Borrowing in Maine: What State Law Allows

Why payday lenders don't operate in Maine

Maine doesn't have a payday lending law. Instead, two rules close off the business model. First, the check cashing law, 32 M.R.S. section 6138, says a check casher may not cash or advance money on a postdated check, agree to hold a check for later deposit, or issue a check without receiving the full amount in cash. That is how a payday loan works, so check cashers can't offer one.

Second, non-bank consumer lenders are licensed by the Bureau of Consumer Credit Protection as supervised lenders and must stay within the Maine Consumer Credit Code's rate limits. Those ceilings leave no room for a fee of $15 or more per $100 every two weeks.

What licensed lenders may charge

Title 9-A, section 2-401 sets the finance charge limits for consumer loans other than open-end credit:

For very small loans, a lender may charge a flat minimum instead: $5 if you borrow $75 or less, $15 if you borrow more than $75 but less than $250, and $25 for $250 or more. On a short loan those minimums can push the APR well above 30%, so ask for the APR and the dollar cost before you sign.

Maine has no law authorizing car title loans at higher rates, so a loan secured by your car from a supervised lender stays under the same limits. Compare offers with the loan payment calculator.

Maine's limits on old debt

The general rule, 14 M.R.S. section 752, gives a creditor six years after a claim arises to sue. That rule covers most consumer debts, including credit card debt.

Maine's Fair Debt Collection Practices Act adds two protections that many states lack:

• A debt collector may not file a collection lawsuit more than six years after your last activity on the debt, or sooner if a shorter limit applies.
• A later payment, a written or spoken promise to pay, or other activity on the debt does not revive or extend that period.
• A collector may not sue when it knows, or should know, that the time limit has run.

So a small good-faith payment on a very old debt won't reopen the door to a lawsuit, as it can in some states. For more, see old debt and the statute of limitations.

How much of your paycheck is protected

Maine protects more of your pay than federal law does. Under 14 M.R.S. section 3126-A, a creditor with a judgment can take no more than the least of three amounts each week:

• 25% of your disposable earnings plus exempt income;
• the amount by which that total exceeds 40 times the federal or Maine minimum hourly wage, whichever is higher (federal law uses 30 times the federal minimum);
• your total disposable earnings.

The higher multiplier and the use of Maine's own minimum wage mean that a lower-income worker may have no wages garnished at all.

Filing a complaint in Maine

1. 1 Look up the business on the Bureau of Consumer Credit Protection's licensee search or NMLS Consumer Access. Lenders, loan brokers and debt collectors all need a Maine license.
2. 2 Gather your papers: the loan agreement, payment records and any letters or texts from the lender or collector.
3. 3 File a complaint with the Bureau online. If a collector sues you over a credit card or student loan, the Bureau also offers a court answer form you can use.

Common questions