Payday Loans and Cash Advance in North Dakota

Legal, 20% fee, $600 limit, 60 days. Below: the law, the limits, what $300 costs here, who regulates it, and how to request a cash advance online in North Dakota.

Is a Cash Advance Legal in North Dakota?

Payday loans are legal in North Dakota under Chapter 13-08 of the North Dakota Century Code, which licenses deferred presentment service providers. Section 13-08-12 lets the licensee charge a fee of up to 20 percent of the amount paid to you, plus the cost of registering the transaction in the state database, and nothing else. A single transaction may not put more than $500 in your hands, and you may not owe more than $600 across all licensees at once, which the licensee must confirm in the database. The total deferral, counting one renewal, may not exceed 60 days, and the renewal carries another fee of up to 20 percent. You may cancel at no cost by the close of the next business day, you cannot be prosecuted over the check unless your account was already closed, and a new loan cannot be opened within three business days of paying off the last one. On $300 for two weeks the fee is $60, about 521 percent APR. The Department of Financial Institutions licenses providers and takes complaints.

The governing law is North Dakota Century Code Chapter 13-08, Deferred Presentment Service Providers (N.D.C.C. 13-08-01, 13-08-02, 13-08-12, 13-08-15).

Loan Limits and Terms in North Dakota

North Dakota prices the loan as a flat 20 percent of what you receive, so the fee on $300 is $60 whether the check is held for two weeks or the full 60 days; a longer term lowers the annual rate but not the dollars. The renewal rule is what makes the loan expensive: one renewal is allowed, it costs another 20 percent, and after 60 days the loan must be paid off or the check deposited. If you cannot manage that, 13-08-12(13) lets the licensee offer a voluntary workout agreement in even weekly, biweekly or monthly installments of up to twelve months with no added fee, though the licensee is not required to agree. The agreement may not contain a hold harmless clause, a confession of judgment, a wage assignment or any mention of criminal prosecution.

What a $300 Loan Costs in North Dakota

This uses the maximum fee in N.D.C.C. 13-08-12(2), 20 percent of the amount paid to the customer, on a 14-day term. $300 x 0.20 = $60, so the borrower writes a check for $360 or authorizes a $360 debit. APR = 60 / 300 x 365 / 14 = 5.21, or about 521 percent. Because the fee does not change with the term, the same loan held for 30 days is 60 / 300 x 365 / 30 = 2.43, about 243 percent, and over the 60-day maximum it is about 122 percent. A renewal adds another $60. The database registration fee is not included because the statute does not fix its amount.

Run your own numbers with the cash advance calculator.

Consumer Protections and Who to Call in North Dakota

• No one may engage in the business of deferred presentment service without a license from the Commissioner of Financial Institutions, and a business is engaged in deferred presentment in North Dakota whenever the customer is located in the state (N.D.C.C. 13-08-02).
• The fee may not exceed 20 percent of the amount paid to you, the only other charge is a database registration fee at cost, and the licensee may not take any property, title or mortgage as a condition of the loan or as a means of collection (N.D.C.C. 13-08-12(2)).
• You may rescind any transaction at no cost by the close of the business day following the day you received the money, and if the money came electronically the licensee must accept repayment the same way (N.D.C.C. 13-08-12(6)).
• A customer is not subject to criminal penalties over the check or debit unless the account was closed on the date of the transaction, and the licensee may not pursue or threaten criminal charges the statute forbids (N.D.C.C. 13-08-12(8)).
• Every agreement must state the fee in dollars and as an annual percentage rate, the database transaction number and the right of rescission above the signature line, and may not contain a hold harmless clause, confession of judgment, wage assignment or waiver of the chapter (N.D.C.C. 13-08-12(6)).
• A licensee may not renew a transaction more than once, may not stretch the total deferral past 60 days, and may not let you repay or refinance one transaction with the proceeds of another (N.D.C.C. 13-08-12(12) and (14)).
• If a check or debit is returned, the licensee may collect only the returned item charge allowed under section 6-08-16 plus civil remedies; willful violations of 13-08-12 are a Class A misdemeanor and unlicensed lending is a Class C felony (N.D.C.C. 13-08-12(7) and (17), 13-08-15).

Complaints and licence checks go to the North Dakota Department of Financial Institutions, Consumer Division: 701-328-9933, www.nd.gov/dfi, or file a complaint at the regulator's complaint page. The federal CFPB also takes complaints about any lender.

Online vs Storefront Lenders in North Dakota

North Dakota's licensing test is where the customer is, not where the lender sits. Section 13-08-02 says a person is considered to be engaging in the business of deferred presentment service if the customer is located in this state, so a website lending to North Dakota residents needs the Department of Financial Institutions license, must register every loan in the state database and is bound by the 20 percent fee, the $500 and $600 limits, the one-renewal rule and the 60-day ceiling. Section 13-08-12(11) speaks to online lenders directly: a licensee that transacts over the internet must make customers acknowledge its fees through a click-through step before the transaction can be completed. A call to the Department at 701-328-9933 will show whether a company holds a North Dakota license. Unlicensed out-of-state and tribal-affiliated websites still advertise to North Dakotans at their own prices and outside the database; a loan from one of them is not protected by the chapter, and lending without a license is a Class C felony under 13-08-15, so keep the paperwork and file a complaint.

Alternatives If a Payday Loan Is Not the Right Fit

North Dakota licenses other consumer lenders through the same Department, and their installment loans are repaid over months rather than in one payment, with rates set by their own chapters rather than by the 20 percent payday fee. North Dakota banks and credit unions offer small personal loans and overdraft lines, and federal credit unions can offer Payday Alternative Loans under National Credit Union Administration rules. If you take a deferred presentment loan, use the full term you are allowed rather than renewing, since the fee is the same whether the check is held for one week or eight, and a renewal doubles it. If you cannot pay at 60 days, ask the licensee for the written workout agreement 13-08-12(13) allows, which spreads the balance over up to twelve months at no added charge. Ask your employer about a wage advance, ask the utility or landlord for a written payment plan, and call the statewide 2-1-1 line to reach community action agencies for rent, heating and food assistance.

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

Frequently Asked Questions

Nearby States

• MinnesotaThe fee cap, a worked example and the regulator to call in Minnesota.
• South DakotaThe fee cap, a worked example and the regulator to call in South Dakota.
• MontanaThe fee cap, a worked example and the regulator to call in Montana.