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Payday Lending 2011 Legislation

Payday Lending 2011 Legislation

Last Updated: December 7, 2011

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

This page addresses state legislation 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.

Twenty-eight states had pending legislation in the 2011 legislative session. Arkansas, Illinois, Mississippi, New Mexico, North Dakota, Tennessee, Texas and Wisconsin enacted legislation in 2011.

Related NCSL Web pages:

AR | CA | CO | FL | HI | IL | IN | IA | KY | MN | MS | MO | NE | NVNH | NM | NY | ND | OK | RI | SD | TN | TX | UT | VA | WA | WI |  WY
STATE
BILL SUMMARY
Alabama
none
Alaska
none
Arizona
none
Arkansas

H.B. 2021
Repeals the Check-Cashers Act, §23-52-101 et seq., to protect consumers from unlawful interest rates.

S.B. 259
Signed by governor 3/28/11, Act 720
Repeals the Check-Cashers Act, §23-52-101 et seq.

California

A.B. 1158
Passed Assembly 6/1/11
Existing law, the California Deferred Deposit Transaction Law, provides for the licensure and regulation by the commissioner of Corporations of persons engaged in the business of making or negotiating deferred deposit transactions, as defined. Existing law authorizes a licensee to defer the deposit of a customer's personal check for up to 31 days, prohibits the face amount of the check from exceeding $300, and requires each deferred deposit transaction to be made pursuant to a written agreement. This bill instead authorizes the face amount of a check for a deferred deposit transaction to be up to $500.

S.B. 365
Existing law, the California Deferred Deposit Transaction Law, provides for the licensure and regulation by the commissioner of Corporations of persons engaged in the business of making or negotiating deferred deposit transactions, as defined. Existing law requires an agreement to enter into a deferred deposit transaction to be in writing and to include specified information and disclosures. Existing law provides that a licensee shall not enter into an agreement for a deferred deposit transaction with a customer during the period of time that an earlier written agreement for a deferred deposit transaction for the same customer is in effect. This bill declares the intent of the Legislature to enact legislation that would authorize the commissioner to contract with a qualified third-party provider for the implementation of a database to aid in the enforcement of the California Deferred Deposit Transaction Law. The bill also clarifies that a licensee shall not enter into an agreement for a deferred deposit transaction with a customer during the period of time that an earlier written agreement for a deferred deposit transaction for the same customer is in effect with any licensee.

Colorado

H.B. 1290
Passed House 3/31/11
The bill specifies that a lender may charge a nonrefundable origination fee deemed fully earned as of the date of a deferred deposit loan.

Connecticut
none
Delaware
none
District of Columbia
none
Florida

H.B. 877
Laid on table 3/22/11
Provides that a title loan lender may not own or operate a title loan office that: (a) Offers or makes deferred presentment transactions as defined in §560.402; or (b) Is located within 1,000 feet of any location owned or operated by a person who shares a common ultimate equitable ownership interest with the title loan lender, if title loans or deferred presentment transactions are offered or made at such location.

S.B. 990
Died in committee 5/7/11
Preempts the regulation of motor vehicle title loans to the state. Provides that title loans are secured by a nonpurchase money security interest in a motor vehicle. Prohibits a title loan lender from also providing deferred presentment transactions. Revises the information that must be in a title loan agreement.

Georgia
none
Guam
not available online
Hawaii

H.B. 1305
Requires the Department of Commerce and Consumer Affairs to regulate the check cashing industry through registration requirements.

Idaho
none
Illinois

H.B. 1017
Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title.

H.B. 1276
Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title.

H.B. 1939
Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title.

H.B. 2314
Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title.

H.B. 2319
Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title.

H.B. 2334
Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title.

H.B. 3257
Signed by governor 8/16/11, Public Act 97-0413
Amends the Payday Loan Reform Act. Re-inserts only the provision providing that notwithstanding any other provision of law, a violation of any provision of Section 670 of the John Warner National Defense Authorization Act for Fiscal Year 2007, Public Law 109-364, or any regulation adopted pursuant thereto shall be deemed to be a violation of the Act.

S.B. 44
Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title.

S.B. 1133
Signed by governor 8/16/11, Public Act 97-0421
Amends the Payday Loan Reform Act. Limits finance charges when the first installment period is longer than the remaining installment periods. Provides that the term "consecutive days" does not include the date on which a consumer makes the final installment payment for purposes of determining eligibility.

S.B. 1375
Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title.

