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Payday Lending 2007 Introduced Legislation

Introduced Payday Lending Legislation - 2007 Session

Last updated: March 13, 2008

NCSL Staff Contact: Heather Morton, Denver, (303) 364-7700

 

 State:  Bill Summary:
 Alabama

S.B. 119
Allow a consumer to rescind a payday loan transaction, provides further for rollover payday loans, allows consumers to request an extended payment plan, and restricts payday loans to military personnel and their dependents. 

 

S.B. 121
Repeals the Deferred Presentment Services Act. 

 Arizona

H.B. 2032
Makes a technical correction relating to the exemptions from provisions for retail sellers not represented as payday lenders.

 

H.B. 2224
Prohibits extensions of payday loans.

 

H.B. 2539
Regulates payday lending and loans to military members.

 

H.B. 2643
Requires the creation of a database to track payday loans. 

 

H.B. 2738
Relates to payday loans for military members. 

 

S.B. 1051
Places a 36 percent interest rate cap and prohibits the extension of payday loans.

 

S.B. 1052
Amends the payday licensing program termination date to January 1, 2008.

 

S.B. 1101
Places a 36 percent interest rate cap on payday loans.

 

S.B. 1446
To Senate for concurrence 5/1/07
Allows repayment plans for deferred presentment transactions; stipulates that before entering into a deferred presentment transaction with a customer, the licensee must use reasonable efforts to verify that a customer does not have an incomplete repayment plan; prohibits prepayment penalties. 

 

S.B. 1473
Limits the interest rate that can be charged for payday loans for members of the military. 

 Arkansas

H.B. 1036
Passed House 2/8/07
Creates the offense of unlawful consumer loans, and places a limit on the fee that can be charged for a deferred deposit transaction. 

 

S.B. 824
Withdrawn 4/3/07
Imposes duties and restrictions on check-cashers as related to military customers and their spouses; imposes penalties for rollovers; encourages and permits no-fee extended payouts; restricts collection practices; otherwise ensures fairness in check cashing.  

 

S.B. 923
Failed to pass House 3/30/07
Imposes duties and restrictions on check-cashers as related to military customers and their spouses; imposes penalties for rollovers; encourages and permits no-fee extended payouts; restricts collection practices; otherwise ensures fairness in check cashing. 

 California

A.B. 1534
Passed Assembly 6/5/07
Requires the commissioner of corporations, on or before March 1, 2008, to submit a report to the governor and the Legislature that, among other things, summarizes the results of a study on, and includes various information related to, payday loans.

 Connecticut

S.B. 1039
Failed Joint Favorable deadline 3/8/07
Specifically includes payday lenders within the purview of the statutory provisions regulating small loan lenders in order to protect consumers from the predatory terms and tactics employed in the making and collection of a payday loan. 

 

S.B. 1040
Failed Joint Favorable deadline 3/8/07
Specifically prohibits the making of payday loans in order to protect consumers from the predatory terms and tactics employed in the making of such loans. 

 Florida

S.B. 2678
Died in committee 5/4/07
Defines the terms "check" and "engage in a deferred presentment transaction"; creates §560.4031, F.S.; provides that any deferred presentment transaction entered into by a drawer with a nonexempt person who is not registered under ch. 560, F.S., is void; provides penalties and civil remedies; provides that a person commits a felony of the third degree if he or she attempts to collect on any deferred presentment transaction that he or she knows to be void. 

 Georgia

H.B. 163
Failed to pass House 3/27/07
Provides for licensing of persons who provide deferred presentment services; to provide for a short title; defines certain terms; provides for licenses, qualifications, and application therefor; provides for fees; provides for limitations; provides for consumer notices; provides for rules and regulations; provides for penalties and hearings; provides for complaint investigation; provides for annual reports; amends Title 16 of the Official Code of Georgia Annotated, relating to crimes and offenses, so as to repeal Chapter 17, "Payday Lending"; provides for related matters; to provide for severability; provides for preemption. 

 

H.B. 420
Relates to industrial loans, so as to add protections for consumers who are customers for these loans; to provide for purposes and definitions; to provide for exemptions; to provide for powers and duties of the Industrial Loan Commissioner; to provide for licensure and fees; to provide for maintenance of books and records by licensees; to prohibit false advertising; to provide for maximum charges; to provide for penalties; to provide for suspension or revocation of license; to provide for judicial review. 

 Hawaii

H.B. 430
Requires the Department of Commerce and Consumer Affairs to regulate the payday lending industry through licensing. Appropriates funds to establish a financial literacy education program. 

 

H.B. 483
In conference committee 5/1/07
Requires the Department of Commerce and Consumer Affairs to regulate the check cashing industry through licensing requirements; provides further requirements for deferred deposit transactions. 

 

S.B. 636
Amends the check cashing laws to require registration of check cashers, provides further requirements on deferred deposit transactions, and clarifies applicability requirements. 

 

S.B. 1660
Requires the Department of Commerce and Consumer Affairs to regulate the payday lending industry through licensing. Appropriates funds to establish a financial literacy education program. 

  

S.B. 1935
Passed Senate 3/6/07
Requires the Department of Commerce and Consumer Affairs to regulate the check cashing industry through licensing requirements; provides further requirements for deferred deposit transactions. 

 Illinois

H.B. 10
Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title.

 

H.B. 82
Creates the Payday Loan Consumer Protection Act. Contains only a short title provision.

 

H.B. 83
Creates the Consumer Protection and Payday Lenders Regulation Act. Contains only a short title provision.

 

H.B. 1184
Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title. 

