State Statutes

Rules in Your State

StateMin/Max TermMin/Max LoanFees and Finance ChargesStatus of Laws
Alabama10-31days$50017.5% of loanAfter the initial loan period and one rollover with the same customer, the
full outstanding amount of the loan, is due and payable. If the borrower is
unable to repay the outstanding balance in full, the payday lender may offer
the customer an extended repayment option of four equal monthly installments
of the remaining balance. If there are insufficient funds to pay a check on
the date of presentment, the lender may charge an additional fee. (Alabama Deferred
Presentment Services Act, Title 5, Chapter 18A)
Alaska14 days min.$50015% or the lesser of $15 per
$100 loaned + $5 fee
S.B. 272 Signed by governor 6/29/04, (Chapter 116) Gives the Department of
Community and Economic Development additional licensing and regulatory authority
over payday lenders; gives borrowers the right to rescind the advance without
cost before the end of the following business day; prohibits onerous collection
practices by both payday lenders and payday third-party collectors, including
the threat of criminal charges; prohibits the acceptance of collateral other
than a check or other instrument; and defines the additional disclosures that
lenders are required to make to clearly describe the advances and their uses
for the borrowers.
Arizona5 days min.$50-$50015% of amount loanedA borrower may have only one outstanding payday loan at one time and the face
amount, exclusive of any fees, cannot be more than five hundred dollars with
three rollovers. Several bills introduced in the 2005 Legislative Session amend
requirements for payday lenders, and loans.
Arkansas6-31 days$40010% of amount loaned + $10 fee
max.
Senate Bill 948 amended existing law protecting the military,
and some licensing requirements.
California31 days$30015% of amount loanedA.B. 207 introduced in 2005 prohibits the fee for some deferred deposit transactions
from exceeding an effective annual rate greater than 10 percent; Requires a
check from a customer for these deferred deposit transactions to be made payable
to the actual name of the licensee; Prohibits a check that has been held by
a licensee for more than 31 days from being presented to a bank for payment.
Colorado40 days$50020% first $300; 7.5% of amount
loaned in excess of $300
Only one loan per borrower at a time.
ConnecticutThe small loan laws of Connecticut permits payday lenders to operate and charge
any interest rate or fees which the borrower agrees to pay. Lenders must comply
with other provisions of the state’s small loan act. This amounts to very
large annual percentage rates.
Delaware60 days$500No limitThe small loan laws of Delaware permits payday lenders to operate and charge
any interest rate or fees which the borrower agrees to pay. Lenders must comply
with other provisions of the state’s small loan act. This amounts to very
large annual percentage rates. H.B. 152: enacted 7/12/05 sets fees/damages for
bad checks and provides that damages or fees may not be obtained for pay-day
loans, made by a bank or licensed payday lenders.
District of Columbia31 days$50 min; up to $1,000 per borrower$5 on amounts up to $250; $10
face amounts $250.01 to $500; $15 on face amounts $500.01 to $750; and $20 on
face amounts of $750.01 to $1,000+ fees
The District of Columbia passed statutes specifically authorizing
payday lending. The interest rates and fees that lenders are permitted to charge
amount to very large annual percentage rates. The APR for a 14-day $100 loan
is 419%. Payday lenders are permitted to add additional fees for handling, processing
and verification on a sliding scale based on the amount borrowed.
Florida7-31 days$500 exclusive of fees10% max + $5 feeFlorida passed statutes specifically authorizing payday lending. The interest
rates and fees that lenders are permitted to charge amount to very large annual
percentage rates. The APR for a 14 day, $100 loan is 390%.
Georgia$3,000 minIn general Georgia law prohibits the making of any loans of $3,000 or less
if that loan violates Georgia’s usury law. Payday lenders in Georgia are not
permitted to loan borrowers less than $3,000 for more than 16% APR. A payday
lender is permitted to charge 16% APR if it attempts to loan money directly
to its customers and only then if the in-state lender holds more than a 50%
interest in the revenues from the loan. However a state chartered bank operating
under the laws of another state and insured by the FDIC, that is not operating
in violation of the federal and state laws applicable to that state charter,
is not limited by Georgia’s 16% cap. (See Georgia Code Ann. §§16-17-1
to 16-17-10).
Hawaii32 days$60015% of face amount of the checkHawaii passed statutes specifically authorizing payday lending. The interest
rates and fees that lenders are permitted to charge amount to very large annual
percentage rates. H.C.R. 172 authorizes a review of the registration of payday
lenders.
IdahoNA$1,000No limitIdaho permits payday lenders to operate and charge any interest rate or fees
which the borrower agrees to pay. Lenders must comply with other provisions
of the state’s small loan act.
Illinois13-45 daysThe lesser of $1,000 or 25% of
borrower’s gross monthly income, whichever is less.
$15.50 per $100Illinois permits payday lenders to operate in Illinois.
Lenders must comply with other provisions of the state’s small loan act
and may not make more than one loan to a borrower at any one time. The law caps
the fee that can be charged to $15.50 per each $100. This amounts to a very
high effective APR. The APR for a 14-day $100 loan is 403%. Payday lenders are
regulated and licensed by the Division of Financial Institutions of the Department
of Financial and Professional Regulation. The Payday Loan Reform Act (H.B.
1100
) provides that the terms of loans, finance charges, renewals; revocations,
suspensions, must be made available to the public.
Indiana14 days min.$50-$500 ( but may not exceed
borrower’s gross income)
15% on amounts <$250; 13%
$251-$400; 10% $410-$500
Indiana permits payday lenders to operate and charge any interest rate or
fees which the borrower agrees to pay. Lenders must comply with other provisions
of the state’s small loan act. Indiana (permits the charging of $33 rather
than the 36% per annum applicable to other loans). The APR for a 14-day $100
loan is 390%
Iowa31 days$500$15 on first $100; $10 on each
$100 after
Lender may make no loans for more than $500 to
a borrower at any given time.
Kansas7-30 days$50015% + administrative feeA lender may not have more than two loans outstanding to the same borrower
at any one time and may not make more than three loans to any one borrower
within a 30 calendar day period. New legislation establishes limits on a payday
lender’s ability to collect on payday loans from military borrowers:

