The debate over the necessity and morality of payday loans has been going on for years, but they’re still legal in most parts of the United States. Unfortunately, each state government has the authority to regulate them within their borders, and they all take a different approach. Here’s what you should know about the Florida payday loan laws.
Payday lending status in Florida: Legal
To effectively eliminate the payday lending industry, state regulations need to prevent payday lenders from charging more than borrowers can afford by restricting interest rates or giving people the time they need to pay.
The Florida payday loan laws limit the amount of money payday lenders can offer, but they do little to protect consumers from high interest rates. As a result, payday loans, also known as deferred presentment transactions, are still legal in Florida.
Loan terms, debt limits, and collection limits in Florida
- Maximum loan amount: $500
- Interest rate (APR): 391% on a 14-day loan of $100
- Minimum loan term: 7 days
- Maximum loan term: 31 days
- Number of rollovers allowed: None
- Number of outstanding loans allowed: 1
- Cooling-off period: 24 hours
- Installment: Yes; up to $1,000 with terms ranging from 60 to 90 days
- Finance charges: 10% of the loan amount plus a $5 verification fee for single payment loans. No more than 8% of the outstanding balance biweekly, plus a $5 verification fee.
- Collection fees: Non-sufficient funds (NSF) fees only.
- Criminal action: Prohibited
The primary danger of payday loans is that they tend to trap borrowers in a cycle of debt that they can’t escape. People take out loans with small balances but shockingly high finance charges. When they can’t pay them in the short period allowed, they get stuck.
In Florida, payday lenders can require 10% finance charges plus a $5 verification fee. That’s a $15 fee for a payday loan of $100, which might not sound like much, which is how they get you, but it works out to an APR of 391% over a two-week repayment term.
For comparison, a credit card typically has an APR of no higher than 36%. That’s also the rate legislators usually cap loans to when they want to protect borrowers from unaffordable fees.
You can read the full text of the Florida payday loan laws in the Florida statutes, Chapter 560, Part IV.
Florida payday loan laws: How they stack up
Because each state has the right to regulate payday lenders as they see fit, laws governing them vary across the country. Unfortunately, most states either condone payday loans or have loopholes that let them continue to operate.
Florida is one of the many states with payday lending regulations that restrict payday loans but fail to eliminate them. They have only minimal protections in place, such as a ban on rollovers and a cap on finance charges that still allows for APRs in the triple digits.
Here’s a more in-depth explanation of the way their rules work.
Maximum loan amount in Florida
Florida permits both traditional payday loans and installment payday loans. State law calls them deferred presentment transactions and deferred presentment installment transactions, respectively.
The maximum loan amount in Florida for a traditional payday loan with a single due date is $500. Technically, the law limits the face amount of the check you deposit with the lender to $500, excluding the finance charges. An installment payday loan with a repayment term between 60 and 90 days can be for no more than $1,000.
Because borrowers can only take out one loan at a time, there’s no need for further legislation restricting the amounts you can take from a second lender.
What is the statute of limitations on a payday loan in Florida?
Statutes of limitations restrict the amount of time creditors have to initiate legal proceedings that can force a borrower to pay their outstanding debts. If your payday loan has been outstanding for longer than the statute of limitations in your state, you can use the age of the debt to defend a lawsuit.
In Florida, the statute of limitations on debt is typically five years.
Rates, fees, and other charges in Florida
Florida payday loan laws let lenders impose finance charges up to 10% of the loan amount and collect a $5 verification fee for traditional payday loans with a single due date. Depending on your repayment term and loan amount, your APR can range from 130% to 782%.
For example, if you were to take a payday loan for $100, you’d pay $10 in finance charges plus the $5 verification fee because payday lenders always charge the most they legally can. If the repayment term were 14 days, your APR would be 391%.
The maximum payday loan amount is $500, which means the most you can pay for a payday loan is a $50 finance charge and a $5 verification fee for a $55 total.
If you take out an installment payday loan, payday lenders can charge you up to 8% of the outstanding balance on a biweekly basis. Lenders can also still include the $5 verification fee for installment loans.
That calculation is less intuitive, but here’s an example: Lending Bear has a $258.06 finance charge for a $1,000 installment payday loan. You’d make five payments of $251.61 every two weeks.
If the post-dated checks you provide to secure your payday loan don’t clear, lenders can charge you an NSF fee to cover the expenses your financial institution charged them as a result. For example, Check Into Cash charges a $25 NSF fee in Florida.
The maximum term for a payday loan in Florida
For a traditional, single-payment payday loan, the maximum repayment term is 31 days in Florida. For a payday loan with multiple installments, the maximum is 90 days.
In many other states, lenders can charge you a fee to extend the due date and “roll over” the loan when you default. Fortunately, Florida prohibits rollovers, so it’s a little harder for lenders to trap you in debt.