 

H.B. 1437
Amends the Payday Loan Reform Act. Changes the definition of "payday loan" to include any loan with a finance charge exceeding an annual percentage rate of 36 percent (instead of with a finance charge exceeding an annual percentage rate of 36 percent and with a term that does not exceed 120 days). Provides that no lender may make a payday loan with periodic payments unless the periodic payments are substantially equal term payments and, if paid as scheduled, result in full payment of the principal and interest owed on the loan at the end of the loan term. Requires the licensee, as part of the information that he or she must collect and maintain, to include the total number of lawsuits filed by the licensee or its agent against consumers to collect on payday loans from consumers during the preceding calendar year. Prohibits a licensee or a person making payday loans from evading the requirements and prohibitions of the Act by use of a device or subterfuge including, but not limited to, (i) disguising a payday loan as a different type of transaction, or (ii) characterizing a required fee as a purchase of a good or service in connection with a payday loan. Authorizes the Department to develop rules to determine if any person or entity seeks to evade the applicability of this Act by any device, subterfuge, or pretense. 

 

H.B. 2643
Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title. 

 

H.B. 3194
Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title. 

 

H.B. 4210
Amends the Payday Loan Reform Act. Provides that no payday lender shall offer or make a consumer installment loan exceeding a double digit (99.99%) annual percentage rate from or upon the same location or premises as it offers or makes a payday loan. Provides that "payday loan" or "loan" means a loan with a finance charge exceeding a double digit (99.99%) annual percentage rate (instead of 36% for a term that does not exceed 120 days). 

 

S.B. 1063
Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title. 

 

S.B. 1271
Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title. 

 

S.B. 1468
Passed Senate 4/20/07
Amends the Payday Loan Reform Act. Changes the definition of "payday loan" to include any loan with a finance charge exceeding an annual percentage rate of 36 percent (instead of with a finance charge exceeding an annual percentage rate of 36 percent and with a term that does not exceed 120 days). Provides that no lender may make a payday loan with periodic payments unless the periodic payments are substantially equal term payments and, if paid as scheduled, result in full payment of the principal and interest owed on the loan at the end of the loan term. Requires the licensee, as part of the information that he or she must collect and maintain, to include the total number of lawsuits filed by the licensee or its agent against consumers to collect on payday loans from consumers during the preceding calendar year. Prohibits a licensee or a person making payday loans from evading the requirements and prohibitions of the Act by use of a device or subterfuge including, but not limited to, (i) disguising a payday loan as a different type of transaction, or (ii) characterizing a required fee as a purchase of a good or service in connection with a payday loan. Authorizes the Department to develop rules to determine if any person or entity seeks to evade the applicability of this Act by any device, subterfuge, or pretense. 

 Iowa

S.F. 132
Makes amendments to Code chapter 533D, delayed deposit services, more commonly known as payday loans. The bill amends Code section 533.9 to provide that a licensee may charge a transaction fee of $5 per $100 of the amount financed, rather than the current fee maximum of $15 on the first $100 financed, and $10 for subsequent $100 increments. The bill also amends Code section 533.9 to require licensees to make written information regarding charges, fees, penalties, and interest rates available upon request, and to provide that notices and disclosures be provided in languages spoken by the consumers who frequent that location. The bill amends Code section 533.10 to provide that the licensee shall not enter into more than one transaction with a maker at one time, and that the licensee must wait two days after termination of a transaction through cashing the maker's check before entering into another delayed deposit transaction with the same maker. The bill also changes the maximum amount of the transaction to $300, rather than $500. The bill creates new Code section 533D.17, which requires licensees to report, and the superintendent to collect, information regarding delayed deposit transactions made, affiliate relationships with other financial institutions, and information regarding the age, ethnicity, and annual income of each consumer of the licensee's delayed deposit services. 

 Kansas

H.B. 2244
Prevents a lender from making a payday loan to a potential borrower if the borrower already has two loans outstanding. The bill prohibits a borrower from receiving a loan if five consecutive loans have been made, until seven days after the fifth consecutive loan is paid in full. The bill defines a consecutive loan as a new loan agreement that a lender enters into with the same borrower within seven days after a previous loan made with that borrower is paid in full. The bill also allows the Office of the State Bank Commissioner, or a third party provider selected by the Office of the State Bank Commissioner, to develop, implement, and maintain a statewide common database to verify compliance with the law. Lenders would be required to input information in the database on all loans that they make, and check with the database to determine if a borrower is eligible to receive a payday loan. Lenders would be charged a verification fee of up to $1 per transaction to access the database. 

 

S.B. 217
Prevents a lender from making a payday loan to a potential borrower if the borrower already has two loans outstanding. The bill prohibits a borrower from receiving a loan if five consecutive loans have been made, until seven days after the fifth consecutive loan is paid in full. The bill defines a consecutive loan as a new loan agreement that a lender enters into with the same borrower within seven days after a previous loan made with that borrower is paid in full. The bill also allows the Office of the State Bank Commissioner, or a third party provider selected by the Office of the State Bank Commissioner, to develop, implement, and maintain a statewide common database to verify compliance with the law. Lenders would be required to input information in the database on all loans that they make, and check with the database to determine if a borrower is eligible to receive a payday loan. Lenders would be charged a verification fee of up to $1 per transaction to access the database. 

 Kentucky

H.B. 92
Creates a new section of Subtitle 9 of KRS Chapter 286 to prohibit a deferred deposit licensee from charging a service fee to a covered member of the armed forces or a dependent of such member which will yield an amount greater than an annual percentage rate of 36 percent; amends KRS 286.9-100 to conform.

 Michigan

S.B. 454
Provides for a cap on payday loan charges allowed for military personnel and their families. 

