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.
- In the state of Nevada a person is not permitted to run a check-cashing business, payday loan organization, high-interest loan enterprise, or title loan business unless they have secured a license with the Commissioner of the Nevada Financial Institutions Division.
- Regardless of the location of their business or the method they utilize to run their operation, a person is required to have a license. This is to include business conducted via the Internet, in person through a kiosk, over the phone, by way of a fax machine, or through any other machine, telecom device, or system. With the exception that a person is not permitted to automate payday loan functions with a machine, lest they be in violation of the provisions of the Nevada Financial Institutions Division.
Loan Amount in Nevada
- Any licensed lender operating high-interest loan businesses is not permitted, under the terms of the loan agreement, to initiate a high-interest loan that requires a monthly payment above 25% of the anticipated monthly gross income of the borrower.
- Any licensed lender who provides a high-interest loan business is in no violation of the provisions of Nevada law NRS 604A.5045 if the customer provides any evidence of their gross monthly income to the lender Under the loan agreement terms, which does not carry interest rates above 25% of a borrower’s projected monthly gross income.
Rates, Fees and Other Charges in Nevada
- There is no limit to the rates of interest or finance charges.
Real APR for payday loans in Nevada can reach 625% for the average $300 payday loan (According to the Center for Responsible Lending 2019).
The Maximum Term for a Payday Loan in Nevada
- Apart from what is outlined in NRS 604A.5045 no high-interest loan term may exceed 35 days.
- 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).
From July 2020, lenders are not required to check a borrower’s ability to repay a loan.
Be careful, evaluate your financial situation, don’t get into a debt trap.
The rule was changed by the CFPB.
- 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.
Regulator: Complaints & Information
Nevada Financial Institutions Division
Address: 3300 W Sahara Ave #250, Las Vegas, NV 89102
File a Complaint: http://fid.nv.gov/uploadedFiles/fidnvgov/content/Resources/FID-Complaint.pdf
Number of Nevada Consumers Complaints by Topics
According to CFPB Consumer Complaint Database
- Fraud and threat ( 133 )
- Not exiting debt ( 76 )
- Charges from account ( 68 )
- Lender is not available ( 32 )
- Loan to return ( 26 )
- Credit rating ( 20 )
- Not requested loan ( 20 )
- Loan not received ( 12 )
The Quantity of Top Nevada Stores by Cities
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.
- 2019 – the SB201 bill was adopted, according to which a special base should be created to control the number of loans issued. According to the new requirements, the lender must check the information about the client in the database before issuing a loan.
[Updated As of February 2020]