 V.S.A. § 214(c), which states:
If the penalty or punishment for any offense is reduced by the amendment of an act or statutory provision, the same shall be imposed in accordance with the act or provision as amended unless imposed prior to the date of amendment.
The court reasoned that § 214(c) was not by its terms limited to criminal penalties or punishments, and that the “forfeiture imposed by 8 V.S.A. § 2233 is a penalty, albeit civil.” On cross-motions for summary judgment, the court entered judgment in plaintiff’s favor in the principal amount of the loan, less interest and other charges already paid. Defendant appeals arguing that the amended provision does not apply retroactively, leaving the bar to recovery of principal or interest in place.
The main issue is whether the 1990 amendment to § 2233 applies retroactively. In general, absent specific legislative intent to the contrary, “a statute affecting legally existing rights should not be construed to operate retrospectively.” Curran v. Marcille, 152 Vt. 247, 250, 565 A.2d 1362, 1364 (1989); 1 V.S.A. § 214(b). Many jurisdictions, however, have recognized an exception to this general rule when a usury statute is amended or repealed. Orden v. Crawshaw Mortgage & Investment Co., 167 Cal. Rptr. 62, 63-64 (Ct. App. 1980) (“statutes which repeal or modify usury laws are to be given retrospective effect to determine the scope of liability with respect to transactions entered into prior to such repeal or modification”); Paul v. United States Mutual Fin. Corp., 389 N.W.2d 487, 492 (Mich. Ct. App. 1986) (usury is a statutory penalty and “is ineffective if removed before judgment”); First Fed. Savings & Loan Ass’n v. Guildner, 295 N.W.2d 501, 503 (Minn. 1980) (“usury laws [are] penal in nature, and ... an amendment or repeal of such a usury law, removing the penalty under certain situations, should be presumed retroactive in the absence of a legislative indication to the contrary”); Vaughan v. Kalyvas, 342 S.E.2d 617, 619 (S.C. Ct. App. 1986) (“repeal of usury [510] laws, absent a savings clause, operates retrospectively to cut off the defense of usury”); see also Ewell v. Daggs, 108 U.S. 143, 150-51 (1883) (repeal of usury law operates retrospectively because statutory right to avoid contract can be taken away by legislature as long as transaction not yet completed); 6A A. Corbin, Corbin on Contracts § 1532, at 803 (1962) (“Under most usury statutes,. . . it is held that the repealing statute validates, expressly or by implication, an antecedently unenforceable bargain.”). These courts consider the forfeiture provisions of usury statutes a penalty to the lender. See, e.g., Orden, 167 Cal. Rptr. at 64 (remedies are in nature of a penalty); see also Allied Chemical Corp. v. MacKay, 695 F.2d 854, 857 (5th Cir. 1983) (usury statute is “highly penal,” especially when calling for forfeiture of both principal and interest). Arguing that a borrower’s right to forfeiture is not a vested interest, these courts have opted to apply amendments to usury statutes retroactively as long as the dispute has not reached final judgment. See Krause v. Griffis, 443 N.W.2d 444, 445 (Mich. Ct. App. 1989) (“defense of usury is not a vested right [and] may be extinguished by subsequent legislative action”).
We agree with the reasoning of these cases. The Vermont Licensed Lenders Law is a special type of usury statute, requiring nonexempted lenders to obtain a license when lending money at an interest rate above twelve percent. The penalty for violating this requirement has undergone numerous recent revisions by the Legislature. Before 1988, § 2233, entitled “Penalties,” provided for both criminal and civil penalties against lenders not complying with the licensing requirement, including the complete forfeiture of principal and interest. In 1988, an amendment to this section ameliorated the penalty provision of the Licensed Lenders Law to limit forfeiture to only interest payments for specific type of loans. 1987, No. 142 (Adj. Sess.), § 2. In 1990, the Legislature broadened the application of this ameliorative provision to include all commercial loans. 1989, No. 244 (Adj. Sess.), § 8. The amendments implicitly recognize that the Legislature considered the penalty of complete forfeiture too extreme.
Vermont law specifically recognizes that when the Legislature reduces a penalty provision in a statute, the lighter penalty will be imposed for any action that has not reached final judgment. 1 V.S.A § 214(c). Based on § 214 and the sound reasoning of other jurisdictions, we conclude that the 1990 amendment to § 2233 was properly applied retroactively by the trial court.
[511] Finally, defendant argues that even if the 1990 amendment to § 2233 is retroactively applied, the loan at issue remains void and cannot be revived. While we recognize that the statute makes the contract “void,” we think the better interpretation of the statute is that the Legislature intended making the contract “voidable.” See Black’s Law Dictionary 1573 (6th ed. 1990) (“The word ‘void’ is used in statutes in the sense of utterly void so as to be incapable of ratification, and also in the sense of voidable and resort must be had to the rules of construction in many cases to determine in which sense the Legislature intended to use it.”); see also Becker v. Becker, 138 Vt. 372, 380, 416 A.2d 156, 162 (1980) (“void” in fraudulent conveyance statute is construed to mean voidable only); Irish v. Clayes, 10 Vt. 81, 85 (1838) (“Contracts are frequently called void, which are only voidable. ... A usurious contract is called void] but it is only so, when it is avoided by the party, on whom the usury is practised.”) (emphasis in original); see In re Kelton Motors, Inc., 130 B.R. 170, 180 (Bankr. D. Vt. 1991) (word “void” in 9 V.S.A. § 2281 means “voidable”). The penalty provision states that an invalid loan “shall be void and the lender shall have no right to collect or receive any principal, interest, or charges whatsoever.” 8 V.S.A. § 2233(b). Reading the provision as a whole, we conclude that the penalty provision of the Vermont Licensed Lenders Law grants the borrower the remedy of voiding the contract. Having granted such a remedy, the Legislature is also free to remove the remedy. See Krause, 443 N.W.2d at 445 (“defense of usury is not a vested right [and] may be extinguished by subsequent legislative action”). Before final judgment in this action, the Legislature removed the remedy of voiding the contract from the transaction at issue; therefore, the loan was not void.
Affirmed.