Pennsylvania Payday Loan Law and Legislation

Pennsylvania Payday Loan Regulations
Legal Status
Interest Rate (APR)
6% APR small loan cap

Payday lending is prohibited in Pennsylvania.

Pennsylvania banned payday lending in 1998 when 6% APR cap, and the situation has remained the same for years. There were attempts to change the law to the benefit of the industry, however, to no avail.

Pennsylvania Payday Lending Statutes

In the state of Pennsylvania, payday lending is considered illegal according to the Check Cashing Licensing Act of 1998, 505(a).

The guidance below is Under section 505 regarding restrictions on licensed payday lenders.

No licensed lender within the Commonwealth of Pennsylvania is permitted to cash or advance any monies on postdated checks. No check cashing licensed organization may transmit money or receive money to be transmitted unless they are licensed under the act of September 2, 1965 (P.L.490, No.249), known commonly as the Money Transmission Business Licensing Law.

September 2, 1965 (P.L.490, No.249

There is also the Consumer Discount Company Act 7 Pa. Cons. Stat. Ann. 6201 et seq.

Pennsylvania’s Loan Interest and Protection Law (LIPL) prohibits lenders without the CDCA license to charge an interest rate in excess of 6% per annum on a loan amount less than $50,000.

The Pennsylvania Supreme Court set a rule in 2008 that all lenders (in-state and out-of-state ones) willing to give loans to Pennsylvania borrowers must abide by the state laws. Online lenders were to be “licensed under the CDCA by February 1, 2009, or cease lending to Pennsylvania residents.”

Rates, Fees and Other Charges in Pennsylvania

  • In Pennsylvania, any lending businesses offering either short-term cash advances or any loans are forbidden to charge more than 6% per annum as APR.
  • Small Loan Rate Cap also applies. All the lenders wishing to operate in the state should adhere to $9.50 per $100 per year interest plus $1.50 service charge for $50 per year when the contract is repayable within forty-eight (48) months from the date of making.

Consumer Information

More information about payday loan laws and regulations in Pennsylvania can be found on the official website of the Pennsylvania Department of Banking.

Regulator: Complaints & Information

Pennsylvania Department of Banking

Address: 17 N 2nd St #1300, Harrisburg, PA 17101
Phone: 717-787-1854 or 800-722-2657 (toll free)
File a Complaint:

Number of Pennsylvania Consumers Complaints by Topics

According to CFPB Consumer Complaint Database

  • Charges from account ( 133 )
  • Fraud and threat ( 116 )
  • Not exiting debt ( 83 )
  • Lender is not available ( 39 )
  • Loan to return ( 31 )
  • Not requested loan ( 27 )
  • Credit rating ( 21 )
  • Loan not received ( 18 )

The History of Payday Loans in Pennsylvania

  • 1998 – Pennsylvania made payday lending illegal according to the Check Cashing Licensing Act of 1998, 505(a).
  • 2018 – An attempt to pass a bill (HB 2429) that would allow payday lenders to return as “loan-brokers” and get a Pennsylvania credit-repair organization license. The bill would create a loophole where fees charged would not be considered interest. Predatory lending would definitely come back. Luckily, the bill died in Committee.
  • Present days – As of 2019, by law payday loans remain prohibited in the state of Pennsylvania.

[Updated As of February 2020]

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