2 . 2 . 4 Limits on simultaneous borrowing
States concerned about payday lending within their borders have passed a variety of laws to regulate it. The following list details the most widely-used regulatory strategies.
A very common form of payday lending regulation is price caps. States that “prohibit” payday lending usually do so by setting APR caps that are too low for the payday business model to profitably operate, effectively driving lenders from the state. Caps of 36% APR are used by many states for this purpose. States with caps high enough to allow payday lending also may use APR limits, but more commonly the caps are stated as a dollar limit per amount lent. A cap of $15 per $100 is typical. Some states use tiered schedules of price caps: for instance, Indiana limits fees to 15% of the first $250 lent, 13% of the next $251-$400, and 10% of anything above that.