Payday Lending 2014 Legislation

1/13/2015

Payday Loan Application FormPayday lending, or deferred presentment, 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.

In the 2014 legislative session, 23 states addressed legislation regarding payday lending. California, Florida, Idaho, Louisiana, Maine, Oklahoma, Rhode Island, Utah and Wyoming enacted payday lending legislation.

PLEASE NOTE:  The summaries should be used for general informational purposes and not as a legal reference. NCSL is unable to provide assistance or guidance to citizens or businesses regarding payday loan laws and practices. If you have questions regarding the application of a state law to a specific payday loan, please contact the Office of the Attorney General in your state.

The box allows you to conduct a full text search ortype the state name.

State Bill Number Bill Summary
Payday Lending 2014 Legislation
Alabama

H.B. 145

Passed House 3/13/14

Relates to deferred presentment transactions; requires licensees to use a database designated by the supervisor; and requires each licensee to report within a specified time certain information to the supervisor and the supervisor to publish the aggregated data to the public.

Alabama H.B. 146

Under existing law, deferred presentment transactions, commonly referred to as payday loans, are regulated by the state Banking Department pursuant to the Deferred Presentment Services Act. This bill adds to this act the term "Principal Balance" and defines the term. This bill provides that a person who is not exempted from the Deferred Presentment Services Act would be subject to the provisions of this act. This bill provides that any loan contract entered into in violation of the act would be void. This bill imposes limits on the amount of interest that could be charged for a loan. This bill prohibits a licensee from extending a loan to a customer who has an outstanding deferred presentment transaction with a value of $500 or more, who has six or more deferred presentment transactions from all licensees in any 12-month period, an extended repayment with a licensee until 14 days after the plan is paid in full, or the customer or their spouse or dependent is a member of the military. This bill extends the time in which payment of a check may be deferred. This bill provides that a licensee may not use or threaten force or violence against a customer and limit the threatening of criminal prosecution against a customer. This bill provides that the period of the deferred presentment transaction would not begin until the customer receives the funds from the licensee. This bill requires licensees to use a database designated by the supervisor to ensure that a customer does not have any deferred presentment transaction over $500. This bill requires each licensee to report within a specified time certain information to the supervisor.

Alabama H.B. 587

This bill allows a customer to repay a deferred presentment transaction over a six month period. This bill forbids the extension of a deferred presentment transaction. This bill decreases the extended repayment option from four months to three months. This bill allows a licensee to collect a bad check fee for each bad check presented. This bill requires licensees to use a database designated by the supervisor to ensure that a customer does not have any deferred presentment transaction over $500. This bill requires each licensee to report within a specified time certain information to the supervisor and the supervisor to publish the aggregated data to the public.

Alabama S.B. 381

This bill further licenses and regulates the title loan business. This bill provides definitions. This bill requires licensure of title loan lenders and offices. This bill provides for charges, interest, and fees concerning title loans. This bill provides that a person who is exempted from the Deferred Presentment Services Act would be subject to the provisions of this act. This bill provides that any loan contract entered into in violation of this act would be void. This bill imposes limits on the amounts of interest that could be charged for a loan; prohibits a licensee from extending a loan to a customer who has an outstanding deferred presentment transaction with a value of $500 or more, who has six or more deferred presentment transactions from all licensees in any 12-month period, an extended repayment with a licensee until 14 days after the plan is paid in full, or the customer or spouse or dependent of the customer is a member of the military. This bill extends the time in which payment of a check may be deferred and provides that the period of the deferred presentment transaction would not begin until the customer receives the funds from the licensee. This bill requires licensees to use a database designated by a supervisor to ensure that a customer does not have any deferred presentment transactions over $500. This bill requires each licensee to report within a specified time certain information to the supervisor. This bill licenses and regulates the title loan business. This bill requires licensure of title loan lenders and offices and provides for charges, interest, and fees concerning title loans. This bill provides for fines, penalties, and enforcement for violations.

Alabama

S.B. 410

Indefinitely postponed 4/1/14

Under existing law, deferred presentment transactions, commonly referred to as payday loans, are regulated by the state Banking Department pursuant to the Deferred Presentment Services Act. This bill allows a customer to repay a deferred presentment transaction over a six month period. This bill forbids the extension of a deferred presentment transaction. This bill decreases the extended repayment option from four months to three months. This bill allows a licensee to collect a bad check fee for each bad check presented. This bill requires licensees to use a database designated by the supervisor to ensure that a customer does not have any deferred presentment transaction over $500. This bill requires each licensee to report within a specified time certain information to the supervisor and the supervisor to publish the aggregated data to the public.

