District of Columbia
Eight jurisdictions protect consumers against abusive lending practices for all four small dollar loan products:
Fifteen states allow abusive lending for all four products included in the Scorecard:
legislative developments affecting the grad- ing in this Scorecard have been 36% APR caps on payday loans6 and title loans7 becoming effective in New Hampshire. New Hampshire now receives passing instead of failing grades for these products.8 Other positive changes include new or clarifying legislation or regula- tion in multiple states, such as Idaho and Min- nesota, to apply their payday lending laws to Internet payday lenders. Also noteworthy was a decision by the Supreme Court of Arkansas striking down the state’s payday lending law as unconstitutional.9 These and other state law developments since the original Scorecard are discussed in more detail below.
As of April 15, 2010, eight jurisdictions— Arkansas, Connecticut, the District of Colum- bia, Maryland, New Jersey, New York,
Pennsylvania, and Vermont—protect con- sumers against abusive lending practices for all four small dollar loan products. On the other hand, fteen states—Arizona, Delaware, Idaho, Illinois, Minnesota, Mississippi, Mis- souri, Montana, Nevada, New Mexico, South Carolina, South Dakota, Tennessee, Utah, and Wisconsin—allow abusive lending for all four products included in the Scorecard. The remaining states protect consumers to varying degrees.
As this Scorecard demonstrates, reforms are still needed in many states. In addition, there is important work to be done at the na- tional level, such as the creation of a nation- wide usury cap for consumer loans as well as a new federal regulator to protect consumers in all lending outlets.
6 7 8 N.H. Rev. Stat. Ann. § 399-A:13(XX). N.H. Rev. Stat. Ann. § 399-A:14(VI). Although not effective until September 2008, Ohio’s 28% APR cap on payday loans was reected in the grading on the original Scorecard. 9 McGhee v. Arkansas Bd. of Collection Agencies, 289 S.W.3d 18 (Ark. 2008).
iv 5 Updated Small Dollar Loan Products
NATIONAL CONSUMER LAW CENTER