Summary of Alaska payday loan laws
There are 32 states in the USA that either legalized high-cost payday loans or failed to close loopholes exploited by payday lenders. Among them is the State of Alaska where payday loans are legal. The five biggest cities of the state are Anchorage, Fairbanks, Juneau, Sitka and Ketchikan. Alaska payday loan market is notably active only in the biggest city Anchorage.
Applicable law in the state
The law that regulates payday loans in Alaska is the Alaska Statute §§ 06.50.010 et seq.
Loan amount and loan term
The Alaska Statute states that the maximum loan amount cannot exceed $500. The minimal term of a loan should be 14 days.
The Alaska Statute also includes special provisions regarding finance charges. The law provides that a licensee can only charge an upfront origination fee that is non-refundable. Its amount cannot exceed $5. Also, the lender may charge a fee that does not exceed $15 for each $100 of the loan, or 15% of its total amount, whichever is lower. This means that, for example, the finance charge for a 14-day $100 loan will be $20. The annual percentage rate for the same loan will be 520%.
Outstanding loans, rollovers limits and obligatory repayment plan
There isn’t a specified maximum number of outstanding loans at one time. The permitted number of rollovers or renewals is two. There are also provisions regarding the repayment plan. The plan can take up to 6 months, excluding all extra fees and the borrower is obliged to pay 5% of the balance due when he takes up the plan.
The collection fees of payday loans in Alaska are as follows: there is a $30 NSF fee and the court can cost up to $700 over the amount of the payment, but only if it is disclosed in the loan agreement.
Criminal action provisions
Criminal action is prohibited unless the check is returned due to closed account.
Payday lending regulator
Alaska payday loan lending regulator and institution that deals with complaints is the Alaska Division of Banking and Securities. Its address is P.O. Box 110807 Juneau AK 99811.
The Alaska Division of Banking and Securities also makes annual overviews of payday lending in the state. For example, the 2015 annual overview states that during that year, one new license was issued to lend payday loans and one license was surrendered.
The total number of operating licensees in 2015 was 26. The number of Alaskans borrowing payday loans was 17,705 and the total amount of these loans was $36,019,968.99. The average amount of Alaska payday loan was $418.51. On average, each payday borrower took up 4.86 payday loans and also borrowed about $2,000 on average.
In 2014, the loans were geographically distributed as follows: The main market share went to Anchorage/Eagle River with 47.91% and a total loan amount of $16,841,735. The second most active loan market was in Fairbanks with 2.47% of the market share and $867.898 total loan amount. Other parts of Alaska have 4.58% of the market that equals to $1,611,260 in total loan amount. Online loans have a 45.04% share with the total loan amount at $15,831,731.
Another overview made in 2016 showed the number of loans made by banks in the state and among them was the number of payday loans. The overview divided the loans into three categories – loans that have passed 30 to 89 days and are still accruing; loans that have passed 90 days and are still accruing and loans that are non-accrual. In the first category, there are 28 loans to individuals for household, family and personal expenditures.
Among a total of 3,412 loans of all kinds are lent by banks in Alaska to borrowers from the state. In the second category, there are no loans of that type. In the third category, there are only 10 loans made to individuals for personal and household expenditures among a total of 14,183 loans of all types.
Nevertheless, it should be noted that this summary excludes several banks because they were considered to be branch offices of other bank institutions. This overview was concluded by the end of September 2016.