Indiana

H.B. 1410
Passed House 2/21/11
Provides that after December 31, 2011, a payday lender doing business in Indiana shall: (1) conspicuously display at its Indiana business locations and include on each informational pamphlet required to be provided to borrowers under current law, a toll free telephone number that borrowers may call to receive information about credit counseling services; and (2) maintain a toll free number that borrowers may call to receive such information. Defines "credit counseling service" as a nonprofit budget and credit counseling agency approved by the United States Trustee or a bankruptcy administrator. Requires a lender to provide through the required toll free telephone number the name, street address, telephone number, and Internet web site address for at least three approved credit counseling services. After December 31, 2011, requires a lender to include on: (1) each required display in the lending area of the lender's Indiana business locations; and (2) each required pamphlet provided to a borrower; an Internet Web site address that borrowers may access to receive information about credit counseling services. Provides that the Web site address may be for: (1) a web page maintained by the lender to allow borrowers to access information for at least three approved credit counseling services; or (2) the United States Trustee's Web page through which the borrower may directly access information on credit counseling services in Indiana. Requires a lender to update, not later than December 31 of each year, the information provided through: (1) the lender's toll free telephone number; and (2) any Web page maintained by lender; to ensure that the information is consistent with that available from the United States Trustee or a bankruptcy administrator. Provides that the toll free telephone number required to be maintained: (1) may connect a borrower to an automated system, such as an interactive voice response system; and (2) may be a telephone number designed to receive customer service calls generally, if the option to receive the required information is in the first menu of options given to the borrower.

Iowa

H.F. 337
The bill provides that the annual percentage rate applicable to delayed deposit services 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 services 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, 2011. Further, the bill requires a licensee making the election, by October 1, 2011, 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.

H.S.B. 156
The bill changes the number of checks which a delayed deposit services business licensee can hold from any one maker from two checks to one check, and prohibits a licensee from entering into another delayed deposit services transaction with the maker of the check if the licensee presently has a delayed deposit services transaction outstanding with the maker, or if the maker has a delayed deposit services transaction outstanding with another licensee in Iowa. For purposes of compliance with the one transaction limitation, the bill directs the superintendent of banking to develop and implement a statewide system by which a licensee may determine whether a maker of a check has an outstanding delayed deposit services transaction, the number of transactions the maker has outstanding, the date on which a transaction concluded, and any other information necessary to comply with the provisions of Code chapter 533D. The bill states that the superintendent may by rule specify the form and content of the system, which at a minimum shall ensure that the information entered into or stored by the system is accessible to and usable by licensees, and secured against public disclosure, tampering, theft, or unauthorized acquisition or use. The bill requires licensees to enter the information at the time a delayed deposit services transaction is entered into, and update the information on a weekly basis up to and including when the transaction is concluded. These requirements shall continue to apply to a licensee who discontinues operation of a delayed deposit services transaction business until all transactions entered into while the business was in operation have been concluded. The bill permits the superintendent to enter into a contract with a vendor or service provider for development and administration of the system, and authorizes that vendor or service provider to charge licensees a fee for access to or use of the system in an amount to be determined by the superintendent by rule, subject to a $1 maximum. The bill provides that information contained in the system shall not be subject to public inspection or disclosure and is not subject to discovery, subpoena, or other compulsory process except in an action brought under Code chapter 533D. The bill directs the superintendent to establish by rule requirements for the retention, archiving, and deletion of information entered into or stored by the system.

S.F. 113
Became S.F. 388 3/2/11
This bill modifies provisions relating to the regulation of delayed deposit services businesses. The bill deletes current provisions prohibiting delayed deposit services licensees from charging a fee in excess of $15 on the first $100 on the face amount of a check or more than $10 on subsequent $100 increments on the face amount of the check for services provided by the licensee. The bill substitutes a provision prohibiting imposition of a finance charge in excess of 36 percent per annum as computed pursuant to the federal Truth in Lending Act, times the face amount of the check. The bill defines “finance charge” to mean all charges payable directly or indirectly as a condition of a delayed deposit service transaction, including interest, fees, service charges, renewal charges, credit insurance premiums, and any ancillary product sold in connection with a delayed deposit service transaction. The bill provides, with respect to prohibited acts by a licensee, that a licensee may not engage in any device or subterfuge intended to evade the requirements of Code chapter 533D, including but not limited to assisting a maker of a check in entering into a delayed deposit service transaction at a rate of interest prohibited pursuant to Iowa law, entering into transactions disguised as personal property sales and leaseback transactions, or disguising amounts received pursuant to a transaction as cash rebates for the pretextual installment sale of goods or services, or assisting a maker of a check in entering into a transaction through the mail, telephone, internet, or any other electronic means, regardless of whether the licensee has a physical location in this state. The bill additionally provides that a delayed deposit service transaction entered into which violates the Code chapter may not be enforced with respect to a maker of a check, that any payment made or collected in connection therewith is void, and that the licensee does not have the right to collect, receive, or retain any payments, interest, or finance charges. Further, the bill deletes a penalty provision authorizing the superintendent of banking to impose a civil penalty not to exceed $5,000 per violation. The bill states that a violation of the Code chapter constitutes a consumer fraud pursuant to the provisions of Code section 714.16, and that the applicable provisions relating to investigation, injunctive relief, and penalties shall apply to Code chapter 533D unless more prescriptive and stringent provisions are otherwise specified in the Code chapter. The primary effect of this change is to make violations subject to a civil penalty pursuant to Code §714.16, subsection 7, in an amount not to exceed $40,000 per violation, and in addition a civil penalty of not more than $5,000 for each day of intentional violation of a temporary restraining order, preliminary injunction, or permanent injunction.

