Wyoming was ahead of the times when it granted women the right to vote in 1869, but are payday loans in Wyoming up to scratch too? In this article, we will analyse the credit and payday loan laws in the so-called ‘Equality State’.
About Wyoming State
The name of Wyoming is derived from the Native American Munsee word which means ‘big, flat river’ but no one is sure which river this applies to. In the Continental Divide across the center of the state there are three famous rivers, the North Platte, the Big Horn and the Yellowstone.
Did you know? The key tourist attractions in Wyoming are Yellowstone Park, Devils Tower National Monument and Fossil Butte National Monument.
Wyoming is the 10th largest state by area but the least populous. Wyoming has an economy that depends upon tourism, agriculture and energy extraction but little else. As a result many young people leave the state and seek out a better life elsewhere.
On July 10th 1890, Wyoming joined the Union when it became the 44th state to do so. The capital is Cheyenne which is the point where the Union Pacific Railroad crossed Crow Creek. Cheyenne is the most heavily populated city in Wyoming and nearly 65,000 people live there. The government is the largest employer followed by the military at FE Warren Air Force Base.
Tourism in Wyoming is by far the largest sector and there are over 32,000 people making a living from the thousands of visitors who come each year to see the beautiful landscapes and enjoy the Cheyenne Frontier Days, an event that runs for 10 days, where people can see bronc riding, calf roping and all the other traditional cowboy pursuits.
Wyoming is considered to have a business friendly environment and receives more tax dollars per capita than any other state with the exception of Alaska. The poverty rate in Wyoming had gone down from 11.4% in 2000 to 8.7% in 2007 but since the financial crisis it has gone higher and now stands at 11.3%.
The result of this rise has led to many people in the state using cash advances and payday loans. The regulations for this kind of loan are different in each state and below you can read the ones that apply to Wyoming.
Payday Loans in Wyoming
Wyoming has some of the least regulated payday loans. There is no limit to the amount that can be borrowed but the maximum term of a loan is one calendar month. The maximum finance rate and fees is capped at either 20% of the value of the loan or $30 whichever is the greater amount. This makes the fees for a $100 loan for 14 days work out at $30. The APR is a huge 780% and this is one of the highest interest rates in the whole of the US.
Borrowing Limits in Wyoming
There is no maximum amount to the number of loans that can be taken out at any one time. But, rollover or renewal loans are not allowed. So, loan applicants cannot finance an existing loan by taking out another one. There is no enforced specific cooling off period between loans.
Did you know? There is no limit to the amount that can be borrowed with a payday loan in Wyoming but the maximum term of a loan is one month.
Limits of collection fees in Wyoming
No collection fees are permitted and lenders may not take criminal court action for unpaid debts. Critics of the regulations in Wyoming have pointed out that the lack of rules relating to payday loans has led some low income families becoming stuck in a cycle of financial problems.
Is it easy to get a payday loan in Wyoming?
In Wyoming the lack of regulations combined with the lack of access to mainstream loans from traditional banks and other financial sources has led to payday loans becoming more available and more popular. As the majority of mainstream lenders are starting to demand high credit ratings and a good credit history, many people are turning to payday lenders for fast access to small sums of cash.
In 2013, the total loaned out was a staggering $107,823,450! The average payday lender gave out 3,541 loans for each store. Wyoming is judged to have 5 payday lenders for every 10,000 residents. This means that the state has a higher percentage of loans than many other areas in the US. So, although the number of lenders (75) is not as high as in other states, because the population is small, these few lenders are turning over many millions of dollars each year through payday loans.
Payday Loan Customer Characteristics in Wyoming
Due to the lack of a borrowing limit the average loan taken out in Wyoming is $516.59. The top three places where loans are used are Cheyenne, Casper and Laramie. Most borrowers come within the age group 30 to 35 and their average earnings are $32,176.71.
Unlike the statistics compiled for most other states, in Wyoming more homeowners borrow through payday loans than people who rent their home. Loans go straight into checking accounts and are used immediately. Finally, people who are in full time work take out more loans than the unemployed or those on benefits.
Regulations for Payday Loans in Wyoming
Under Wyo. Stat. 40-14-362 et seq. payday loans are legal and the regulator is Wyoming Division of Banking. This state has some of the most relaxed rules for lender and borrowers.
Online payday lenders are not prohibited in Wyoming and using one of these businesses is going to get you the best deal. Due to the lack of competition amongst store lenders most charge very high rates of interest. The steady rise of online lenders is now making this a more attractive option.
The option of using an online lender also eliminates the possibility of meeting someone you know at the store and all transactions are confidential. In addition, looking online for a loan allows you the time to assess the terms and conditions with no pressure to sign up immediately. Anyone who has concerns about the legality or terms of a payday loans can contact the regulator at the address below:
Division of Banking, Herschler Building, 3rd Floor West, 122 West 25th Street, Cheyenne, WY 82002
Qualifying for a Wyoming payday loan
Qualifying for a payday loan is easy and the process is simple. But, it is important to remember that the very high rates of interest charged can be a strain when the next paycheck arrives and there are other demands. So, taking out a loan should be a last resort and should not be done on a regular basis. The short term nature of the loan means that if credit is over extended, when the next payday arrives essential items like rent and groceries will need to be paid for.
The requirements on an application ask for proof of identity, proof of income, a social security number and details of an active bank account. Applicants must also be over the age of 18 and be an American citizen or permanent resident in the US.
Rights for borrowers and lenders in Wyoming
The lack of meaningful regulations for payday loans in Wyoming does not mean that there is no protection. Lenders must be licensed and the license must be renewed every year. Even though there is no cooling off period, customers may return to the store the following day before close of business and cancel the loan
The lack of meaningful regulations for payday loans in Wyoming does not mean that there is no protection for borrowers.
There is no charge for repaying a loan early and lenders are required to establish that the consumer has the means and expectation of being able to repay the loan at the set date. They should also keep a record of how the loan decision was made. The obligation for the borrower is to pay off the loan in full and on time.
Taking out a payday loan should be viewed as a last resort and should be considered only when a financial emergency arises. it is important to think about the implications of the loan including whether or not it can be paid back on time.
Summary for payday loans Wyoming
The lack of regulations in Wyoming relating to payday loans has meant an increase in the take up of this kind of borrowing. There are few lenders and a lack of competition so loans are expensive with very high rates of interest.
There is no maximum amount that can be borrowed and no limit to the interest rate that can be charged. Before considering taking out a payday loan, consumers are encouraged to look at all the other options including the many programs of assistance or by consulting a debt counselor.
The most important point to think about is that this kind of short term loan is not meant to be used on a regular basis. For someone in need of an emergency cash injection for a limited time, it can be of help1 but only if the repayment can be made in full and on time.