Massachusetts Payday Loan Law and Legislation

Massachusetts Payday Loan Regulations
Legal Status
Interest Rate (APR)
23% small loan cap

Payday lending is prohibited in Massachusetts.

The Division of Banks of Massachusetts states that there are no prohibitions for payday lending in Massachusetts though exceedingly high APRs are illegal. Thus, presently, all lenders willing to offer small-dollar loans in the state are required to be properly licensed and have to adhere to a 23% APR small loan cap.

Massachusetts Payday Lending Statutes

In accordance with the Small Loan Act, 209 Mass. Code Regs. 45:14(8), any lenders not complying with the law will be dealt with accordingly. This especially refers to check cashers as they are prohibited from making loans unless licensed under the small loan act.

Moreover, the restriction also concerns local banks that are prohibited to work with out-of-state payday loan companies. Such measures are taken with the aim of protecting the residents of the state from usury and any unscrupulous actions of indecent lenders.

Lenders are only allowed to run the businesses provided that they do so in compliance with the Small Loans Act. The same regards online lending companies – they should adhere to the requirements stated in the aforementioned document as well as the state laws of the Commonwealth of Massachusetts.

It is also required by state laws that an employer paid the workers weekly or once in two weeks. Such measures were taken to prevent people from staying without cash for a long time and they aimed at reducing the necessity of payday lending.

In terms of employee unions and labor laws, Massachusetts is probably the most advanced state in the country as the authorities of the state take proper care of every resident no matter their position. All the efforts are being made here to reduce the necessity in payday lending (and any lending) to a minimum.

Rates, Fees and Other Charges in Massachusetts

  • Lenders are allowed to charge not more than 23% of the loan and they cannot charge more than $20 as an administrative fee or any finance charge whatsoever.

Consumer Information

More information about payday loan laws and regulations in Massachusetts can be found on the official website of the Massachusetts Division of Banks.

Regulator: Complaints & Information

Massachusetts Division of Banks

Address: 1000 Washington St 10th Floor, Boston, MA 02118-6400
Phone: 617-956-1500 or 800-495-2265 (toll free)
Fax: 617-956-1599
File a Complaint:

Number of Massachusetts Consumers Complaints by Topics

According to CFPB Consumer Complaint Database

  • Charges from account ( 74 )
  • Fraud and threat ( 26 )
  • Not exiting debt ( 23 )
  • Lender is not available ( 14 )
  • Not requested loan ( 13 )
  • Credit rating ( 9 )
  • Loan to return ( 9 )
  • Loan not received ( 4 )

The History of Payday Loans in Massachusetts

  • Massachusetts never authorized payday loans.
  • 1980M.G.L. c. 140, §§ 96 through 113 has been holding lenders to an interest cap that prohibits payday loans.
  • Present days – Payday loans are currently illegal in Massachusetts.

[Updated As of February 2020]

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