S.F. 388
This bill modifies provisions relating to the regulation of delayed deposit services businesses. The bill deletes current provisions prohibiting delayed deposit services licensees from charging a fee in excess of $15 on the first $100 on the face amount of a check or more than $10 on subsequent $100 increments on the face amount of the check for services provided by the licensee. The bill substitutes a provision prohibiting imposition of a finance charge in excess of an amount equal to 36 percent per annum as computed pursuant to the federal Truth in Lending Act. The bill defines “finance charge” to mean all charges payable directly or indirectly as a condition of a delayed deposit service transaction, including interest, fees, service charges, renewal charges, credit insurance premiums, and any ancillary product sold in connection with a delayed deposit service transaction. The bill provides, with respect to prohibited acts by a licensee, that a licensee may not engage in any device or subterfuge intended to evade the requirements of Code chapter 533D, including but not limited to assisting a maker of a check in entering into a delayed deposit service transaction at a rate of interest prohibited pursuant to Iowa law, entering into transactions disguised as personal property sales and leaseback transactions, or disguising amounts received pursuant to a transaction as cash rebates for the pretextual installment sale of goods or services, or assisting a maker of a check in entering into a transaction through the mail, telephone, internet, or any other electronic means, regardless of whether the licensee has a physical location in this state. The bill additionally provides that a delayed deposit service transaction entered into which violates the Code chapter may not be enforced with respect to a maker of a check, that any payment made or collected in connection therewith is void, and that the licensee does not have the right to collect, receive, or retain any payments, interest, or finance charges. Further, the bill deletes a penalty provision authorizing the superintendent of banking to impose a civil penalty not to exceed $5,000 per violation. The bill states that a violation of the Code chapter constitutes a consumer fraud pursuant to the provisions of Code section 714.16, and that the applicable provisions relating to investigation, injunctive relief, and penalties shall apply to Code chapter 533D unless more prescriptive and stringent provisions are otherwise specified in the Code chapter. The primary effect of this change is to make violations subject to a civil penalty pursuant to Code §714.16, subsection 7, in an amount not to exceed $40,000 per violation, and in addition a civil penalty of not more than $5,000 for each day of intentional violation of a temporary restraining order, preliminary injunction, or permanent injunction.

Kansas
none
Kentucky

H.B. 182
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 establishes 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, and 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; and 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 and the person who paid the interest, or his or her legal representative, may recover twice the amount paid in any action against the lender if commenced within two years of the deferred deposit transaction.

Louisiana
none
Maine
none
Maryland
none
Massachusetts
none
Michigan
none
Minnesota

H.F. 1195
Indefinitely postponed 5/21/11
S.F. 1268
Passed Senate 5/20/11
Authorizes the imposition of certain fees and charges in connection with certain loan transactions.

Mississippi

H.B. 16
Died in committee 2/1/11
Creates the "Mississippi Alternative Loan Act"; defines certain terms; to prohibit any person from engaging in the business of lending money, except as authorized by this act; provides for applications for a license for those 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 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. 216
Died in committee 2/1/11
Amends §§75-67-313, 75-67-413 and 75-67-519 to provide that the maximum amount that pawnbrokers, title pledge lenders and check cashers may charge for their services shall not exceed an annual percentage rate of 25 percent per annum on the amount of the principal amount that remains unpaid.

H.B. 455
Signed by governor 2/24/11, Chapter 309
Reenacts §§75-67-501 through 75-67-537, which are the Mississippi Check Cashers Act; amends reenacted §75-67-505 to provide that any transaction that would be subject to the Check Cashers Act that is made by a person who does not have a valid license under the act shall be null and void; amends reenacted §75-67-519 to provide that the period of a delayed deposit check of not more than $250 may be for up to 30 days, and the period of a delayed deposit check of more than $250 but not more than $500 shall be for 28 to 30 days, as selected by the customer, with the licensee having the option to deposit or collect the check; increases the maximum face amount of a delayed deposit check to $500 and increase the maximum amount that a customer may have outstanding at any time to $500; revises the maximum fee for cashing a delayed deposit check from a percentage of the face value of the check to a stated dollar amount per $100 advanced; provides that the maximum fee for cashing a delayed deposit check of not more than $250 shall be $20 per $100 advanced, and the maximum fee for cashing a delayed deposit check of more than $250 but not more than $500 shall be $21.95 per $100 advanced; requires licensees to provide the customer a pamphlet prepared by the commissioner of Banking that describes general information about the transaction and about the customer's rights and responsibilities in the transaction and includes the consumer hotline phone number to the Mississippi Department of Banking and Consumer Finance and to the Mississippi attorney general's office, before entering into a delayed deposit transaction; amends §75-67-539 to extend the date of the repealer on the Check Cashers Act.