Alaska None  
Arizona None  
California

A.B. 2289

Signed by governor 9/29/14, Chapter 782

The California Deferred Deposit Transaction Law generally requires the commissioner of Business Oversight to, among other things, proscribe the form of the application for a license to engage in the businesses of offering, making, or arranging a deferred deposit transaction, as specified. This bill authorizes the commissioner to prescribe circumstances under which to accept electronic records or electronic signatures, as defined.

California

S.B. 515

Returned to secretary of Senate pursuant to Joint Rule 56 2/3/14

Existing law, the California Deferred Deposit Transaction Law, provides for the licensure and regulation by the commissioner of Corporations until July 1, 2013, and thereafter by the senior deputy commissioner of Business Oversight for the Division of Corporations, of persons engaged in the business of originating or making deferred deposit transactions, as defined. Existing law requires a licensee to file an annual report with the commissioner, on or before March 15 of each year. Under existing law, the licensee’s annual report is confidential and not open to public inspection. Existing law requires the commissioner to prepare an annual consolidated report based upon specified information received from licensees. Existing law authorizes the commissioner to suspend or revoke the license of a license that fails to file the annual report. Existing law makes a willful violation of the California Deferred Deposit Transaction Law a crime. Under existing law, a licensee may defer the deposit of a customer’s check for up to 31 days, regardless of the check amount. Existing law requires a licensee to provide a notice to the customer regarding the deferred deposit transaction, containing specified information, including an example of all charges and fees that would be charged on at least a $100 and a $200 deferred deposit transaction, payable in 14 and 30 days, respectively. Existing law also authorizes a licensee to offer an extension of time, or a payment plan, for the repayment of a deferred deposit transaction under specified circumstances. This bill revises the period for which a licensee could defer a customer’s check, depending on the amount of the check. The bill requires the notification provided to the customer to set forth an example of charges and fees charged on a $100, $200, and $300 deferred deposit payable in 30, 60, or 90 days, respectively. The bill imposes specified underwriting duties on licensees, to determine a customer’s likely ability to repay a deferred deposit transaction when due. The bill also prohibits a licensee from entering into a deferred deposit transaction with a customer if it would result in the customer entering into more than four deferred deposit transactions in a 12-month period. This bill deletes existing repayment extension procedures, and instead require a licensee to offer an installment payment option, as specified, to a customer who notifies the licensee that he or she is unable to repay a deferred deposit transaction amount when due. The bill deletes the provisions that make a licensee’s annual report to the commissioner confidential and exempt from public inspection. The bill revises the required contents of the licensees’ and commissioner’s annual reports described above to include, among other things, prescribed information relating to installment plans entered into by a licensee. Existing law prohibits a licensee from entering 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 instead prohibits a licensee from entering 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, as specified. This bill requires the commissioner to develop and implement a common database to provide licensees with real-time access, via an Internet connection, to specified information relating to deferred deposit transaction customers. Records in the database would not be open to public inspection. The bill prescribes the duties of licensees, the database provider, and the commissioner in connection with the creation and operation of the database, and additionally makes various conforming changes. The bill authorizes the database provider, pursuant to rules adopted by the commissioner, to charge a fee for entering data into the database.

California

S.B. 526

Returned to secretary of Senate pursuant to Joint Rule 56 2/3/14

Existing law, the California Finance Lenders Law, provides for the licensure and regulation by the commissioner of Corporations of licensees engaged in making consumer loans, as defined. Existing law requires these licensees to file an annual report with the commissioner concerning their business and operations. Existing law requires the commissioner to annually make and file with the department a composite of those annual reports. 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 originating or making deferred deposit transactions, as defined. Existing law requires a licensee to file an annual report with the commissioner. Existing law requires the commissioner to prepare an annual consolidated report based upon specified information received from licensees. The governor’s Reorganization Plan No. 2 of the 2011–12 Regular Session provides that, on and after July 1, 2013, the responsibilities of the Department of Corporations and the commissioner of Corporations shall be transferred to the Department of Business Oversight and the deputy commissioner of Business Oversight for the Division of Corporations. This bill, on or before March 15 annually, requires the commissioner to prepare a specified report on the lending and collection practices of unlicensed persons offering deferred deposit transactions or installment loans, or both, in amounts under $2,500, over the Internet, to persons in California, and on the enforcement actions taken by the commissioner against these persons. The bill also requires the commissioner to post on the department’s Internet website the company names and Internet Web site addresses of unlicensed lenders offering those deferred deposit transactions or installment loans without a license from the commissioner. The bill also requires the commissioner to accompany this posting with a consumer warning that alerts Californians to the unlicensed nature of the activities being conducted by these lenders.

