Payday lending: Know where it is legal

Sunday, February 17th, 2013 By

A legal gavel and a stack of payday lending cash.

Know where payday loans are legal in the United States with the handy reference chart in this article. (Photo: ThinkStock)

Hard-working Americans sometimes find themselves in situations where they need the extra cash payday lending can provide. Other options are sometimes available, but if the consumer is credit constrained, those options are few and far between. Thus, it pays to know where payday lending (whether it is for a payday loan, installment loan or similar consumer loan product) is practiced. If you know where payday loans are legal – in which states, specifically – then you’re that much closer to obtaining fast cash when unforeseen events strike at your budget.

Payday lending – the American tale

Current as of May 27, 2010, Fox Business has compiled a list of the legal status of payday lending. Some of the information has changed based upon current payday loan legislation, and a general summary of those changes are noted below for the Arizona, Colorado and Wisconsin state entries. For your convenience, Personal Money Market includes a summary of the Fox list for your payday loan needs, including the maximum amount allowed by each state for a payday loan:

Alabama: Legal, $500 maximum
Alaska: Legal, $500 maximum
Arizona: Legal until June 30, due to Operation Sunset; $500 maximum
Arkansas: Legal for check cashers only, $400 maximum
California: Legal, $300 maximum
Colorado: Essentially prohibited, as Colorado House Bill 1351 caps APR at 45 percent and requires six-month payment term; $500 maximum
Connecticut: Prohibited
Delaware: Legal under small loan act/licensing law; $500 maximum
Florida: Legal, $500 maximum
Georgia: Prohibited
Hawaii: Legal for check cashers only, $600 maximum
Idaho: Legal, $1,000 maximum
Illinois: Legal, the lesser of either $1,000 or 25 percent of applicant’s gross monthly income, maximum
Indiana: Legal, $550 maximum
Iowa: Legal, $500 maximum
Kansas: Legal, $500 maximum
Kentucky:  Legal for check cashers only), $500 maximum
Louisiana: Legal, $350 maximum
Maine: Prohibited, except from selected supervised lenders
Maryland: Prohibited
Massachusetts: Prohibited
Michigan: Legal, $600 maximum
Minnesota: Legal, $350 maximum
Mississippi: Legal for check cashers only, $400 maximum
Missouri: Legal, $500 maximum
Montana: Legal, $300 maximum
Nebraska:  Legal, $500 maximum
Nevada: Legal, 25 percent of gross monthly income maximum
New Hampshire:  Legal, $500 maximum
New Jersey:  Prohibited
New Mexico: Legal, $2,500 maximum
New York: Prohibited
North Carolina: Prohibited
North Dakota: Legal, $500 maximum
Ohio: Legal for 31-day minimum term, $500 maximum amount
Oklahoma: Legal, $500 maximum
Oregon: Legal, unspecified maximum
Pennsylvania: Prohibited
Rhode Island: Legal for check cashers only), $500 maximum
South Carolina: Legal, $300 maximum
South Dakota: Legal under small loan act/licensing law; $500 maximum
Tennessee: Legal, $500 maximum
Texas: Legal, unspecified maximum
Utah: Legal for check cashers only, Unlimited maximum
Vermont: Prohibited
Virginia: Legal, $500 maximum
Washington: Legal, $700 maximum
West Virginia: Prohibited
Wisconsin: Legal, $1,500 or 35 percent of gross monthly income maximum. See other recent law changes regarding payday lending in Wisconsin
Wyoming: Legal, unspecified maximum

Sources:

Fox Business

Payday Loan Consumer Information

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