H.B. 457
Died in committee 2/1/11
Reenacts §§75-67-501 through 75-67-537, which are the Mississippi Check Cashers Act; amends reenacted §75-67-505 to provide that any transaction that would be subject to the check cashers act that is made by a person who does not have a valid license under the act shall be null and void; amends reenacted §75-67-519 to provide that the period of a delayed deposit check shall be for 28 days instead of up to 30 days; increases the maximum face amount of a delayed deposit check and increase the maximum amount that a customer may have outstanding at any time; directs the commissioner of Banking to provide for the development of a database in which licensees must record each delayed deposit transaction in order to prevent violations of the maximum amount that may be outstanding; authorizes the commissioner to charge a fee to licensees as necessary to maintain the database system; revises the fee that licensees may charge for cashing a delayed deposit check from a percentage of the face value of the check to a stated dollar amount per $100 advanced; requires licensees to provide the borrower a pamphlet prepared by the commissioner that describes general information about the transaction and about the borrower's rights and responsibilities in the transaction, before entering into a delayed deposit transaction under this section or an alternative loan transaction under §75-67-520; creates new §75-67-520 to authorize licensees to make unsecured loans in amounts less than $1,500 as an alternative to, and not in addition to, any delayed deposit transaction authorized under the check cashers act; authorizes licensees to charge an acquisition charge for making the loan and an installment account handling charge; provides for the full or partial refund of those charges if the borrower repays the loan early; authorizes the licensees to charge an additional late charge when a scheduled payment is in default or delinquent; provides for the minimum and maximum term of any loan made under this section; provides that the principal loan amount and charges shall be repaid in installments, which shall be payable at approximately equal periodic intervals of time and shall be so arranged that no installment is substantially greater in amount than any preceding installment; authorizes licensees to charge a bad check charge if a check or other instrument given in full or partial payment of a loan is dishonored by the depository institution; specifies the licensee's duties with regard to making and receiving payments for a loan under this section; to provide for forfeiture of all charges by the licensee if any charge in excess of that expressly permitted by this section is contracted for or received; amends §75-67-539 to extend the date of the repealer on the check cashers act.

H.B. 780
Died in committee 2/1/11
Amends §75-67-519 to prohibit check cashers from cashing a delayed deposit check for any person who has an outstanding delayed deposit check with another check casher that has not been repaid in full; directs the commissioner of Banking to provide for the development of a database in which check cashers must record each delayed deposit transaction in order to prevent violations of the maximum amount that may be outstanding; authorizes the commissioner to charge a fee to check cashers as necessary to maintain the database system; provides that the maximum amount that check cashers may charge for cashing a delayed deposit check shall not exceed an annual percentage rate of 36 percent per annum on the amount of the principal amount that remains unpaid.

S.B. 2242
Died in committee 2/1/11
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. 2666
Died in committee 2/1/11
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 create the Mississippi Title Pledge Act; repeals §§ 75-67-501 through 75-67-539, which create the Mississippi Check Cashers Act.

S.B. 2683
Died in committee 2/1/11
Amends §75-67-519 to revise the maximum fee and length of deferral on loans made by check casher licensees; amends §§75-67-505 and 75-67-515 to increase the license renewal fees and examination fees paid to the commissioner of Banking by check casher licensees.

S.B. 2739
Died in committee 2/1/11
Reenacts §§75-67-501 through 75-67-537, which create the Mississippi Check Cashers Act and provide for the licensing of check cashers; amends §75-67-539 to extend the repealer on those reenacted sections.

Missouri

H.B. 132
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 a lender 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 previous 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 for each day that a neglect, failure, or refusal continues; to impose an order of rescission, restitution, or disgorgement against a person or entity who has violated any laws relating to consumer loans; or to order any other relief as the court deems appropriate; (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 a payment required every two weeks so that the loan will fully amortize in 90 days. No other charges are permitted except as provided in the bill including, but not limited to, late fees.

H.B. 359
This bill establishes the Payday Loan Protection Act regarding unsecured loans of $500 or less, commonly known as payday loans. In its main provisions, the bill: (1) Requires a lender to provide disclosure of the annual percentage rate, finance charges, amount financed, and payment totals; (2) Requires a lender to allow a borrower to repay the full amount of the loan in one payment on the date the payment is due or to allow the borrower to repay the loan in four separate payments in which the principal amount of the loan is reduced by 25 percent upon each payment; (3) Allows a lender to charge and receive interest at a simple annual rate not to exceed 18 percent and not to exceed $80 on each loan. Currently, a lender cannot charge an amount of accumulated interest and fees in excess of 75 percent of the initial loan amount for the entire term of the loan and all renewals; and (4) Allows a lender to charge origination and documentation fees on each loan and specifies that any fees charged on a returned check must not be considered a fee or charge for purposes of this provision.

H.B. 522
This bill changes the laws regarding unsecured loans of $500 or less, commonly known as payday loans. In its main provisions, the bill: (1) Limits the interest and other fees that may be charged on the loans to no more than $15 per $100 of principal for the first 30 days of the loan and not more than three percent per month thereafter; (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 maintain an action in circuit court against any lender who fails, refuses, or neglects to comply with the provisions of the bill or any law relating to consumer loans to issue an injunction, restraining order, or declaratory judgment; to impose a civil penalty of up to $1,000 per day for each day that a violation continues; or to impose an order of rescission, restitution, or disgorgement; (5) Specifies that the limitations on interest and other fees apply to all lenders, whether or not they are properly licensed pursuant to Chapter 408, RSMo; and (6) Changes the requirement that the Division of Finance within the Department of Insurance, Financial Institution and Professional Registration report to the General Assembly regarding the number of licenses issued and other specified loan information from every other year to every year.

