Payday Loans and the Florida Laws that Govern Them

It is not uncommon here at Loan Lawyers to encounter well-meaning consumers who have been taken advantage of by unscrupulous payday lenders. These payday lenders commonly advertise their services as helpful “bridge loans” in order to deal with unexpected expenses or simply to get customers from one pay period to another. In reality, these loans can be anything but helpful as these catchy commercials and advertisements gloss over the fact that these payday loans come with an exorbitant price tag. In fact, it is not uncommon for a 14 day payday loan for a $100.00 loan to have an annual percentage rate of as much as 391.07%. To provide further context, this would mean that a consumer who initially borrowed only $100.00 on January 1^st could owe about 4 times that amount by December 31^st. Now granted, the loan was not intended to last one year as Florida law limits the length of a payday loan to between 7 to 31 days.[1] The reality however, is that life happens and despite the best of intentions, consumers default on these loans.

In an attempt to protect Florida consumers, Florida has enacted certain laws governing payday loans and their lenders. Some of the more important parts of these laws provide as follows:

1. Payday lenders are restricted from making more than one loan to a consumer at a time. To circumvent this restriction, many payday lenders are out of state businesses i.e. they do not maintain a physical presence in the state and offer their services over the phone or the internet;
2. Payday Lenders operating a business in Florida must be licensed with the Office of Financial Regulations; [2]
3. Payday loans cannot exceed $500.00, exclusive of costs;[3]
4. Payday lenders cannot charge fees in excess of 10% or $5, whichever is greater.[4] Florida payday lenders may also charge a verification fee of no more than $5.00;[5]
5. Florida payday lenders must allow at least a 24 hour “cooling off” period between payday loans.[6] Payday lenders are required to check the database established by the Office of Financial Regulations to verify whether the consumer has an outstanding loan or has terminated one within 24 hours.; and,[7]
6. Payday lenders cannot “roll over” payday loans, that is charge consumers an additional fee to continue to hold the check.

So what options do Florida consumers who have been preyed upon by payday lenders have? Florida law allows consumers to redeem the check being held by the payday lender by paying the face value of check on or before the date the payday lender could cash it.[8] For payday loan consumers who default, there is also a 60 day “grace period” following default so long as the consumer makes an appointment with a consumer counseling agency within 7 days after the end of the deferment period and complete the counseling by the end of the grace period.[9]

Subsequent to default, payday lenders commonly employ aggressive tactics in order to collect on the outstanding balances. If you are behind or about to fall behind on your payday loans, you need a knowledgeable and aggressive legal team working on your behalf to help you to find a solution.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 1,800 homes from foreclosure, eliminated $100,000,000 in mortgage principal and consumer debt, and have collected millions of dollars on behalf of our clients due to bank, loan servicer, and debt collector violations, negligence and fraud. Contact us for a free consultation to see how we may be able to help you.

[1] Fla. Stat. 560.404(8)

[2] Fla. Stat. 560.403

[3] Fla. Stat. 560.404

[4] Fla. Stat. 560.309(8)(c)

[5] Fla. Stat. 560.309(8)

[6] Fla. Stat. 560.404(19)

[7] Id.

[8] Fla. Stat. 560.405(4)

[9] Fla. Stat. 560.404(22-22(a)