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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.

payday-laws-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
Illinois BUSINESS TRANSACTIONS
(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

 

Richard Allan

Richard Allan

Richard Allan is the founder of Capital Bean and a passionate writer about personal finance, budgeting and how to save money at home and work.

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