California

S.B. 896

Signed by governor 8/15/14, Chapter 190

Existing law, the California Finance Lenders Law, provides for the licensure and regulation of finance lenders and brokers by the commissioner of Business Oversight who is the chief officer of the Department of Business Oversight. Existing law prohibits a person from engaging in the business of a finance lender or broker without obtaining a license from the commissioner. Under existing law, a finance lender includes any person who is engaged in the business of making consumer loans or making commercial loans and the business of making those loans includes lending money and taking, in the name of the lender, or in any other name, in whole or in part, as security for a loan, any contract or obligation involving the forfeiture of rights in or to personal property, the use and possession of which property is retained by other than the mortgagee or lender, or any lien on, assignment of, or power of attorney relative to wages, salary, earnings, income, or commission. Under existing law, a broker includes any person who is engaged in the business of negotiating or performing any act as broker in connection with loans made by a finance lender. Existing law makes certain persons and entities exempt from, or not subject to, the law if certain requirements are met. In any proceeding, under this law, the burden of proving an exemption is upon the person or entity claiming it. This bill makes exempt from this law a nonprofit organization that facilitates one or more zero-interest, low-cost loans with a minimum principal amount upon origination of $250 and a maximum principal amount upon origination of $2,500 if certain requirements are met, including, among other things, that the organization is exempt from federal income taxes, no part of the net earnings of the organization inures to the benefit of private persons, and that the loan terms meet certain requirements. The bill authorizes any organization wishing to operate pursuant to an exemption to file a specified application with, and pay a fee in an amount to be determined by, the commissioner. The bill authorizes the commissioner to refuse to grant an exemption, or to suspend or revoke an exemption, if he or she makes a specified finding and finds that such action is in the best interests of the public. The bill requires an organization granted an exemption, referred to as an exempt organization, to, among other things, offer a borrower a credit education program or seminar at no cost to the borrower, report each borrower’s payment performance to at least one consumer reporting agency, and underwrite each loan and ensure that a loan is not made if the organization determines that the borrower’s total monthly debt service payments exceeds a specified amount. This bill makes the law inapplicable to a nonprofit organization that partners with an exempt organization for the purpose of facilitating zero-interest, low-cost loans, if certain requirements are met, including, but not limited to, that this nonprofit organization, to be known as the partnering organization, meet specified requirements for federal income tax exemption, that no part of the net earnings of the organization shall inure to the benefit of private persons, and that the loan terms meet certain requirements. The bill requires the partnership of each exempt organization and each partnering organization to be formalized through a specified written agreement to be provided to the commissioner upon his or her request. The bill requires each exempt organization to provide the commissioner with notice and certain information upon entering into a written agreement with a partnering organization. Upon a determination that a partnering organization has acted in violation of certain requirements, the bill authorizes the commissioner to, among other things, disqualify that partnering organization from facilitating zero-interest, low-cost loans, bar that partnering organization from performing services at one or more specific locations, terminate a written agreement, and prohibit the use of that partnering organization by all organizations granted exemptions if the commissioner determines it is in the public interest. The bill authorizes the commissioner to examine each exempt organization and each partnering organization for compliance with these provisions upon reasonable notice. The bill requires any examined organization to make available to the commissioner all books and records requested by the commissioner. The bill requires the cost of any such examination to be paid by the exempt organization. The bill requires every exempt organization whose exemption is approved to file an annual report with the commissioner on or before March 15 containing specified information. The bill also requires an exempt organization to include information regarding the loans facilitated by a partnering organization in this annual report. On or before July 1 annually, the bill requires the commissioner to post a report on the department’s Internet website site that summarizes information relating to exempt organizations, partnering organizations, and the facilitation of these zero-interest, low-cost loans including that information compiled by the commissioner from the annual reports submitted by the exempt organizations.

California S.B. 1280

Existing law, the California Finance Lenders Law, provides for the licensure and regulation of finance lenders and brokers by the commissioner of Business Oversight and makes a willful violation of its provisions a crime. Existing law regulates the terms and conditions under which a lender may make consumer loans. Under existing law, “consumer loan” means a loan, whether secured by either real or personal property, or both, or unsecured, the proceeds of which are intended by the borrower for use primarily for personal, family, or household purposes. Existing law, until Jan. 1, 2018, establishes the Pilot Program for Increased Access to Responsible Small Dollar Loans for the purpose of allowing greater access for responsible installment loans in principal amounts of at least $300 and less than $2,500. This bill requires the Department of Business Oversight to establish, by regulation, a licensure program for the provision of unsecured consumer loans. In developing this program, the bill authorizes the department to consider certain factors, as specified.

