Illegal Lending

This page describes the Attorney General’s response to illegal lending (updated August 2014)


Sometimes referred to as “payday loans,” these are small-dollar consumer loans (average loan amount of $500), at very high interest rates (typically exceeding 300% annual interest), for short-term periods (typically 2-4 weeks). Such loans are generally illegal in Vermont because the interest rates exceed Vermont’s usury cap and the lenders do not have the required state lending license, but the lenders offer the loans via the internet:

  • Read the Attorney General’s Report on Illegal Lending (dated April 23, 2014)
  • Read the "Fact Sheet" summarizing the Report.
  • Click here to read more background information on illegal lending and loan issues
  • Relevant Vermont Laws

  • Consumer Protection Act provision on “Unlicensed loan transactions” (including payment processors): 9 V.S.A. § 2481w
  • Licensing requirements: 8 V.S.A.§ 2201; 8 V.S.A. § 2233
  • All lending requirements: Title 8, Chapter 73
  • Interest rate limits: 9 V.S.A. § 41a
  • For information on Settlements, Lawsuits and related letters click here

    Consumer Tips

    Download a one-page "Consumer Tips" summary.

  • Alternatives to an online loan, including:
  • Ask your employer about participating in the United Way’s “Working Bridges” income advance loan program -- for more information, visit:
  • The United Way continues to work with the Attorney General’s Office and Vermonters to bring the Working Bridges loan program to any employer and credit union willing to participate. Some participating credit unions include:
  • North Country Federal Credit Union
  • New England Federal Credit Union
  • Heritage Family Federal Credit Union
  • Green Mountain Credit Union
  • River Valley Credit Union
  • Send your lender and a copy to your bank or credit union the "Cancellation Form to revoke access to your bank account and cancel the loan
  • Read the Attorney General’s Report (pp. 11-13 for “consumer tips”)
  • Contact the Attorney General:
  • If you’re reporting an unlicensed lender, please provide as much detail as possible: the lender’s full business name, address, website, any other pertinent details.
  • Sign up for news or alerts from the Attorney General’s email list on illegal lending:
    Click here
  • Published: May 28, 2014