Payday and Title Loans in

Nevada

Payday Loans in Nevada: Subprime Report

At a Glance
Nevada, USA
  • Nickname: The Silver State
  • Population: 2,940,058
  • Capital: Carson City
  • Website: NV.gov

Outsiders come to Nevada from all over the world to enjoy a good time. But within the state, many residents are struggling economically. Around 13 percent of Nevadans live in poverty1 and more than 71,000 residents—around 5 percent—are unemployed.2 Nearly 10 percent of Nevadans count on short-term loans just to get by.3

In Nevada, it’s perfectly legal for payday and auto title lenders to charge interest rates of more than 600 percent—in fact, the typical interest rate for a payday loan in the state is 652 percent, according to the Center for Responsible Lending.4

This may seem unfair, but it’s a fact of life for many Nevada residents. In fact, Silver State borrowers have become a gold mine for payday and title lenders. Every year, these lenders drain $182,569,531 in fees alone from Nevadans.5

One former state lawmaker said lenders charged rates so high “people’s lives were being basically destroyed.” Many borrowers find themselves on a “treadmill of debt” they can’t escape.

Here, we’ll explain how payday and title loans work in Nevada—and tell you why you should avoid these risky loans. For details about Las Vegas, visit our Las Vegas Payday Loan Report.

Payday Loans in Nevada

Take a guess: which has more storefronts in Nevada, payday lenders or McDonald’s?

While you might think a burger would be easier to find than a loan, in fact, it’s payday lenders—and, shockingly, this is true for many US states.7

Nevada’s 339 payday lending storefronts make an average of 3,541 loans per store. And though the typical loan amount is relatively small—$350—this adds up to more than $77 million in fees annually across the state.8 For the typical borrower, it ultimately costs $596 to borrow $300 for 5 months.9 Nationally, 80 percent of all payday loans are either rolled over (meaning the borrower pays a fee to have the loan extended for two weeks) or renewed (meaning the borrower immediately takes out a new loan to cover the last one).10 It’s easy to get trapped by payday loans.

According to the Center for Responsible Lending, Nevada is one of more than 25 states with “no meaningful regulation of payday lending.”11 That means there’s absolutely no limit to how much interest lenders can charge for a $300 loan over a two-week pay period.12 And without a cap on interest rates, “consumers can pay double of what they originally borrowed, which keeps them in the cycle of poverty,” Nevada deputy state treasurer Sheila Salehian explained in 2016.13

Nevada Payday Regulations
  • Maximum Loan Amount:25 percent of expected gross monthly income
  • Loan Term:35 days
  • Rollovers Permitted:Yes
  • Finance Charge on a 14-day $100 Loan:No limit
  • APR on a 14-day $100 Loan:No limit
  • Maximum Number of Outstanding Loans at a Time:No limit
  • Cooling-off period between loans:None14

Nevada Payday Loan Borrower Story

Las Vegas resident Harold Carnes was working at McDonald’s making $8.25 an hour when he took out a $500 payday loan to help cover the cost of his rent. Then, two things went wrong: his hours at work were cut, and he got sick. He couldn’t pay back the loan. At the suggestion of his lender, he took out another loan from a different company to help cover the payments on his original loan. Before long, he owed almost $2,000. Harold’s story isn’t uncommon. Many payday loan borrowers find they can’t afford to pay back what they owe, so they end up taking on additional debt. The vicious cycle goes on and on.15

The History of Payday Loans in Nevada

Forty years ago, you couldn’t get a payday loan in Nevada. State law prohibited small lenders from charging interest rates above 18 percent. That all changed in 1984, when the state legislature abolished the 18 percent rate cap. Before long, payday lenders were a fixture of every strip mall in the state.16

Today, as a result of widespread financial insecurity in Nevada, many residents have come to rely on risky loans, including payday loans and auto title loans. According to a 2016 study, 35 percent of Nevada households have used these and other dangerous financial products.17 Many of the Nevada borrowers harmed by payday loans are veterans. In a 2015 survey, 20 percent of Nevada veterans said they had taken out a payday loan or used a cash advance service.18

