Louisiana State regulates the local payday industry largely through La. Stat. Ann. 9:3578.1 et seq. Against the background of other states, Louisiana practices quite tough regulation methods and poses heavy restrictions on a wide array of payday organization functions – all of that aimed at protecting the citizens from draconian contracts. The industry has been subjected to considerable regulations
According to Louisiana state payday loan laws each payday loans, each direct lender is required to complete a registration that allows issuing payday loans contract (regardless of whether the provider is offering other loan solutions).
Nevertheless, some unfair lenders operate under a different license and offer ‘payday loans’ under different titles to set higher interest rates and drive revenue.
Therefore, a person can get the maximum of $350 per payday loan contract and have no more than 1 active loan contract. The loan contract may not be issued for less than 30 days, and selfsame, the maximum contract length is capped by 60 days. A borrower may be charged a $5 documentation fee, while the upper limit for the interest rate is capped at 16.75%. With all the surcharges and extra fees the repayment for a loan cannot exceed $125 per $100 borrowed, which means that the APR is not going to break the limit of 650% (calculated for 14 days contract).
The local payday loan regulations enable borrowers to send as many applications for a loan as you want; however, once you choose the particular offer no renewals, rollovers or extension plans are allowed. The local regulations require repaying the loan to the full extent by the deadline indicated in the contract. Although the exceptions enable a person to refinance the loan by covering 25% of the latter contract (in this case 75% of loan can be refinanced) – this service is provided separately on paid basis. The local regulations don’t allow collecting a penalty fee for repayments completed ahead of deadline.
The local direct lending companies are not forced to provide full guidance for potential clients in the places of payday loan services provision (whether it is a website or a pawn shop); nevertheless, they are recommended to educate the potential clients on the possible issues interconnected with payday loans. The lenders are obliged to provide customers with contracts containing a breakdown of all the fees, charges and surcharges envisioned in the effective contract (per each $100 borrowed).
Louisiana payday loans laws do not allow lending agencies practice offensive tactics as for collecting the due loans. Criminal action threats are prohibited and the company must send a mail notification before starting any legal proceedings against expired contracts. If the violations are registered and approved by the observing bodies, a lender may be penalized (up to license cessation), while the active loan can be cancelled.