 Mississippi 

H.B. 1136
Died in committee 1/30/07
Amends §75-67-509, Mississippi Code of 1972, to provide that any person who has been convicted of a felony shall not be eligible for a license as a check casher; amends §75-67-515, Mississippi Code of 1972, to provide that the commissioner of banking shall impose a civil penalty against a check casher licensee for initiating criminal proceedings for an overdrawn check; requires licensees to attend annual continuing education training; amends §75-67-519, Mississippi Code of 1972, to provide that the commissioner shall impose a civil penalty against a licensee for renewing or extending a delayed deposit check or accepting repayment of a delayed deposit check with the proceeds of another check cashed by the same licensee; amends §75-67-527, Mississippi Code of 1972, to increase the amount of a civil penalty that the commissioner may impose against a licensee for violations of the check cashers act.

 

H.B. 1479
Died in committee 1/30/07
Creates new code §75-67-541, Mississippi Code of 1972, to require check casher licensees to file annual reports with the commissioner of banking and consumer finance; requires the commissioner to compile an annual report containing certain data regarding all deferred deposit loans made in the preceding year. 

 

S.B. 2016
Died in committee 1/30/07
Requires check casher licensees to file annual reports with the commissioner of Banking and Consumer Finance; requires the commissioner to compile an annual report containing certain data regarding all deferred deposit loans made in the preceding year.

 

S.B. 2722
Died in committee 1/30/07
Reenacts §75-67-501 through §75-67-537, Mississippi Code of 1972, which are the Mississippi Check Cashers Act; amends reenacted §75-67-505, Mississippi Code of 1972, to delete provisions that allow the change of ownership of a licensed check cashing business without obtaining a new license for the business; repeals §75-67-539, Mississippi Code of 1972, which is a repealer on the Check Cashers Act.

 Missouri

H.B. 237
Changes the laws regarding unsecured loans of $500 or less. The bill: (1) Limits the interest and other fees that may be charged on the loans to $15 for the first $100 of principal for the first 30 days of the loan and not more than three percent per month thereafter, which is an annual percentage rate of approximately 36 percent; (2) Prohibits repeated renewals of loans to circumvent interest rate restrictions; (3) Grants jurisdiction to the attorney general to issue cease and desist orders against violators; (4) Allows the attorney general to sue for injunctions, rescission of loan contracts and restitution, and civil penalties for violations; and (5) Clarifies that the limitations apply to all lenders, whether or not they are properly licensed pursuant to Chapter 408, RSMo.

 

H.B. 423
Changes the laws regarding unsecured loans of $500 or less. The bill: (1) Limits the interest and other fees that may be charged on the loans to $15 for the first $100 of principal for the first 30 days of the loan and not more than 3% per month thereafter, which is an annual percentage rate of approximately 36 percent; (2) Prohibits repeated renewals of loans to circumvent interest rate restrictions; (3) Grants jurisdiction to the attorney general to issue cease and desist orders against violators; (4) Allows the attorney general to sue for injunctions, rescission of loan contracts and restitution, and civil penalties for violations; and (5) Specifies that the limitations apply to all lenders, whether or not they are properly licensed pursuant to Chapter 408, RSMo. 

 

H.B. 989
Changes the laws regarding unsecured loans, commonly known as payday loans, of $500 or less. In its main provisions, the bill: (1) Limits the interest and other fees that may be charged on loans to not more than an annual percentage rate (APR) of 10 percent over the prime interest rate; (2) Requires lenders to post in at least six-inch high numbers the maximum APR that they are currently charging. Loans initiated through the Internet must display this information in at least 16 point type; (3) Prohibits repeated renewals of loans to circumvent interest rate restrictions; (4) Grants jurisdiction to the attorney general to issue cease and desist orders against violators; (5) Allows the attorney general to sue for injunctions, rescission of loan contracts and restitution, and civil penalties for violations; (6) Requires lenders to disclose to the borrower the total interest paid upon the loan maturity date; and (7) Removes the provision requiring the Division of Finance within the Department of Insurance, Financial Institutions, and Professional Registration to report annually to the General Assembly. 

 

H.B. 1080
Requires lenders of unsecured loans under $500, commonly referred to as payday loans, to notify borrowers of the balance owed on the principal, interest, and other fees at least every three months. 

 

S.B. 96
This act amends the law relating to unsecured loans of $500 or less. Under current law, lenders may renew such loans upon the borrower's request. This act prohibits lenders from renewing such loans. Under current law, the director of the Division of Finance may issue a cease and desist order when lenders fail to make a good faith effort to comply with laws relating to consumer loans. This act allows the attorney general to do the same. The attorney general may also file an action in any circuit court to enjoin the practice; impose a civil penalty; or to obtain an order of rescission, restitution, or disgorgement. Under the act, a lender may only charge interest and fees up to the amount of $15 for the first $100 of principal for the first 30 days of the loan, and not more than three percent per month thereafter, which is an annual percentage rate of approximately 36 percent. Under current law, the Division of Finance must report to the general assembly, the number of licenses issued under this section every other year. This act requires the division to report every year. The provisions in this section apply to all lenders, whether or not they are properly licensed.

 Montana

H.B. 29
Died in committee 4/27/07
Revises the Montana Deferred Deposit Loan Act and the Montana Title Loan Act; increases licensing fees; removes the requirement that the Department of Administration annually examine each deferred deposit lender's operation; modifies bookkeeping requirements for lenders; prohibits additional deferred deposit loans to consumers with an outstanding deferred deposit loan; creates a database of consumers with outstanding deferred deposit loans and requires deferred deposit lenders to subscribe to the database; provides for repayment plans for a consumer with a deferred deposit loan outstanding after the term of the loan; caps the interest rate on loans; modifies license suspension and revocation provisions; authorizes the Department to conduct investigations and issue subpoenas and cease and desist orders; authorizes the Department to seek court-ordered injunctions.