Thanks to payday lenders’ cozy relationship with state legislators—the industry donated nearly $130,000 to Nevada lawmakers in 2016 alone—few attempts at regulation have been successful.19 Laws passed in 2005 and 2007 limit abusive collection practices and restrict interest rates under certain circumstances (if, for instance, the borrower falls behind in payments),20 but for the most part, payday lenders ride roughshod over borrowers.21

In 2017, Nevada lawmakers made several attempts to rein in payday lenders in the state. One bill would have prevented lenders from making more than one loan at the same time to the same person, required a “cooling-off” period between loans, and created a statewide database of payday loans to ensure lenders were complying with these rules. But the bill died and never made it into law.21

However, one small change did make it through the legislative process. In June 2017, Nevada governor Brian Sandoval signed into law a bill that prohibits payday lenders from making loans without first making sure the borrower actually has the ability to repay them. This means lenders can look at financial information such as bank statements before handing out irresponsibly large sums to borrowers.22 It’s a start, but many lawmakers and residents would like to see more serious reforms. “Payday loan abuses need to be addressed,” Las Vegas Review-Journal columnist Steve Sebelius argued in 2017.23

Final Word on Nevada Payday Loans

Payday lenders in Nevada make their product seem quick, easy and convenient. But because interest rates are so high and loan terms are so short, many borrowers find themselves trapped in a cycle of debt they can’t get out of when they take out payday loans. Once you start borrowing, it’s hard to get yourself out of the trap—borrowers take out an average of eight loans per year.24 And the payday lending industry loves repeat customers, because borrowers who take out 11 or more loans a year account for about 75 percent of fees.25 That’s why consumers should avoid payday loans at all costs, and seek outside help during a budget squeeze.

Nevada Title Loans

Every year, about one million US households take out a car title loan, according to the Federal Deposit Insurance Corporation.26 These are so dangerous they’re illegal in about half of US states, but they remain legal in Nevada.27

To receive a title loan, borrowers use their cars as collateral. That means if you can’t pay back the loan (or the huge amount of interest you’re charged) your car can be taken from you. The typical title loan is about $951; a typical APR is around 300 percent. That means borrowers pay $25 for every $100 they receive. Payment is usually due in one month. However, many borrowers find they can’t afford to repay the loan in that amount of time, so they renew their loan multiple times, paying new fees each time. In the end, many borrowers lose their car anyway.28

Essentially, lenders are “trying to get as much money out of you as possible, for as long as possible, and they still take your car in the end,” explained attorney Christine Miller of the Legal Aid Center of Southern Nevada.29

In fact, in any given year, according to the Pew Charitable Trusts, 6 to 11 percent of auto-title borrowers have their car repossessed and 5 to 9 percent lose the vehicle entirely when they can’t pay back the debt.30 Without a car, many people can’t get to work or look for a new job—making their financial problems even worse than they were before.

As of 2013, there were 197 car title lenders in Nevada. That means there’s one title lender for every 10,333 adults in the state.31 And every year, these title lenders take $104,843,696 in fees out of Nevadans’ pockets.32

Roughly half of all car title borrowers are unbanked, meaning they do not have a checking or a savings account. Nevada has higher than average rates of unbanked households—10.1 of Las Vegas-area households are fully unbanked, and 29.1 percent are underbanked, meaning they have a checking or savings account but also used alternative financial services like pawnshops and title lenders.33 Car title borrowers make less than $25,000 a year on average and a vast majority (80 percent) rent their homes.34

Nevada Title Loan Borrower Story

Retired Las Vegas resident Wayne Fischer gets less than $500 a month from Social Security. That one check is his main source of income. But his modest income didn’t stop a title lender from giving him a 30-day loan of about $2,500. In exchange for the cash, Fischer handed over the title to his 2006 Ford Ranger. When he couldn’t pay back the loan, his lender seized the car. It was a devastating loss. “I can’t get anywhere. I can’t get to jobs,” Fischer told the Las Vegas Review Journal.

