Payday Lending 2021 Legislation

Heather Morton 6/11/2021

$100 bills

Payday lending, or deferred presentment, involves single-payment, short-term loans based on personal checks held for future deposit or on electronic access to personal checking accounts. This document also tracks loan products designed to be alternatives to payday lending.

In the 2021 legislative session, 21 states have pending legislation regarding payday lending and payday lending alternatives.

Mississippi reenacted the licensing requirements for check cashers under the Mississippi check cashers act and removed the repealer. New Hampshire clarified and extended deadlines in consumer credit examinations applicable to certain entities licensed by the banking department. North Dakota amended and reenacted §§13-04.1-02.1, 13-05-02.3, and 13-08-12 of the North Dakota Century Code, relating to money broker exemptions, collection agency exemptions, and deferred presentment service transaction procedures

Please note: The summaries should be used for general informational purposes and not as a legal reference. NCSL is unable to provide assistance, guidance or answer questions for citizens or businesses regarding payday loan laws and practices. If you have questions regarding the application of a state law to a specific payday loan, please contact the Office of the Attorney General in your state.

 

The box allows you to conduct a full text search or type the state name.

 

 

 

Payday Lending 2021 Legislation

State:

Bill Number:

Bill Summary:

Alabama

None

 

Alaska

None

 

Arizona

None

 

Arkansas

None

 

California

None

 

Colorado

None

 

Connecticut

None

 

Delaware

HB 181

This bill caps interest rates at 20% for short-term consumer loans of $1,000 or less that must be repaid in less than 60 days and motor vehicle title loans.

District of Columbia

None

 

Florida

None

 

Georgia

None

 

Guam

None

 

Hawaii

HB 29

Transitions from lump sum deferred deposit transactions to installment-based small dollar loan transactions. Specifies various consumer protection requirements for small dollar loans. Beginning Jan. 1, 2022, requires licensure for small dollar lenders that offer small dollar loans to consumers. Specifies licensing requirements for small dollar lenders. Authorizes the division of financial institutions to appoint 1.0 FTE examiner position, funded via the compliance resolution fund, to carry out the purposes of the small dollar installment loan program.

Hawaii

HB 304
SB 205

Reduces the maximum fee a check casher may charge under a payday loan agreement for deferring the deposit of a check from fifteen per cent to seven per cent of the face value of the check.

Hawaii

HB 1192
Sent to governor 4/28/21
SB 1355

Transitions from lump sum deferred deposit transactions to installment loan transactions. Specifies various consumer protection requirements for installment loans. Beginning Jan. 1, 2022, requires licensure for installment lenders that offer installment loans to consumers. Repeals the statutory authorization for deferred deposit transactions on Jan. 1, 2022.

Hawaii

HB 1233

Transitions from lump sum deferred deposit transactions to installment-based short-term loans. Specifies various consumer protection requirements for short-term loans, including interest and fee caps, allowable outstanding loans, a cooling-off period, and the right to rescind. Beginning Jan. 1, 2022, requires persons operating as short-term loan companies to be licensed. Specifies licensing requirements for short-term loan companies.

Hawaii

SB 974
Passed Senate 3/9/21

Beginning July 1, 2023, provides for new viable installment-based small dollar loan transactions; specifies various consumer protection requirements for small dollar loans; requires licensure for small dollar lenders, subject to the oversight of the division of financial institutions of the department of commerce and consumer affairs; specifies licensing requirements for small dollar lenders; and caps the maximum allowable loan size at $1,500. Amends requirements for check cashers, including requiring check cashers to be licensed with the department of commerce and consumer affairs, to offer voluntary payment plans to consumers, and make various notice and disclosure requirements. Requires the division of financial institutions to conduct an analysis of the regulation of payday lenders and deferred deposit agreements and report to the legislature.

Idaho

None

 

Illinois

HB 104

Amends the Currency Exchange Act, the Sales Finance Agency Act, the Debt Management Service Act, the Consumer Installment Loan Act, and the Payday Loan Reform Act. Changes application fees, license fees, initial license fees, and fees to operate under those Acts. Changes the fine for late annual consumer installment loan reports to $500 (instead of $25) for each day beyond March 1 such report is filed. Establishes an initial license fee to operate as a payday lender in the amount of $1,250. Changes the fine for late annual payday lender reports to $500 (instead of $25) for each day beyond March 1 such report is filed. In the Sales Finance Agency Act, the Consumer Installment Loan Act, and the Payday Loan Reform Act, makes changes to the expiration date of licenses under those Acts and adds a fee to reinstate an expired license.

