Payday Loan Laws

Vermont has some of the toughest laws in the nation with respect to payday lending. The state caps annual interest rates at 24%, and a 2012 state law imposes liability on anyone who assists illegal lenders.

That law is unusual among the 50 states. It enables the Vermont attorney general's office to take a series of steps that are aimed at stamping out online payday lending in the state.

The AG's office sent letters to Google, Yahoo, Microsoft, Comcast, DirecTV, Dish Network and the Vermont Association of Broadcasters, notifying them that it's a violation of Vermont law to knowingly provide substantial assistance to an unlicensed lender.

The letters do not argue that the TV providers and search-engine companies are violating Vermont law, but they don't absolve the firms of legal responsibility, either. The letters ask the companies to stop running ads for any lender that is not authorized to operate in Vermont.

Vermont's 2012 law is also the basis for actions announced against two companies that have processed payments on behalf of online payday lenders.

The AG's office filed suit against a North Dakota-based company, Intercept Corp., which allegedly processed payments on behalf of companies that made illegal loans.

At the same time, Vermont authorities announced a settlement with a California company, T$$, LLC, that similarly processed payments for online payday lenders. Under the settlement, T$$ denied that it violated Vermont law but agreed to pay restitution to consumers of up to $150,000.

For a thorough discussion of the payday loan industry and access to our payday loan training materials, we recommend you proceed to Payday Loan University