Nevada Title Loan Restrictions

Nevada has few restrictions on title loans. Under Nevada law, the amount of a title loan can’t exceed the “fair market value” of the car. Loan terms are limited to 30 days, with up to six extensions allowed. Borrowers are required to prove their employment status and ability to repay the loan before it’s issued. However, in practice, many lenders don’t care whether borrowers can actually repay the loan or not, since they know they can seize the borrower’s car in the event of a loan default.36

Final Word on Nevada Title Loans

Title lenders make their product seem like a safe and easy option. And if you’re in a tight spot, getting $1,000 or more in a hurry can seem tempting. But title loans are dangerous. In addition to paying huge sums of money in interest and fees, you could end up losing your car. Don’t take the risk—avoid title loans.

Nevada Payday Loan Rules and Regulations

Everyone goes through rough patches. But if you’re in need of quick cash, avoid payday and title loans. These dangerous offerings can actually make your financial situation worse. Better options might include a safe personal installment loan.

What if you’ve already fallen victim to a payday or title lender? Don’t worry—help is out there. Government agencies and nonprofit institutions can assist you in fighting back against a payday lender who is breaking the law, and provide guidance on how to navigate short-term financial crises.

How to Report a Payday Lender in Nevada

How to report a lender in Nevada

Don’t be afraid to ask for help if you’re having problems with a payday or title lender. You can report them to the Nevada Financial Institutions Division. You can submit a complaint by calling (702) 486-4120 or submitting a complaint form to FIDMaster@fid.state.nv.us.

The Nevada Financial Institutions Division
Address: 3300 W. Sahara Ave., Suite 250, Las Vegas, Nevada 89102
Phone: (702) 486-4120
Website: http://fid.nv.gov/

You can also report problems with a payday lender to the Consumer Financial Protection Bureau, a federal agency, either online or by calling (855) 411-2372.

Outside help for payday and title loans in Nevada

If you are being harassed by a lender or believe that a lender broke the law, seek advice from a trustworthy attorney. Nevada has several legal aid organizations that provide low- or no-cost (“pro bono”) representation:

Legal Aid Center of Southern Nevada
725 E. Charleston Blvd.
Las Vegas, NV 89104
(702) 386-1070
lacsn.org

Volunteer Attorneys for Rural Nevadans (VARN)
904 N. Nevada St.
Carson City, NV 89701
(775) 883-8278
varn.org

Washoe Legal Services
299 S. Arlington Ave.
Reno, Nevada 89501
(775) 329-2727
washoelegalservices.org

Nevada Legal Services
Office locations in Las Vegas, Reno, Elko, Carson City, and Yerington: https://nlslaw.net/contact/
(702) 386-0404

Consumer Protection in Nevada

While state legislators have dragged their feet on protecting consumers from the dangers of payday and title lenders, several Nevada cities are taking matters into their own hands. For instance, Henderson requires that payday lending storefronts be at least 1,000 feet from each other and 200 feet from residential neighborhoods.37 Similar ordinances are in place in Clark County, Las Vegas, and North Las Vegas.38

And state lawmakers have indicated they will continue the fight, even though some of their proposed measures have been defeated. “We’re not going to do something symbolic,” assembly speaker Jason Frierson told the Nevada Independent. “We’re going to try and help some Nevadans who maybe have a need in this market but also have the right to have some parameters on that, so they’re not exploited.”39