  • Lenders are prohibited from garnishing the wages of military borrowers;
  • Lenders must defer all collection activity against a borrower who is deployed
    to combat or a combat support post for the duration of such posting; and
  • Lenders may not contact any person in the military chain of command of
    a borrower in an attempt to make collection.
Kentucky14-60 days$500$15 per $100 on amount loaned
Louisiana60 days$35016.75% max. of amount loaned;
$45 max fee
Louisiana requires payday lenders to be licensed. And prohibits
them from attaching property when collecting on payday loans.
MaineMaine permits payday lenders to operate and charge any interest rate or fees
which the borrower agrees to pay. Lawmakers in Maine are considering approving
changes to existing laws that would allow significant expansion of the payday
loan industry. One of the proposed changes would allow lenders to charge as
much as 17.5%, which would amount to $17.50 per $100. In addition, payday lenders
are permitted to use advertising methods that are currently prohibited, and
have greater leeway, in collection methods in the event of default than other
types of creditors.
MarylandMaryland requires payday lenders to comply with the state’s small loan
or criminal usury laws. Basically, since the allowable interest rates and fees
are much lower than what the payday industry usually charges, payday lenders
in these states are probably operating illegally.
MassachusettsMassachusetts requires payday lenders to comply with the state’s small
loan or criminal usury laws. Basically, since the allowable interest rates and
fees are much lower than what the payday industry usually charges, payday lenders
in these states are probably operating illegally.
Michigan<31 days$60015% or the first $100; 14% of
amounts $100-200 13% of amounts $200 – $300; 12% of $300-400 the fourth $100;
11% of amounts $400-$600 plus administrative fees
New legislation, the Deferred Presentment Service Transactions Act (H.B.
4834
)signed by Governor Granholm will regulate payday lending in Michigan
by limiting loan amounts to 600 in a 31 day period and allow lenders to charge
up to 15% depending on the size of the loan. Borrowers are allowed only one
loan at a time. The law requires all payday lenders to be licensed by June 1,
2006, by the Office of Financial and Insurance Services. The law establishes
a statewide database for lenders to determine if customers have other open transactions;
and allows borrowers to file complaints with the state. The law permits payday
lenders to charge service transaction and service fees for each transaction.
Minnesota30 days$350Ranges from $5.50 for loans up
to $50 to 6% + $5 for loans $250 to $350
(i) On any amount up to and including $50, a charge of $5.50 may be added;
(ii) on amounts in excess of $50, but not more than $100, a charge may be added
equal to ten percent of the loan proceeds plus a $5 administrative fee; (iii)
on amounts in excess of $100, but not more than $250, a charge may be added
equal to seven percent of the loan proceeds with a minimum of $10 plus a $5
administrative fee; (iv) for amounts in excess of $250 and not greater than
$350, a charge may be added equal to six percent of the loan proceeds with a
minimum of $17.50 plus a $5 administrative fee. After maturity, the contract
rate must not exceed 2.75 percent per month of the remaining loan proceeds after
the maturity date calculated at a rate of 1/30 of the monthly rate in the contract
for each calendar day the balance is outstanding. (Minnesota Small Loans – Chapter
47.60)
Mississippi30 days$40018% loan amountMississippi passed statutes specifically authorizing payday lending. The fees
and interest rates amount to very large annual percentage rates. The APR for
a 14-day $100 loan is 572%.
Missouri14-31 days$50075%Missouri passed statutes specifically authorizing payday lending. Lenders
may not charge interest and fees in excess of 75% of the initial loan amount
on any single authorized loan for the entire loan term and all authorized renewals.
Otherwise, interest is set pursuant to small loan law which provides that parties
may set rate by contract. The APR for a 14-day $100 loan is 1980%.
Montana31 days$50-$30025% of face value of the checkThe maximum loan cannot exceed $300 plus fees and the minimum amount is $50
plus fees. A loan cannot exceed 25% of the borrower’s monthly net income (take-home
pay). A borrower cannot have more than 2 loans at any one time with a single
payday lender. The total of the two loans cannot exceed the $300 maximum. Payday
lenders are prohibited from renewing, refinancing or consolidating payday loans.
However a payday lender may extend the term of the loaned beyond the due date
for no additional charge. S.B.
165
provides that a borrower has the right to rescind for one day after
signing a payday loan agreement; and permits lenders to require arbitration.
Nebraska31 days$50015% per $100A lender may only loan $500 maximum to any one borrower at a time. Nebraska
passed statutes specifically authorizing payday lending.
NevadaNANot to exceed 25% of the expected
gross income of the borrower when the loan is made
NAThere are no statutory limits on fees that may
be charged so long as the borrower agreed to those fees in writing. This amount
to a very high APR. Payday lenders are licensed in Nevada.
New Hampshire7-30 days$500Only interest may be charged
on loans; No fees are permitted
New Hampshire permits payday lenders to operate and charge any interest rate
