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Payday Lending 2010 Legislation

Payday Lending 2010 Legislation

Last Updated: January 6, 2011

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

 

This page addresses state legislation introduced in 2010 regarding payday lending or deferred presentment, which features single-payment, short-term loans based on personal checks held for future deposit or on electronic access to personal checking accounts, and loan products designed to be an alternative to payday lending.

Bills were introduced in 26 states. Bills in California, Colorado, IllinoisLouisiana, New Hampshire, Oklahoma, OregonRhode Island, Utah and Wisconsin were enacted this year.

Related NCSL Web pages:

 

AK | AZ | CA | CO | FL | IL | IA | KS | KY | LA | MN | MS | MONH | NMOH | OK | OR | PA | RI | SC | SD | TN | UT | VAWI
STATES
TITLE
Alabama
none
Alaska

H.B. 269
Relates to deferred deposit advances licensing requirements, loan duration and telephone and Internet lending.

Arizona

H.B. 2161
Regulates payday loans, including: examination of deferred presentment providers, qualifications for deferred presentment licensees; and verification of loans.

Arkansas
none
California

A.B. 545
Died pursuant to Art. IV, Sec. 10(c) of the Constitution 1/31/10
Authorizes the commissioner of Corporations, by contract with a vendor or service provider or otherwise, to develop and implement a system that enables a licensee to receive specified information regarding a consumer's history with deferred deposit transactions. Authorizes the commissioner to adopt rules to establish the system and for the retention, archiving, and deletion of the information entered into, or stored by, the system. Authorizes the operator of the system to charge licensees a fee, as specified. Imposes various requirements on licensees relative to information that would be required to be reported to the system, if it is developed and implemented.

 

A.B. 2511
This bill prohibits a licensee from offering, originating, or making a deferred deposit transaction, arranging a deferred deposit transaction for, or acting as an agent for, a deferred deposit originator, or, making, offering, brokering, or assisting a deferred deposit originator or customer in the origination of a deferred deposit transaction in California to a person who is receiving unemployment benefits, as defined, unless the interest charged on the deferred deposit transaction, when calculated as an annual percentage rate, does not exceed 36 percent.

 

S.B. 1146
Signed by governor 9/30/10, Chapter 640
This bill, until January 1, 2015, establishes the Pilot Program for Affordable Credit-Building Opportunities for the purpose of increasing the availability of credit-building opportunities to underbanked individuals seeking low-dollar-value loans. The bill requires licensees to file an application with, and pay a fee to, the commissioner to participate in the program. The bill authorizes a licensee approved by the commissioner to participate in the program to impose specified alternative interest rates and charges, including an administrative fee and delinquency fees, on loans of at least $250 and less than $2,500, subject to certain requirements. This bill also authorizes licensees in the program to use the services of finders, defined as entities who, at the finder's physical location for business, bring licensees and prospective borrowers together for the purpose of negotiating loan contracts at the finder's location, subject to a written agreement meeting specified requirements. The bill establishes the services a finder is authorized and required to perform, and requires a finder to comply with the laws applicable to the licensee relative to information security. The bill requires a licensee to notify the commissioner within 15 days of entering into a contract with a finder, requires a licensee to pay an annual finder registration fee to the commissioner, and requires a licensee to submit an annual report to the commissioner on the licensee's relationship and business arrangements with a finder, as specified. The bill authorizes the commissioner to examine the operations of a licensee and a finder to ensure that the activities of the licensee and the finder are in compliance with these provisions. The bill makes a licensee that uses a finder responsible for a violation of these provisions by a finder or a finder's employee, and authorizes the commissioner to impose administrative penalties against a finder for a violation of these provisions. The bill authorizes the commissioner, upon a violation of these provisions, to disqualify a finder from performing services, bar a finder from performing services at one or more specific locations of the finder, terminate a written agreement between a licensee and a finder, and, under specified circumstances, prohibit the use of the finder by all licensees. This bill requires the commissioner to examine the performance of each licensee in the program at least once every 24 months, and requires the costs of examination to be paid by the licensee to the commissioner, as specified. The bill also requires the commissioner to conduct a random sample survey of borrowers under the program. The bill requires the commissioner to report to specified legislative committees, by January 1, 2014, summarizing utilization of the Pilot Program for Affordable Credit-Building Opportunities, as specified. This bill authorizes the commissioner to direct any licensee to submit advertising copy for review by the commissioner prior to its use. The bill authorizes the commissioner to require a licensee to maintain a file of all advertising copy for a period of two years from the date of its use.

