BOISE -- Nearly a-half million Idahoans borrowed money from payday loan centers last year alone, according to the Idaho Department of Finance. Beginning July 1, new consumer protections will take effect for those borrowers.
Anthony Polidori with the Idaho Department of Finance says the new regulations bring substantial changes to how payday lenders will be authorized to operate in Idaho.
"The idea would be that this would help a consumer trapped in a cycle of debt with a payday lender to actually get out of that cycle," said Polidori.
Figures from the Department of Finance show the average estimated size of a payday loan in 2013 was $363, and the average payday loan term was 20 days.
Beginning July 1, the amount a person can borrow will be restricted.
"One individual payday lender will be restricted to lending up to 25 percent of somebody's gross monthly income, or $1,000 whichever is greater," said Polidori.
Polidori says in 2013, Idaho's licensed payday lenders made 446,704 payday loans to Idaho borrowers in the total dollar amount of $169,446,196.
Payday lenders will now be required to provide an extended payment plan for borrowers who experience difficulties paying off their loans.
"That payment plan would have to be offered at least once every 12 months, and must be no less than 60 days in length and four equal installments," said Polidori.
Payday lenders will also be limited in the number of times a payday lender may present a borrower's check for payment. A payday lender may only make one initial presentment of a check and two subsequent re-presentments if the check remains unpaid.
An informational brochure, “Payday Loans in Idaho,” is available on the department’s website, and copies are available by contacting the department.
The department says payday loan borrowers also are urged to comparison shop because payday loan fees do vary between lenders and are negotiable under Idaho law.