Home → By state → Pennsylvania
Two different claims. The first means a person traced every figure on this page to the regulator, the statute or a court — each one cited inline, click any marker to open the source. The second is automated: our monitor confirms daily that those sources still resolve and still contain the text we cite them for. Only a person moves the first. Only the monitor moves the second.
Effectively prohibited. An unlicensed lender may charge no more than 6% a year, a licensed one no more than 24% — and above 36% it stops being a civil matter and becomes criminal usury.
Pennsylvania criminal usury — 18 Pa.C.S. § 4806.1
Pennsylvania is one of the few states where the usury limit sits in the criminal code with a serious penalty attached. Charging interest, fees and other charges above 36% per year is criminal usury, and federal prosecutors have described the maximum penalty as ten years’ imprisonment.Pennsylvania · Federal court filingUS Attorney, Eastern District of Pennsylvania — charging interest, fees and other charges associated with a loan at a rate in excess of 36 percent per year; the maximum penalty for criminal usury was ten years' imprisonment
The civil position is stricter still. Under the Loan Interest and Protection Law an unlicensed lender may charge no more than 6% simple annual interest. A lender licensed under the Consumer Discount Company Act may charge between 6% and 24% on loans of $25,000 or less.
Loan Interest and Protection Law, 41 P.S. §§ 101–605 · Consumer Discount Company Act, 7 P.S. §§ 6201–6219 · 18 Pa.C.S. § 4806.1
The Pennsylvania Supreme Court held in Cash America v. Pennsylvania Department of Banking that consumer lenders not licensed in Pennsylvania are bound by the 6% cap — including on loans made over the internet to Pennsylvania borrowers.
The Department of Banking followed by requiring internet lenders to obtain a CDCA licence by 1 February 2009 or stop lending to Pennsylvania residents. Its earlier position had been that the Act reached only companies with a physical presence in the Commonwealth.
A settlement with a national online payday lender covered roughly 80,000 Pennsylvanians. Under it, all remaining loan balances were voided, and consumers who had repaid more than the principal plus 6% shared in a multimillion-dollar restitution fund.
Effective rates in that scheme ran as high as 448%.
If you have paid interest above 6% to an unlicensed lender in Pennsylvania, that is a specific and well-trodden question to put to a consumer attorney or legal aid office.
You can revoke authorisation and instruct your bank to stop the payment, whatever your agreement says.
What Regulation E says about automatic payments →
Every figure carries the jurisdiction and the exact provision it came from. Click to open the source.
A payday loan is a consumer debt. If it goes unpaid, two Pennsylvania rules decide what a lender can do next: how long it has to sue you, and how much of your pay a court can order taken.
Being sued over an old payday loan? A collector can still file, but the time limit is a defence you can raise — and you cannot be jailed for the debt. What can and cannot happen if you don’t pay →