Colorado

H.B. 1351
Signed by governor 5/25/10, Chapter 267
The act creates a six-month minimum loan term and no maximum loan term for each deferred deposit loan. Lenders must accept prepayment from a consumer with no penalty for the early payment. In addition to the finance charge currently allowed for each loan, lenders may charge an interest rate of 45 percent and must pay a prorated refund of the interest rate back to the consumer if the loan is prepaid. A lender may charge a monthly maintenance fee for each outstanding deferred deposit loan and charge an interest rate of 45 percent upon renewal of a deferred deposit loan. A lender is no longer required to offer a consumer a payment plan after a 4th consecutive loan. The act creates an unfair or deceptive trade practice for specific violations of the "Deferred Deposit Loan Act."

Connecticut
none
Delaware
none
District of Columbia
none
Florida

H.B. 536
Died in committee 4/30/10
Provides that any deferred presentment transaction entered into by a drawer with a nonexempt person who is not registered under specified provisions are void. Provides penalties and civil remedies. Provides that it is a felony of the third degree to collect on any deferred presentment transaction known to be void. Provides criminal penalties.

Georgia
none
Guam
none
Hawaii
none
Idaho
none
Illinois

H.B. 537
Signed by governor 6/21/10, Public Act 96-0936
Amends the Consumer Installment Loan Act. Changes provisions concerning the licensure of a licensee. Changes provisions concerning permitted charges. Adds provisions concerning small consumer loans with respect to permitted charges, terms, and loan amounts. Adds provisions concerning the verification of a borrower's ability to repay a small consumer loan. Contains provisions concerning the prohibition against accepting certain checks. Amends the Illinois Financial Services Development Act to change the definition of the term "financial institution". Amends the Payday Loan Reform Act to make changes concerning loan terms, permitted fees, borrower verification, consumer reporting services qualification bonding, required disclosures, default, licensure of licensees, and prohibited acts. Provides that no lender may charge more than $15.50 per $100 loaned on any payday loan or more than $15.50 per $100 on the initial principal balance and on the principal balances scheduled to be outstanding during any installment period on any installment payday loan. Provides that, except for installment payday loans and except as provided in the provisions concerning the right to cancel future payment obligations, this charge is considered fully earned as of the date on which the loan is made. Provides that the disclosed annual percentage rate shall be applied to the principal balances outstanding from time to time. Provides that no finance charge may be imposed after the final scheduled maturity date. Provides that when any loan contract is paid in full, the licensee shall refund any unearned finance charge.

Indiana
none
Iowa

H.F. 288
Modifies provisions applicable to the regulation of delayed deposit services businesses licensed pursuant to Code chapter 533D. The bill provides that the combined interest, penalties, fees, or other charges imposed by a licensee upon a maker of a check shall not exceed an annual percentage rate of 36 percent as computed pursuant to the federal Truth in Lending Act. The bill modifies a provision requiring disclosure of the annual percentage rate to specify that it is based on the sum of interest, penalties, fees, or other charges. The bill deletes current restrictions on the amount of fees which may be charged per $100 loan increment by a licensee and deletes a provision establishing a penalty not to exceed $15 which may be imposed upon the maker of a check if the check proves not negotiable, to correspond with the inclusion of any interest, fees, charges, and penalties within the 36 percent annual percentage rate maximum. The bill additionally deletes a current provision that prohibits a licensee from holding or agreeing to hold a check for longer than 31 days. The bill also modifies a restriction that prohibits the repayment, refinancing, or consolidation of a postdated check transaction with the proceeds of another postdated check transaction made by the same licensee to provide that repayment, refinancing, or consolidation of a postdated check transaction with the proceeds of another postdated check transaction made by any licensee would constitute a prohibited act. The bill expands the current criminal penalty of a serious misdemeanor for operation of a delayed deposit services business without a license to apply to any violation of Code chapter 533D. A serious misdemeanor is punishable by confinement for no more than one year and a fine of at least $315 but not more than $1,875. The bill also expands injunction from operation of a business to be applicable to any violation of the Code chapter.

