Maine has a limit of $2,000 on payday loans that are available within the state. The terms for payday lending in Maine are quite strict, and while it isn’t a limit on the duration of the loan period, payday loans have a limit of 30 percent APR for loans of up to $2,000.
The financing charges must be no more than $5 on loans up to $75, $15 for loans of $75 to $250 and $25 for loans that exceed $250. Criminal acts are not allowed.
Payday loans are regulated extensively in Maine. They are not allowed within the state in the event that the lender is not licensed and monitored. In reality, the State of Maine has one of the most stringent regulations across the nation. Businesses that are not listed on the list of excluded businesses cannot cash post-dated cash checks.
These rules have been in place for many years and, as a result of these regulations, only a handful of licensed payday lenders can currently be operating within the state.
Within the State of Maine, the following laws govern payday lending: Me. Rev. Stat. Ann. Tit 9-A SS1-201 & Me. Rev. Stat. Ann. Tit. 9-A SS1-301.
All consumer lenders, even payday lenders must be required to get the “Supervised loan” license. Another crucial requirement is that lenders have to sign a $50,000 consumer security bond in the state.
The law states that “Supervised Lenders are not subject to 32 M.R.S.A. 6138(4)(D) which bans the cashier of a check from cashing or advancing funds on a postdated check.”
That means it’s difficult to become an individual payday loan lender within the State. These strict rules are negative in terms of profits therefore there aren’t many payday lenders operating in this state. In actual fact, there was only one in 2001 and just seven in 2005.
According to the report from 2016 on payday loans published by The Journal of Economics and Business in 2016, there were just eleven completely licensed loan providers that were by way the least number when compared with other states that have similar laws.
The current list of authorized lenders ( 15 from 2018 and 2019) can be found on the Bureau of Consumer Credit Protection’s official website.
Additionally, as per the state Legislature, the payday lenders that deal with Maine residents must be licensed ” wherever the lender is situated,” 9-A MRS sec.1-201(1)(C).
So, the situation gets more difficult when it comes to online businesses. In taking strict license requirements into account, some businesses decide to operate without a license within the state. These are tribe-based lenders who aren’t licensed and lenders with licenses elsewhere, and foreign-based lenders. They are all difficult to track so long as they’re practically impractical.
“2. About the consumer loan, other than a loan made according to open-end credit, the lender can contract for and pay the finance cost by the actuarial methodology and not exceed the amount equivalent to the following:
At the end of July 2020, lenders will not be required to verify the borrower’s capacity to repay loans.
Be aware, analyze your financial situation, and don’t be entangled in debt.
The rule was modified through the CFPB.
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