California passed safe harbor legislation for cash advance businesses, authorizing payday loans at interest rates of triple digits and based on checks written on borrowers' bank accounts. A payday loan store may issue a cash advance to a borrower, utilizing a post-dated check, as long as the business holds the check and does not deposit it for a period not exceeding thirty days. A consumer cannot have more than one outstanding loan at a time. Check cash advance businesses operating in California are prohibited from cashing a government check or a payroll check surpassing 3% of the check's face value if the borrower furnishes a valid identification. Payday advance lenders are barred from pursuing criminal action against borrowers.
A customer can borrow up to $300 in payday loan funds.
The maximum loan term is 31 days.
California law does not permit rollovers.
The maximum finance rate that a cash advance lender can charge is 15% of the check's amount. The finance fee for a two-week loan in the amount of $100 is $17.65. The repayment plan is only voluntary, and a payday loan store cannot charge a fee in conjunction with the plan.
Under California law, a 14-day loan valued at $100 translates into a 459% APR.