Your Right to Revoke
Under federal law (Electronic Fund Transfer Act / Regulation E), you have the right to revoke any ACH authorization at any time. This means you can stop a payday lender from automatically debiting your bank account. The lender cannot refuse, cannot charge a fee for revocation, and cannot accelerate the debt because you revoked. This is a federal right that overrides any contract language.
How to Revoke
You need to notify BOTH the lender AND your bank. For the lender: send a written revocation via certified mail stating you are revoking ACH authorization under Regulation E, effective immediately. For your bank: submit a written stop payment order and verbal confirmation. Your bank must honor the stop payment if received at least 3 business days before the next scheduled debit.
What the Bank Must Do
Your bank must stop the payment if you give notice at least 3 business days before the scheduled debit. If the bank processes the payment anyway, they must recredit your account. Written stop payment orders are good for 6 months and can be renewed. The bank may charge a stop payment fee (typically $15-35), but this is far less than a payday loan renewal fee.
After Revoking
The payday lender will still try to collect the debt through other means (calls, letters, possibly lawsuit). But they cannot access your bank account. This gives you control over when and how much you pay. If the lender attempts to debit your account after revocation, report it to your bank immediately and file a CFPB complaint.
Frequently Asked Questions
Can the lender sue me for revoking ACH?
They can sue you for the unpaid debt (separate from the ACH issue), but they cannot sue you for exercising your federal right to revoke ACH authorization. Revoking ACH is legal and protected.
What if the lender debits my account after I revoked?
Contact your bank immediately for a recredit. File a complaint with the CFPB. The unauthorized debit may violate the Electronic Fund Transfer Act, entitling you to damages.
Should I close my bank account instead?
Closing your account works but is disruptive. Revoking ACH authorization and placing a stop payment is usually sufficient. If you have reason to believe the lender will attempt unauthorized debits, closing and opening a new account at a different bank provides the most protection.
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