According to the existing legislation, payday lending is legal in Alaska.
Alaska imposes a $500 amount limit on payday loans offered in the state. Payday loans can be taken for the period not less than 14 days with the maximum finance charge of 15% for every $100 and 435%* APR. One renewal is allowed and a cooling-off period of 14 business days should pass before a new loan. Any NSF fees are prohibited; all criminal actions are prohibited as well.
Nowadays payday lending is available to every resident of Alaska. However, the state regulations of payday lending are pretty tough. Besides, there are fewer storefronts in Alaska than in other states and, thus, the popularity of online vendors is higher.
Alaska Payday Lending Statutes
Alaska Statute Code 06.50.010 et seq. for more than a decade has stayed the only statute regulating payday lending in Alaska. It contains all the information concerning the operation of payday lending companies as well as state policy on the subject.
In Alaska, payday lenders operate under the term of “deferred deposit advance lenders“.
Regulations apply to both online and storefront loan providers. In order to operate in the state, lenders have to comply with the following regulations:
- All lenders (“including a person doing business from outside this state“) must be licensed by the Division of Banking and Securities.
- “A separate license is required for each physical location or Internet website from which the person conducts the business.“
- All lenders must disclose all the loan information (terms, APR for 30 days for each $100, APR for 14 days for each $100, fees, all as a dollar amount, repayment period) before the loan documents are signed.
Loan Amount in Alaska
One $500 loan at a time is allowed.
Rates, fees and other charges in Alaska
- Finance charges and fees should not exceed 15% for every $100 of the amount advanced.
licensee may only charge a nonrefundable origination fee in an amount
not to exceed $5; and a fee that does not exceed $15 for each $100 of an
advance, or 15 percent of the total amount of the advance, whichever is
less.” Alaska Statute 06.50.010 et seq.
- APR equals 435% (*According to the Center for Responsible Lending 2019: “Typical APR based on average rate for a $300 loan advertised by largest payday chains or as determined by state regulator, where applicable”).
Maximum term for a payday in Alaska
- “The minimum duration of an advance is 14 days.” (Alaska Statute 06.50.010 et seq.)
- Alaska state law does not contain any information about the maximum loan term.
- The minimum renewal term of an advance is 14 days.
- Alaska has collection restrictions in cases when payday loans were delayed or were not entirely repaid. Licensee may not collect any fees under AS 06.50.400.
- Criminal actions against borrowers in Alaska are entirely prohibited.
More information about payday loan laws and regulations in Alaska can be found on the official Alaska Division of Banking and Securities website.
“You can file a complaint with the Division by completing the attached complaint form and submitting it, along with supporting documentation, through our web portal. If you do not want to submit your complaint via the portal, you may print a copy of the complaint form and mail it with copies of your supporting documentation to our Anchorage office.”
Or you can also contact the Office of the Attorney General Consumer Protection Unit.
The History of Payday Loans in Alaska
- 2004 – The first law regulating the payday industry in Alaska passed. Among other things, the law required that lenders got a license to dispense deferred deposit advance loans in Alaska.
- 2010 – The law was updated; apart from the requirements for licensing each physical location that issued loans ought to have a license. Also, the number of loans and the average amount of the loan are set. The disclosure of terms, APR, fees, and charges “expressed both as a dollar amount” and other points were added to the requirements.
- 2016 – The Consumer Financial Protection Bureau (CFPB) proposed a Payday Loan Rule that hasn’t yet fully come into effect (expected in November 2020).
- 2017 – The CFPB’s Payday Loan Rule was proposed for reevaluation and reexamination under the Congressional Review Act. No news so far.
- 2010-2019 – The loan amount, interest rate and fee terms, as well as loan duration, stayed the same.
(As of April 2019)