Works Cited

  1. “Quick Facts Nevada,” US Census Bureau. Accessed October 31, 2017. https://www.census.gov/quickfacts/fact/table/NV/PST045216
  2. “Nevada Economy at a Glance,” Bureau of Labor Statistics. Accessed October 31, 2017. https://www.bls.gov/eag/eag.nv.htm
  3. “Nevada senators urged to tighten payday loan rules,” Nevada Appeal. Accessed October 31, 2017. http://www.nevadaappeal.com/news/government/nevada-senators-urged-to-tighten-payday-loan-rules/
  4. “Map of U.S. Payday Interest Rates,” Center for Responsible Lending. Accessed October 31, 2017. http://responsiblelending.org/research-publication/map-us-payday-interest-rates
  5. “Quick Facts Nevada,” US Census Bureau. Accessed October 31, 2017. https://www.census.gov/quickfacts/fact/table/NV/PST045216
  6. “The Indy Explains: Lawmakers push for additional rules on high-interest payday loans,” Nevada Independent. Accessed October 31, 2017. https://thenevadaindependent.com/article/indy-explains-lawmakers-push-additional-rules-high-interest-payday-loans
  7. “Think Payday Lending isn’t out of control in the United States?” California State University Northridge. Accessed October 31, 2017. http://www.csun.edu/~sg4002/research/mcdonalds_by_state.htm
  8. “Payday Lending Abuses and Predatory Practices,” Center for Responsible Lending. Accessed October 31, 2017. http://www.responsiblelending.org/state-of-lending/reports/10-Payday-Loans.pdf
  9. “How State Rate Limits Affect Payday Loan Prices, Pew Charitable Trusts,” Accessed October 31, 2017. http://www.pewtrusts.org/~/media/legacy/uploadedfiles/pcs/content-level_pages/fact_sheets/stateratelimitsfactsheetpdf.pdf
  10. http://files.consumerfinance.gov/f/201403_cfpb_report_payday-lending.pdf
  11. “Payday Lending Abuses and Predatory Practices,” Center for Responsible Lending. Accessed October 31, 2017. http://www.responsiblelending.org/state-of-lending/reports/10-Payday-Loans.pdf
  12. “How State Rate Limits Affect Payday Loan Prices, Pew Charitable Trusts,” Accessed October 31, 2017. http://www.pewtrusts.org/~/media/legacy/uploadedfiles/pcs/content-level_pages/fact_sheets/stateratelimitsfactsheetpdf.pdf
  13. “Nevada officials promise bill tightening rules on payday lending,” Las Vegas Review-Journal. Accessed October 31, 2017. https://www.reviewjournal.com/business/nevada-officials-promise-bill-tightening-rules-on-payday-lending/
  14. “Nevada State Information,” PayDay Loan Consumer Information. Accessed October 31, 2017. http://www.paydayloaninfo.org/state-information/36
  15. “Payday loans reform advocates say Las Vegas borrowers often end up on ‘treadmill of debt,’” Las Vegas Review-Journal. Accessed October 31, 2017. https://www.reviewjournal.com/local/local-las-vegas/downtown/payday-loans-reform-advocates-say-las-vegas-borrowers-often-end-up-on-treadmill-of-debt/
  16. “The Indy Explains: Lawmakers push for additional rules on high-interest payday loans,” Nevada Independent. Accessed October 31, 2017. https://thenevadaindependent.com/article/indy-explains-lawmakers-push-additional-rules-high-interest-payday-loans
  17. “Rates of unbanked, underbanked on the rise in Southern Nevada,” Las Vegas Review-Journal. Accessed October 31, 2017. https://www.reviewjournal.com/business/rates-of-unbanked-underbanked-on-the-rise-in-southern-nevada/
  18. “Executive Summary: Nevada Veterans Survey,” UNLV School of Environmental and Public Affairs. Accessed October 31, 2017. http://www.opportunityalliancenv.org/wp-content/uploads/2015/04/OA-Veterans-Survey-Final-Report-for-Release-January-2015.pdf
  19. “Connecting the Dots: Payday lenders command powerful presence at Legislature,” Nevada Independent. Accessed October 31, 2017. https://thenevadaindependent.com/article/connecting-dots-payday-lenders-command-powerful-presence-legislature
  20. http://www.nevadaappeal.com/news/payday-loan-companies-targeted/