Colorado None  
Connecticut

H.B. 5512

Failed Joint Favorable deadline 3/20/14

Regulates payday lenders in this state.

Delaware None  
District of Columbia None  
Florida

H.B. 623

Substituted by S.B. 590 4/21/14

Prohibits knowing and willful failure of licensee to provide certain information relating to check cashing transaction; authorizes the Office of Financial Regulation to summarily suspend license if criminal charges are filed against certain persons or such persons are arrested for certain offenses; provides that deferred presentment transaction conducted by unauthorized person is void.

Florida

S.B. 590

Signed by governor 6/13/14, Chapter 81

Provides that failing to provide certain information relating to a check cashing transaction is a felony; authorizes the Office of Financial Regulation to summarily suspend a license if criminal charges are filed against certain persons or such persons are arrested for certain offenses; provides that a deferred presentment transaction conducted by an unauthorized person is void.

Georgia None  
Guam Not available  
Hawaii

H.B. 2447

Failed First Crossover deadline 3/6/14

Requires check cashers to provide specific additional information relating to deferred deposit transactions. Limits the cumulative fees charged by check cashers. Requires or authorizes specific types of payment plans with customers. Removes retailers from the exemption to the check cashing law.

Idaho

S.B. 1314

Signed by governor 3/26/14, Chapter 270

Relates to payday loans; amends §28-46-401 to revise a definition and to add a definition; amends §28-46-412 to remove reference to written notice to the borrower and to provide that a payday lender shall not make more than two electronic re-presentments of a borrower's check; amends §28-46-413 to provide that a payday loan shall not exceed 25 percent of a borrower's gross monthly income, to provide that a lender shall obtain information on a borrower's gross monthly income and to provide correct code references; adds a new §28-46-414 to provide for extended payment plans and the provisions for extended payment plans; and adds a new §28-46-415 to provide for written disclosures to a borrower before funds are disbursed.

Illinois H.B. 4182

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

Illinois H.B. 5027

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

Illinois H.B. 5284

Amends the Payday Loan Reform Act. Provides that the Department of Financial and Professional Regulation shall develop a short video depicting the manner in which compound interest works and setting forth statutorily required disclosures. Requires the video to be available in Spanish and English and to be presented to payday loan customers at the time of a transaction.

Illinois S.B. 3410

Amends the Payday Loan Reform Act. Authorizes a municipality to limit the number of licensees located in the municipality beginning Jan. 1, 2015. Provides that the limit established by a municipality may be no less than five. Provides for the Department of Financial and Professional Regulation to randomly nonrenew licenses if the renewed license would result in a number of licenses in excess of the municipal limit. Reduces maximum permissible finance charges.

Indiana None  
Iowa S.F. 2094

Modifies provisions relating to the regulation of delayed deposit services businesses; 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; substitutes a provision prohibiting imposition of a finance charge in excess of 36 percent per annum.

Kansas None  
Kentucky None  
Louisiana H.B. 239

Amends and reenacts R.S. 9:3578.3(3) through (6), 3578.4(A)(1), 3578.5, and 3578.6(A)(7), to enact R.S. 9:3537, 3578.3(7), and 3578.6(A)(9) and (C), and repeals R.S. 9:3560(A)(8) and 3578.3(4), relative to consumer credit transactions; prohibits preliminary check holding; provides for definitions; modifies relative to refunds and deferred presentment transactions or small loans; provides modifications relative to creditor provisions and chargeable interest; provides for creditor and transactional prohibitions.

Louisiana H.B. 685

Places a moratorium on licensing of new deferred presentment and small loan institutions in the state.

Louisiana H.B. 687

Requires online pay day lenders and out-of-state lenders to be licensed in the state.

Louisiana

H.B. 730

Passed House 4/14/14

Permits providers of deferred presentment transactions or small loans to report positive information to credit bureaus.

Louisiana

H.B. 766

Passed House 4/8/14

Amends and reenacts R.S. 9:3557(B), 3560(A)(8) and (9), 3561(A), and 3561.1(G)(1) and enacts R.S. 9:3518.4 and 3561.2, relative to licensing and record maintenance for consumer credit transactions; nullifies certain consumer transactions and deferred presentment transactions; provides relative to the location of offices of makers of consumer loans; provides relative to records retention of makers of consumer loans; provides relative to makers of consumer loans registration with the secretary of state.

