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States that have outlawed Payday Loans

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After a search, I didn't find one post that listed all the states that have banned payday loans. For those who are interested, here are the states:








New York

New Jersey

North Carolina (12/22/05--banned Advance America operations)



West Virginia

*Note* These states may still be subjected to rent-a-bank arrangements b/c chains such as Advance America, Check 'n Go, and Check Into Cash affiliate with out-of-state banks which contend they are exempt from state law.

This info may help those of you who live in any of the above-mentioned states if your credit repair includes battling a payday loan. It SURELY has helped me. :D


Edited to clarify: NC banned payday loans in 2001; however, Advance America, Check N 2 Cash, & Check 'n Go continued to operate in the state by partnering with out-of-state banks that they claimed were not subject to North Carolina law. As of 12/22/05, NC passed a law to ban Advance America from operating in NC. They are currently working on banning the other 2.

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  • 2 weeks later...

Georgia is actually involved in a fed lawsuit now about their state ban on payday loans.

Something to do with outside banks using a GA business to act as an intermediary to provide the payday loan and whether or not GA had the right to ban banks not chartered in Georgia from using intermediaries to get around their state law in this fashion.

Last I saw, parts of the district case were appealed to the 11th circuit which found for the defendant (Georgia) and remanded the case back to the district court.

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Illinois just implemented a bunch of limitations on payday loans.

The new law:

· Limits the interest that can be charged for each loan to $15.50 per $100;

· Sets a cap on total loan amounts to $1,000 or 25% of a customer’s monthly salary, whichever is less;

· Prevents borrowers from having more than two payday loans at a time;

· Provides that payday borrowers cannot have payday loans for more than 45 days. Once they have reached the 45-day limit they must have at least a seven-day loan free period.

· Creates a new 56-day repayment period with no additional interest charges for borrowers who have trouble repaying their loans;

· Protects borrowers from paying attorneys fees and court costs;

· Extends a special protection to members of the military, including a ban on garnishing wages, deferral of collections for deployed personnel, and a prohibition on contacting a borrower’s commanding officer.

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The approach that some states are toying around with is more along the lines of limiting the interest charged by such outfits.

It is not that payday loans are bad. It is the big chorizo that they are giving you with interest... Such as 100 percent or even 200 percent interest...

As long as people need money (and have no credit), there will always be a market for loan sharks...

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You got nothing for Texas?

This is what I've found out:

Texas Finance Commission--(7 Tex. Admin. Code § 1.605 et seq.) Under the terms of Texas law and regulations, payday lenders can only loan up to $350 for terms of 7 to 31 days. Fees are capped at 48% APR plus a $10 monthly fee. A two-week $100 loan costs $11.87 or 309% APR.

You can probably get more accurate and up-to-date info at the Texas Finance Commission website (www.fc.state.tx.us).

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We have those here too. Wanna hear about my experience with payday loans? It is great!

The loans worked like this:

I wrote a check for $335 and got $300 in cash. Two weeks later, you pay the $335 back and they return your check to you. Of course, I didn't have the money to spare, so (under Florida law, you would now have to wait 24 hours) I would write another check for $335 to get $300. I was getting back the same $300 I just gave them!

One week, I left and didn't bother to count the money. I get a call and they tell me that the cashier's drawer was short and did I get extra money. I told them no. I later counted the money and found out that she had given me $600 instead of $300. I went down the next day and paid off my "loan".

Dirtbags! $35 for a two week loan of $300 is over 300% interest. I wish all states would make this practice illegal.

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What ever was left after I paid them back the $335. Look, they still made a profit off of me. I took out the original $300 loan, which I paid back.

I "renewed" it a total of 9 times. So I paid a total of $350 in interest in 22 weeks on a $300 loan. I had $265 left over after paying the loan back. That means they made $85, or a 66% APR on their money.

A lot less than the 300%+ they planned on, but still not a bad return.

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