Payday lending is legal in Nevada.
Nevada has no limit on payday loans offered in the state. The maximum loan term is 35 days. There are no set limits to the interest rates, however, the loan amount should not exceed 25% of gross monthly income. Real APR is 625%*. Criminal actions against borrowers are prohibited.
In the majority of states, payday lending is regulated by pretty strict laws. However, this does not refer to Nevada. Perhaps, only Nevada has got such a lenient policy in terms of payday lending. There are no restrictions to the amount of loan (other than 25% of gross monthly income), the number of outstanding loans, and there are no actual limits for fees and interest rates as well. This makes Nevada a place to be a payday lender and also a bad place to be a borrower.
Nevada Payday Lending Statutes
According to the state statute, in order to operate in the state, payday lenders have to obtain a license to issue high-interest loans.
“1. A person, including, without limitation, a person licensed pursuant to chapter 675 of NRS, shall not operate a check-cashing service, deferred deposit loan service, high-interest loan service or title loan service unless the person is licensed with the Commissioner pursuant to the provisions of this chapter.
2. A person must have a license regardless of the location or method that the person uses to operate such a service, including, without limitation, at a kiosk, through the Internet, through any telephone, facsimile machine or other telecommunication device or through any other machine, network, system, device or means, except that the person shall not operate such a service through any automated loan machine in violation of the provisions of subsection 3.”
Loan Amount in Nevada
- “1. A licensee who operates a high-interest loan service shall not make a high-interest loan which, under the terms of the loan agreement, requires any monthly payment that exceeds 25 percent of the expected gross monthly income of the customer.
- 2. A licensee who operates a high-interest loan service is not in violation of the provisions of this section if the customer presents evidence of his or her gross monthly income to the licensee and represents to the licensee in writing that the monthly payment required under the terms of the loan agreement for the high-interest loan does not exceed 25 percent of the customer’s expected gross monthly income.” (NRS 604A.5045)
Rates, fees and other charges in Nebraska
- There is no limit to the rates of interest or finance charges.
Real APR for payday loans in Nevada can reach 625% (*According to the Center for Responsible Lending 2019: “Typical APR based on
Maximum term for a payday in Nevada
- “Except as otherwise provided in this chapter, the original term of a high-interest loan must not exceed 35 days.” (NRS 604A.5045)
- It is prohibited to extend loans for periods longer than 60 days after the initial term is due (90 days for the payday loan installment loan, no extensions are allowed).
- NSF fee is set at $25 for the first two checks by the state law.
- Criminal actions, however, should be taken only in case it is proved that a borrower has never meant to repay a loan.
- One thing that should be avoided in Nevada is defaulting on a loan. As has been aforementioned, interest rates rise high to the skies in this case. Surely enough, the state takes measures to protect borrowers from harassment and threats of lenders and there are certain regulations on the account. Still, it is better to repay in due time and be well aware of the laws in the field.
More information about payday loans in Nevada can be found on the official website of the Nevada Financial Institutions Division.
The History of Payday Loans in Nevada
- Before 1980s – Nevada had a usury cap of 18% APR for all small loans, thus, no payday lenders were to be found in the state.
- 1984 – Nevada abolished the 18% APR usury cap and by doing so it welcomed the payday loan industry into the state.
- 2005 – NRS Chapter 604A, a new Nevada statute, was enacted. It became the first law that actually regulated certain types of high interest loans.
- 2006 – The Military Lending Act effectively capped payday loans offered to the military at 36% APR. This federal law has no exceptions, thus, no lender in Nevada is now allowed to offer loans to the military in excess of 36% APR.
- 2007 – The term “high interest loans” was added into the statute in order to be specifically regulated thereby. The legislation stayed the same for years since that time.
- 2016 – It is reported that the industry donated large sums to the state lawmakers in order to rule out any attempts to restrict the industry regulations. And regardless of the laws that came into effect years earlier, payday lenders still thrived. One bill was proposed to limit the number of outstanding loans, to set a “cooling-off” period between loans, and to create a statewide lender database; however, it never came to life.
- June 2, 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 – AB 163 was enacted. This time, Nevada decided not to wait for the federal decision, and the state legislature managed to introduce a change into payday loan regulations. Now payday lenders are forced to check whether a prospective borrower is able to repay a loan before giving approval. It might not seem much (the overall payday loan situation in the state considered) but it is a start.
(As of May 2019)