 

S.B. 455
Missed deadline for general bill transmittal 2/28/07
Revises the Montana Deferred Deposit Loan Act and the Montana Title Loan Act by capping the interest rate that may be charged on deferred deposit loans and title loans. 

 Nebraska

L.B. 122
Indefinitely postponed 5/31/07
Changes and eliminates provisions relating to financial institution assessment; changes examination expense provisions relating to the Nebraska Installment Sales Act, Mortgage Bankers Registration and Licensing Act, Delayed Deposit Services Licensing Act, and Nebraska Installment Loan Act. 

 Nevada

S.B. 259
Existing federal law imposes limitations on the terms of consumer credit that are extended to members of the Armed Forces of the United States who are on active duty and their dependents, including, without limitation, a prohibition against a lender imposing an interest rate greater than 36 percent. The federal law preempts any state law that is inconsistent with the federal law. (Section 670 of the John Warner National Defense Authorization Act for Fiscal Year 2007, Public Law 109-364) This bill provides that any violation of the federal law shall be deemed to be a violation of chapter 604A of NRS, thereby making violators subject to the remedies and penalties set forth in that chapter, including the imposition of an administrative fine of not more than $10,000 for each violation, the revocation or suspension of a license issued pursuant to that chapter and civil actions for damages. 

 

S.B. 537
Reduces the number of persons and businesses who are not subject to the provisions of NRS governing deferred deposit loans, short-term loans, title loans and check-cashing services. (NRS 604A.250) Section 27 of this bill prohibits a check-cashing service from cashing a check for an amount less than the face value of the check, minus any fee charged for the service. (NRS 604A.400) Section 28 of this bill extends provisions governing multiple deferred deposit and short-term loans to one customer to also apply to multiple title loans to one customer. (NRS 604A.430) Section 29 of this bill provides that the repayment period that certain loan providers must allow for a borrower in default may not extend beyond 180 days. (NRS 604A.675) 

 New Hampshire

H.B. 267
Establishes a limit on the percent of interest for certain small loans. This bill also limits eligibility for payday and title loans. 

 

H.B. 620
Repeals the statutory provisions regarding small loans, title loans, and payday loans and establishes a general statutory usury rate. 

 

H.B. 759
Establishes additional remedies for violations of banking laws. Modifies reporting and record-keeping requirements for banking licenses. Makes certain technical changes to the laws regarding banking. Amends definition of payday lending. 

 New Mexico

H.B. 1224
Requires short-term lenders to provide information on financial literacy courses to consumers. 

 New York

A.B. 722
Prohibits foreign banking corporations from issuing payday loans; defines payday loans as any transaction in which a short-term cash advance is made to a consumer in exchange for (i) a consumer's personal check or share draft, in the amount of an advance plus a fee, where presentment or negotiation of such check or share draft is deferred by agreement of the parties until a designated future date; or (ii) a consumer's authorization to debit the consumer's transaction account, in the amount of the advance plus a fee, where such account will be debited on or after a designated future date.

 

A.B. 3514
Sets forth procedures for licensed lenders and payday loans by military borrowers; provides that a licensee shall not garnish any wages or salary paid for service in the armed forces when collecting any delinquent payday loan, defer all collection activity against a military borrower, honor the terms of any repayment agreement between a licensee and military borrower and make no loans to a military borrower if a commander has declared a specific location of the licensee's business is off limits to military personnel. 

 Ohio

H.B. 333
Prohibits a check-cashing business from making a loan to a borrower who has an outstanding loan with any check-cashing licensee, creates a statewide database of loans by check-cashing licensees, modifies the terms for making a loan under the check-cashing loan act, creates a small loan linked deposit program, expands the responsibilities of the consumer finance education board to promote small loan counseling and education for borrowers, and eliminates a certain credit union lending option. 

 

H.B. 337
Modifies terms and permissible charges under the Check-Cashing Lender Law, establishes the Financial Literacy Education Fund, authorizes the director of Commerce to administer the fund and establish adult financial literacy education programs, and creates the Small Emergency Loan Task Force.

 

H.B. 358
Modifies the provisions for making a loan under the Check-Cashing Business Loan law. 

 

S.B. 72
Prohibits check-cashing businesses from making loans to a customer who has an outstanding loan with another licensee, creates a statewide database of open loans at check-cashing licensees, and changes the permitted interest rate, fees, and duration of such loans. 

 

S.B. 207
Modifies the provisions for making a loan under the check cashing loan act. 

 

S.B. 248
Exempts certain armed forces discharges from inspection or copying as a public record, prohibits failing to report the unauthorized use of certain electronic property to law enforcement authorities, creates restrictions for check-cashing businesses when making a loan to certain members of the military, excuses certain military persons from jury duty, establishes a criminal penalty for unlawfully using a deceased military person's persona, establishes tuition benefits for certain military persons, and creates the Ohio Military Medal of Distinction and the National Guard Youth Challenge Program Study Committee. 

 Oklahoma

S.B. 693
Passed Senate 2/15/07
Relates to the Deferred Deposit Lending Act; prohibits the cashing of certain instruments under certain circumstances; provides certain deferred deposit loan transaction as complete and paid in full; prohibits certain collection; provides for certain proper documentation; modifies penalties. 

 

S.B. 807
Relates to the Deferred Deposit Lending Act; modifies and adds prohibited acts; modifies certain finance charges; makes exception to certain finance charges; modifies when a deferred deposit loan shall not be made; modifies when a new deferred deposit loan agreement may be made after certain completion; modifies limit on number of loans; provides exception; states what certain advertising material shall include. 

 Oregon

H.B. 2205
Passed House 2/13/07
Requires a person in the business of making consumer finance loans to obtain a license. Defines a consumer finance loan. Directs the director of Department of Consumer and Business Services to issue a consumer finance loan license or a short term loan license to qualified applicants.

