Maryland Payday Loan Law and Legislation
In the state of Maryland, payday lending is prohibited.
Maryland bans payday loans since 2002. Any lenders wishing to operate in the state have to comply with the 33% APR cap (2.75% a month).
While payday loans are prohibited in Maryland, there may be unlicensed lenders operating in the state. Among them are out-of-state lenders operating without a license, tribal lenders (subject to their tribal laws), and foreign-based lenders (subject to their foreign laws).
Maryland is one of the states that prohibits the exportation of laws to its territory, however, there are plenty of lenders that violate this regulation and offer payday loans in the state. Thus, the cases of lending at triple-digit rates are numerous in Maryland.
Maryland Payday Lending Statutes
There is a ban on payday lending in Maryland according to the Consumer loan act (Md. Code Com. Law § 12-101 et seq.). In 2002 Senate Joint Resolution 7 passed and it reads that payday lending is illegal in the state of Maryland and every lending business that wants to operate in the state has to comply with the state law.
Also, under Maryland law, MOST lenders are required to have a license from the Commissioner of Financial Regulation. The law also restricts interest rates depending on the loan size.
Rates, Fees and Other Charges in Maryland
As of the Consumer loan act (Md. Code Com. Law § 12-101 et seq.), lenders are prohibited to charge more than 33% APR (equals to 2.75% a month). All the lenders charging more than this will be considered as violating the law.
The Office of the Commissioner of Financial Regulation is in charge of all the businesses in any respect dealing with lending – be it banks, or large and small finance companies, as well as check-cashing businesses. It provides licenses and supervises the operation of the aforementioned companies as well as gets complaints and handles all the violation cases.
In case of any illegal actions on the part of a lender, you can file a complaint with the Office of the Commissioner of Financial Regulation.
Regulator: Complaints & Information
Maryland Commissioner of Financial Regulation
Address: 500 N Calvert St #402, Baltimore, MD 21202
Phone: 410-230-6100 or 888-784-0136
Fax: 410-333-3866 or 410-333-0475
File a Complaint: http://www.dllr.state.md.us/finance/consumers/frcomplaints.shtml
Number of Maryland Consumers Complaints by Topics
According to CFPB Consumer Complaint Database
- Charges from account ( 156 )
- Fraud and threat ( 105 )
- Not exiting debt ( 98 )
- Lender is not available ( 31 )
- Loan to return ( 28 )
- Loan not received ( 18 )
- Credit rating ( 18 )
- Not requested loan ( 11 )
The History of Payday Loans in Maryland
- 2002 – Code Com. Law § 12-101 et seq. and Senate Joint Resolution 7 made payday loans illegal and they capped all the loans in the state at 33% APR (2.75% a month).
- Illegal Internet payday lenders, however, still find ways to offer loans with triple-digit APR rates in the state. They are hard to regulate as online lenders are either offshore, or out-of-state, or affiliated with the Indian tribes and thus claim to be exempt from state laws.
[Updated As of February 2020]