or fees which the borrower agrees to pay. Lenders must comply with other provisions
of the state’s small loan act. New Hampshire removed its interest rate
cap effective 1/1/2000.
New JerseyNew Jersey does not have specific payday lending legislation and permits payday
lenders to operate and charge any interest rate or fees which the borrower agrees
to pay.
New MexicoNANANo limitNew Mexico permits payday lenders to operate and charge any interest rate
or fees which the borrower agrees to pay. Lenders must comply with other provisions
of the state’s small loan act.
New YorkNew York does not have specific payday lending legislation and permits payday
lenders to operate and charge any interest rate or fees which the borrower agrees
to pay.
North CarolinaNorth Carolina passed statutes specifically authorizing payday lending. The
fees and interest rates that payday lenders are permitted to charge amount to
very large annual percentage rates. For example, North Carolina permits a 15%
charge on a maximum loan amount of $300. This means that the consumer will receive
$255 in cash and the lender will pocket a $45 fee. If a $300 loan at this rate
is repaid in two weeks, the APR is about 458%.
North Dakota60 days$50020% of loan plus database feeThe maximum rate of interest that can be charged on a $200 loan
is 30%.
Ohio6 months$8005% per month on unpaid balance
plus $5 fee; plus $3.75 fee for every $50 above $500
The APR for a 14-day $100 loan is 390%.
Oklahoma12-45 days$50015% up to $300; 10% $300 to $500Oklahoma passed statutes specifically authorizing payday lending. The fees
and interest rates that payday lenders are permitted to charge amount to very
large annual percentage rates. APR for a 14-day $100 loan is 390%.
Oregon60 daysNo more than 25% of net monthly
income
No limitNew legislation enacted in 2006 (S.B.
1105
), sets new restrictions on lenders by limiting the maximum rate of
interest on payday loans, the amount of the loan origination fees; sets a minimum
31-day loan term for payday loans; prohibits charges other than interest, origination
fees and fees for dishonored check or insufficient funds; prohibits the renewal
of payday loans more than two times; prohibits a lender from making a new payday
loan to a consumer within seven days of expiration of the previous payday loan;
Limits the amount of the fee for a dishonored check or insufficient funds; prohibits
recovery of statutory damages and attorney fees from consumers for dishonored
checks; and grants rulemaking authority to Director of Department of Consumer
and Business Services.
PennsylvaniaPennsylvania does not have specific payday lending legislation and permits
payday lenders to operate and charge any interest rate or fees which the borrower
agrees to pay.
Puerto RicoPuerto Rico requires payday lenders to comply with the state’s small
loan or criminal usury laws. Basically, since the allowable interest rates and
fees are much lower than what the payday industry usually charges, payday lenders
in these states are probably operating illegally.
Rhode Island13 days min.$50015% of the face amount of the
check
Rhode Island requires payday lenders to comply with the state’s
small loan or criminal usury laws. The APR for a 14-day $100 loan is 390%.
South Carolina31 days$30015% of the face amount of the
check
South Carolina passed statutes authorizing payday lending. The fees and interest
rates that payday lenders are permitted to charge amount to very large annual
percentage rates. The APR for a 14-day $100 loan is 459%.
South DakotaNA$500No limitSouth Dakota permits payday lenders to operate and charge any interest rate
or fees which the borrower agrees to pay. Lenders must comply with other provisions
of the state’s small loan act. This amounts to very large annual percentage
rates.
Tennessee31 days$50015% of the face amount of the
check
Tennessee passed statutes specifically authorizing payday lending. The fees
and interest rates that payday lenders are permitted to charge amount to very
large annual percentage rates. The effective APR for a 14-day $100 loan is 459%.
Texas7-31 daysNone10% per loan plus 48% annual
interest + $12 monthly fee
Texas does not have specific payday lending legislation and permits payday
lenders to operate and charge any interest rate or fees which the borrower agrees
to pay. The effective APR for a 14-day $100 loan is 309%. S.B.
1479
protects military members and their families from some actions by payday
lenders, and requires lenders to make special disclosures to military borrowers.
UtahNANoneNo limitUtah passed statutes authorizing payday lending. The fees that payday lenders
may charge amount to very large annual percentage rates, although there is a
limit on the interest that can be charged on judgments related to a payday loans.
VermontVermont does not have specific payday lending legislation and permits payday
lenders to operate and charge any interest rate or fees which the borrower agrees
to pay.
Virgin Islands$7,500The Virgin Islands requires payday lenders to comply with the state’s small
loan law which maintain interest rate caps of up to 26% per annum. Basically
since the allowable interest rates and fees are lower than that which the payday
lenders usually charge, payday loans are not practical.
Virginia7 days min.$50015% plus a fee for 6% late paymentsIn Virginia payday lenders must be licensed when making loans
to Virginia residents whether or not they have a business in Virginia. Payday
lenders cannot:

