Payday loans in New York
New York bans payday loans since non-bank lenders face a 16% yearly civil usury cap and a 25% yearly criminal cap, with no law permitting such lending.
- Payday lending
- Banned
- Max cost
- 16% APR
- Top amount
- None allowed
Are payday loans legal in New York?
No. New York bans payday loans under the General Obligations Law, the Banking Law, and the Licensed Lender Law. On loans under $250,000, state usury laws cap the interest a lender may charge at 16 percent a year. For consumer loans of $25,000 or less, non-bank lenders must have a license to charge higher rates. Payday lending has no authorization in state law, and it is a felony to charge over 25 percent yearly without legal authority.
Any unlicensed loan exceeding 16 percent from a non-bank lender is void in New York, so the company cannot collect payment. During April 2025 the Attorney General filed suit against the apps MoneyLion and DailyPay, and state regulators also act against online and tribal lenders. The suit claims the fees amount to interest of up to 750 percent a year. Check the licensed lender list at the Department of Financial Services before borrowing, or file a consumer complaint via their web form.
- Under New York law there are two interest limits: 16% yearly for civil cases and 25% yearly for criminal ones. Going above the criminal cap counts as a class E felony.
- Loans exceeding the civil usury rate are void, preventing non-bank payday lenders from collecting repayment.
- APRs as high as 1,095% were cited in the August 2013 DFS action ordering 35 internet payday lenders to halt loans to New Yorkers.
- In the suit the Otoe-Missouria Tribe brought against DFS (2d Cir. 2014) New York's action against tribe-affiliated online lenders was left standing by the court, which pointed to loans reaching 912.49%.
- In April 2025 the Attorney General sued MoneyLion and DailyPay, calling them payday lenders. The complaint says the fees at these earned wage access apps amount to APRs that often reach 750%.
- Signed in May 2025, the FY2026 budget established a supervision and licensing system for buy now, pay later lenders.
New York payday loan laws
- Law in force
- New York usury laws (Banking Law 14-a; General Obligations Law Article 5 Title 5) and Licensed Lender Law (Article 9 of the Banking Law)
- Cited as
- N.Y. Gen. Oblig. Law 5-501, 5-511; N.Y. Banking Law 14-a, 340; N.Y. Penal Law 190.40
- Fees under the law
- Sixteen per centum per annum shall be the maximum interest rate that section 5-501 in the general obligations law provides for.
- Installment lending limits
- The civil usury cap is 16% a year under Banking Law 14-a, GOL 5-501. For consumer loans not over $25,000, a lender that is not a bank must hold a DFS licence under Banking Law 340 before charging more. Unauthorized charges above 25% a year are criminal usury under Penal Law 190.40.
Also checked against dfs.ny.gov. Full statute text.
Tribal loans in New York
In New York, loans above 16% from unlicensed online lenders are treated as void, and online payday lenders have received cease and desist letters from the state. In 2014 the Second Circuit refused to stop DFS from acting against tribe-affiliated lenders that lend to New Yorkers.
On the immunity claim tribal lenders make, see are tribal loans legal.
None of the tribal lenders we track lists New York as a state it serves. Browse every tribal lender we track.
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Lender cases and orders in New York
- 2025 · New York DFSCash App Borrow: Settlement terms for Cash App include a $40 million penalty and a monitor due to failures in virtual currency and anti-money laundering compliance. Source
- 2025 · New York Attorney GeneralMoneyLion: MoneyLion was sued by the New York AG, which argued fees and tips made Instacash illegal payday lending. The case was remanded to state court in November 2025; we could not confirm how it ended. Source
- 2014 · US Court of Appeals, Second CircuitAmerican Web Loan: American Web Loan, the Otoe-Missouria Tribe and other plaintiffs asked the court to stop New York DFS from enforcing usury laws; the appeals court upheld the denial of a preliminary injunction. Source
- 2013 · New York Department of Financial ServicesPlain Green Loans: To stop illegal payday loans to New Yorkers, a cease and desist letter targeted 35 online lenders, including Plain Green, LLC. Source
New York and the states around it
| State | Payday lending | Max cost | Top amount |
|---|---|---|---|
| New York | Banned | 16% APR | None allowed |
| Connecticut | Banned | 36% APR | None allowed |
| Massachusetts | Banned | 23% APR | None allowed |
| New Jersey | Banned | 30% APR | None allowed |
| Pennsylvania | Banned | None in the law | None allowed |
| Vermont | Banned | None in the law | None allowed |
New York loans with no credit check
Installment loan rates: The civil usury cap is 16% a year under Banking Law 14-a, GOL 5-501. For consumer loans not over $25,000, a lender that is not a bank must hold a DFS licence under Banking Law 340 before charging more. Unauthorized charges above 25% a year are criminal usury under Penal Law 190.40.
See no credit check loans: the checks lenders still run, and the price.
Verify a lender's license in New York
- Look the lender up on the license list before you hand over any bank details.
- Lenders here answer to the New York State Department of Financial Services (DFS).
- Had trouble with a lender? Report the lender.
Sources for New York
- 16% a year is the civil usury maximum.nysenate.gov
- Any contract demanding interest above the rate in section 5-501 is void.nysenate.gov
- It is criminal usury to charge more than 25% yearly without legal permission.; Second-degree criminal usury is a felony.nysenate.gov
- Making consumer loans of $25,000 or less above the usual legal rate requires a licence.nysenate.gov
- DFS says civil usury rules cover loans under $250,000 that charge more than 16% a year.; Per DFS, an unlicensed non-bank lender that offers payday loans breaks Banking Law 340.; According to DFS, a usurious loan from a non-bank lender is void and cannot be enforced.dfs.ny.gov
- Under Article 9 of the Banking Law, DFS licenses lenders.dfs.ny.gov
- The Who We Supervise search from DFS lists the institutions it supervises, which includes licensed lenders.myportal.dfs.ny.gov
- You can submit tips or complaints about lenders and banks to DFS through its website.myportal.dfs.ny.gov
- In 2014, the Second Circuit upheld the refusal to stop DFS from acting against tribal lenders.; Tribal-affiliated loans drew complaints to DFS, with interest reaching 912.49%.law.justia.com
- The Attorney General sued MoneyLion and DailyPay on April 14, 2025, alleging illegal payday lending.; According to the AG, the apps' fees often work out to annual rates as high as 750%.ag.ny.gov
- Buy now, pay later providers got a licensing framework from the FY2026 budget, signed May 9, 2025.governor.ny.gov