 Rhode Island

S.B. 537
Eliminates certain restrictions and limitations placed upon deferred deposit transactions which are currently governed by Title 19. 

 South Carolina 

H.B. 3294
Amends §34-39-130, Code of Laws of South Carolina, 1976, relating to licensure requirements in connection with a person engaging in the business of deferred presentment services, so as to prohibit a nonresident from engaging in those services in this state without a license and to further differentiate between a person required to be licensed and a bona fide state or federally chartered bank, thrift, savings association, or credit union; amends §34-39-180, relating to restrictions and requirements for deferred presentment or deposit of a check, so as to cap the annual interest rate chargeable at 36 percent; amends §34-39-200, relating to limitations on licensees, so as to limit the licensee to one contract with a customer at a time; and amends §34-39-230, relating to civil penalties for violations, so as to void a violating contract, provide for damages, make a violation an unfair trade practice, make the penalties in this chapter cumulative of all remedies, both legal and equitable, prohibit the enforcement of an unconscionable arbitration provision, and outline factors for determining unconscionability. 

 

H.B. 3416
Creates the crime of engaging in the business of deferred presentment in this state, to provide that a violation is a felony, and to provide for a mandatory minimum penalty; and to repeal chapter 39 of title 34, relating to the South Carolina Deferred Presentment Services Act. 

 

H.B. 3419
Relates to application for licensure as a deferred presentment service, so as to provide that the Board of Financial Advisors notify the secretary of state of the name and address of each licensee; amends §34-39-160, relating to qualifications for licensure as a deferred presentment service, so as to provide that the applicant may not place a licensed location within a three-mile radius of an existing licensed location or the location of a check-cashing service; amends §34-39-180, relating to restrictions and requirements for presentment or deposit, so as to limit the aggregate total of advanced monies to one customer in any 31 day period to $300; and amends §34-39-190, relating to books, accounts, and records of a deferred presentment service, so as to provide that they must be accessible by the Department Of Consumer Affairs. 

 

H.B. 3448
Relates to charges permitted and other provisions allowed in consumer finance transactions, so as to exclude "payday loans", known as deferred presentment transactions; amends §34-39-140, relating to application of the provisions requiring licensing of a person engaged in the business of deferred presentment transactions, so as to make the provisions applicable to a person actually engaged in that business while purporting to act as an entity that would not be required otherwise to be licensed; amends §34-39-180, so as to limit the number and the amount of a transaction for each customer and to cap the annual interest rate chargeable in a deferred presentment transaction to 36 percent; amends §34-39-200, relating to limitations on licenses, so as to restate the limit of one contract with a customer at a time; amends §37-3-201, relating to the allowable loan finance charge for consumer loans, and §37-3-305, relating to the posting of a maximum rate schedule for consumer loans, both so as to exclude their applicability to a deferred presentment transaction. 

 

H.B. 3831
Provides for the development, implementation, and maintenance of a statewide database of deferred presentment transactions accessible to deferred presentment licensees for the purpose of tracking open and closed transactions with other licensees and accessible to the board of financial institutions for the purposes of investigation and enforcement; amends §34-39-180, relating to restrictions and requirements for a deferred presentment transaction, so as to limit a licensee to a maximum loan amount for any one customer of $300 during any 60-day period, to limit the number of transactions in a year to six for any one customer, and to require a licensee to grant a six-month repayment grace period and a repayment plan option to a customer; amends §34-39-230, relating to penalties and remedies for violations by a deferred presentment licensee, so as to require the board to impose certain civil penalties, to provide that violations run with the licensee, or the person subject to the licensing requirement, and not with the location, to provide for cumulative civil remedies, including injunctive relief, damages and attorney's fees, unfair trade practice remedies, and voiding of the contract, and to prohibit the enforcement of an arbitration clause if a court finds that specified circumstances render the contract unconscionable. 

 

S.B. 76
Provides for a common database of deferred presentment transactions, implemented by the Consumer Finance Division of the Board of Financial Institutions and accessible to deferred presentment providers to verify if an applicant has an existing or recently terminated deferred presentment transaction, provides for the information required, and allows a fee up to $1 for submitted data; amends §34-39-130, relating to engaging in the business of deferred presentment services, so as to require compliance by both resident and nonresident providers of deferred presentment services; and amends §34-39-180, relating to requirements of a licensed provider of deferred presentment services, so as to include the requirements that the licensee verify existing or recently terminated transactions by way of the established database and that the provider give a grace period to a consumer who cannot repay in a timely manner, including written notice of the grace period, information about consumer credit counseling, and conspicuous notice that the consumer cannot be arrested for failure to repay the loan, and provides that the licensee pay one-half the cost of the consumer's counseling.

 

S.B. 398
Creates the crime of engaging in the business of deferred presentment in this state, provides that a violation is a felony, and provides for a mandatory minimum penalty; and repeals chapter 39 of title 34 relating to the South Carolina Deferred Presentment Services Act. 

 South Dakota

H.B. 1137
Prohibits certain money lenders from providing a subsequent short-term consumer loan without some intervening time. 

 Tennessee

H.B. 2133
S.B. 1562
Clarifies that deferred presentment establishments have 30 days to appeal sanctions imposed against them; no civil penalties are due until the 30-day period has expired. 

 Texas

H.B. 285
S.B. 1804
Relates to a consumer debt owed by certain military personnel called to active duty.

 

H.B. 464
Relates to making a cash advance under a deferred presentment transaction in conjunction with another person.

 

H.B. 1867
S.B. 753
Passed Senate 5/14/07
Relates to the regulation of a person who offers, services, or brokers a deferred presentment transaction. 

 

H.B. 2048
S.B. 855
Passed Senate 4/19/07
Relates to the extension of consumer credit to certain members of the Texas National Guard and armed forces of the United States and their dependents; provides a penalty. 

