Short answer: payday and small loan rules are set mostly by each state, so the answer depends on where you live. Some states do not allow payday lending at all, and many cap fees at $10 to $30 per $100 borrowed (CFPB). The fastest way to check is your state's financial regulator, listed in the CSBS directory, and the lender's license in NMLS Consumer Access.
How to check your state's rules in 3 steps
- Find your regulator. Every state has an agency that licenses lenders; the Conference of State Bank Supervisors keeps the list (CSBS).
- Check the lender's license. Search the company in NMLS Consumer Access; if it is not there, ask your state agency whether it is licensed (CSBS).
- Read the APR before you sign. Whatever the state, the lender must show you the APR, which includes interest and certain fees (CFPB).
States where Modern Lending Solutions is not available
Residents of Arkansas, New York, Vermont and West Virginia are not eligible to use this website. Here is what each state's own officials say:
| State | What the state says | Who to contact |
|---|---|---|
| Arkansas | All storefront payday loan operations have been shut down, but such loans are still offered on the internet (Arkansas AG). | Arkansas Attorney General, Consumer Protection Division |
| New York | Payday loans are illegal in New York, whether made in person, by phone or online, and collecting on them is illegal too (NY DFS). | NY Department of Financial Services |
| Vermont | Lenders other than banks and credit unions need a Vermont license, and Vermont limits annual interest rates, including fees, to 12% to 24% (Vermont AG, Vermont DFR). | Vermont Department of Financial Regulation |
| West Virginia | The West Virginia Consumer Credit and Protection Act is enforced by the state Attorney General (WV DFI). | WV Attorney General: (304) 558-8986 or 1-800-368-8808 |
Federal rules that apply in every state
- Truth in Lending: the APR and finance charge must be disclosed; loan fees count as finance charges (Regulation Z).
- Military Lending Act: most consumer loans to active-duty servicemembers and dependents are capped at 36% (CFPB).
- Telemarketers may not ask you to pay up front for a promised loan (FTC).
Red flags across all states
A lender you cannot find in NMLS or with your state agency, a fee before the loan, or an offer that ignores your state's limits are reasons to stop. See advance-fee loan scams and personal loan vs payday loan. For Texas, read our guide to Texas installment, payday and title loan rules.
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Disclosure: Modern Lending Solutions is not a lender, loan broker or agent for any lender or loan broker, and does not make credit decisions. Any compensation we receive is paid by participating lenders, only for advertising services. This guide is general information, not financial or legal advice.
Sources
- CFPB: What is a payday loan?
- CSBS: Contact Your State Bank Agency (directory of state regulators)
- NMLS Consumer Access (state license lookup)
- CFPB: What is the difference between a loan interest rate and the APR?
- Arkansas Attorney General: Payday Lending / Check Cashing
- New York DFS: Predatory Loans and Loan Scams
- Vermont Attorney General: Illegal lending, summary of facts and figures (fact sheet)
- Vermont Department of Financial Regulation: Lender license
- West Virginia Division of Financial Institutions: FAQ
- CFPB: Regulation Z, 12 CFR 1026.4 Finance charge
- CFPB: I am in the military, are there limits on how much I can be charged for a loan?
- FTC: What To Know About Advance-Fee Loans