Companies offering pay day loans to residents in Minnesota over the internet will now be subject to Minnesota licensing requirements, it has been emerged.

The Minnesota Department of Commerce said that regardless of whether they have a physical presence in the state, lenders must comply with state law.

As well as being licensed in Minnesota, they will also have to comply with limits on fees, charges and loan amounts, officials confirmed.

"We have a pretty conservative fee schedule and we want the internet lenders to toe the line," Kevin Murphy, deputy commissioner of the Minnesota Department of Commerce's financial examinations division, told the Minneapolis Star Tribune.

Pay day loans are short-term loans that are offered to consumers facing a financial shortfall to tide them over until their next pay check.

Residents in Arizona are preparing to vote on Proposition 200, which seeks to regulate pay day lenders in the state.

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