 

H.B. 2134
S.B. 988
Relates to the regulation of certain consumer lenders. 

 

S.B. 857
Relates to restrictions on the authority of certain persons to act as or on behalf of, or associate with, a lender. 

 

S.B. 858
Relates to the interest and fees that may be charged for certain consumer loans; providing a criminal penalty. 

 Utah

H.B. 159
Enacted clause struck 2/28/07
Requires the Department of Financial Institutions to study payday lending; requires the Department to work with various interest groups; requires reporting to the Business and Labor Interim Committee; and provides a repeal date. 

 

H.B. 329
Enacted clause struck 2/28/07
Modifies provisions related to deferred deposit loans; addresses operational restrictions including: the contents of the required written contract; prohibitions on the number, term, and amount of a deferred deposit loan; and prohibitions on unfair, deceptive, or fraudulent practices; addresses treatment of payments; requires recordkeeping; requires annual reports related to deferred deposit loans by check cashers and the department.

 Virginia

H.B. 1621
Incorporated into H.B. 2563 1/30/07
Requires the State Corporation Commission, on or before July 1, 2008, to contract with a third party to establish and administer a database with real-time access through an Internet connection to ensure compliance with the Payday Loan Act. Lenders are prohibited from making a payday loan unless it has obtained information from the database, or other permitted verification source, that the borrower does not have three or more outstanding payday loans and has not terminated a payday loan within 48 hours. The measure also (i) prohibits a payday lender from making a payday loan to a borrower if the borrower has three or more other payday loans outstanding or within 48 hours following the borrower's termination of a payday loan; (ii) prohibits a lender from instituting collection proceedings against a borrower until 60 days after the date of default; (iii) prohibits a lender from engaging in any unfair, misleading, deceptive, or fraudulent acts or practices in the making or collecting of a payday loan; (iv) requires a lender, when collecting or attempting to collect a payday loan when the check given as security for such loan is dishonored, to comply with the provisions of the Fair Debt Collection Practices Act that apply to debt collectors; (v) authorizes the Commission to impose a penalty on a person who violates any regulation promulgated by the Commission pursuant to the Payday Loan Act or other law or regulation applicable to the conduct of the lender's business; and (vi) provides that any provision of a written loan agreement that violates the Payday Loan Act is unenforceable against the borrower.

 

H.B. 1684
Tabled 1/30/07
Repeals the Payday Loan Act effective July 1, 2009. 

 

H.B. 1799
Incorporated into H.B. 2563 1/30/07
Establishes a maximum annual interest rate for payday loans of 36 percent.

 

H.B. 1813
Incorporated into H.B. 2563 1/30/07
Requires the State Corporation Commission, on or before July 1, 2008, to contract with a third party to establish and administer a database with real-time access through an Internet connection to ensure compliance with the Payday Loan Act. Lenders are prohibited from making a payday loan unless they have obtained information from the database, or other permitted verification source, that the borrower does not have two or more outstanding payday loans from one or more lenders. The maximum fee that may be charged in a payday loan is reduced from 15 percent to 7.5 percent of the amount advanced.

 

H.B. 1955
Incorporated into H.B. 2563 1/30/07
Requires the State Corporation Commission, on or before July 1, 2008, to contract with a third party to establish and administer a database with real-time access through an Internet connection to ensure compliance with the Payday Loan Act. Lenders are prohibited from making a payday loan unless they have obtained information from the database, or other permitted verification source, that the borrower does not have any outstanding payday loans and has not terminated a payday loan within 48 hours. The maximum fee that may be charged in a payday loan is reduced from 15% to 10% of the amount advanced. The measure also (i) prohibits a payday lender from making a payday loan to a borrower if the borrower has a payday loan outstanding or has terminated a payday loan within the preceding 48 hours; (ii) prohibits a lender from instituting collection proceedings against a borrower until 60 days after the date of default; (iii) prohibits a lender from engaging in any unfair, misleading, deceptive, or fraudulent acts or practices in the making or collecting of a payday loan; (iv) requires a lender, when collecting or attempting to collect a payday loan when the check given as security for such loan is dishonored, to comply with the provisions of the Fair Debt Collection Practices Act that apply to debt collectors; (v) authorizes the Commission to impose a penalty on a person who violates any regulation promulgated by the Commission pursuant to the Payday Loan Act or other law or regulation applicable to the conduct of the lender's business; (vi) provides that any provision of a written loan agreement that violates the Payday Loan Act is unenforceable against the borrower; and (vii) prohibits making payday loans to members of the military or their spouses.

 

H.B. 2159
Tabled 1/30/07
Repeals the Payday Loan Act effective July 1, 2008.

 

H.B. 2243
Tabled 1/30/07
Repeals the Payday Loan Act.

 

H.B. 2563
Stricken from House Calendar 2/6/07
Requires the State Corporation Commission, by July 1, 2008, to certify and contract with one or more third parties to develop, implement, and maintain an Internet-accessible database, and requires payday lenders to query the database prior to making any loan to determine whether an applicant is eligible for the loan. Fifty cents may be charged to defray the costs of using the database. A payday lender is prohibited from making a payday loan to a person who has terminated a payday loan on the loan application date, or if the loan would cause the borrower to have more than three payday loans outstanding at the same time. Payday lenders are prohibited from knowingly making loans to a member of the military service or to the spouse of such person. If a borrower obtains three or more consecutive payday loans, the borrower may enter into an extended payment plan, which allows the borrower to repay the loan in at least two equal installments over 60 days. The installments may be secured by three checks written by the borrower. Other provisions (i) prohibit a lender from engaging in any unfair, misleading, deceptive, or fraudulent acts or practices in the making or collecting of a payday loan; (ii) require a lender, when collecting or attempting to collect a payday loan when the check given as security for such loan is dishonored, to comply with certain restrictions and prohibitions contained in the Fair Debt Collection Practices Act ; (iii) provide that any provision of a written loan agreement that violates the Payday Loan Act is unenforceable against the borrower; (iv) state that the provisions of the Payday Loan Act apply to Internet lenders; and (vi) allow licensees to secure payday loans with the borrower's electronic debit authorization.

