Short-Term Loan Regulations

July 2024

Payday Loan Regulations

At the federal level, payday lending is regulated by several acts, including the Truth in Lending Act (TILA) and the Fair Lending Act, which require lenders to disclose the cost of loans to consumers. The Consumer Financial Protection Bureau (CFPB) further oversees payday lending practices to protect consumers from predatory lending.

Legal Status of Payday Loans by State

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nebraska New Hampshire New Jersey New Mexico New York North Carolina Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming North Dakota Ohio

States Where Payday Loans Are Allowed

Each state in the US has its own set of regulations regarding payday loans, in some cases shaped by recent local legal acts. While payday loans are permitted in certain states and offer immediate financial assistance, others have chosen to restrict or outright ban them to protect consumers. Below, you can find a comprehensive list of states where payday loans are allowed, ensuring you stay informed and compliant with current legislation.

States where payday loans are allowed include Alabama, Alaska, California, Colorado, Delaware, Florida, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin and Wyoming.

Payday Lending Restricted

Some states strictly prohibit payday loans, while in others, they are legal but subject to stringent regulations to ensure consumer protection.

Where Payday Loans Are Strictly Regulated

In states where payday loans are strictly regulated, they are still technically legal. However, specific laws severely control interest rates, borrowing limits, and repayment terms. For example, Colorado caps the annual percentage rate (APR) on payday loans at 36%, significantly lower than many other states. Below is a list of states where payday loans are strictly regulated, detailing these regulations by state.

Payday loan states with strict regulations include Colorado, Nebraska, Minnesota, Illinois.

Payday Loans Prohibited

In states where payday loans are prohibited, laws prevent the operation of payday lending institutions, aiming to protect consumers from potentially high interest rates and debt cycles. Such measures ensure financial practices adhere to local legal standards, safeguarding public interest. Below, you'll find a list of states where payday lending is not allowed.

States where payday loans are prohibited include Arizona, Arkansas, Connecticut, Georgia, Hawaii, Maryland, Massachusetts, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Vermont, West Virginia, and the District of Columbia.