A payday loan in California has been available since 1997, when the products became legal, and payday lenders are regulated in the state by The California Department of Corporations (DOC).
The DOC also regulates cash advance companies doing business in California over the internet, but without a physical presence in the state.
Among the central payday loan laws in California that apply to this industry is California Deferred Deposit Transaction Law, the 2004 law that details how payday advance lenders have to be licensed by the DOC to legally operate in the state.
To fully understand your rights as a consumer, you should get to know these California cash advance laws and regulations, including how payday lending is authorized in statute as an exception to the California's Finance Lender's Law.
Payday advances have become a very popular form of debt to manage day-to-day finances in California (these are NOT solutions for long-term financial problems due to the high interest rates, as measured by annual percentage rates (APRs)).
As an example of this, there are estimates that over 2,400 payday lending locations operate throughout the state, with the state residents taking out over 10 million of these short-term loans annually.
In California, the typical in-store payday loan process includes showing proof of steady employment, and the borrower writes a personal check against the loan sum (and fees), to which the payday lender holds onto until the borrower's next payday.
Then, on the loan due date (often the borrower's payday), the customer simply can return to pay off the debt and reclaim the check, or alternatively, the lender gets the payment by cashing the check once payment is due.
When thinking about using payday loan product in California, you should also familiarize yourself with the alternatives, which might have much lower borrowing costs.
For example, several types of small loan financial instruments exist as consumer finance loans, credit card cash advances, lines of credit, and signature loans, developed by California credit unions and local banks.
As for payday lenders, one of the most popular and one with among the most outlet locations in the state is Advance America, the nation's largest cash advance operator with over 2,400 total storefronts.
Most of the Advance America California stores offer a variety of financial services, ranging from short-term consumer loans to tax services, VISA prepaid cards, and MoneyGram services.
Cash advances should be used for short-term financial needs only, not as a long-term financial solution.
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