 

H.F. 2127
This bill relates to specified aspects of the regulation of delayed deposit service businesses. The bill provides that the annual percentage rate applicable to delayed deposit service transactions shall not exceed 36 percent, as computed pursuant to the federal Truth in Lending Act, unless a licensee elects to impose an alternative higher rate. This is the same percentage rate limitation imposed as a restriction or safeguard for military personnel pursuant to 10 U.S.C. 49 §987. Such an election shall make requirements regarding indebtedness limitations and electronic database reporting requirements specified in a subsequent section of the bill applicable. The bill provides that a licensee must disclose to the maker of a check that the licensee cannot initiate debt collection procedures, civil court proceedings, or arbitration to collect an unpaid check unless the licensee has provided the maker of a check the opportunity to repay the obligation without any charges, other than the current $15 penalty, in biweekly payments of not more than 10 percent of the face of the check until the debt is paid in full. The bill adds that during this repayment period the licensee cannot sell or transfer the debt owing on the unpaid check and the loan shall not be considered to be in default. However, if the maker of the check fails to honor the repayment obligation, the bill provides that the loan shall be placed in default. The bill makes the failure to conform with these provisions a prohibited act on the part of the licensee, which could subject the licensee to disciplinary action as specified in Code §533D.12. Additionally, the bill changes a current provision that prohibits a licensee from holding or agreeing to hold a check for more than 31 days to a modified provision that the licensee cannot hold or agree to hold a check for less than 14 days. The bill also prohibits a licensee from entering into another transaction with the maker of a check who already has a transaction outstanding with the licensee or from entering into a new transaction within two days of the conclusion of the previous transaction, unless the maker acknowledges in writing specified restrictions relating to successive transactions, applicable penalties, and the opportunity to repay the obligation in installments in the event the check is not negotiable. As previously indicated, the bill authorizes a licensee to impose an annual percentage rate which exceeds 36 percent by filing with the superintendent of banking a written notice of intent. If this election is made, it shall apply to all transactions entered into by the licensee. The bill provides that a licensee may discontinue imposition of an alternative interest rate and consent to imposition of the 36 percent rate otherwise applicable, and a licensee previously imposing the 36 percent rate may elect to impose the alternative rate, by submitting a request to the superintendent no more often than annually. The bill provides that a licensee electing to impose an alternative annual percentage rate shall be prohibited from entering into a delayed deposit service transaction that results in the maker of the check being indebted to the licensee, or when aggregated with other delayed deposit service business licensees, for longer than a 90-day period during the preceding 12 months. This provision of the bill takes effect October 1, 2010. Further, the bill requires a licensee making the election, by October 1, 2010, to subscribe to, report to, and utilize an electronic database tracking service developed or selected by the banking division of the Department of Commerce to monitor the number of transactions entered into by a maker of a check for purposes of complying with this provision. The bill states that licensee records and the database shall be subject to review and examination by the division, and provides that information, records, and documents obtained by the division in the performance of such a review or examination shall be considered confidential. A violation of the bill's provisions will subject a licensee to existing penalty provisions in Code chapter 533D, including possible license suspension or revocation, a civil penalty in an amount not to exceed $5,000, an administrative fine in an amount not to exceed $5,000, and the criminal penalty of a serious misdemeanor punishable by confinement for no more than one year and a fine of at least $315 but not more than $1,875.

Kansas

S.B. 503
Requires that a $1 surcharge be assessed on each payday and title loan. The surcharge would be paid by the borrower to the lender and then remitted to the office of the state bank commissioner (OSBC). The monies collected would be transferred to the Professional Development Fund of the Department of Education. The Department of Education would use this money to fund professional development programs or topics that deal with personal financial literacy.

