There are many laws and guidelines regulating payday loans across the US. There are state and federal acts that mean that the rules differ from state to state. There are Payday Lending State Statutes and this exists alongside the Payday Lending 2016 Legislation.
Another important act is the Truth in Lending Act which states that all payday lenders must disclose full and truthful information bout all aspects of the loan to the customer. There shouldn’t be any hidden information especially when it comes to financial elements including the rates and the total amount that is repayable.
In general, the Federal Truth and Lending Act regulates payday in a similar way that it would for all other loans and credit products. It states that:
- The borrower must know and be advised of the total cost of the loan
- The lender must state the commission amount that they will receive
- The APR (annual percentage rate) must be stated.
- All details of the loan must be confirmed in writing before the loan can be authorized by the borrower.
Below we have listed the laws and governing codes for each state in the US.
What Are The Laws In Each State?
|State||Regulation||Loan amount (max), $||Loan term (max)||APR||Charges|
|Alabama Payday Loans||Alabama Code Title 5. Banks and Financial Institutions § 5-18A-1||500||31 days||456%||Max fee is 17.5%|
|Alaska||LICENSEE PRACTICES AND RECIPIENT RESCISSION AND PAYMENT
AS 06.50.400 – AS 06.50.560
|500||14 days||435%||15% of the amount advanced|
|California Payday Loan||California Code, Financial Code – FIN § 23000||300||31 days||460%||15% of the amount advanced|
|Colorado||Colorado Revised Statutes 2018 TITLE 5||500||6 months||36%|
|Delaware||TITLE 5 – Banking – Other Businesses Under Jurisdiction of State Banking Department – CHAPTER 22. Licensed Lenders||1000||60 days||521%||No limit for finance charges; 5 loan limit for 12 months|
|Florida||560.402 – REGULATION OF TRADE, COMMERCE, INVESTMENTS, AND SOLICITATIONS||500||31 days||304%||10% charge; One loan limit at a time; No roll-over allowed|
|Hawaii||Hawaii Revised Statutes Division 2. Business § 480F-1||600||32 days||460%||15% of the mount advances; One loan limit at a time; No roll-over allowed|
|Idaho||Idaho – Commercial transactions – Title 28||1000||Not specified||652%||A loan cannot exceed 25% of borrower’s gross monthly income|
(815 ILCS 122/) Payday Loan Reform Act.
|1000 or 25% of gross income||Up to 120 days||404%||One loan limit at a time; Finance charge 15.5% per $100|
|Indiana||Indiana Code Title 24. Trade Regulation § 24-4.5-7-101||550 or 20% of gross income||Not specified||382%||10%, 13% or 15% finance charge depending on amount advanced; No roll-over allowed|
|Iowa||2016 Iowa Code Title XIII – COMMERCE Chapter 533D||500||31 days||337%||15% finance charge on the loan up to $100 and only 10% on subsequent $100|
|Kansas||Kan. Stat. Ann. § 16a-2-404, 405||500||30 days||391%||15% of the amount advanced; No roll-over allowed; 2 loans at a time|
|Kentucky||Kentucky Rev. Stat. Ann. §§ 286.9.010 et seq.||500||60 days||460%||15% finance charge of $100; No roll-over allowed|
|Louisiana||2013 Louisiana Laws Revised Statutes TITLE 9 – Civil Code-Ancillaries RS 9:3578.1||350||30 days||391%||16.75% of the amount advanced|
|Maine||Title 9-A: MAINE CONSUMER CREDIT CODE||2000||Not specified||30% (actually 217%)||Small loan rate cap|
|Michigan||Mich. Comp. Laws §§ 487.2121 et seq.||600||31 days||369%||Two loans at a time allowed; 15%-11% finance charge|
|Minnesota||2021 Minnesota Statutes – Section 47.60 – Consumer Small Loans||350||30 days||200%||Finance charge varies depending on amount of a loan|
|Mississippi||Title 75. REGULATION OF TRADE, COMMERCE AND INVESTMENTS||500||30 days||521%||Finance charge 20%-21.95% for $100; No roll-over allowed|
|Missouri||Mo. Rev. Stat. §§ 408.500.1 et seq.||500||31 days||443%||Finance charges should not exceed 75% of initial loan amount;6 roll-overs allowed|
|Montana||TITLE 31. CREDIT TRANSACTIONS AND RELATIONSHIPS
CHAPTER 1. CREDIT TRANSACTIONS
|300||31 days||36% small loan cap||1.39% finance charge for $100 given for 2 weeks|
|Nebraska||Neb. Stat. Ann. §§ 45-901||500||34 days||460%||15% of the amount advanced; No roll-over allowed|
|Nevada||CHAPTER 604A – DEFERRED DEPOSIT LOANS, HIGH-INTEREST LOANS, TITLE LOANS AND CHECK-CASHING SERVICES.||25% of monthly gross income||35 days||No limit||Real APR 625%;No restriction to a number of loans|
|North Dakota||CHAPTER 13-08 DEFERRED PRESENTMENT SERVICE PROVIDERS Code 13-08-01 et seq.||500||60 days||487||20% of the amount advanced|
|Ohio||Ohio Rev. Code Ann. 1321.35 et seq.||1000||1 year||28%||One loan is allowed at a time; No roll-over allowed|
|Oklahoma||Okla. Stat. Tit. 59 §§ 3101 et seq.||500||45 days||395%||10%-15% finance charge|
|Oregon||Chapter 725A — Short-Term Loans and Student Loan Servicing||50,000||60 days||154%||Finance charges are capped at 36%|
|Rhode Island||R.I. Stat. Ann. 19-14.4-1 et seq.||500||Not specified||261%||10% on the amount advanced|
|South Carolina||S.C. Code §§ 34-39-110 et seq.||550||31 days||391%||10% on the amount advanced|
|South Dakota||S.D. Codified Laws 54-4-36 et seq.||500||Not specified||36%||1.39% finance charge for $100 given for 2 weeks; 4 roll-overs allowed|
|Tennessee||Consumer Notice Deferred Presentment Services Act||500||31 days||460%||15% of the amount of the check|
|Texas||TITLE 5. PROTECTION OF CONSUMERS OF FINANCIAL SERVICE – CHAPTER 393. CREDIT SERVICES ORGANIZATIONS||Not specified||Not fixed||662%||Finance charge varies depending on amount of a loan; No roll-over allowed|
|Utah||Utah Code Ann. 7-23-101 et seq.||No limit||70 days||658%||No limits on finance charges|
|Virginia||Va. Code Ann. §§ 6.2-1800 et seq.||500||30 days||36% (can reach 601%)||APR is capped at 36%; 5% verification fee; 20% loan fee|
|Washington||Wash. Rev. Code Ann. 31.45.010 et seq.||700 or 30% of gross monthly income||45 days||391%||10%-15% finance charges; no roll-over|
|Wisconsin||Wis. Stat. 138.14||1500 or 35% of gross monthly income||90 days||547%||2.75% monthly finance charge; 2 renewals allowed|
|Wyoming||Wy. Stat. 40-14-362 et seq.||Not specified||1 month||261%||20%-30% finance charges per month|