Louisiana H.B. 834

Provides that the commissioner of the Office of Financial Institutions within the limitations provided by law may collect and compile information and data from all licensees concerning the operation, function, and extent of all consumer loan activities. The information and data collected by the commissioner from the licensee shall include, for the preceding year, the following: (1) The total number and dollar amount of consumer loans originated including installment, insurance premium finance, deferred presentment, and any other loan type as may be applicable. (2) The total number and dollar amount of consumer loans outstanding including installment, insurance premium finance, deferred presentment, and other types of loans as may be applicable. (3) The aggregate amount of fees earned including interest, service charges, late fees, origination fees, documentation fees, and insufficient funds fees. (4) The total number of consumer loans in default or collection status and the balance of those loans as of the reporting date. (5) The total number of consumer loans reduced to judgment and the principal amount of those judgments.

Louisiana H.B. 1187

Relates to consumer credit transactions; prohibits preliminary check holding in certain municipalities; provides for definitions; modifies relative to refunds and deferred presentment transactions or small loans made in certain municipalities; provides modifications relative to creditor provisions and chargeable interest in conjunction with transactions in certain municipalities; provides for creditor and transactional prohibitions in conjunction with transactions in certain municipalities.

Louisiana S.B. 84

Amends and reenacts R.S. 9:3560(A), 3578.3, 3578.4(A), 3578.5 and 3578.6, and enacts R.S. 9:3537, relative to consumer credit transactions, deferred presentment transactions and small loans; provides relative to holding of checks; provides relative to licensing; provides relative to partial payments and interest; provides relative to certain limitations on loans, loan fees and interest rates; provides relative to certain prohibited acts and violations of such acts; provides for certain terms, conditions, and procedures.

Louisiana

S.B. 241

Signed by governor 5/28/14, Act 293

Provides that the commissioner of the Office of Financial Institutions within the limitations provided by law may collect and compile information and data from all licensees concerning the operation, function, and extent of all consumer loan activities. The information and data collected by the commissioner from the licensees shall include, for the preceding year, the following: (a) The total number and dollar amount of consumer loans originated including installment, insurance premium finance, deferred presentment, and any other type of loan as may be applicable. (b) The total number and dollar amount of consumer loans outstanding including installment, insurance premium finance, deferred presentment, and any other types of loans as may be applicable. (c) The aggregate amount of fees earned including interest, service charges, late fees, origination fees, documentation fees, and insufficient funds fees. (d) The total number of consumer loans in default or collection status and the balance of those loans as of the reporting date. (e) The total number of consumer loans reduced to judgment and the principal amount of those judgments.

Louisiana S.B. 284

Amends and reenacts R.S. 9:3578.4(A)(2)(a) and 3578.8(C), and repeals R.S. 9:3578.8(D), relative to the Louisiana Deferred Presentment and Small Loan Act; provides for interest rates; provides for duties of the commissioner of the Office of Financial Institutions; provides for the collection of certain data by the commissioner; requires the commissioner to submit a report to the Louisiana Legislature every two years.

Louisiana

S.B. 483

To conference committee 6/2/14

Repeals certain outdated information collection and reporting requirements of the Louisiana Deferred Presentment and Small Loan Act.

Louisiana S.B. 679

Relates to consumer credit transactions, deferred presentment transactions and small loans; provides relative to the Louisiana Consumer Credit Law and to the Louisiana Deferred Presentment and Small Loans Act; provides for powers of the commissioner of the Office of Financial Institutions; provides for examination of certain records by the legislative auditor; provides relative to the authority of the attorney general relative to deferred presentment transactions and small loans; provides relative to certain lenders; provides relative to licensing and record maintenance in consumer credit transactions; provides relative to the location of offices of makers of consumer loans; provides for the collection and reporting of certain information and data; provides relative to holding of checks in deferred presentment transactions and small loans; provides relative to certain limitations on loans, loan fees, finance charges and interest; provides relative to certain prohibited acts and violations of such acts; provides relative to applicability of loan-sharking in deferred presentment transactions and small loans; provides certain definitions, terms, conditions, procedures, prohibitions, exemptions, penalties and effects.

Louisiana S.C.R. 79

Requests that the Louisiana Credit Union League work on viable loan and product alternatives for consumers who do not qualify for traditional bank loans and services.