 

H.B. 2819
Requires licensed payday lenders to place a signboard at each licensed payday lending location on which not-for-profit charitable organizations that are willing to make unsecured loans of up to $500 may post a notice advising persons about their alternative to payday loans. In addition, licensed payday lenders are required to allow financial institutions to place brochures or pamphlets regarding alternative loan programs within payday lending locations.

 

H.B. 3104
Tabled 1/30/07
Prohibits creditors from making consumer loans to active duty members of the armed services or their dependents at an interest rate that exceeds an annual percentage rate of 36 percent. The measure prohibits certain other practices with respect to consumer loans to covered servicemembers and their dependents, including making a loan without reasonable grounds for believing that the servicemember has the ability to repay the loan, securing the loan with a personal check held for future deposit or electronic access to a bank account, and securing a nonpurchase money loan with a lien on the title to a motor vehicle. 

 

S.B. 1014
Failed to pass Senate 2/24/07
Requires the State Corporation Commission, by July 1, 2008, to certify and contract with one or more third parties to develop, implement, and maintain an Internet-accessible database, and requires payday lenders to query the database prior to making any loan to determine whether an applicant is eligible for the loan. Fifty cents may be charged to defray the costs of using the database. A payday lender is prohibited from making a payday loan to a person who has terminated a payday loan on the loan application date, or if the loan would cause the borrower to have more than three payday loans outstanding at the same time. Payday lenders are prohibited from knowingly making loans to a member of the military service or to the spouse of such person. If a borrower obtains three or more consecutive payday loans, the borrower may enter into an extended payment plan, which allows the borrower to repay the loan in at least two equal installments over 60 days. The installments may be secured by three checks written by the borrower. Other provisions (i) prohibit a lender from engaging in any unfair, misleading, deceptive, or fraudulent acts or practices in the making or collecting of a payday loan; (ii) require a lender, when collecting or attempting to collect a payday loan when the check given as security for such loan is dishonored, to comply with certain restrictions and prohibitions contained in the Fair Debt Collection Practices Act ; (iii) provide that any provision of a written loan agreement that violates the Payday Loan Act is unenforceable against the borrower; (iv) state that the provisions of the Payday Loan Act apply to Internet lenders; and (vi) allow licensees to secure payday loans with the borrower's electronic debit authorization.

 

S.B. 1320
Repeals the Payday Loan Act.

 

S.B. 1326
Repeals the Payday Loan Act effective January 1, 2009.

 Washington

H.B. 1020
Finds that consumers should be able to access loans at reasonable rates; no one should have to pay usurious interest rates. Paying the interest rates associated with payday loans can cause a borrower to need a loan to pay off their loan. By turning to payday loans again and again, the borrower can become trapped in a debt cycle. Declares that the director of the department of financial institutions must ensure compliance with laws prohibiting rollovers by thorough and regular examinations and investigations. Violations of the prohibition on rollovers or other consumer protections by a licensee in chapter 31.45 RCW must be followed by timely and appropriate disciplinary actions. Requires the director of the department of financial institutions to study the merits of implementing a real-time database that allows licensees to verify if a consumer has an outstanding small loan. The director shall study the cost of a database and the effectiveness of a database in limiting the possibility of an excessive number of contemporaneous loans. The director must provide the findings of this study to the committees of the legislature that address financial regulation no later than November 30, 2007. The director may include recommendations based upon the study.

 

H.B. 1021
Finds that consumers should be able to access loans at reasonable rates; no one should have to pay usurious interest rates. Paying the interest rates associated with payday loans can cause a borrower to need a loan to pay off their loan. By turning to payday loans again and again, the borrower can become trapped in a debt cycle. Declares that the director of the department of financial institutions must ensure compliance with laws prohibiting rollovers by thorough and regular examinations and investigations. Violations of the prohibition on rollovers or other consumer protections by a licensee in chapter 31.45 RCW must be followed by timely and appropriate disciplinary actions. Provides that military borrowers, as defined in RCW 31.45.210(3), must be offered the payment plan option terms and conditions in RCW 31.45.210(2). Requires that a licensee shall: (1) When collecting any delinquent small loan, not garnish any wages or salary paid for service in the armed forces; (2) Defer any payments on a small loan that was taken out prior to deployment by a military borrower who has been deployed to a combat or combat support posting until 30 days after the duration of the posting. A licensee shall not charge a fee or accrue interest on a small loan while the payments are deferred; (3) Defer until 30 days after the duration of the posting all collection activity against a military borrower who has been deployed to a combat or combat support posting; (4) Not contact, or threaten to contact, either orally or in writing, the military chain of command of a military borrower in an effort to collect a delinquent small loan; (5) Not communicate with a military borrower in such a manner as to harass, intimidate, threaten, or embarrass the military borrower, including but not limited to communication at an unreasonable hour, with unreasonable frequency, by threats of force or violence, by threats of criminal prosecution, and by use of offensive language. Requires the director of the department of financial institutions to study the merits of implementing a real-time database that allows licensees to verify if a consumer has an outstanding small loan. The director shall study the cost of a database and the effectiveness of a database in limiting the possibility of an excessive number of contemporaneous loans. The director must provide the findings of this study to the committees of the legislature that address financial regulation no later than November 30, 2007. The director may include recommendations based upon the study.