H.B. 656
Passed House 4/19/11
This bill changes the laws regarding unsecured loans of $500 or less, commonly known as payday loans. In its main provisions, the bill: (1) Specifies that any cost associated with a returned check is not considered as a fee or charge under payday lending laws; (2) Requires a licensed lender to conspicuously post in the lobby of its office in at least 14-point bold type the fee in terms of dollars charged per $100 loaned in addition to the currently required maximum annual percentage rate; (3) Allows a lender to renew a loan up to three times if a borrower requests in writing and pays at least $25 of the original principal amount. Currently, a lender is required to renew a loan up to six times if a borrower requests it in writing and pays at least five percent of the original principal amount; (4) Allows a borrower to enter into an extended payment plan once in any 12-month period with an individual lender by completing a written agreement to repay the amount owed in four equal installments or less in 60 days or less. Interest cannot accrue and the amount can be paid in full at any time without penalty. If the borrower fails to pay the amount owed when due, the lender can accelerate the unpaid loan balance. No other payday loan can be entered into until the extended payment plan is paid in full; (5) Requires the lender to conspicuously post in the lobby of its office in at least 14-point bold type a notice that a borrower can enter into an extended payment plan and that brochures are available at the counter containing the terms and conditions of the plan; (6) Limits the total interest and fees on any single loan authorized to 60 percent of the initial loan amount. Currently, the limit is 75 percent of the initial loan amount; (7) Prohibits a lender from making a loan to a borrower until the next business day after a borrower has paid or otherwise satisfied in full a previous payday loan. Currently, once a borrower has completed a loan, he or she may enter into a new loan with a lender; (8) Prohibits a lender from threatening, or causing to be instigated, criminal proceedings against a borrower if a check, given as security for a loan, is dishonored. Any lender that knowingly violates this provision must pay the borrower, in addition to any other remedies available by law, three times the amount of the dishonored check unless the borrower's account was closed by the borrower prior to the agreed-upon date of negotiation or the borrower has stopped payment on the check; (9) Requires a lender when collecting or attempting to collect a payday loan to comply with the restrictions and prohibitions applicable to debt collectors contained in the federal Fair Debt Collection Practices Act regarding harassment or abuse, false or misleading misrepresentations, and unfair practices in collections; and (10) Establishes a pilot program within the Division of Finance in the Department of Insurance, Financial Institutions and Professional Registration to develop a real-time statewide compliance system for licensed payday lenders to record each payday loan transaction. No fee exceeding 10 cents per transaction can be charged for the administration of this program. The division must submit a preliminary report to the General Assembly by March 1, 2012, and a final report by June 1, 2012, documenting the usefulness of the system and the general compliance of licensees. The system must be fully implemented by September 1, 2011, and will expire August 31, 2012.

H.B. 890
This bill changes the laws regarding unsecured loans of $500 or less, commonly known as payday loans. In its main provisions, the bill: (1) Specifies that any cost associated with a returned check is not to be considered as a fee or charge under payday lending laws; (2) Requires a licensed lender to conspicuously post in the lobby of its office in at least 14-point bold type the fee in terms of dollars charged per $100 loaned in addition to the currently required maximum annual percentage rate; (3) Allows a lender to renew a loan up to three times if a borrower requests in writing and pays at least $25 of the original principal amount. Currently, a lender is required to renew a loan up to six times if a borrower requests in writing and pays at least five percent of the original principal amount; (4) Prohibits a borrower from having more than $1,500 in loans at one time; (5) Allows a borrower to enter into an extended payment plan once in any 12-month period with an individual lender by completing a written agreement to repay the amount owed in four equal installments or less in 60 days or less. Interest cannot accrue and the amount can be paid in full at any time without penalty. If the borrower fails to pay the amount owed when due, the lender can accelerate the unpaid loan balance. No other payday loan can be entered into until the extended payment plan is paid in full; (6) Requires the lender to conspicuously post in the lobby of its office in at least 14-point bold type a notice that a borrower can enter into an extended payment plan and that brochures are available at the counter containing the terms and conditions of the plan; (7) Limits the total interest and fees to 60 percent of the initial loan amount on any single loan authorized. Currently, the amount is 75 percent of the initial loan amount; (8) Prohibits a lender from making a loan to a borrower until the next business day after the borrower has paid or otherwise satisfied in full a previous payday loan; (9) Prohibits a lender from threatening, or causing to be instigated, criminal proceedings against a borrower if a check, given as security for a loan, is dishonored. Any lender that knowingly violates this provision must pay the borrower, in addition to any other remedies available by law, three times the amount of the dishonored check unless the borrower's account was closed by the borrower prior to the agreed-upon date of negotiation or the borrower has stopped payment on the check; (10) Requires a lender when collecting or attempting to collect a payday loan to comply with the restrictions and prohibitions applicable to debt collectors contained in the federal Fair Debt Collection Practices Act regarding harassment or abuse, false or misleading misrepresentations, and unfair practices in collections; and (11) Establishes a pilot program within the Division of Finance in the Department of Insurance, Financial Institutions and Professional Registration to develop a real-time statewide compliance system for licensed payday lenders to record each payday loan transaction. The division must submit a preliminary report to the General Assembly by March 1, 2012, and a final report by June 1, 2012, documenting the usefulness of the system and the general compliance of licensees. The system must be fully implemented by September 1, 2011, and will expire August 31, 2012.