Illinois

HB 1008

Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title.

Illinois

HB 2231

Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title.

Illinois

HB 2906

Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title.

Illinois

HB 3059

Amends the Illinois Credit Union Act, the Transmitters of Money Act, the Sales Finance Agency Act, the Debt Management Service Act, the Consumer Installment Loan Act, the Debt Settlement Consumer Protection Act, and the Payday Loan Reform Act. Requires applicants for a license or renewal of a license to operate a credit union, operate as a transmitter of money, engage in the business of a sales finance agency, engage in a debt management service, make consumer installment loans, operate as a debt settlement provider, or operate as a lender of payday loans to provide an email address of record to the Department of Financial and Professional Regulation. In provisions concerning service of certain notices and orders, allows service by email to the email address of record. Provides that service to an email address of record is deemed complete when sent. Provides that service by certified mail shall be deemed completed when the notice is deposited in the U.S. mail. Defines the term "email address of record." Makes other changes.

Illinois

SB 722

Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title.

Indiana

SB 184

Changes the current incremental finance charge limits that apply to a small loan to a maximum annual rate. Prohibits making, or taking other actions with respect to, a small loan with a greater rate or amount of interest, or other fees and charges, than allowed under the statute governing small loans. Prohibits a credit services organization from providing certain functions with respect to a small loan and makes a violation a deceptive act.

Iowa

SF 206

This bill modifies provisions applicable to delayed deposit services. The bill limits the annual percentage rate applicable to a delayed deposit services transaction to 36%, as computed pursuant to the federal Truth in Lending Act. The bill requires a licensee holding multiple checks from one maker at any one time to enter into an extended repayment plan agreement if the maker of the multiple checks requests to enter into such agreement prior to the date upon which the checks are to be negotiable. The licensee may not initiate debt collection, civil court proceedings, or arbitration to collect on the unpaid checks during the term of the extended repayment plan agreement. A licensee need only enter into one extended repayment plan agreement with a maker of multiple checks in a 12-month period. A licensee cannot charge a fee, interest charge, or other charge as a result of entering into an extended repayment plan agreement. During the duration of the agreement, the obligations that the maker owes on the unpaid checks are not delinquent and the licensee cannot charge penalties for a delinquent obligation. The bill allows a maker obtaining more than four delayed deposit service loans from one licensee in a two-month period to enter into an extended repayment plan agreement with the licensee if the maker requests to enter into such an agreement prior to the date upon which the last check accepted by the licensee is to be negotiable. The licensee may not initiate debt collection, civil court proceedings, or arbitration to collect on any unpaid checks during the term of the extended repayment plan agreement. A licensee need only enter into one extended repayment plan agreement with a maker in a 12-month period. A licensee cannot charge a fee, interest charge, or other charge as a result of entering into an extended repayment plan agreement. During the duration of the agreement, the obligations that the maker owes on any unpaid checks are not delinquent and the licensee cannot charge penalties for a delinquent obligation. The bill requires the extended repayment plan agreement to be in writing, signed by the maker and the licensee, and contain the schedule for payment of the total unpaid check obligations. The schedule must allow the maker to pay the checks in at least four substantially equal installments. The bill requires the licensee to return any postdated checks that the maker has given to the licensee for the original transactions. The licensee may then either require the maker to provide a new check for the balance on the unpaid checks or provide multiple checks for each scheduled payment under the agreement. The bill states that upon the maker's failure to make a scheduled payment, the licensee may charge a penalty pursuant to Code §533D.9(2), and may initiate debt collection, civil court proceedings, or arbitration to collect on the unpaid checks. A violation of the bill may result in an administrative fine of not more than $5,000 for each violation and the cost of investigation.

