California

California state payday loan law provides for the payday loans offered by check cashers. A bill which deals with specifics of California state payday loan laws was passed in 1996. According to this bill, a check casher may offer advance cash to a consumer, using a post dated check for the amount of the cash advance plus a fee, as long as the check casher holds the check without depositing for a period of no longer than thirty days.

This bill also mandates that every deferred deposit made is pursuant to a written agreement between the check casher and the consumer which outlines all fees to be charged in the transaction by the check casher. These fees are capped at 15% of amount of the cash advance. Violation of these restrictions are punishable by a civil penalty of not more than $2000.

Further restrictions on this relationship between check casher and consumer include the inability of the check casher to enter into a short term cash advance agreement with the consumer if the consumer has an existing cash advance agreement with the same service. The previous cash advance agreement must expire before another can begin.

The check casher may accept a valid California drivers license or state identification card, as well as a U.S. military ID. Any check casher conducting a payday loan or cash advance business must obtain a permit to conduct business by the Attorney General’s office.

It is a misdemeanor in the state of California to cash a payroll check or government check in excess of 3% of the face value of the check if the customer provides valid legal identification.