S.B. 295
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 1 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. Lenders shall make certain disclosures to consumers at loan signing, including the duration of the loan, amount and date of payments due, and amount of interest and fees to be charged through the duration of the loan. 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 days for repayment and a payment shall be required every two weeks. The lender's exclusive remedy against consumers who deliver checks that are not honored in relation to the loan shall be a breach of contract claim and lenders shall be barred from bringing a civil action for passing bad checks. This act establishes a pilot program whereby the Division of Finance is charged to develop a real-time statewide compliance system for licensed payday lenders to record each payday loan transaction. The division shall deliver reports to the legislature documenting the usefulness of the system and the general compliance of licensees. The program shall be fully implemented by September 1, 2011 and sunset on August 31, 2012.

Montana
none
Nebraska

L.B. 553
Relates to the Delayed Deposit Services Licensing Act; amends §§45-901, 45-906, 45-915, 45-919, 45-921, 45-925, and 45-927, Reissue Revised Statutes of Nebraska; states intent; prohibits certain acts; provides fees; provides penalties; creates a database; provides powers and duties for the director of Banking and Finance; changes provisions relating to fines; harmonizes provisions; and repeal the original sections.

Nevada

A.B. 541
Existing law establishes certain requirements that are applicable to a person who has been issued a license to operate a check-cashing service, deferred deposit loan service, high-interest loan service or title loan service and who makes a new deferred deposit loan or high-interest loan to a customer to pay the balance of an outstanding loan. Existing law also provides an exemption from those requirements if the licensee, in making the new deferred deposit loan or high-interest loan, complies with certain conditions, one of which is that the licensee does not commence any civil action or process of alternative dispute resolution on a defaulted loan or any extension or repayment plan thereof. (NRS 604A.480) This bill provides that, to comply with that condition, the licensee must include in the written loan agreement for the new deferred deposit loan or high-interest loan a provision which sets forth that the licensee will not commence any civil action or process of alternative dispute resolution on the outstanding loan or any extension or repayment plan thereof.

New Hampshire

S.B. 186
Removes the exemption from the consumer protection act for trade or commerce under the jurisdiction of the bank commissioner, the director of securities regulation, the insurance commissioner, the public utilities commission, the financial and insurance regulators from other states, and federal banking or securities regulators with authority to regulate unfair or deceptive trade practices in regulating small loans, title loans and payday loans. Permits the banking department to investigate unfair or deceptive banking practices in conjunction with the attorney general. Removes the exclusive authority of the securities division to investigate unfair or deceptive trade practices under the jurisdiction of the director of securities regulation.

New Jersey
none
New Mexico

H.B. 337
Signed by governor 4/6/11, Chapter 105
Relates to financial institutions; amends the New Mexico Small Loan Act of 1955; requires licensees to file annual reports; provides penalties; requires the Financial Institutions Division of the Regulation and Licensing Department to prepare an annual report.

S.B. 299
Amends the New Mexico Bank Installment Loan Act of 1959 and the New Mexico Small Loan Act of 1955; requires that consumer loans of $2,500 or less be made under the New Mexico Small Loan Act of 1955; requires a database and amends reporting requirements for payday loans.

S.B. 305
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; repealing a section of the New Mexico Small Loan Act of 1955.

New York

A.B. 3288
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.

North Carolina
none
North Dakota

H.B. 1130
Signed by governor 4/11/11
Creates and enacts §13-08-05.1 and two new sections to chapter 13-09 of the North Dakota Century Code, relating to notice regarding change of name and address of licensed deferred presentment service providers and money transmitters and prohibited acts and practices of licensed money transmitters; amends and reenacts §§13-08-02 and 13-08-11, subsection 6 of §13-08-12, §§13-08-14 and 13-08-14.1, subsection 7 of §13-09-02, subsection 3 of §13-09-14, and §13-09-17 of the North Dakota Century Code, relating to license requirements, retention of records, licensee transaction procedures, suspension and revocation of license, suspension and removal of agency officers and employees, definition of electronic instruments regarding deferred presentment service providers, and money transmitters; and to provide a penalty.

H.B. 1233
Withdrawn 1/14/11
Relates to payday loan fees.

Ohio
none
Oklahoma

H.B. 1198
Relates to consumer credit; creates the Task Force on Payday Lenders and Rental Purchase Lessors; directs the Task Force to review the Deferred Deposit Lending Act and payday lending and rental purchase laws in other states and to review the topic of requiring payday lenders to comply with the interest caps on consumer loans.

S.B. 503
Relates to the Department of Consumer Credit; relate to prescription of fees and deposit of fees for the Deferred Deposit Lending Act.