Kentucky

H.B. 381
Amends KRS 286.9-010 to define "annual percentage rate," "consideration," and "interest"; amends KRS 286.9-100 to delete the service fee of $15 per $100 loan and establish a maximum annual percentage rate of 36 percent; provides that making a deferred deposit transaction in violation of the maximum interest provisions of this Act is an unfair, false, misleading, and deceptive practice in violation of the Consumer Protection Act and subject to its rights and remedies; prohibits a licensee from engaging in deceptive practices to evade the requirements of Subtitle 9 of KRS Chapter 286; amends KRS 286.9-102 to require a licensee to conspicuously display interest charges for services; creates a new section of Subtitle 9 of KRS Chapter 286 to provide that knowing violation of the maximum allowable interest rate provisions of this Act shall be deemed a forfeiture of the entire interest for the transaction or, if already paid, the person who paid the interest, or his or her legal representative, may recover twice the amount paid in an action against the lender if commenced within two years of the deferred deposit transaction.

Louisiana

S.B. 725
Signed by governor 6/29/10, Act 668
Allows for a delinquency charge on deferred presentment transactions.

Maine
none
Maryland
none
Massachusetts
none
Michigan
none
Minnesota

H.F. 3170
S.F. 2837
Regulates payday lending; amends provisions on interest rates and fees.

Mississippi

H.B. 1161
Died in committee 2/2/10
Creates the "Mississippi Alternative Loan Act"; defines certain terms; prohibits any person from engaging in the business of lending money, except as authorized by this act; provides for applications for a license for such loans; to authorize licensing fees; provides for the revocation or suspension of licenses by the commissioner of Banking and Consumer Finance; authorizes an examination fee; provides record keeping requirements; authorizes the commissioner of Banking and Consumer Finance to promulgate rules and regulations for administration of this act; authorizes certain loan charges by the licensee; prescribes certain terms of the loan contract; requires all borrower contracts and records of the licensee to be open to the inspection of the commissioner or his duly authorized representatives; provides that certain finance charges contracted for or received in excess of that authorized by this act shall be forfeited and may be recovered.

 

H.B. 1216
Died in committee 2/2/10
Amends §75-67-519 to reduce the maximum rate of interest that a check casher may charge for cashing a delayed deposit check; specifies how the interest on a delayed deposit check loan will be calculated.

 

S.B. 2214
Died in committee 2/2/10
Creates new code §75-67-541 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. 2262
Died in committee 2/2/10
Creates the "Credit Enhancement Loan Act"; provides for findings of the legislature; defines certain terms as used in the act; requires licensing of lenders by the Department of Banking and Consumer Finance; prescribes penalties for violations; provides for fees payable to the Department; establishes requirements necessary for issuance of a license by the Department; provides for the form and contents of an application; provides for revocation or suspension of a license; provides for amounts of loans and interest rates; prohibits multiple loans in certain situations; provides for enforcement of loan agreements; provides for disclosure forms for the customer; provides for reports to credit bureaus; requires maintenance of financial records by licensees; provides for reports to be filed with the commissioner of Banking and Consumer Finance; provides for desist orders; provides for appeals from actions of the Department; provides for nonenforcement of credit enhancement loans.

 

S.B. 2584
Died in committee 2/2/10
Creates the "Mississippi Short-term Lender Law"; requires licensure of short-term lenders; provides application procedure and bond requirements; provides certain restrictions on short-term loans; limits the interest rate and fees on short-term loans; prohibits certain acts by short-term loan licensees; provides for the refusal, suspension or revocation of license; requires licensee records and reports; authorizes the commissioner of Banking and Consumer Finance to adopt rules and issue specific orders to enforce and carry out the provisions of the act; provides criminal penalties for certain violations; prohibits debt collector communications and conduct by short-term lenders; requires the commissioner of Banking to develop and maintain a statewide database of short-term loans; provides reporting requirements by the commissioner of Banking; creates a consumer finance education board and provide for its membership; prescribes the duties of the board; repeals §§75-67-501 16 through 75-67-539, which creates the Mississippi Check Cashers Act.

