Payday Loans and Cash Advance in Maine

Restricted; supervised lenders, capped fees. Below: the law, the limits, what $300 costs here, who regulates it, and how to request a cash advance online in Maine.

Is a Cash Advance Legal in Maine?

Maine does not have a payday loan statute, and it does not ban the product outright either. Anyone making supervised consumer loans must be licensed as a supervised lender by the Bureau of Consumer Credit Protection under Article 2 of the Maine Consumer Credit Code (Title 9-A), and every loan is subject to the finance charge limits in section 2-401: 30 percent a year on the part of the balance up to $2,000, 24 percent from $2,000 to $4,000 and 18 percent above $4,000. What makes a payday-style loan possible at all is the minimum charge rule in section 2-401(7), which lets a supervised lender collect at least $5 on a loan of $75 or less, $15 on a loan over $75 but under $250, and $25 on a loan of $250 or more, regardless of how short the term is. A two-week $300 loan therefore costs $25, about 217 percent APR, and that is the ceiling. There is no rollover provision, no fee per $100, and no separate payday license. The Bureau lists supervised lenders, including payday lenders, among the businesses it takes complaints about, and it publishes its enforcement actions.

The governing law is Maine Consumer Credit Code, Title 9-A, Article 2 (supervised lenders and finance charges) (9-A M.R.S. 2-301 and 2-401).

Loan Limits and Terms in Maine

The minimum charge is the whole story of payday lending in Maine. At 30 percent a year, two weeks of interest on $300 would be about $3.45, so a lender relies on the $25 minimum instead, and that $25 is the most it can collect for a loan of $250 or more no matter how short the term. Under $250 the minimum drops to $15, and at $75 or less to $5. Because the charge is fixed by loan size rather than by time, a longer term does not cost more until the actuarial interest at 30 percent overtakes the minimum, which on $300 takes about 100 days. Maine has no statutory limit on renewals, so watch for a lender that closes and reopens a loan every two weeks to collect the minimum charge again; the Bureau's complaint page names supervised lenders, including payday lenders, as businesses it investigates.

What a $300 Loan Costs in Maine

9-A M.R.S. 2-401 caps interest at 30 percent a year on balances of $2,000 or less, which on $300 for 14 days is only $300 x 0.30 x 14 / 365 = $3.45; but subsection 7 allows a supervised lender a minimum charge of $25 when the amount financed is $250 or more, so $25 is the lawful charge and you repay $325. APR: $25 / $300 = 0.0833; 0.0833 x 365 / 14 = 2.17, or about 217 percent. On a $200 loan the minimum charge falls to $15, about 196 percent APR for two weeks.

Run your own numbers with the cash advance calculator.

Consumer Protections and Who to Call in Maine

• No one may make supervised consumer loans in Maine without a supervised lender license from the Bureau of Consumer Credit Protection, unless it is a supervised financial organization such as a bank or credit union (9-A M.R.S. 2-301).
• The finance charge on any consumer loan is capped at 30 percent a year on balances up to $2,000, 24 percent from $2,000 to $4,000 and 18 percent above $4,000, calculated by the actuarial method (9-A M.R.S. 2-401).
• The minimum charge a supervised lender may collect is fixed at $5, $15 or $25 depending on loan size, so a payday-style loan of $250 or more can never cost more than $25 in finance charges for its term (9-A M.R.S. 2-401(7)).
• The Bureau accepts complaints from Maine residents against supervised lenders, including payday lenders, online or by mail, and its examiners review licensee compliance; call 800-332-8529 in Maine or 207-624-8527.
• License status for any lender can be checked on NMLS Consumer Access, which the Bureau's website points to, and the Bureau publishes the enforcement actions it takes against licensees.
• Federal law caps the annual rate at 36 percent, including most fees, for active-duty service members and their dependents under the Military Lending Act.

Complaints and licence checks go to the Maine Bureau of Consumer Credit Protection: 800-332-8529, www.maine.gov/pfr/consumercredit, or file a complaint at the regulator's complaint page. The federal CFPB also takes complaints about any lender.

Online vs Storefront Lenders in Maine

The supervised lender license requirement in 9-A M.R.S. 2-301 applies to any company making supervised loans to Maine residents, storefront or online, and the 30 percent cap and minimum charge schedule travel with it. Out-of-state internet lenders and lenders affiliated with tribal governments do market to Mainers, and their fees routinely exceed the $25 maximum for a $300 loan many times over. The Bureau can act only against businesses within its jurisdiction, but its complaint page still invites complaints about check cashers, loan brokers and supervised lenders including payday lenders, and it publishes enforcement actions that show which companies have been ordered to stop. Before applying online, look up the lender on NMLS Consumer Access, which the Bureau's website links to for license status, and compare the finance charge on the disclosure with the statutory minimums: $5, $15 or $25. Anything higher on a short loan is a sign the lender is not following Maine law. Report it to the Bureau at 800-332-8529 and to the Consumer Financial Protection Bureau.

Alternatives If a Payday Loan Is Not the Right Fit

In Maine the cheapest short loan is often the same product with a longer term: at 30 percent a year, a supervised lender's $300 loan repaid over three months still costs only the $25 minimum charge, so ask for installments rather than a two-week balloon. Federal credit unions in Maine may offer payday alternative loans under NCUA rules: $200 to $1,000 over one to six months, or up to $2,000 over up to twelve months, at no more than 28 percent APR with an application fee of at most $20 and no rollovers. Banks and credit unions are supervised financial organizations that can make consumer loans under the same 30 percent cap without a Bureau license. Ask your employer about an advance on earned wages, ask the utility or landlord for a payment arrangement, and call 2-1-1 Maine for emergency assistance programs. If you already owe a supervised lender, ask for a written payoff figure; the finance charge is fixed by statute, so the number should not move.

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

Frequently Asked Questions

Nearby States

• New HampshireThe fee cap, a worked example and the regulator to call in New Hampshire.