Kansas

HB 2189

The bill amends the Uniform Consumer Credit Code. Under current law, open-end credit finance charges are determined by the agreement of the involved parties. The bill establishes an annual maximum of 36% for open-end credit. The bill also limits monthly maintenance fees and other fees on open-end consumer credit. Currently, closed-end credit finance charges are generally calculated at a maximum annual rate of 36% for the portion of credit under $860 and 21% for a credit over $860. The bill establishes an annual maximum of 36% for closed-end credit. Under current law, a cash advance loan less than $500 cannot be assessed more than 15% per week or per month of the amount of the cash advance, which translates to a higher annual percentage rate. The bill caps that rate at 36% annually, along with other charges described in the bill. The bill replaces the payday loan section by establishing a small loan that would not exceed $2,500 with a minimum term of three calendar months and a maximum term of 24 months. The bill also adds new language for loan disclosure information and provide for more restrictions relating to the new small closed-end loans. The bill also creates provisions regarding when a lender could accept an interest in a vehicle, which would include a prohibition on the lender seeking or obtaining a personal money judgment against the borrower for any amount owed under the loan agreement or for any deficiency resulting after the sale of a motor vehicle. A lender would be allowed to seek a personal money judgment against the borrower for any amounts owed under the loan agreement if the borrower impairs the lender's security interest in certain instances. The bill requires annual reports to be filed with the State Bank commissioner.

Kansas

SB 218

The bill amends the Uniform Consumer Credit Code. Under current law, open-end credit finance charges are determined by the agreement of the involved parties. The bill establishes an annual maximum of 36% for open-end credit. The bill also limits monthly maintenance fees and other fees on open-end consumer credit. Currently, closed-end credit finance charges are generally calculated at a maximum annual rate of 36% for the portion of credit under $860 and 21% for a credit over $860. The bill establishes an annual maximum of 36% for closed-end credit. Under current law, a cash advance loan less than $500 cannot be assessed more than 15% per week or per month of the amount of the cash advance, which translates to a higher annual percentage rate. The bill caps that rate at 36% annually, along with other charges described in the bill. The bill replaces the payday loan section by establishing a small loan that would not exceed $2,500 with a minimum term of three calendar months and a maximum term of 24 months. The bill also adds new language for loan disclosure information and provide for more restrictions relating to the new small closed-end loans. The bill also creates provisions regarding when a lender could accept an interest in a vehicle, which would include a prohibition on the lender seeking or obtaining a personal money judgment against the borrower for any amount owed under the loan agreement or for any deficiency resulting after the sale of a motor vehicle. A lender would be allowed to seek a personal money judgment against the borrower for any amounts owed under the loan agreement if the borrower impairs the lender's security interest in certain instances. The bill requires annual reports to be filed with the State Bank commissioner.

Kentucky

HB 243

Amends KRS 286.9-100 to reduce the maximum charges for deferred deposit transactions; limits charges for veterans, persons under the age of 21, and persons over the age of 61 to an APR of 36%; prohibits deferred deposit transactions within 45 days after a customer has entered into five or more transactions within 180 days; requires licensees to offer at least one extended payment plan to customers each year; requires notice of the ability to extend the time period for paying off a loan to be posted; makes technical corrections; provides that Act applies to deferred deposit transactions entered on or after effective date.

Louisiana

None

 

Maine

None

 

Maryland

None

 

Massachusetts

None

 

Michigan

HB 4004

Allows licensed providers of deferred presentment service transactions to make certain small loans.

Michigan

HB 4515

Amends the Deferred Presentment Service Transactions Act, which regulates what are commonly known as payday loans, to prohibit a lender from entering into a loan with a customer who has another such loan open or who has closed a previous loan within the last 30 days, regardless of whether the earlier loan was with that lender or another lender. The bill also prohibits a lender from entering into a payday loan without first determining that the customer has a reasonable ability to repay the amount owed.

 

Michigan

HB 4828

Amends the Deferred Presentment Service Transactions Act to require the director of the Department of Insurance and Financial Services (DIFS) to submit, each year for seven years, a report on deferred presentment service transactions (commonly known as payday loans) to the House and Senate committees concerned with banking and financial services. The bill also requires DIFS to post a similar annual report on its website.

 

Minnesota

HF 102

Regulates interest rates for consumer short-term and small loans; amends Minnesota Statutes 2020, §47.59, subdivision 2; §47.60, subdivision 2; 47.601, subdivisions 2, 6; §53.04, subdivision 3a; §56.131, subdivision 1.

Minnesota

SF 892

Regulates interest rates for consumer short-term and small loans; amends Minnesota Statutes 2020, §47.59, subdivision 2; §47.60, subdivision 2; §47.601, subdivisions 2, 6; §53.04, subdivision 3a; §56.131, subdivision 1.

