Small-dollar credit regulation in the United States is governed primarily at the state level, creating three distinct legal environments across the 50 states.
1. State Regulatory Archetypes
| Regulatory Category | Key State Jurisdictions | Permitted Loan Structure | Usury Cap Status |
|---|---|---|---|
| Permissive States | Texas, California, Nevada, Florida, Ohio, Tennessee | Storefront & online short-term loans permitted | Fee caps set by statute (e.g. $15–$20 per $100) |
| 36% Rate Cap States | Illinois, Colorado, Virginia, Hawaii, New Mexico | Installment loans permitted only under 36% APR cap | Strict 36% all-in APR limit (effective payday ban) |
| Prohibited / Zero Usury | New York, New Jersey, Massachusetts, Connecticut, Pennsylvania | Payday loans strictly prohibited under criminal usury laws | Strict 6%–16% general usury statutory caps |