Payday Loan Laws in Kansas

By Maggie O'Leary

  • Overview

    Payday loan vendors are becoming more proliferate as the years go by. While the payday loan practice was once a free-for-all, these loans have become highly regulated in recent years. Federal legislation has been passed to restrict the scope of payday loans and protect consumers. Most of the fifty states have passed their own legislation which further serves to restrict the payday loan industry. Kansas is no exception.
  • Definition

    A payday loan is a short-term loan offered to consumers who are in financial troubles. These loans carry a high interest rate, and must be paid back when the consumer receives their next paycheck. Often, consumers are unable to break free from the payday loan cycle. When the first loan needs to be repaid, the consumer often does not have the funds, and has to take a new loan to pay the first. Many times the interest will compound from payday to payday, and one loan will not be enough. The consumer will then be forced to take multiple payday loans from different lenders to try to keep above water.
  • History

    The exact history of the payday loan is somewhat unclear. According to the Federal Trade Commission (FTC), payday loan shops began operating in the United States in the early 1990s. As more consumers take advantage of the services these businesses provide, more payday loan vendors set up shop to take advantage of consumers who have no other financial options.

  • Administration

    Consumer law in Kansas is mainly handled by the Kansas Office of the Attorney General. In recent years, the Attorney General has passed several pieces of state legislation to regulate payday loans.
  • Purpose

    The purpose of passing legislation that restricts payday loan lenders is two-fold. These laws protect the consumer by capping interest rates and restricting the amount of debt that consumers can take on. These laws also ensure that payday loan lenders are less able to take advantage of consumers.
  • Restrictions

    According to the Kansas Office of the Attorney General, payday loan consumers in Kansas are restricted to two loans at any given time. These loans may not exceed $500 each. The interest rate is not to exceed 15%, and the loan term may be between 7 to 30 days. Payday loans may not be rolled over. Military members may not have any payday loans.
  • Assistance

    If you live in Kansas and feel that you have been taken unfair advantage of by a payday loan vendor, there are several places you can go for help. The first is the Kansas Office of the Attorney General. You can contact this office to file a complaint by calling (785) 296-2215, or by visiting them on the web. You may also seek the services of the Better Business Bureau (BBB). You can find contact information for your local BBB by looking in your local Yellow Pages. Finally, you can contact the Federal Trade Commission (FTC) by calling your local branch of the FTC, or by visiting them on the web.
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