Mississippi

HB 1075
Signed by governor 3/17/21

Reenacts §§75-67-601 through 75-67-637, Mississippi Code of 1972, which are the Mississippi credit availability act; reenacts §75-67-403, Mississippi Code of 1972, which defines certain terms used under the Mississippi title pledge act; reenacts §75-67-505, Mississippi Code of 1972, which establishes licensing requirements for check cashers under the Mississippi check cashers act; amends §75-67-639, Mississippi Code of 1972, to extend the date of the repealer on the Mississippi credit availability act to 2026; removes the repealer on those reenacted sections under the Mississippi title pledge act and the Mississippi check cashers act; and for related purposes.

 

Mississippi

SB 2628
Passed Senate 2/4/21

Reenacts §75-67-403, Mississippi Code of 1972, which defines certain terms used under the Mississippi title pledge act; reenacts §75-67-505, Mississippi Code of 1972, which establishes licensing requirements for check cashers under the Mississippi check cashers act; reenacts §§75-67-601 through 75-67-639, Mississippi Code of 1972, which create the Mississippi credit availability act; amends reenacted §75-67-639, Mississippi Code of 1972, to remove the repealer on the previously mentioned sections in the Mississippi title pledge act and the Mississippi check cashers act, and extends the repealer on the Mississippi credit availability act; and for related purposes.

 

Missouri

HB 651

This bill prohibits lenders of consumer credit loans, title loans, consumer installment loans, and unsecured loans of $500 or less (commonly called payday loans) from charging interest, fees, and finance charges in excess of 36% of the unpaid balance of the loan. Lenders are prohibited from intentionally evading statutory requirements through any method, including but not limited to mail, telephone, internet, or any electronic means. This bill requires voter approval.

 

Montana

None

 

Nebraska

None

 

Nevada

SB 381
Passed Senate 4/21/21

Relates to businesses; exempts certain creditors from provisions governing deferred deposit loans, high-interest loans and title loans; revises provisions relating to service contracts and providers of services contracts; sets forth various requirements and restrictions for providers of home service contracts; authorizes the commissioner of Insurance to make certain inquiries into the conduct of providers of home service contracts.

New Hampshire

HB 312
Signed by governor 5/25/21, Chapter 51

This bill: I. Clarifies and extends deadlines in consumer credit examinations applicable to certain entities licensed by the banking department. II. Clarifies the home state licensing requirement for mortgage loan originators. III. Provides that family trust companies may be examined more frequently than every 36 months if the commissioner deems it necessary. IV. Clarifies that depository banks may elect RSA 293-C benefit corporation status. V. Establishes requirements applicable to credit union boards who delegate to committees. VI. Adjusts restrictions on loans and other financial transactions that disqualify the commissioner or deputy commissioner from serving in his or her role.

New Hampshire

HB 610
To conference committee 6/4/21

This bill: I. Requires retail sellers, sale finance companies, small loan lenders, debt adjusters, and money transmitters to license and report through NMLA, and clarifies the filing deadlines for call reports under RSA 397-A. II. Clarifies the circumstances under which background investigations are conducted for trust executive officers and provides for removal of directors or officers by the commissioner. III. Adjusts fees for filings by state-chartered institutions. IV. Requires payment of assessment by institutions seeking approval to dissolve or convert. V. Establishes minimum interest rates tied to federal funds interest rates set by the Federal Open Market Committee. VI. Authorizes the department to transmit consumer complaints via email rather than by certified mail. VII. Requires certain employers to provide access to a sufficient space and a reasonable break period for nursing mothers to express milk during working hours. VIII. Establishes the New Hampshire housing and planning conservation program. IX. Requires individual and group insurers to reimburse a primary care physician for the treatment of mental health and substance use disorders provided through the psychiatric collaborative care model.

New Jersey

AB 2730
SB 1922

Includes payday lending as a violation of the consumer fraud act.

New Mexico

None

 

New York

SB 5774

Prohibits foreign banking corporations from issuing payday loans; defines payday loans as any transaction in which a short-term cash advance is made to a consumer in exchange for (i) a consumer's personal check or share draft, in the amount of an advance plus a fee, where presentment or negotiation of such check or share draft is deferred by agreement of the parties until a designated future date; or (ii) a consumer's authorization to debit the consumer's transaction account, in the amount of the advance plus a fee, where such account will be debited on or after a designated future date.

North Carolina

None

 

North Dakota

SB 2103
Signed by governor 4/16/21

Creates and enacts §13-04.1-09.3 of the North Dakota Century Code, relating to money broker charges; amends and reenacts §§13-04.1-02.1, 13-05-02.3, and 13-08-12 of the North Dakota Century Code, relating to money broker exemptions, collection agency exemptions, and deferred presentment service transaction procedures; repeals §13-04.1-09.2 of the North Dakota Century Code, relating to money broker charges; and provides a penalty.