The minimum terms for traditional and installment payday loans are seven days and 60 days, respectively.
The Florida Office of Financial Regulation is responsible for overseeing the financial services industry in the state. Its mission is to protect consumers, promote a safe financial marketplace, and grow Florida’s economy through fair regulation.
Their Division of Consumer Finance licenses and regulates non-depository financial institutions such as collection agencies, title loan companies, and deferred presentment providers, which is the term for payday lenders in Florida.
Where to make a complaint
The Florida Office of Financial Regulation is also the best place to register a complaint about illegal activity regarding a payday lender in the state. The easiest way to notify them of your issue is to complete their online form.
Here’s their contact information:
- Regulator: Florida Office of Financial Regulation
- Address: 200 E. Gaines St. Tallahassee, FL 32399
- Phone: (850) 487-9687
- Fax: (850) 410-9663
- Link to website: https://flofr.gov/sitePages/FileAComplaint.htm
You can also file a complaint with the Consumer Federal Protection Bureau (CFPB). The CFPB is the federal government’s organization committed to helping consumers with financial issues, such as payday lenders.
Number of Florida consumer complaints by issue
The following statistics are from the CFPB Consumer Complaint Database.
|Charged fees or interest you didn’t expect||379|
|Struggling to pay your loan||134|
|Problem with the payoff process at the end of the loan||98|
|Getting the loan||91|
|Can’t contact lender or servicer||88|
|Problem when making payments||80|
|Received a loan you didn’t apply for||61|
|Incorrect information on your report||53|
|Loan payment wasn’t credited to your account||47|
|Can’t stop withdrawals from your bank account||36|
|Money was taken from your bank account on the wrong day or for the wrong amount||27|
|Applied for loan/did not receive money||23|
|Problem with additional add-on products or services||15|
|Was approved for a loan, but didn’t receive money||9|
|Vehicle was repossessed or sold the vehicle||6|
|Problem with a credit reporting company’s investigation into an existing problem||5|
|Vehicle was damaged or destroyed the vehicle||5|
|Improper use of your report||4|
|Credit monitoring or identity theft protection services||3|
Source: CFPB website
The number one complaint among consumers in Florida is that their lenders have charged them fees or interest that they didn’t expect. In fact, it’s not even a close competition.
The difference between first and second place is a whopping 245 complaints. There are almost three times the number of complaints about fees and interest than the next most common issue.
Ironically, that issue still has to do with the cost of the loan. There were 134 complaints from people whose problem was they were struggling to keep up with their loan payments.
Clearly, the Florida payday loan laws provide inadequate protection for consumers. Lenders in the state are consistently charging more for their loans than their borrowers can afford.
The most complained about payday lender in Florida: Big Picture Loans, LLC
Big Picture Loans, LLC is the most complained about payday lender in Florida. They’re an online lender and make the top ten list in many states, so that’s not much of a surprise.
Traditional payday lenders are expensive enough, but Big Picture Loans is also a tribal lender. Tribal lenders partner with Native American tribes to use their tribal immunity, which helps to protect them against state laws.
They use that as an excuse to ignore the lending limitations that states put in place to protect consumers. In Florida, that means that Big Picture Loans charges even more than the 10% finance charge that payday lenders can require.
Big Picture Loans offers installment payday loans with principal balances that range from $200 – $5,000. Their repayment terms can be anywhere from 4 to 18 months, and the cost of their loans is between 35% and 699% APR.
Unfortunately, to qualify for an APR below 200%, you must be a returning customer and meet their undisclosed credit requirements. It’s unlikely that anyone actually gets the lowest rates they advertise.
Most common complaints about Big Picture Loans, LLC
|Charged fees or interest you didn’t expect||77|
|Struggling to pay your loan||9|
|Money was taken from your bank account on the wrong day or for the wrong amount||4|
|Problem with the payoff process at the end of the loan||3|
|Loan payment wasn’t credited to your account||3|
|Received a loan you didn’t apply for||3|
|Problem when making payments||2|
|Applied for loan/did not receive money||1|
|Can’t stop withdrawals from your bank account||1|
|Can’t contact lender or servicer||1|
|Getting the loan||1|
Source: CFPB website
Typical of lenders in Florida, the top complaint about Big Picture Loans is that they charge fees or interest that people didn’t expect. Since they charge new borrowers at least 200% APR and can ask for as much as 699%, that’s not surprising.
Similarly, the second biggest complaint people have is that they’re struggling to pay back their loans. They charge even more than typical payday lenders, which already tend to trap people in a cycle of debt.
