Personal Loan & Lending Regulations in California
Understand California lending laws, the CFL, interest rate caps under the Fair Access to Credit Act, and borrower protections when borrowing in CA.
California has comprehensive consumer lending protections through the Department of Financial Protection and Innovation (DFPI). Here's what California borrowers need to know.
Interest Rate Caps in California
California's lending laws are governed by the California Financing Law (CFL) and California Deferred Deposit Transaction Law. For loans under $2,500, rates are capped at approximately 36% APR. For loans of $2,500–$10,000, AB 539 (effective 2020) caps rates at 36% APR plus the federal funds rate. Loans over $10,000 have no state rate cap. Payday loans are capped at $300 maximum.
💡 Pro Tip: California's AB 539 was a landmark consumer protection law. If you're charged above 36% on a loan between $2,500–$10,000, the lender may be violating state law.
DFPI Licensing Requirements
All consumer lenders in California must be licensed by the Department of Financial Protection and Innovation (DFPI). This includes online lenders that serve California residents. The DFPI maintains a public database of licensed lenders. Operating without a license is a violation of California law.
💡 Pro Tip: Verify any lender at dfpi.ca.gov before borrowing. The DFPI's licensee search tool lets you confirm a company is authorized to lend in California.
Payday Loan Protections
California's Deferred Deposit Transaction Law limits payday loans to $300 maximum, with a maximum fee of $45 (15% of the loan). Payday loans have a maximum term of 31 days. Lenders cannot roll over or refinance payday loans. Borrowers can only have one payday loan outstanding at a time through a statewide database.
💡 Pro Tip: California caps payday loans at $300 — one of the lowest maximums in the US. If you need more, consider a personal loan or credit union PAL.
Consumer Legal Protections
California's Rosenthal Fair Debt Collection Practices Act extends federal FDCPA protections to original creditors (not just third-party collectors). The state's Unfair Competition Law (UCL) provides additional remedies against deceptive lending. California also has strong anti-predatory lending laws under the California Homeowner Bill of Rights.
💡 Pro Tip: California is one of the few states where the original creditor — not just a third-party collector — must follow fair debt collection rules.
Where to Get Help
The DFPI (1-866-275-2677) handles complaints about licensed lenders. California Legal Aid provides free legal services. The California Attorney General's office investigates unfair lending practices. Non-profit credit counselling agencies are available statewide.
💡 Pro Tip: The DFPI has a dedicated consumer complaint portal at dfpi.ca.gov/file-a-complaint for quick submission and tracking.
Additional Tips for Success
- California caps interest at 36% for loans between $2,500–$10,000
- Verify lender licensing through DFPI at dfpi.ca.gov
- Payday loans are capped at $300 in California
- File complaints with the DFPI for quick investigation
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