North Dakota

The “Deferred Deposit Loan Act” in North Dakota imposes strict regulations on deferred deposit lenders, otherwise known as “payday lenders.” Under the act, payday loan terms are limited to no more than 40 days. Also, the maximum amount that a cash advance store can loan to customers is $500.

All payday loan stores in North Dakota are required to provide their customers with a loan agreement. The written agreement shall contain the name of the consumer, the transaction date, the amount of the loan, the annual percentage rate charged, and a statement with all the charges expressed in dollar amount and an annual percentage rate. North Dakota also requires that payday loan lenders include the following notice in at least 10-point type:

“A deferred deposit loan is not intended to meet long-term financial needs. A deferred deposit loan should be used only to meet short-term cash needs. Renewing the deferred deposit loan rather than paying the debt in full will require additional finance charges.”

North Dakota allows lenders to charge financing charges, so long as the amount doesn’t exceed 20 percent of the first $300 loaned, plus 7.5 percent of any amount loand in excess of $300.

In North Dakota, if a borrower can rescind a payday loan by 5 p.m. the day following the transaction. Under North Dakota law, a payday lender cannot seek any criminal charges against a borrower who is unable to payback their payday loan as a result of insufficient funds. If however, the borrower closes the count or writes fraudulent checks, they may be prosecuted under North Dakota law.