Top 10 most complained about payday lenders
|Lender||No. of complaints since 2013||Primary complaint reason|
|Big Picture Loans, LLC||105||Charged fees or interest you didn’t expect|
|LDF Holdings, LLC||48||Charged fees or interest you didn’t expect|
|Mobiloans, LLC||45||Charged fees or interest you didn’t expect|
|Advance America, Cash Advance Centers, Inc.||35||Received a loan you didn’t apply for|
|Populus Financial Group, Inc.||32||Charged fees or interest you didn’t expect|
|TMX Finance LLC||32||Charged fees or interest you didn’t expect|
|BlueChip Financial||32||Charged fees or interest you didn’t expect|
|Lending Club Corp||25||Problem when making payments|
|Enova International, Inc.||23||Applied for loan/did not receive money|
|Amscot Corporation||22||Problem with the payoff process at the end of the loan|
Source: CFPB website
As you can see, Big Picture Loans, LLC isn’t the only payday lender people have complaints about in Florida. Florida has the third-most payday loan complaints in the country, and there’s plenty of blame to go around.
Interestingly, even though Florida has relatively loose restrictions for payday lenders, the top three most complained about businesses are tribal lenders. Once again, the number one complaint about 60% of them is that they charged fees or interest that consumers didn’t expect.
If you’re struggling financially because of these or any other predatory lender, DebtHammer can help you turn the tables on them. Contact us today for a free quote, and we’ll help you get out of the payday loan trap and stay out — for good.
Payday loan statistics in Florida
- Florida ranks as the 3rd state for the most overall payday loan complaints
- Florida ranks as the 17th state for the most payday loan complaints per capita
- There have been 18,281 payday loan-related complaints made to the CFPB since 2013 ― 1164 of these complaints originated from Florida
- The estimated total population in Florida is 21,477,737 people
- There are 5.4196 payday loan complaints per 100,000 people in Florida
- The most popular reason for submitting a payday loan complaint is “Charged fees or interest you didn’t expect”
Historical timeline of payday loans in Florida
Unfortunately, payday lending laws have been trending the wrong way in the state of Florida for years. Instead of implementing further protection for consumers, the state has steadily weakened them.
Here’s an overview of the history of payday loans in Florida.
- The 1990s: Florida had a usury limit, capping interest rates at 18%. Still, many payday lenders operated illegally or found a way around the law and charged much higher rates.
- 2001: The Deferred Presentment Act went into effect. The act contained many of the same regulations it includes today, such as the one-at-a-time payday loan limit and the requirement for a 24-hour cooling-off period in between loans.
- 2018: Florida passed the Deferred Presentment Transactions Law. The legislation allowed payday lenders to increase the principal amount of their loans up to $1,000 as long as they set them up as installment loans with terms between 60 and 90 days.
The Deferred Presentment Act was supposedly an attempt by Florida government officials to pass laws they thought would better protect consumers. Unfortunately, these laws didn’t help much since payday loan companies could still charge very high APRs.
The Deferred Presentment Transactions Law only served to expand the payday loan industry’s freedoms, further endangering the people who feel the need to borrow from them.
Flashback: A Florida payday loan law story
The payday loan industry has a talent for skirting around the law. Tribal lenders are a prime example, which are little more than payday lenders who hide behind the tribal immunity of Native American tribes.
That’s not the only strategy they’ve taken, though. They often attempt to acquire a license other than the one required for payday lenders or otherwise attempt to classify themselves as a business that doesn’t have to abide by those laws.
For example, in 2001, then-governor Jeb Bush signed the Deferred Presentment Act. As a result, the Florida payday loan laws required payday lenders to collect post-dated checks for the total amount owed before issuing a loan, and labeled any business that did so a payday lender.
Ace Cash Express and Cash America International, Inc. used that as an opportunity to sidestep the rules. Instead of collecting post-dated checks from borrowers, they collected promissory notes and claimed they were credit organization services.
Because they weren’t payday lenders, they could avoid the laws intended to restrict them and went on to charge their consumers as much as 1,200% APR, according to a subsequent class-action suit filed by Weisberg and Meyers, LLC.
Don’t count on lenders to stick to the rules. Know your rights and question creditors if they do anything that contradicts what you think they can do.
Final verdict: Should I take out a payday loan in Florida?
Even if you’re in a pinch for cash, taking out a payday loan in Florida is a bad idea. Payday lenders in the state can charge you as much as 10% of your loan plus a $5 verification fee, which usually puts you at an APR in the mid-triple digits.
If you need some money to get you to your next paycheck but struggle with bad credit, consider using a cash advance app like Earnin. There are no fees or interest, and you can get an advance on your earnings of up to $250 per pay period.
However, these types of short-term financing can’t support you forever. Eventually, you’ll need to pay off your debts, fix your credit, and rebuild your finances. If you’re a Florida resident looking to escape the debt trap, DebtHammer can get you started. If you need help, contact us today for a free quote.