Colorado Consumer Lending Rights in Denver: The UCCC Explained

If you borrow money in Denver, Colorado, your Colorado consumer lending rights come mostly from one body of law: the Uniform Consumer Credit Code, usually called the UCCC. It sits in Title 5 of the Colorado Revised Statutes, and it explains who may lend, what a lender may charge and what you can do when something goes wrong. This guide puts it in plain English.

What the UCCC is and why it matters in Denver

Think of the UCCC as the rulebook for consumer credit in Colorado. It covers loans made for personal, family or household reasons, not business loans. Lenders must be licensed, must show you the cost of credit in writing and must stay inside the limits the law sets. For a Denver renter, a student on the Auraria Campus or a hospitality worker between paychecks, that gives you a public standard to check loan paperwork against.

What the UCCC covers

Two parts matter most for everyday borrowers:

• Small deferred deposit loans. These are what people search for as “payday loans.” Colorado regulates them in the Deferred Deposit Loan Act, C.R.S. §§ 5-3.1-101 to 5-3.1-123.
• Supervised loans. Installment and personal loans from finance companies are called supervised loans, and the lender must hold a supervised lender license.

Ask which kind of loan you are being offered. For a side-by-side look, see payday vs. installment vs. personal loans.

Who enforces the code

The Colorado Attorney General’s Consumer Credit Unit acts as the UCCC Administrator. It handles licensing and complaints. You can search for a license and file a complaint at coag.gov. Check before you sign, not after. A license does not make a loan cheap, but a lender with no license is a warning sign. If you already have a problem, see how to file a complaint against a Colorado lender.

The 36% APR cap

The biggest change came from Proposition 111, approved by voters in November 2018 and in effect February 1, 2019. It capped small deferred deposit loans at a 36% annual percentage rate. Before that, Colorado payday loans averaged well over 100% APR, and since the cap most payday storefronts in the state have closed.

The 36% covers the finance charge, and a lender may charge only the charges the Act expressly allows (§ 5-3.1-105). Today’s legal product is a small installment loan capped at 36% APR. To see how the number is figured, read Colorado’s 36% APR cap explained.

What a capped loan costs: worked examples

Here is what a loan at the 36% APR cap costs when repaid in six equal monthly payments:

• $300 loan: about $32.28 in interest, about $55.38 a month, about $332.28 repaid.
• $500 loan: about $53.79 in interest, about $92.30 a month, about $553.79 repaid.

Stretch a $500 loan over 12 months and the payment drops to about $50.23 a month, but interest rises to about $102.77. A lower payment feels easier, yet it costs more in total.

Limits on amount and term

• Amount (§ 5-3.1-106): a lender may not lend more than $500 to one consumer at any time. More than one loan is allowed only if the total stays at or below $500 and there is at least a 30-day wait between loans.
• Term (§ 5-3.1-103): the minimum term is six months from the loan date. There is no maximum term and no minimum finance charge.

An offer of a $1,000 deferred deposit loan or a two-week due date does not match Colorado’s rules for this product. Check the lender’s license.

Your right to cancel and to repay early

You may cancel a deferred deposit loan on or before 5 p.m. the next business day after the loan (§ 5-3.1-106). Keep proof of when you told the lender. If you repay early, the lender must refund a prorated share of the finance charge for the time left (§ 5-3.1-105).

Renewals, returned payments and collection limits

• Renewal (§ 5-3.1-108): a deferred deposit loan may be renewed only once, at no more than 36% APR, with a prorated refund if renewed early. After that the debt must be paid, though a lender may refinance it as a supervised loan under the UCCC.
• Returned payment (§ 5-3.1-112): one returned-instrument charge of no more than $25 per loan. Court costs and reasonable attorney fees apply only if a court awards them, and attorney fees may not exceed the loan amount. No other default fees are allowed.
• No jail for the loan (§ 5-3.1-120): you cannot face a criminal penalty for taking a deferred deposit loan or because the check bounces, unless the account was closed before the agreed date.

Car-title loans and online lenders

Colorado has no separate title-loan law. A loan secured by your car is a consumer loan that must follow the UCCC and come from a licensed lender, and you can lose your car. See car title loans in Colorado.

Online and out-of-state lenders must follow Colorado law when lending to Coloradans and should hold a Colorado license. Many claim tribal ownership or an out-of-state bank partnership. Colorado’s 2023 law (HB 23-1229) applies its rate caps to some out-of-state bank loans, but it is being challenged in federal court and the outcome is not final. Check any lender’s license with the Colorado Attorney General before you borrow.

Federal rules that work alongside Colorado law

• The Truth in Lending Act requires disclosure of the finance charge and APR before you sign.
• The Equal Credit Opportunity Act bars discrimination in lending.
• The Fair Credit Reporting Act lets you dispute credit report errors, and you can get free weekly reports at AnnualCreditReport.com.
• The Military Lending Act caps many loans at 36% MAPR for active-duty service members, including active Guard and Reserve, and covered dependents. Veterans, retirees and civilian workers are not covered.

Airmen, Guardians and families at Buckley Space Force Base in Aurora, next to Denver, can also ask the base about Air Force Aid Society emergency help. The Consumer Financial Protection Bureau has plain guides on these federal rules.

How to check a Denver lender before you sign

• Search the lender’s name and license at coag.gov.
• Ask for the APR, the total you will repay and every fee in writing.
• Confirm the term is at least six months and the amount is $500 or less.
• Keep copies of everything, including the date you signed.

Our loan application checklist helps you gather what you need.

Cheaper options to try first

Credit unions often offer lower rates, so ask about membership rules. As an illustration only, $1,000 at 18% a year over 12 months is about $91.68 a month and about $100.16 in interest. Federal credit unions can also offer payday alternative loans, which charge at most 28% interest plus an application fee of at most $20.

If the problem is a bill, ask first. Xcel Energy offers payment arrangements for past-due balances, and Colorado’s LEAP helps with winter heating bills through Colorado PEAK. Dial 2-1-1 to reach Mile High United Way for local help.

If a lender breaks the rules

Write down dates, amounts and names, save every message, and file a complaint with the Attorney General’s Consumer Credit Unit. Colorado Legal Services helps low-income residents with civil problems such as debt collection. Small claims cases of up to $7,500 are heard in Denver by the Denver County Court. You can read the full text of Title 5 on the Colorado General Assembly’s website. For a broader summary, see your rights as a Colorado loan borrower.

This article is educational and is not financial or legal advice. Before you borrow, confirm the lender is licensed with the Colorado Attorney General — Consumer Credit Unit (UCCC Administrator), and read the fee disclosure in full.