  • Make more than one loan to a borrower at any time;
  • Renew or extend any loan;
  • Lend to military personnel located in certain locations declared ‘off-limits’
    by a military base commander;
  • Garnish military wages or conduct collection activities when the borrower
    is deployed to a combat or a combat support post.
Washington45 days$70015% up to $500; 10% of the principal
in excess of $500
Licenses lenders may loan up to $700 at one time, In general the usury
rate in Washington is 12% per year or 4% above the treasury bill rate. However
Washington state-chartered Credit Unions may offer loans to their members
at 15%. Washington requires payday lenders to be licensed and has special
rules for military borrowers: Payday lenders are prohibited from:

  • Garnishing a military borrower’s wages s;
  • Contacting the borrower’s chain of command in an effort to collect
    on a delinquent loan; and
  • Make a loan to a person that the licensee knows is a military borrower
    from a location that a military base commander has notified the licensee
    in writing is designated off-limits to military personnel
  • May not collect against a military borrower who has been deployed to
    a combat or combat support post for the duration of the posting
  • Must honor the terms of any repayment agreement negotiated between the
    borrower and lender, or through military counselors or third party credit
    counselor on behalf of the military borrower

A “military borrower” includes any active duty member of the armed
forces of the United States, any member of the National Guard or the reserves
of the armed forces of the United States who has been called to active duty
S.B.
5415
. The effective APR for a 14-day $100 loan is 390%.

West VirginiaWest Virginia in an apparent attempt to discourage payday loans, passed laws
which requires payday lenders to comply with the state’s small loan and
usury laws. Basically since the allowable interest rates and fees are substantially
below that which the payday industry charges, payday lenders in these states
are likely operating illegally.
WisconsinNANANo limitWisconsin permits payday lenders to operate and charge any interest rate or
fees which the borrower agrees to pay. Lenders must comply with other provisions
of the state’s small loan act.
Wyoming30 daysNA$30 or 20%, of the principal
whichever is greater
Wyoming law regulates payday lenders with physical addressees in Wyoming,
which must be licensed. The rates are based in a full calendar month. For example
if the total amount loaned is $100 the most that could be charged is $30 since
$30 is greater than $20 which is 20% of the amount borrowed. If the amount borrowed
is $200 for 14 days, the highest amount that may be charged is $30 [14 days/31
days x 20% x $200 = $18.06]. Rolling over is prohibited. A lender may permit
the borrower to repay original finance charges in installments but may not charge
an additional fee for that convenience. The APR for a 14-day $100 loanis 780%.