Oregon
none
Pennsylvania
none
Puerto Rico
none
Rhode Island

H.B. 5242
This act 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. It also requires the licensee to be incorporated or qualified to do business in the state. This act also requires the licensee to report all financial transactions concerning checks sold, cashed, transfers, amount of loans made and other financial information.

H.B. 5562
This act repeals sections of the general laws allowing deferred deposit providers, also known as "payday lenders."

H.B. 5834
This act reduces the amount a check cashing business can charge for deferred deposit transaction fees.

S.B. 288
This act repeals sections of the general laws allowing deferred deposit providers, also known as "payday lenders."

S.B. 503
This act provides that no check-cashing licensee would charge deferred deposit transaction fees in excess of five percent of the amount of funds advanced.

S.B. 505
This act 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. It also requires the licensee to be incorporated or qualified to do business in the state. This act also requires the licensee to report all financial transactions concerning checks sold, cashed, transfers, amount of loans made and other financial information.

S.B. 1045
This act adds further rights and obligations to those operating check cashing businesses and those using the services provided, including a payment plan.

South Carolina
none
South Dakota

H.B. 1223
Revises licensure fees for, and prohibits certain harassment practices by, persons engaging in the business of payday loans and title loans.

H.B. 1224
Provides a maximum finance charge for payday loans and title loans.

Tennessee

H.B. 1391
Substituted 5/4/11
S.B. 1557
Signed by governor 5/20/11, Public Chapter 205
Increases percentage of ownership required to be deemed in control of a deferred presentment licensee from 25 percent to 50 percent and lengthens notification requirement for changing business location or name from five days to seven days before such a change.

H.B. 1392
S.B. 1554
Redefines check and defines payment instrument for the purposes of the Deferred Presentment Services Act.

H.B. 1393
S.B. 1553
Redefines check and defines payment instrument for the purposes of the Deferred Presentment Services Act.

H.B. 1548
S.B. 1179
Authorizes specified fees relative to deferred presentment services.

H.B. 1550
S.B. 1486
Lowers the fees authorized to be charged for deferring the presentment of a check or for making a title loan and lowers the interest authorized to be charged for making a title loan.

H.B. 1911
S.B. 1736
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. 1965
S.B. 2033
Lowers the fees authorized to be charged for deferring the presentment of a check or for making a title loan and lowers the interest authorized to be charged for making a title loan.

Texas

H.B. 2592
Signed by governor 6/17/11, Chapter 1301
This bill amends the Finance Code to require a credit access business to post in a conspicuous location in its place of business and on any business Internet Website it maintains a schedule of all fees to be charged for services performed in connection with payday loans or auto title loans; directory information for the Office of Consumer Credit Commissioner, including the number for the office's consumer helpline; and an advisory notice that such loans are not intended to meet long-term needs and that refinancing rather than paying the debt in full when due will incur additional charges. The bill requires a credit access business, before performing loan services, to provide to a consumer a disclosure adopted by the Finance Commission of Texas regarding the interest, fees, and annual percentage rates to be charged on a payday or auto title loan relative to the interest, fees, and annual percentage rates charged for alternative forms of consumer debt and other information relating to the effect of renewing or refinancing such payday or auto title loans for periods of varying duration and the typical payment patterns in the repayment of such loans. A credit access business that obtains or assists a consumer in obtaining an auto title loan also must provide a notice warning of the consequences of a default on such a loan. The bill authorizes the consumer credit commissioner to assess an administrative penalty against a credit access business that knowingly or willfully violates the law.

H.B. 2593
Postponed 5/12/11
Adds a new subchapter H to Finance Code, Ch. 393 to regulate certain characteristics of payday and auto title loans. The subchapter defines a “credit access business” (CAB) as a credit services organization (CSO) that obtained for a consumer or assisted a consumer in obtaining an extension of consumer credit in the form of a payday loan or an auto title loan. The bill establishes limits on the cash value of a payday or auto title loan. These limits would be scaled to the borrower’s gross family income and tiered based on whether that gross family income was above or below 100 percent of the federal poverty level for a family of four. The bill requires a payday or auto title loan to be payable in two-week or one-month increments or in a single payment, and the bill requires partial payments of the loan principal to be accepted. Under the bill, a payday loan could not be renewed, refinanced, or partially paid more than four times if the loan was payable monthly or six times if the loan was payable every two weeks. If a loan had been renewed, refinanced, or partially paid the maximum number of times allowed but still was not fully paid off, a CAB could arrange an extended repayment plan for the consumer but could not charge fees in connection with such a plan. An extended repayment plan would have to consist of four equal payments of principal and interest, with all principal and interest paid in full with the fourth payment. The plan payments would have to occur with the same two-week or one-month frequency that was initially required in the loan. A borrower would default if he or she failed to make any scheduled payment under the extended repayment plan.

