The Short Term Loan
Fin. Code 23035 — a check of no more than three hundred dollars ($300), deferred for up to 31 days
The size and the term. A licensee may defer the deposit of a customer's personal check for up to 31 days. The face amount of the check may not exceed three hundred dollars ($300), and the transaction is made under a written agreement signed by both.
The fee. The fee may not exceed 15 percent of the face amount of the check. No amount beyond what the section allows may be charged, directly or indirectly.
No criminal process. A customer who does not comply with the agreement is not subject to any criminal penalty, and the licensee may not use the criminal process against a consumer to collect.
One at a time. A licensee does not enter into a new deferred deposit agreement with a customer while an earlier one is in effect. An extension or payment plan may be allowed, but no additional fee may be charged for it.
A returned check. A fee not to exceed fifteen dollars ($15) may be charged when the check is returned, and it is the only charge for that. No fee may be added for late payment.
Licensing, the disclosures the lender owes, and what happens when a check is returned are set out in other parts of the law that are not on this page. Whether a particular loan broke these limits is a question for the state's financial regulator or a licensed California attorney.
Sources for this section (2)
- Fin. Code 23035 — Deferred deposit transactions: up to $300 and 31 days
- Fin. Code 23036 — The 15 percent fee, and no fee for an extension
Legal information, not legal advice. Verified as of September 2026. Applying it to a particular situation is the work of a licensed California attorney.