 

S.B. 2757
Died in committee 2/2/10
Create the "Mississippi Alternative Loan Act"; defines certain terms; prohibits any person from engaging in the business of lending money, except as authorized by this act; provides for applications for a license for such loans; authorizes licensing fees; provides for the revocation or suspension of licenses by the commissioner of Banking and Consumer Finance; authorizes an examination fee; provides record keeping requirements; authorizes the commissioner of Banking and Consumer Finance to promulgate rules and regulations for administration of this act; authorizes certain loan charges by the licensee; prescribes certain terms of the loan contract; requires all borrower contracts and records of the licensee to be open to the inspection of the commissioner or his duly authorized representatives; provides that certain finance charges contracted for or received in excess of that authorized by this act shall be forfeited and may be recovered.

 

S.B. 3006
Died in committee 2/2/10
Declares legislative intent to prohibit activities commonly referred to as payday lending, deferred presentment services, advance cash services and other similar activities; provides that it shall be unlawful to engage in the business of making certain small loans; provides criminal penalties therefor; provides for collection of civil penalties in actions by the state or by private parties on behalf of the state; declares the site or location of a place of business where payday lending takes place in the state of Mississippi as a public nuisance; repeals §§ 75-67-401 through 75-67-449, which creates the Mississippi Title Pledge Act; repeals §§75-67-501 through 75-67-539, which create the Mississippi Check Cashers Act.

Missouri

H.B. 1508
This bill changes the laws regarding unsecured loans of $500 or less, commonly known as payday loans. In its main provisions, the bill: (1) Prohibits repeated renewals of loans to circumvent interest rate restrictions; (2) Prohibits lenders from making a loan to a person who currently has a payday loan or from lending to a person within one week of that person paying or otherwise satisfying in full a payday loan; (3) Authorizes the attorney general to issue cease and desist orders for certain violations by lenders; (4) Allows the attorney general to file a motion requesting a circuit court to issue an injunction, restraining order, or declaratory judgment; to impose a civil penalty of up to $1,000 per day; or to impose an order of rescission, restitution, or disgorgement against a person or entity who has violated any laws relating to consumer loans; (5) Specifies that these provisions apply to all lenders, whether or not they are properly licensed pursuant to Chapter 408, RSMo; and (6) Limits the loan set-up fee that may be charged on the loans to five percent of the loan up to a maximum of $25 and limits the interest at a simple annual rate not to exceed 36 percent. Lenders must give a borrower a minimum of 90 days to repay a loan with payments required every two weeks so that the loan will fully amortize in 90 days. No other charges can be assessed except as provided in the bill including, but not limited to, late fees.

 

H.B. 1509
This bill prohibits unsecured loans of $500 or less, commonly known as payday loans, from being facilitated, encouraged, solicited, advertised, or provided on the premises of any nursing home property or any residential care facility, assisted living facility, intermediate care facility, or skilled nursing facility.

 

H.B. 2116
This bill changes the laws regarding unsecured loans of $500 or less, commonly known as payday loans. In its main provisions, the bill: (1) Prohibits repeated renewals of loans to circumvent interest rate restrictions; (2) Prohibits lenders from making a loan to a person who currently has a payday loan or from lending to a person within two weeks of that person paying or otherwise satisfying in full a payday loan; (3) Authorizes the attorney general to issue cease and desist orders for certain violations by lenders; (4) Allows the attorney general to file a motion requesting a circuit court to issue an injunction, restraining order, or declaratory judgment; to impose a civil penalty of up to $1,000 per day; or to impose an order of rescission, restitution, or disgorgement against a person or entity who has violated any laws relating to consumer loans; (5) Prohibits these loans from being facilitated, encouraged, solicited, advertised, or provided on the premises of any nursing home property or any residential care, assisted living, intermediate care, or skilled nursing facility; (6) Specifies that these provisions apply to all lenders whether or not they are properly licensed pursuant to Chapter 408, RSMo; and (7) Limits the loan set-up fee that may be charged on a loan to five percent of the loan up to a maximum of $25 and limits the interest at a simple annual rate not to exceed 36 percent. A lender must give a borrower a minimum of 90 days to repay a loan with payments required every two weeks so that the loan will fully amortize in 90 days. No other charges can be assessed except as provided in the bill including, but not limited to, late fees.

 

S.B. 593
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 per $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.