  21. “These bills died in the Nevada Legislature, but they would have improved life in Las Vegas,” Las Vegas Review-Journal. Accessed October 31, 2017. https://www.reviewjournal.com/steve-sebelius/these-bills-died-in-the-nevada-legislature-but-they-would-have-improved-life-in-las-vegas/
  22. “Nevada passes new payday lending reforms,” KTNV.  Accessed October 31, 2107. http://www.ktnv.com/news/nevada-passes-new-payday-lending-reforms
  23. “These bills died in the Nevada Legislature, but they would have improved life in Las Vegas,” Las Vegas Review-Journal. Accessed October 31, 2017. https://www.reviewjournal.com/steve-sebelius/these-bills-died-in-the-nevada-legislature-but-they-would-have-improved-life-in-las-vegas/
  24. “Payday Lending Abuses and Predatory Practices,” Center for Responsible Lending. Accessed October 31, 2017. http://www.responsiblelending.org/state-of-lending/reports/10-Payday-Loans.pdf
  25. “Consumer Protection Agency Seeks Limits on Payday Lenders,” New York Times. Accessed October 31, 2017. https://dealbook.nytimes.com/2015/02/08/consumer-protection-agency-seeks-limits-on-payday-lenders/
  26. “Borrow $2,500 today, lose an $8,000 car tomorrow,” Las Vegas Review-Journal. Accessed October 31, 2017. https://www.reviewjournal.com/business/borrow-2500-today-lose-an-8000-car-tomorrow/
  27. “States That Allow Car Title Loans,” Investopedia. Accessed October 31, 2017. http://www.investopedia.com/articles/personal-finance/110714/states-allow-car-title-loans.asp
  28. “Driven to Disaster: Car-Title Lending and Its Impact on Consumers,” Center for Responsible Lending. Accessed October 31, 2017. http://www.responsiblelending.org/other-consumer-loans/car-title-loans/research-analysis/CRL-Car-Title-Report-FINAL.pdf
  29. “Borrow $2,500 today, lose an $8,000 car tomorrow,” Las Vegas Review-Journal. Accessed October 31, 2017. https://www.reviewjournal.com/business/borrow-2500-today-lose-an-8000-car-tomorrow/
  30. http://www.pewtrusts.org/~/media/assets/2015/03/autotitleloansreport.pdf
  31. “Driven to Disaster: Car-Title Lending and Its Impact on Consumers,” Center for Responsible Lending. Accessed October 31, 2017. http://www.responsiblelending.org/other-consumer-loans/car-title-loans/research-analysis/CRL-Car-Title-Report-FINAL.pdf
  32. “Payday and Car Title Lenders Drain $8 Billion in Fees Every Year,” Accessed October 31, 2017. http://responsiblelending.org/sites/default/files/nodes/files/research-publication/crl_statebystate_fee_drain_may2016_0.pdf
  33. “Rates of unbanked, underbanked on the rise in Southern Nevada,” Las Vegas Review-Journal. Accessed October 31, 2107. https://www.reviewjournal.com/business/rates-of-unbanked-underbanked-on-the-rise-in-southern-nevada/
  34. “Driven to Disaster: Car-Title Lending and Its Impact on Consumers,” Center for Responsible Lending. Accessed October 31, 2017. http://www.responsiblelending.org/other-consumer-loans/car-title-loans/research-analysis/CRL-Car-Title-Report-FINAL.pdf
  35. “Borrow $2,500 today, lose an $8,000 car tomorrow,” Las Vegas Review-Journal. Accessed October 31, 2017. https://www.reviewjournal.com/business/borrow-2500-today-lose-an-8000-car-tomorrow/
  36. “The Indy Explains: Lawmakers push for additional rules on high-interest payday loans,” Nevada Independent. Accessed October 31, 2017. https://thenevadaindependent.com/article/indy-explains-lawmakers-push-additional-rules-high-interest-payday-loans
  37. “Loan store request approved despite ordinance,” Las Vegas Sun. Accessed October 31, 2017. https://lasvegassun.com/news/2006/dec/20/loan-store-request-approved-despite-ordinance/
  38. “Payday Lending Zoning Laws/Legislation,” Iowa Citizens for Community Improvement. Accessed October 31, 2017. http://iowacci.org/wp-content/uploads/2012/05/PAYDAY-LENDING-ZONING-LAWS-chart%C2%A05-12.pdf
  39. “With days left in session, emergency payday loan bill introduced,” Nevada Independent. Accessed October 31, 2017. https://thenevadaindependent.com/article/with-days-left-in-session-emergency-payday-loan-bill-introduced