Payday Loans and Cash Advance in District of Columbia

Prohibited; 24% APR cap on loans. Below: the law, the limits, what $300 costs here, who regulates it, and how to request a cash advance online in District of Columbia.

Is a Cash Advance Legal in District of Columbia?

Payday loans are not legal in the District of Columbia. The Payday Loan Consumer Protection Amendment Act of 2007, D.C. Law 17-42, took effect on November 24, 2007 and stripped the payday provisions out of the check cashing law. What remains is D.C. Code 26-319(b): no licensed check casher may at any time cash or advance any money on a post-dated check, which is the mechanics of a payday loan. Every other lender is bound by the District's usury ceiling in D.C. Code 28-3301(a), which lets parties to a written contract agree to interest of no more than 24% per year, and anyone in the business of lending at more than 6% needs a money lender license under D.C. Code 26-901. A two-week loan at $15 per $100 is close to 400% APR, so no licensed lender can offer one. For a borrower, the rule of thumb is that any loan above 24% APR from a company that is not a bank or credit union is outside District law. The Department of Insurance, Securities and Banking licenses check cashers and money lenders and takes complaints, and in November 2024 the Attorney General sued a cash-advance app for charging District residents fees that worked out to more than 300% APR.

The governing law is Payday Loan Consumer Protection Amendment Act of 2007 (D.C. Law 17-42) and the District usury law (D.C. Code 26-319; 28-3301; 26-901).

Loan Limits and Terms in District of Columbia

With no payday product, the limits above describe what a licensed money lender may do. The 24% ceiling in D.C. Code 28-3301(a) applies to any written contract for the payment of money at a future time, and it does not vary by loan size or term. The statute exempts business or investment loans above $2,500, loans to qualified nonprofit or religious organizations, and first-lien home mortgages, none of which help a consumer looking for a short-term loan. A money lender license under D.C. Code 26-901 carries a $500 annual license tax, and a corporate licensee must keep a resident agent in the District for service of process. Nothing in District law sets a minimum term, a cooling-off period or a database, because the 24% rate makes the payday model impossible rather than merely regulated.

What a $300 Loan Costs in District of Columbia

The District has no payday loan, so this shows the cheapest legal loan from a licensed money lender at the 24% ceiling in D.C. Code 28-3301(a). For $300 over 14 days: 300 x 0.24 x 14 / 365 = $2.76. Checking the APR: 2.76 / 300 x 365 / 14 = 0.24, or 24%. The borrower repays $302.76. Against that, the Department of Insurance, Securities and Banking notes that payday loans typically carry interest of 400% or more, which on the same $300 would be roughly $46 for two weeks.

Run your own numbers with the cash advance calculator.

Consumer Protections and Who to Call in District of Columbia

• A licensed check casher may not at any time cash or advance money on a post-dated check, which removes the payday loan mechanism from the District entirely (D.C. Code 26-319(b), as amended by D.C. Law 17-42 effective November 24, 2007).
• Interest under a written loan contract may not exceed 24% per year, with exceptions only for business and investment loans over $2,500, loans to qualified nonprofits and religious organizations, and home mortgages (D.C. Code 28-3301).
• Anyone in the business of lending money at more than 6% per year must hold a District money lender license, pay a $500 annual license tax, and if a corporation keep a resident agent in the District (D.C. Code 26-901).
• The Department of Insurance, Securities and Banking licenses and examines check cashers and money lenders, and accepts consumer complaints by phone at 202-727-8000, by email at [email protected], online, or by mail.
• The Attorney General enforces the usury cap against companies that dress payday loans up as something else; in November 2024 the office sued an earned wage access app whose tips and expedite fees produced APRs above 300% for District users.
• The Department's own guidance warns that payday loans typically carry interest of 400% or more and that rolling one over compounds the fees, and it points borrowers to lower-cost options first.

Complaints and licence checks go to the DC Department of Insurance, Securities and Banking: 202-727-8000, disb.dc.gov, or file a complaint at the regulator's complaint page. The federal CFPB also takes complaints about any lender.

Online vs Storefront Lenders in District of Columbia

There are no payday storefronts in the District, so the pressure comes from websites and apps. The 24% ceiling in D.C. Code 28-3301 and the money lender license in D.C. Code 26-901 do not depend on where a company is based; they apply to loans made to District residents. The clearest recent test was the Attorney General's November 2024 lawsuit against an earned wage access app: the office rejected the argument that tips and expedite fees are not interest, found that nearly 90% of District users paid expedite fees, and treated the product as unlicensed payday lending at more than 300% APR. Out-of-state and tribal-affiliated websites make the same kinds of arguments. Before borrowing online, look the company up in NMLS Consumer Access, which the Department of Insurance, Securities and Banking links from its homepage, and compare the APR on the Truth in Lending disclosure to 24%. If the number is higher, keep the documents and file a complaint with the Department at 202-727-8000 or [email protected].

Alternatives If a Payday Loan Is Not the Right Fit

The legal small-dollar loan in the District is a personal installment loan from a licensed money lender or a bank or credit union at no more than 24% APR. The Department of Insurance, Securities and Banking's own advice on avoiding payday loans starts elsewhere: ask the creditor you owe to waive fees or set up a payment plan, look for a low-interest loan from a bank or credit union, ask family for help, and talk to a nonprofit credit counseling service. Credit unions serving District residents can offer payday alternative loans under federal rules, and a credit card cash advance, while expensive, is still far cheaper than an app charging the equivalent of 300% APR. Employer pay advances cost nothing if your employer offers them. If you have already used a cash-advance app, read about the Attorney General's action before paying more tips or expedite fees, and file a complaint if the effective rate on your advances is above 24%.

Compare the installment loan and payday alternative loan options before you decide.

Frequently Asked Questions

Nearby States

• MarylandThe fee cap, a worked example and the regulator to call in Maryland.
• VirginiaThe fee cap, a worked example and the regulator to call in Virginia.