 

S.B. 699
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 up to six times. This act only allows for two renewals. Each renewal may not be made for a period exceeding the original loan period. 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. A lender may only charge interest and fees up to the amount of $15 per $100 of principal for the first 30 days of the loan and each renewal, 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.

 

S.B. 811
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. Lenders shall not make loans to consumers who have one outstanding or within one week of a borrower paying a previous loan. 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 current law, loans have a minimum term of 14 days and a maximum term of 31 days. Under the act, lenders shall give the borrower a minimum of 90 for repayment and a payment shall be required every two weeks. A lender may only charge interest at a simple annual rate not to exceed 36 percent plus an initial fee equal to five percent of the loan amount up to $25. No other charges or fees are permitted.

Montana
No Regular 2010 Session
Nebraska
none
Nevada
No Regular 2010 Session
New Hampshire

S.B. 193
Signed by governor 7/23/10, Chapter 369
Establishes a maximum interest rate on small loans of $10,000 or less. The bill also includes credit services organizations in the definition of lender for purposes of small loans, title loans, and payday loans.

New Jersey
none
New Mexico

S.B. 33
Amends the New Mexico Bank Installment Loan Act of 1959 and the New Mexico Small Loan Act of 1955; adds and amends certain definitions; imposes a cap on interest rates and fees for certain loans; amends payday loan disclosure requirements; requires a database for certain loans.

New York
none
North Carolina
none
North Dakota
No Regular 2010 Session
Ohio

H.B. 486
Passed House 5/12/10
Amends §§1315.26, 1321.13, 1321.15, 1321.57, 1321.59, 1321.99, and 4712.07 and enacts §4712.021 of the Revised Code to establish certain consumer protections with respect to small loans to be known as the Small Loan Consumer Protection Act.

Oklahoma

H.B. 2722
Relates to professions and occupations; relate to the Deferred Deposit Lending Act; modifies lender restrictions; provides for exception for certain military personnel; modifies finance charges; prohibits certain finance charges for military personnel; provides time limit for certain loans; modifies time between consecutive deferred deposit loans; modifies advertising materials; provides disclosure statements and disclosure requirements.

 

H.B. 2831
Signed by governor 6/9/10, Chapter 415
Relates to the Department of Consumer Credit; relate to the Uniform Consumer Credit Code; removes specified fees from statute; authorizes establishment of fees and civil penalties by rule by the Commission on Consumer Credit; limits maximum amount of civil penalty; defines term; gives the administrator of Consumer Credit discretion to determine when to require payment of examination fee; provides for distribution of revenue from fees and civil penalties, includes the Deferred Deposit Lending Act.

Oregon

S.B. 993, Special Session
Signed by governor 3/4/10, Chapter 23
Requires payday lenders and title lenders to obtain a license to conduct business. Specifies requirements for licensing. Specifies duties and prohibitions for licensees. Sets allowable rate of interest for payday loans and title loans. Provides that the director of the Department of Consumer and Business Services may investigate licensee compliance with provisions of license and enforce licensee duties and prohibitions.

Pennsylvania

S.B. 1071
Amends Titles 7 (Banks and Banking) and 18 (Crimes and Offenses) of the Pennsylvania Consolidated Statutes, in Title 7, providing for short-term loan protection; and, in Title 18, further providing for deceptive or fraudulent business practices and providing for unlicensed short-term lending.

Puerto Rico
none
Rhode Island

H.B. 7258
Requires businesses operating as or taking part in small loan lending, money transfers or check cashing to provide additional information when submitting their annual license renewal. Said information would include the net profit for each location listed under their license; whether or not they have a policy to guide their community reinvestment, and if so to provide a copy of such; and, a list of donations made, including amount and to which institutions or organizations.

 

H.B. 7330
Became law without governor’s signature 6/25/10, Chapter 204
Amends the period of time for which a check cashier may defer the deposit of a personal check from 13 to 30 days.

 

S.B. 2177
Requires businesses operating as or taking part in small loan lending, money transfers or check cashing to provide additional information when submitting their annual license renewal. Said information would include the net profit for each location listed under their license; whether or not they have a policy to guide their community reinvestment, and if so to provide a copy of such; and, a list of donations made, including amount and to which institutions or organizations.