Louisiana

S.R. 160

Adopted 5/30/14

Requests that the Louisiana Credit Union League work on viable loan and product alternatives for consumers who do not qualify for traditional bank loans and services.
Maine

L.D. 1691

Signed by governor 3/16/14, Public Chapter 480

Makes an unlicensed loan transaction, including an unlicensed loan transaction by a payday lender an unfair or deceptive act and a violation of the Consumer Credit Code; relates to the automated clearinghouse of nationwide electronic funds transfer system that provides for an interbank exchange of either checks or automated debit or credit entries; prohibits processing loans from an unlicensed lender or providing financial assistance to a lender or processor out of compliance.

Maryland None  
Massachusetts None  
Michigan None  
Minnesota

H.F. 2293

Passed Senate 5/16/14

S.F. 2368

Indefinitely postponed 4/28/14

Regulates payday lending; eliminates a reference to a statute that is not relevant to this bill because the loan amounts allowed under it are too small to be relevant to the rest of the bill; adds definitions of “advertise” and “debt-to-income ratio” and amends definitions of “borrower” and “consumer short-term lender;” clarifies provisions relating to short-term loans; specifies detailed requirements that short-term consumer lenders must comply with; and prohibits industrial loan and thrift companies from making a consumer short-term loan under any section other than §47.60.

Minnesota

H.F. 2936

S.F. 2621

Relates to commerce; regulates certain lenders, loans, lending practices, health insurance benefits, and property and casualty cancellations and nonrenewals; establishes a communications fraud act and prescribes criminal and civil penalties.

Mississippi

H.B. 311

Died in committee 2/4/14

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 face amount of the check.
Mississippi

H.B. 1157

Died in committee 2/4/14

Amends §§75-67-313 and 75-67-413 to provide that the maximum amount that pawnbrokers and title pledge lenders may charge for their services shall not exceed an annual percentage rate of 25 percent per annum on the amount of the principal amount advanced in the transaction that remains unpaid; amends §75-67-519 to provide that the maximum amount that check cashers may charge for cashing a delayed deposit check shall not exceed an annual percentage rate of 25 percent on the face amount of the check.
Mississippi

S.B. 2847

Died in committee 2/4/14

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.

Missouri H.B. 1675

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 the provisions regarding payday loans apply to unsecured loans of $750 or less. Currently, they apply to unsecured loans of $500 or less; (2) Allows a lender to renew a loan twice, instead of the current six times; (3) Prohibits a borrower from having more than $750 in outstanding loans at one time; (4) Prohibits a lender from making a loan to a borrower if the loan would cause the borrower to have more than one unsecured loan or from making a loan to a borrower within one day of the borrower paying or otherwise satisfying in full a previous payday loan; (5) Requires a lender to disclose to a borrower at the time of signing a loan the duration of the loan, amount and date of payments due, and amount of interest and fees to be charged throughout the duration of the loan; (6) Specifies that a lender's sole and exclusive remedy against a borrower who delivers a check, draft, or order that is not honored for payment on a loan will be a breach of contract claim and that a lender is barred from bringing a civil action for passing a bad check; and (7) Requires the Division of Finance within the Department of Insurance, Financial Institutions and Professional Registration to develop and administer a real-time statewide compliance system for licensed payday lenders to record each payday loan transaction.

Missouri H.B. 2060 Modifies provisions of law relating to payday loans.
Missouri

S.B. 694

Vetoed by governor 7/10/14

Under current law, payday lenders are required to pay an annual licensing fee of $300 per location. This bill increases that amount to $500 per location. Costs associated with the return of checks shall be considered collection expenses which, under current law, are not considered a fee or charge. The bill requires payday lenders to conspicuously post the fee in terms of dollars charged per $100 loaned. Current law limits the number of renewals to six and requires a five percent reduction of the original principal amount beginning with the first renewal. The bill repeals these provisions and bars renewals and extensions. Borrowers may pay outstanding loans by means of an extended payment plan (EPP) with the following conditions: (i) Borrowers may not be eligible to enter into more than one such plan in a 12 month period with an individual lender. (ii) Borrowers shall agree in a signed written agreement to repay the amount in four equal installments or less over an aggregate term of 60 days or less if the borrower receives bi-monthly paychecks or an aggregate term of 120 days or less if the borrower receives monthly paychecks. Interest shall not accrue during the term of the EPP. (iii) There shall be no prepayment penalties. However, the lender shall have the right of acceleration upon failure to pay. (iv) Another loan may not be extended to the borrower by the lender until the EPP is paid in full. (v) The lender shall post a notice stating that the borrower may enter into such an agreement and that the lender maintains literature at the counter describing the terms and conditions of the plans. (vi) The borrower shall enter into the agreement on the day before the due date of the loan by signing an amendment to the original agreement reflecting the new payment schedule. No additional interest or fees may be charged if borrowers fail to make full payment upon the expiration of the original loan or the EPP. The bill requires lenders who offer payday loans through the internet to be licensed as all other lenders unless otherwise preempted by federal law. Lenders are required to inform consumers of the intended use of payday loans through their marketing materials. Current law limits the total amount of accumulated interest and fees to 75 percent of the initial loan amount of the life of the loan. This bill reduces that amount to 35 percent. With the exception of instances when a borrower closes an account or stops payment on a check, lenders are barred from threatening criminal proceedings against a borrower if a check given as security for a loan is dishonored. Those who knowingly do so are liable for three times the amount of the dishonored check. Lenders are required to comply with the Fair Debt Collection Practices Act regarding harassment or abuse, false or misleading misrepresentations and unfair collections practices. Under current law, the Division of Finance is required to report certain information relating to the payday loan industry to the General Assembly every other year. This bill requires an annual reporting.

