New laws are being enacted by more and more states to regulate the industry. At the same time, efforts are being made by the federal government to frame a nationwide payday lending policy. Stricter regulation of the payday industry is favored by most borrowers.
According to Investopedia, Georgia is the only state in which payday loans are clearly prohibited. Many states enforced caps on small loans ranging from 17% to 30% in 2014. Payday lenders are allowed to charge very high annual interest rates in 32 states.
According to The Pew Charitable Trusts, 15 states have imposed restrictions on payday lending and don’t have payday loan storefronts. These states are Montana, Arizona, Arkansas, Georgia, North Carolina, West Virginia, Pennsylvania, New Jersey, New York, Connecticut, Massachusetts, Vermont, District of Columbia, Maryland and New Hampshire.
There are 9 hybrid states which permit storefronts but have stricter requirements, like longer repayment periods. These states are Washington, Oregon, Colorado, Minnesota, Florida, Virginia, Delaware, Rhode Island and Maine.