South Carolina

S.B. 1065
Passed Senate 4/15/10
Amends §37-3-501, relating to the definition of supervised loan, to provide that certain closed-end credit transactions are not supervised loans; and amends §37-3-503, relating to a license to make supervised loans, to provide that certain licensed deferred presentment providers may not conduct the business of making supervised loans, to provide penalties, and provides necessary definitions.

South Dakota

S.B. 173
Provides a maximum finance charge for payday loans and title loans.

Tennessee

H.B. 1713
S.B. 1427
Withdrawn 3/24/10
Decreases ownership required to be determined in control of a corporation and increases the length of time that a licensee must notify the Department of Financial Institutions of a change in location or name before such change.

 

H.B. 2636
H.B. 2764
Present law authorizes licensed deferred presentment service providers to charge a fee to defray operational costs, not to exceed the lesser of 15 percent of the face amount of the check or $30. For checks in excess of $500, the present law limit on deferred presentment fees will remain unchanged. For checks that are $500 or less, this bill changes the maximum amount of the fee that deferred presentment service providers may charge to an amount that does not exceed an annual interest rate of 100 percent on the amount of the check.

 

H.B. 2638
H.B. 2762
Requires the maker of a check requesting a deferral to be physically present in the licensee's business location; prohibits deferred presentment services to occur by telephone, mail, or the Internet.

 

H.B. 3005
S.B. 2802
Lowers the fee authorized to be charged for deferring the presentment of a check or for making a title loan.

 

H.B. 3111
S.B. 3104
Establishes a ceiling of 100 percent for interest rates on payday loans; defines "payday loan" as short-term cash loan or funds provided to an individual in anticipation of future receipt of wages.

 

H.B. 3112
S.B. 3103
Prohibits a payday lender from providing loans to borrowers via the Internet, regardless of whether the lender is located inside or outside Tennessee.

 

H.B. 3113
S.B. 3102
Requires the Department of Financial Institutions to impose a fee of $2,500 on every payday lender at each of their business locations; creates special financial literacy trust fund.

 

H.B. 3306
S.B. 3742
Changes from 25 percent to 50 percent the percentage of ownership required to be determined in control of a corporation and increases the length of time that a licensee must notify the department of financial institutions of a change in location or name before such change from five to seven days.

Texas
No Regular 2010 Session
Utah

H.B. 15
Signed by governor 3/23/10, Chapter 102
Modifies the Check Cashing and Deferred Deposit Lending Registration Act to address operational requirements related to deferred deposit lending. This bill addresses required information in annual operation statements; changes the permissible length of rollovers to 10 weeks; imposes restrictions related to communications at a place of employment; provides for an extended payment plan option; and makes technical and conforming amendments.

 

H.B. 191
Enacting clause struck 3/11/10
Modifies the Check Cashing and Deferred Deposit Lending Registration Act to address annual reporting by deferred deposit lenders. The bill adds additional items to be included in an annual operational statement of a deferred deposit lender; and makes technical and conforming amendments.

 

H.B. 366
Signed by governor 3/30/10, Chapter 393
This bill: amends definitions; provides that a pawnbroker engaged in selling, exchanging, or pawning motor vehicles is considered as coming into possession of the motor vehicles incident to the person's regular business and shall be licensed as a used motor vehicle dealer; provides that a person engaged in a title lending, check cashing, or deferred deposit lending business that comes into possession of motor vehicles incident to the person's regular business and sells the motor vehicle under contractual rights that it may have in the motor vehicle is not considered a dealer.

Vermont
none
Virginia

H.B. 188
Repeals provisions of the Payday Loan Act that authorize lenders to charge a loan fee or verification fee, thereby limiting permissible charges on payday loans to simple interest at a maximum annual rate of 36 percent.

 

H.B. 412
Tabled 2/11/10
Authorizes the governing body of any locality to adopt a resolution or ordinance that reasonably limits the number of payday lenders and of lenders engaged in the business of making secured or unsecured open-end loans that may operate within the locality. With respect to payday lenders, the State Corporation Commission is prohibited from issuing licenses for new establishments after the limit is met. With respect to open-end credit lenders, the locality is prohibited from issuing a local business license for new establishments after the limit is met.

