In the state of Louisiana payday lending is considered legal.
Louisiana has a $350 payday loan limit. Payday loans can be taken for the period up to 30 days with the maximum finance charges of 16.75% of the amount advanced; actual APR equals 391%. No rollovers are allowed. Criminal actions are prohibited.
While most states try to restrict payday lending regulations, Louisiana seems to be going in the reverse direction. In the light of the looming CPPB payday loan rule, lenders tried to push a bill that would extend the payday loan options (higher loan amount, longer terms).
However, fortunately, the bill died in a House committee and Louisiana is to stay with the existing payday loan regulations for now.
Louisiana Payday Lending Statutes
La. Stat. Ann. 9:3578.1 et seq., or Louisiana Deferred Presentment and Small Loan Act, regulates the industry.
Other payday loan regulations:
- LL 01-04 Records Retention Schedule
- LL 02-01 Sale and Financing of Club Memberships Policy
- Records Retention Rule for Non-depository Institutions
- Title 9: Chapter 2-A. Deferred Presentment and Small Loan Act
In order to operate in the state, payday lenders are required to obtain a license with the Louisiana Office of Financial Institutions (OFI).
A full list of licensed lenders can be accessed on the Active Payday Licensees page.
Loan Amount in Louisiana
Rates, fees and other charges in Louisiana
Lenders willing to operate in the state should adhere to the following charges and fees allowed:
- “A licensee may charge a fee not to exceed 16.75 percent of the face amount of the check issued.” (La. Stat. Ann. 9:3578.1 et seq.)
- Thus, 16.75% max. of amount loaned; $45 max fee; + $10 documentation fee.
- Plus, a finance charge for 14-day $100 loan is $30.
APR can reach 391% (*According to the Center for Responsible Lending 2019: “Typical APR based on
Maximum term for a payday in Louisiana
- The loans are given for a
periodof up to 30 days.
- Rollovers are not allowed in Louisiana.
- Criminal charges are prohibited in the state of Louisiana.
In case of any assistance in regard to payday loans, one can contact the Louisiana Office of Financial Institutions (OFI).
The History of Payday Loans in Louisiana
- Before 1990s – Louisiana had 12% usury cap on loans.
- 1990s – La. Stat. Ann. 9:3578.1 et seq., or Louisiana Deferred Presentment and Small Loan Act, exempted payday loans from usury laws and the payday loan stores opened for business.
- 2006 – The Military Lending Act effectively capped payday loans offered to the military at 36% APR.
- 2010 – The Legislature passed a law that allowed increased fees on payday loans.
- 2014 – The Louisiana Legislature took an attempt to pass the bill that would have capped payday loan APR at 36%. The bills didn’t pass.
- June 2, 2016 – The Consumer Financial Protection Bureau (CFPB) proposed a Payday Loan Rule that hasn’t yet fully come into effect (the federal rule is expected in November 2020).
- 2018 – The Louisiana Senate tried to pass a bill to expand payday industry (the Louisiana Credit Access Loan Act that would allow payday loans from $500 to $875 for terms of 3-12 months), however, an effort failed in a House committee.
(As of April 2019)