It is legal to obtain a payday loan in the District of Columbia and there are restrictions in place to help regulate these businesses. It is legal for lenders to charge high rates of finance charges for loans as long as the lenders follow the standard procedures the state has in place.

District of Columbia Payday Loans consumer protection Act 0n November 24, 2007 gave a judgment which prohibits a check to be held in exchange for a high interest loan. Till recently as of may 2008. District of Columbia Payday Loans are offered on the 24% usury cap.

Payday Laws which regulate in District of Columbia are:

Effective January 9, 2008, the maximum interest rate that payday lenders may charge in the District of Columbia is 24 percent. Payday lenders also must have a license from the District government in order to operate. Lender cannot automatically deduct the amount from the borrower account as this practice is illegal in District of Columbia. The business of payday lending is rapidly expanding in the District of Columbia. New locations are opening all the time, which makes it difficult to determine the exact number of lenders that are operating in the state.

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