Montana No regular 2014 session  
Nebraska None  
Nevada No regular 2014 session  
New Hampshire None  
New Jersey A.B. 1977

Includes payday lending as a violation of the consumer fraud act.

New Mexico None  
New York None

 

Ohio None  
Oklahoma H.B. 2468

Prohibits deferred deposit lender from garnishing earnings.

Oklahoma H.B. 3355

Permits the administrator of the consumer credit code to reduce annual license fees on a pro rata basis, including deferred deposit lenders; directs the administrator to notify licensees of reduction before certain date; provides exception for initial annual license fee.

Oklahoma S.B. 1810

Permits the administrator of the consumer credit code to reduce annual license fees on a pro rata basis, including deferred deposit lenders; directs the administrator to notify licensees of reduction before certain date.

Oklahoma

S.B. 1940

Signed by governor 5/9/14, Chapter 261

Permits the administrator of the consumer credit code to reduce annual license fees on a pro rata basis, including deferred deposit lenders; directs the administrator to notify licensees of reduction before certain date.

Oklahoma

S.B. 1941

Signed by governor 4/15/14, Chapter 48

Relates to deferred deposit loan transaction; clarifies when loan transaction is complete.

Oregon None  
Pennsylvania S.R. 458 Directs the Legislative Budget and Finance Committee, in collaboration with other state departments and agencies, to study consumer access to and the regulatory structure of short-term consumer credit.
Puerto Rico None  
Rhode Island H.B. 7285

This bill repeals the provisions of the general laws allowing deferred deposit providers, also known as "payday lenders."

Rhode Island

H.B. 7648

Signed by governor 6/16/14, Chapter 125

S.B. 2787

Signed by governor 6/16/14, Chapter 106

This bill amends various state banking laws (including, but not limited to, those relating to licensing, bonding and fee structuring) to remove antiquated provisions, and to alleviate unnecessary regulatory burdens.

Rhode Island

H.B. 7997

Signed by governor 7/8/14, Chapter 522

S.B. 2789

Signed by governor 7/8/14, Chapter 487

This act requires that persons performing the functions of a debt collector, servicing loans, directly or indirectly, owed or due or asserted to be owed or due to another, or making deferred deposit loans obtain a license from the director of the department of business regulation. This act also establishes annual fees for these persons, minimum capital requirements and bonding amounts. Additionally, this act also requires third-party loan servicers to be licensed by the department of business regulation.

Rhode Island S.B. 2309

This bill repeals the provisions of the general laws allowing deferred deposit providers, also known as "payday lenders."

Rhode Island S.B. 2790

This bill amends the financial institutions statute to separate “check cashing” and “payday lending” licenses into separate license categories.

South Carolina None  
South Dakota H.B. 1255

Provides for regulation of certain short-term, small dollar consumer loans and provides a penalty therefor.

Tennessee

H.B. 1771

Withdrawn from further consideration 2/6/14

S.B. 1590

Imposes an annual privilege tax of $1,000 due by Dec. 31 of each year for each office operated by licensed deferred presentment service businesses.

Tennessee

H.B. 2074

S.B. 2276

Allows title pledge and deferred presentment lenders to charge a convenience fee for accepting payment through electronic means.

Tennessee

H.B. 2478

S.B. 2545

Imposes an annual fee of $1,000 due by Dec. 31 of each year for each office operated by licensed deferred presentment service businesses.

Texas No regular 2014 session  
Utah

H.B. 46

Enacting clause struck 3/13/14

This bill prohibits a deferred deposit lender from imposing certain forum requirements.

