Who makes Payday Loans?
Payday loans are made by storefront lenders, check cashers, and pawn shops and are marketed via toll-free telephone numbers and over the Internet. Up to 24,000 outlets make 95 to 100 million loans a year worth $25 to $27 billion, and generate over $4 billion in fees. Is Payday Lending Legal? Payday Lending Is Illegal in New York States traditionally regulate the small loan market and license lenders who are allowed to charge relatively high rates to make small loans available to consumers without perfect credit standing. New York’s civil usury cap is 16 percent interest a year (New York General Obligations Law § 5-501 and New York Banking Law § 14-a, subd. 2). The criminal usury cap is 25 percent annual interest (New York Penal Law § 190.40). Check cashers are prohibited from cashing checks with deferred dates in New York. New York is one of fifteen states with a usury law or small loan rate caps that apply to loans of up to $500, the typical payday loan size. See attached chart for li