 

H.B. 413
Tabled 2/11/10
Authorizes a locality to adopt an ordinance requiring that a special exception or a special use permit be obtained before a payday lender makes a payday loan from a location within the locality. The measure also allows a locality to adopt such an ordinance applicable to persons, other than certain licensed lenders and sellers, making certain unregulated revolving loans, including title loans. These authorizations shall not limit any existing authority of a locality.

 

S.B. 21
Repeals provisions of the Payday Loan Act that authorize lenders to charge a loan fee or verification fee, thereby limiting permissible charges on payday loans to simple interest at a maximum annual rate of 36 percent.

 

S.B. 138
Substituted by S.B. 250 2/8/10
Repeals provisions of the Payday Loan Act that authorize lenders to charge a loan fee or verification fee, thereby limiting permissible charges on payday loans to simple interest at a maximum annual rate of 36 percent.

Washington
none
West Virginia
none
Wisconsin

A.B. 55
Failed to pass pursuant to Senate Joint Resolution 1 4/28/10
Creates a maximum finance charge for certain motor vehicle title and payday loans. The bill defines “motor vehicle title loan” as a loan that is secured by an interest, other than a purchase money security interest, in the borrower’s motor vehicle, and that has an original term of three months or less. The bill defines “payday loan” as a transaction between a person and an issuer of a check in which all of the following are satisfied: 1) the person agrees to hold the check for a period of time before negotiating or presenting the check for payment; and 2) the person pays the issuer, upon accepting the check, the amount of the check less any finance charge. Under the bill, a lender, other than a bank, savings bank, savings and loan association, or credit union, who makes motor vehicle title or payday loans in the regular course of business, may not assess a finance charge that exceeds two percent per month. In addition, such a lender who makes such loans must obtain the license described above. Also, the bill requires the division to enforce the bill’s prohibition. The bill also allows a borrower to bring an action against a person who violates the bill’s requirements to recover damages in an amount equal to the greater of the following: 1) twice the amount of the finance charge in connection with the loan made to the borrower; or 2) the actual damages, including incidental and consequential damages, sustained by the borrower by reason of the violation. In addition, the bill allows the borrower to recover the costs of the action, including reasonable attorney fees.

 

A.B. 311
Failed to pass pursuant to Senate Joint Resolution 1 4/28/10
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. The bill also prohibits DFI, or any other state agency, from establishing or maintaining a database of individuals who enter into payday loans.

 

A.B. 447
Failed to pass pursuant to Senate Joint Resolution 1 4/28/10
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; 2) provide to the applicant a copy of certain written informational materials, described below, developed by the division; and 3) disclose to the applicant that he or she has the right to rescind the payday loan transaction by the end of the business day after the loan is made. 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 also imposes certain restrictions on payday loans. A payday loan may not accrue interest after the loan maturity date and may not include any penalty arising from the customer’s default or late payment except that a payday loan provider may charge a fee not to exceed $15 if the customer’s payment method is dishonored for insufficient funds. A payday loan provider may present a customer’s check for payment, or initiate an EFT from the customer’s account, only two times and the second time only if certain conditions are satisfied. A payday loan provider may not accept from a customer a check or authorization to initiate an EFT if the amount of the check or authorization exceeds the principal amount of the payday loan plus the finance charge on the payday loan. A payday loan provider may not rollover a payday loan unless the customer enters into a new payday loan transaction, including issuing a new check or executing a new authorization to initiate an electronic fund transfer. In addition, a customer has a right to rescind a payday loan, without incurring any fee, by returning the payday loan proceeds to the payday loan provider by the close of business on the next business day after the payday loan is made. 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 and costs, 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. The bill defines “rollover” or “rolled over” as the refinancing, renewal, amendment, or extension of a payday loan beyond its original maturity date, 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.

 

S.B. 530
Signed by governor with line item veto 5/18/10, Act 405
Regulates consumer small loans, creates a payday loan database, limits the areas in which a payday lender may operate, grants rule-making authority, and provides a penalty.

Wyoming
none

 

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