West Virginia

West Virginia is one of 19 sates that prohibit payday loans because of small interest rate caps. Currently lenders can charge up to 31 percent interest on loans that are $2000 or less. For loans between $2001 and $10,000 the interest is less: 27 percent.

Under West Virginia law a lender can charge annual interest of up to 31 percent on the unpaid principal plus a non-refundable fee of 2 percent. This only applies to loans that are under $1200. West Virginia law prohibits any loan amounts that exceed $45,000.

Although there are laws that prohibit payday loans in West Virginia, it hasn’t stopped some payday loan companies from lending there. Some payday loan lenders escape consumer laws through bank charters. By chartering with banks, payday lenders claim the rights of banks to charge rates permitted in the bank’s home state. As a result, some lenders in West West Virginia charge triple digit interest. As much as 470% APR!

Payday lenders in West West Virginia that are chartered with banks usually charge higher rates, make larger loans, and make repeat violations of state laws. Currently, the only states taking action against this practice are Colorado, Ohio, Maryland, and Florida.