 

N. Mariana Islands

Not available

 

Ohio

None

 

Oklahoma

HB 1585

Relates to professions and occupations; relates to finance charges; decreases certain finance charge maximum.

Oregon

None

 

Pennsylvania

None

 

Puerto Rico

None

 

Rhode Island

HB 5685

This bill repeals the provisions of the general laws allowing deferred deposit providers, also known as "payday lenders."

 

Rhode Island

HB 5802

This bill cap the annual percentage rate (APR) for payday loans to 28%; requires a maturity date of more than 90 days from loan closing; prohibits fees and interest payments of more than 60% of the principal loan amount; and requires that payments be made monthly, with each payment being no more than 25% of the loan's original principal.

Rhode Island

SB 453

This bill repeals the provisions of the general laws allowing deferred deposit providers, also known as "payday lenders."

 

A. Samoa

Not available

 

South Carolina

HB 3461

Adds §39-5-45 so as to provide that a person who accepts a check for a deferred presentment transaction violates the South Carolina unfair trade practices act; and repeals chapter 39, title 34 relating to deferred presentment services.

South Carolina

HB 3462

Amends §34-39-180, code of laws of South Carolina, 1976, relating to restrictions and requirements for deferred presentment or deposit of checks, so as to provide that the effective annual percentage rate charged on a deferred presentment transaction cannot exceed 36%.

South Carolina

SB 58

Amends §34-39-180(e) of the 1976 code, relating to restrictions and requirements for the deferred presentment or deposit of checks, to provide that the effective annual percentage rate charged on a deferred presentment transaction cannot exceed 36%.

South Carolina

SB 97

Adds §39-5-45, to provide that a person who accepts a check for a deferred presentment transaction violates the South Carolina unfair trade practices act; and to repeal chapter 39, title 34 of the 1976 code, relating to deferred presentment services.

South Dakota

None

 

Tennessee

HB 824
SB 1029

Prohibits a licensee that offers interactive sports wagering from allowing a person to place a bet or wager at the same location as where the person entered into a flex loan plan, a title pledge agreement, a deferred presentment services agreement, or a check cashing transaction; prohibits certain provisions in documents for such transactions.

Tennessee

HB 1329
SB 1064

Prohibits a licensee engaged in the business of deferred presentment services from contracting for or receiving a fee or charge exceeding a 36% annual percentage rate on the unpaid balance of the amount financed.

Texas

HB 206

Relates to credit services organizations and extensions of consumer credit facilitated by credit services organizations; increases a criminal penalty.

Texas

HB 1916
Passed House 4/13/21

Prohibits a credit access business or its representative from making telemarketing calls to consumers on the Texas no-call list unless: the consumer had a current contract with the business; or the consumer previously had a contract with the business and the call was made before the first anniversary of the date on which the contract had been terminated, unless the consumer requested that the business or its representative stop calling the consumer.

Texas

HB 1937

Relates to the maximum permitted rate of interest, sum of fees, and other amounts that may be charged in connection with deferred presentment transactions.

Texas

HB 2432
SB 1089

Relates to increasing the maximum reference base amount for certain consumer loans.

Texas

HB 2624

Relates to a restriction on total charges charged for certain extensions of consumer credit that are facilitated by credit access businesses and entered into by consumers residing in disaster areas.

Utah

None

 

Vermont

None

 

Virginia

None

 

U.S. Virgin Islands

None

 

Washington

None

 

West Virginia

None

 

Wisconsin

AB 213

This bill limits the interest rate that a payday loan licensee may charge, before the maturity date, on a payday loan to an annual percentage rate of 36%. A payday loan on which a greater rate of interest is charged is not enforceable.

Wisconsin

SB 220

This bill limits the interest rate that a payday loan licensee may charge, before the maturity date, on a payday loan to an annual percentage rate of 36%. A payday loan on which a greater rate of interest is charged is not enforceable.

Wyoming

None

 

 

Powered by LexisNexis State NetLexisNexis Terms and Conditions

Heather Morton is a program principal in NCSL's Fiscal Affairs Program. She covers financial services, alcohol production and sales, telecommunications and medical malpractice issues for NCSL.

 

Additional Resources