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Payday Loans: A Model State Statute

For many consumers, a payday loan at very high annual percentage rates may be their only source of credit. In this AARP Public Policy Institute report, Elizabeth Renuart of the National Consumer Law Center proposes the Deferred Deposit Loan Act as a model statute that would enable individual states to regulate the payday loan business and curtail its most serious problems. The statute incorporates provisions intended to eliminate usurious interest rates and fees, the rolling over or refinancing of one payday loan with another, the threatened use of the criminal courts for collections, and other abuses.

The report includes summaries of existing state statutes regulating payday lending. It identifies key consumer protection provisions such as legal status of payday lending, licensing registration requirements, maximum loan term, maximum interest rates and fees, disclosure requirements, limits or prohibitions on rollovers, and availability of a private right of action. (71 pages)

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