Payday lending is prohibited in Puerto Rico.
In Puerto Rico, the Payday Lending State Statutes page on the National Conference of State Legislature reads: “Puerto Rico – Not available“. All lending is governed by state laws, there are no specific payday lending statutes, the practice is not authorized in the state.
Puerto Rico Payday Lending Statutes
In Puerto Rico, the system of law functions within the U.S. federal law system framework; however, it is based on the basics of the Spanish civil code.
In the state, all the lending is regulated by special laws and acts, and when it comes to payday loans, they are basically prohibited by Small Loan Law and Check Casher Law.
Puerto Rico Check Casher Law reads:
Small Loan Law regulates the rates of interest that can be charged for small personal loans in Puerto Rico:
- 2000 – According to the P.R. Laws Ann. §10-942 et seq., lenders cannot charge more than 36% APR;
- 2001 – The rate cap is 25% and “can be set by Finance Board“.
- 2010 – Present days – Current statute §10-942 et seq:
- “(a) Maximum charge. — The Financial Board shall be empowered to fix, regulate, increase, reduce or open to free trade through regulations and for the time needed, the rates of interest and maximum charges allowed by law. Furthermore, the Financial Board may determine the methods for computing the rate of interest.“
According to these laws, it is compulsory that all the lenders adhere to the regulations, and, therefore, any lenders charging differently are considered to be operating illegally.
More information about Puerto Rico and its laws can be found on the Official website of Puerto Rico.
The History of Payday Loans in Puerto Rico
- 2000 – The P.R. Laws Ann. §10-942 et seq. read that all small lenders cannot charge more than 25% APR.
- Present days – Payday loans are currently illegal in Puerto Rico.
[Updated As of February 2020]