New York Payday Loan Law and Legislation

New York Payday Loan Regulations
Legal Status
Interest Rate (APR)
25% small loan cap

Payday lending is prohibited in New York.

It is a violation in New York to make payday loans either in-person, or by telephone, or online. Check cashing of post-dated checks is forbidden in the state; every lending business is required to have a license to operate in the state; state laws impose small loan cap of 25% APR for any loans. Debt collection or an attempt at debt collection on a payday loan is considered illegal as well.

New York Payday Lending Statutes

N.Y. Banking Law 340 et seq. outlines lending rules in the state:

  • “For the purposes of this section, a person or entity shall be considered as engaging in the business of making loans in New York, and subject to the licensing and other requirements of this article, if it solicits loans in the amounts prescribed by this section within this state and, in connection with such solicitation, makes loans to individuals then resident in this state, except that no person or entity shall be considered as engaging in the business of making loans in this state on the basis of isolated, incidental or occasional transactions which otherwise meet the requirements of this section.”

N.Y. Banking Law 373 prohibits check cashers from giving payday loans:

  • “No licensee shall at any time cash or advance any moneys on a post-dated check or draft or engage in the business of transmitting money or receiving money for transmission…”

N.Y. Penal Code 190.40 sets the usury cap at 25% APR:

  • A person is guilty of criminal usury in the second degree when, not being authorized or permitted by law to do so, he knowingly charges, takes or receives any money or other property as interest on the loan or forebearance of any money or other property, at a rate exceeding twenty-five per centum per annum or the equivalent rate for a longer or shorter period.
  • Criminal usury in the second degree is a class E felony. “

Rates, Fees and Other Charges in New York

  • State laws impose a criminal usury cap that equals 25% APR for any loans; there is also a civil usury cap that equates 16% per annum.

Consumer Information.

More information about payday loan laws and regulations in New York can be found on the official website of the New York Department of Financial Services.

Regulator: Complaints & Information

New York State Department of Financial Services

Address: 1 State St, New York, NY 10004
Tel: 800-342-3736
File a Complaint:

Number of New York Consumers Complaints by Topics

According to CFPB Consumer Complaint Database

  • Fraud and threat ( 60 )
  • Charges from account ( 57 )
  • Not exiting debt ( 45 )
  • Not requested loan ( 18 )
  • Lender is not available ( 15 )
  • Credit rating ( 11 )
  • Loan not received ( 9 )
  • Loan to return ( 7 )

[Updated As of February 2020]

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