 

H.B. 1817
Provides that a borrower may convert the unpaid principal and fee authorized by RCW 31.45.082 into a no additional cost payment plan. Except as authorized by this act, the licensee may not assess any additional charge to convert a loan into a no additional cost payment plan under this subsection. A licensee is only obligated to extend to each borrower one no additional cost payment plan during any twelve-month period of time. A new 12-month period begins on the date that any prior no additional cost payment plan is paid in full. Provides that, to convert a small loan into a payment plan under this act, a borrower must return to the licensee's point of sale location and request a payment plan no later than the close of business on the business day prior to the due date of the loan. 

 

H.B. 2314
Establishes the short-term cash advance loan program. 

 

S.B. 5705
Declares that evidence showing that the establishment robbed was a financial institution is not required when "bank," "savings and loan," "trust," "payday," or "credit union" appears in the name of the establishment. 

 West Virginia

H.B. 2237
Relates to the use of checks, bank account debit authorizations or share drafts as security for loans or cash advances made for personal, family or household purposes. 

 

H.B. 2495
Relates to the use of checks, bank account debit authorizations or share drafts as security for loans or cash advances made for personal, family or household purposes. 

 

H.B. 2820
Regulates deferred deposit loans by establishing the Deferred Deposit Loan Act. 

 

S.B. 28
Relates to the use of checks, bank account debit authorizations or share drafts as security for loans or cash advances made for personal, family or household purposes.

 Wisconsin

A.B. 4
Creates a maximum finance charge for payday loans. Under the bill, a lender, other than a bank, savings bank, savings and loan association, or credit union, who makes payday loans in the regular course of business, which the bill defines as a “payday loan provider,” may not assess a finance charge that exceeds two percent per month. In addition, a payday loan provider must obtain the license described above. Also, the bill requires the division to enforce the bill’s prohibition.

 

A.B. 511
Creates certain requirements applicable to payday loan transactions. Under the bill, a “payday loan provider” is a licensed lender that makes payday loans. A “payday loan” is a transaction between an individual with an account at a financial establishment and the payday loan provider in which the provider agrees to either: 1) accept from the individual a check, hold the check for at least three days before negotiating it, and before negotiating the check pay the individual an agreed amount; or 2) accept the individual’s authorization to initiate an electronic fund transfer (EFT) from the individual’s account, wait for at least three days before initiating the EFT, and before initiating the EFT pay the individual an agreed amount. The bill requires a payday loan provider, at least 15 minutes before entering into a payday loan with an applicant, to: 1) disclose to the applicant the total amount of all fees and costs, in dollars, and the annual percentage rate (APR), to be paid by the applicant assuming that the loan is paid in full at the end of the loan term; and 2) provide to the applicant a copy of certain written informational materials, described below, developed by the division. The payday loan provider must retain, for at least three years after the origination date of the payday loan, a record of compliance with these requirements. The bill requires the division to develop written informational materials, designed to educate, on payday loans and the payday loan industry. These informational materials must include: 1) a clear and conspicuous notice to payday loan applicants containing specified information; 2) certain aggregated information from reports submitted to the division by payday loan providers; and 3) a summary of actions that the payday loan provider may take against a payday loan customer if the customer defaults on the loan or the customer’s payment method is dishonored for insufficient funds. The bill also requires each payday loan provider to report annually to the division and pay a report filing fee. The report covers the payday loan provider’s business in the preceding calendar year and must include information required by the division. The report must also contain specified information, aggregated for all customers, including: 1) the number of payday loans originated, the number of payday loans rolled over, and the average number of times a rolled over payday loan was rolled over; 2) the average total fees, including costs and penalties, and average APR, for all payday loans of the payday loan provider, categorized by loans that were not rolled over and loans that were rolled over; 3) the number of payday loans resulting in the customer’s default; and 4) the number of payday loans on which the customer’s payment method was dishonored for insufficient funds and the average fees, including costs and penalties, charged to customers due to these insufficient funds accounts. The bill defines “rollover” or “rolled over” as the refinancing, renewal, amendment, or extension of a payday loan beyond its original term, including the consolidation of payday loans and any transaction in which a payday loan is repaid with the proceeds of another payday loan made by the same payday loan provider. Under the bill, a payday loan provider that violates these disclosure or reporting requirements may be required to forfeit not more than $200. The bill also requires the division to promulgate rules and prescribe forms related to the provisions of the bill.

 

A.B. 574
Creates certain requirements applicable to payday loan transactions. Under the bill, a “payday loan provider” is a licensed lender that makes payday loans. A “payday loan” is a transaction between an individual with an account at a financial establishment and the payday loan provider in which the provider agrees to either: 1) accept from the individual a check, hold the check for at least three days before negotiating it, and before negotiating the check pay the individual an agreed amount; or 2) accept the individual’s authorization to initiate an electronic fund transfer (EFT) from the individual’s account, wait for at least three days before initiating the EFT, and before initiating the EFT pay the individual an agreed amount. A payday loan provider may not make a payday loan in a principal amount that exceeds $800 or 50 percent of the applicant’s next paycheck, whichever is greater. The bill also limits a consumer’s ability to “rollover” a payday loan. The bill defines “rollover” as the refinancing, renewal, amendment, or extension of a payday loan. Under the bill, a payday loan provider may enter into no more than one rollover of a consumer’s payday loan and, before entering into such a rollover, the consumer must make payment, applied to the existing payday loan, that reduces the outstanding balance on the existing payday loan by at least 50 percent. 

 Wyoming

H.B. 86
Relates to the Uniform Consumer Credit Code; provides for a limit on the amount of post-dated check financing; provides for the suspension of post-dated check casher's license; provides an appropriation; authorizes an additional position.

 

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