H.B. 2594
Signed by governor 6/17/11, Chapter 1302
The bill amends the Finance Code to set out provisions relating to the licensing and regulation of a credit access business, which is defined as a credit services organization that obtains for a consumer or assists a consumer in obtaining an extension of consumer credit in the form of a deferred presentment transaction or a motor vehicle title loan. The bill authorizes a credit access business to assess fees for its services as agreed to between the parties and prohibits a fee from being charged unless it is disclosed. Requires a credit services organization to obtain a license for each location at which the organization operates as a credit access business in performing the services described above and sets out provisions relating to the application for and issuance of that license. The bill requires the filing of a surety bond in a specified amount, if so required by the consumer credit commissioner, or the maintenance of a surety account held in trust in lieu of the surety bond filing; requires the commissioner to conduct an investigation of the application before issuing a license; requires the commissioner to approve an application and issue a license on a finding that an applicant meets certain financial criteria and sets deadlines for the approval or denial of the application; provides for the disposition of the application and investigation fees on denial of the application; requires each license to state the name of the license holder and the address associated with the license; requires a display of the license at the place of business stated on the license; requires the license holder to maintain minimum net assets as specified; requires payment of an annual license fee and provides for the expiration of the license on failure to pay that fee; establishes grounds for a license suspension or revocation; requires the filing of a decision regarding a suspended or revoked license and the associated evidence in the commissioner's public records; provides for the reinstatement of a suspended license under certain conditions and for the issuance of a new license after revocation; provides for the voluntary surrender of a license; establishes the effect of a license being suspended, revoked, or surrendered; requires a license holder to notify the commissioner before moving an office from the location specified on the license; requires commissioner approval for the transfer or assignment of a license; vests the duty to administer these licensing provisions in the office of the consumer credit commissioner; prohibits providing or advertising the applicable services without a license; establishes restrictions on off-site advertising; requires compliance with federal laws and regulations applicable to the extension of consumer credit to military borrowers; makes certain debt collection practices that are violations of other state law violations of these licensing provisions; and requires the filing of a credit access business's quarterly report with the consumer credit commissioner and the payment by each credit access business or license holder of an annual assessment for the Texas Financial Education Endowment to improve consumer credit, financial education, and asset-building opportunities in Texas. The bill authorizes the Finance Commission of Texas to adopt rules for purposes relating to the licensing and regulation of credit access businesses. Requires the consumer credit commissioner to assess an administrative penalty against a credit access business that knowingly and willfully violates or causes a violation of statutory provisions relating to credit services organizations or a rule adopted under those provisions.

H.B. 3165
Relates to notice requirements for licensed lenders of deferred presentment transactions and motor vehicle certificate of title loans.

H.B. 3225
Relates to the renewal of a deferred presentment transaction.

H.B. 3786
S.B. 1862
Relates to the requirements for certain extensions of credit to consumers.

Utah

H.B. 113
Enacting clause struck 3/10/11
This bill modifies the Check Cashing and Deferred Deposit Lending Registration Act to address when a person is ineligible to obtain a deferred deposit loan and to provide for the creation of a database.

Vermont
none
Virginia

H.B. 1441
Caps the rate of interest that may be charged on motor vehicle title loans, payday loans, and open-end credit plans at 36 percent per year.

S.B. 752
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. 933
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

H.B. 1195
Passed House 3/1/11
S.B. 5601
Clarifies that a license and endorsement are needed to make small loans.

H.B. 1644
S.B. 5600
Clarifies licensing requirements for any person who makes a small loan. Prohibits small loan lead generation unless certain conditions are met. Makes certain activities an unranked Class B felony.

H.B. 1678
Eliminates the cap on the total number of small loans a borrower may have in a 12-month period.

H.B. 1810
Eliminates the cap on the total number of small loans a borrower may have in a 12-month period and imposes a maximum interest rate of 36 percent per annum.

H.B. 1838
Prohibits small loan lead generation unless certain conditions are met. Makes unlicensed small loan lead generation a Class B felony.

H.B. 1918
S.B. 5602
Allows a check casher or check seller that has obtained the required small loan endorsement to charge interest or fees for small loans not to exceed in the aggregate 36 percent per annum.

H.B. 2151, Second Special Session
Reduces the number of small loans a borrower may have in a twelve-month period and imposes a maximum interest rate of 36 percent per annum.

S.B. 5547
Removes the cap on the maximum number of small loans a borrower may have in a 12-month period.

West Virginia
none
Wisconsin

A.B. 40
Signed by governor with line-item veto 6/26/11, Act 32
Amends payday lending provisions; requires income verification with new customers; provides that if a payday loan is not repaid, the lender can charge up to 2.75 interest rate as specified and specifies updates on the payday lending database.

A.B. 150
This bill limits the interest rate that a payday loan licensee may charge, before the maturity date, on a payday loan to an annual percentage rate of 36 percent. A payday loan on which a greater rate of interest is charged is not enforceable.

S.B. 99
This bill limits the interest rate that a payday loan licensee may charge, before the maturity date, on a payday loan to an annual percentage rate of 36 percent. A payday loan on which a greater rate of interest is charged is not enforceable.

Wyoming

H.B. 231
Provides for notification of pay-day check cashing laws; provides for a limit on amount financed; modifies interest charges and maximum term; provides a penalty for a post-dated check cashier who violates this act as specified; allows for suspension of a post-dated check casher's license.

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