Utah

H.B. 47

Enacting clause struck 3/13/14

This bill modifies the Check Cashing and Deferred Deposit Lending Registration Act to address deferred deposit loans. This bill modifies the definition provision; requires a deferred deposit lender to query the database before extending a deferred deposit loan; provides for reporting requirements; imposes ineligibility conditions; requires the creation of a deferred deposit database; addresses query procedures; and makes technical and conforming amendments.

Utah

H.B. 127

Signed by governor 3/29/14, Chapter 131

This bill modifies the reporting requirements for deferred deposit lenders; imposes additional requirements before the extension of a deferred deposit loan; prohibits a deferred deposit contract from modifying statutory venue provisions; requires notice before initiating a civil action; modifies provisions related to extended payment plans; and makes technical and conforming amendments.

Utah

S.J.R. 20

Adopted 3/13/14

This joint resolution of the Legislature gives the Legislative Management Committee items of study it may assign to the appropriate interim committee including a study on amendments to the Check Cashing and Deferred Deposit Lending Registration Act to address deferred deposit loans.

Vermont None  
Virginia H.B. 979

Provides that a locality may by ordinance reasonably limit the number of motor vehicle title loan businesses, payday lenders, check cashers, and precious metals dealers that may be operated at any one time within its territorial limits. The ordinance may limit the number of such establishments based on a specific number of businesses per magisterial or election district or by limiting the number of such businesses within an established radius.

Virginia

S.B. 157

Passed by indefinitely 2/10/14

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.

Virginia

S.B. 164

Passed by indefinitely 2/10/14

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.

Virgin Islands Not available  
Washington None  
West Virginia None  
Wisconsin

A.B. 301

Failed to pass pursuant to Senate Joint Resolution 1 4/8/14

This bill repeals the default provision specific to installment loans by licensed lenders and payday loans that was created in 2013 Wisconsin Act 20.

Wisconsin

A.B. 864

Failed to pass pursuant to Senate Joint Resolution 1 4/8/14

This bill modifies the definition of payday loan" to remove the requirement that, to be a payday loan, the loan term must be 90 days or less.

Wisconsin

S.B. 694

Failed to pass pursuant to Senate Joint Resolution 1 4/8/14

Under current law, a person must be licensed by the Division of Banking (division) in the Department of Financial Institutions to originate or service a payday loan involving a Wisconsin resident.  Current law does not impose a limit on the interest that a payday loan licensee may charge, before the maturity date, on a payday loan, but current law limits the interest that may be charged after the maturity date, when the loan is not paid in full by this maturity date, to 2.75 percent per month. 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. Under current law, a lender other than a bank, savings bank, savings and loan association, credit union, or its affiliate (financial institution) generally must obtain a license from the division to assess a finance charge for a consumer loan that is greater than 18 percent. This type of lender is generally referred to as a “licensed lender.” A “consumer loan” is a loan made to an individual for personal, family, or household purposes that is payable in installments or for which a finance charge may be imposed and includes most transactions under an open−end credit plan such as most credit card debt. A “finance charge” is the sum of all charges payable by the customer as an incident to or condition of the extension of credit, including interest and other costs and fees to the extent not specifically designated by statute as permissible charges of the creditor. Consumer loans are largely regulated under the Wisconsin Consumer Act. With certain limited exceptions, current law provides no maximum interest rate or finance charge for a consumer loan, including those made by a licensed lender. This bill expands the class of creditors that are considered “licensed lenders” and are subject to the licensing requirements as such. Under the bill, a lender, other than a financial institution, that makes consumer loans exceeding $5,000 in principal amount must also obtain a license from the division and is a licensed lender. The bill also prohibits a licensed lender from charging an annual percentage rate of interest greater than 36 percent. However, this maximum interest rate does not apply to an open−end credit plan, including most credit card debt, or to a consumer loan secured by a first lien security interest in a mobile home or manufactured home. The bill also does not affect the maximum interest rate under current law of 12 percent per year for consumer loans after their final scheduled maturity date.  If a licensed lender violates the 36 percent interest limitation, the loan is not enforceable.

Wyoming

H.B. 88

Signed by governor 3/10/14, Chapter 70

Relates to the Uniform Consumer Credit Code; authorizes extended payment plans to repay post-dated check obligations; provides for rescission of post-dated check and similar arrangements; provides for notification relating to payday check cashing laws.

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Heather Morton is a program principal in NCSL's Fiscal Affairs Program. She covers financial services, alcohol production and sales, and medical malpractice issues for NCSL.

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