Payday Lending 2017 Legislation

Heather Morton 1/22/2018

Payday Loan ApplicationPayday lending, or deferred presentment, involves single-payment, short-term loans based on personal checks held for future deposit or on electronic access to personal checking accounts. This document also tracks loan products designed to be alternatives to payday lending.

In the 2017 legislative session, 28 states addressed legislation regarding payday lending and payday lending alternatives. California, Nevada, New Hampshire, New Mexico, Oklahoma, Oregon, South Dakota, Texas and Utah 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, guidance or answer questions for 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 or type the state name.

State Legislation Addressing Genetically-modified Organisms
State Bill Number Bill Summary
Alabama

H.B. 535

Passed House 5/4/17

Relates to deferred presentment services; amends §5-18A-2, 5-18A-3, 5-18A-12, and 5-18A-13, Code of Alabama 1975; clarifies that no person may engage in the business of deferred presentment services by mail, telephone, over the Internet, or in person without a license; specifies that certain transactions in violation are void; provides for hours of operation of a deferred presentment services business; prohibits renewal or extension of a deferred presentment transaction at the expiration of the initial term; provides further for a repayment plan; to limit the extension of a new deferred presentment services transaction until a certain time after repayment and the extension of a new transaction while the customer is utilizing a repayment plan; requires a licensee to notify the customer of the availability of other products in certain circumstances; and limits the number of deferred presentment transactions that may be offered to a customer.
Alabama S.B. 284 Under existing law, the term of a deferred presentment transaction is between 10 and 31 days, and the deferred presentment services provider may charge an interest rate of up to 17.5 percent for the term. Under existing law, a borrower may renew a deferred presentment transaction no more than once, and, if, after one renewal, the borrower is unable to repay, the deferred presentment services provider must allow the borrower to repay in four equal monthly installments. This bill limits the number of deferred presentment transactions a borrower could enter into in a 12-month period to four transactions and prohibits a licensee from rolling over a deferred presentment transaction within seven days of a prior transaction. This bill sets the term of all deferred presentment transactions at 30 days. This bill provides for one automatic three-month extension. This bill prohibits a licensee from engaging in certain actions in an attempt to collect on a transaction or evading the requirements of the Deferred Presentment Services Act by disguising the transaction as another type of loan product. This bill provides for licensing through a national database.
Alabama S.B. 404

Under existing law, a person who engages in the business of deferred presentment services must be licensed by the State Banking Department. Under existing law, when a deferred presentment services transaction becomes due, the licensee may renew or extend the transaction for one additional term. After one renewal or extension, the licensee may not enter into a new transaction with the customer until the next business day after the previous transaction is paid in full. Under existing law, if the customer is unable to pay upon the expiration of the initial term and one renewal or extension, the licensee may offer an extended repayment plan of four equal monthly installments. This bill clarifies that a person may not engage in the business of deferred presentment services with a consumer in this state by mail, telephone, over the Internet, or in person without a license, and any transaction in violation is void. This bill removes the provision authorizing one renewal or extension of a deferred presentment transaction and specifies that the licensee could not enter into a new transaction with the customer until at least 48 hours after the previous transaction is paid in full. This bill provides for a free extended repayment plan if the customer is unable to pay at the end of the term of the transaction or if the customer's check or debit authorization is returned for any reason. This bill allows the customer to request a repayment plan once in a 12-month period. This bill requires a customer participating in the repayment plan to also participate in a financial literary and education program or financial counseling program and to produce documentation of completion of such a program before entering into a new deferred presentment transaction. This bill allows the licensee to access and collect a late charge and prohibits any licensee from entering into a new transaction with a customer under an extended repayment plan. This bill requires a licensee who offers other installment loan products to inform a customer of the availability of these products once the customer has successfully used and repaid six transactions in a 12-month period. This bill also prohibits a licensee from using the proceeds of a loan made under the Small Loan Act or the Alabama Consumer Credit Act to repay a deferred presentment services transaction. This bill allows a licensee to enter into a deferred presentment transaction with a customer who has made 12 or more transactions in the previous 12 months only after 14 days have passed since the previous transaction is paid in full.

Alaska None  
Arizona None  
Arkansas None  
California

A.B. 784

Existing law, the California Finance Lenders Law, generally 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 prescribes limits on the maximum rate of charges and administrative fees that a licensee may contract for, and receive, on loans of up to $2,500. The California Finance Lenders Law, until Jan. 1, 2023, establishes the Pilot Program for Increased Access to Responsible Small Dollar Loans, which requires licensees and other entities that wish to participate in the program to file an application and pay a specified fee to the commissioner to participate in the program. The program authorizes a licensee approved by the commissioner to participate in the program to impose specified alternative interest rates and charges, including an administrative fee and delinquency fees, on unsecured loans of at least $300 and less than $2,500, subject to certain requirements. This bill applies the prescribed limits on charges and administrative fees that a licensee under the California Finance Lenders Law may contract for, and receive, described above, to loans of up to $5,000. This bill deletes the repeal of the Pilot Program for Increased Access to Responsible Small Dollar Loans, thereby extending the program indefinitely. The bill increases the amount of a permissible loan under the program from $2,500 to $5,000, make conforming changes, and revise the statement of legislative findings for the program.

California

A.B. 1636

Signed by governor 9/27/17, Chapter 329

Existing law, the California Finance Lenders Law, provides for the licensure and regulation of finance lenders and brokers by the commissioner of Business Oversight. Existing law requires each finance lender and broker licensee to file an annual report with the commissioner giving relevant information concerning the business and operations conducted by the licensee within the state during the preceding calendar year for each licensed place of business. Existing law authorizes the commissioner to, by order, summarily suspend or revoke the license of any licensee if that person fails to file that report within 10 days after notice by the commissioner that the report is due and not filed. This bill authorizes the commissioner, except in certain circumstances, to impose, by order, a penalty on any licensee who fails to either provide the commissioner with any report required by law or any material information required by the commissioner to be included in a report. The bill prohibits the penalty from exceeding $100 for each business day the report or information is overdue for the first five business days and thereafter from exceeding $500 for each day the report or information is overdue, not to exceed $25,000 in the aggregate. The bill specifies the due date for these penalties under specified circumstances. The bill authorizes a licensee ordered to pay the penalty to request in writing a hearing to challenge that order and requires that hearing to be held under specified administrative proceedings. Existing law, the California Deferred Deposit Transaction Law, requires each licensee to file a specified annual report with the commissioner of Business Oversight and requires the report to be kept confidential. Existing law requires the annual consolidated report to be prepared by the commissioner and made available to the public. This bill instead requires those annual reports to be made available to the public for inspection, except as specified, and also requires the reports to include any other information reasonably required by the commissioner.

California

S.B. 266

Signed by governor 10/5/17, Chapter 514

(1) Existing federal law, the Military Lending Act, prohibits a creditor who extends consumer credit to a covered member of the armed forces or a dependent of such a member from requiring that member or dependent to pay interest with respect to the extension of such credit, unless an exception to that rule applies. The federal act also requires a creditor to satisfy other terms and conditions before extending consumer credit to a covered member, and to comply with mandatory disclosure requirements, as specified. Any person who violates the federal act is subject to both criminal and civil penalties. Existing law, the Banking Law, prescribes the conditions pursuant to which a state-chartered bank may engage in the practice of banking. The California Credit Union Law provides for the regulation of credit unions within the state by the commissioner of Business Oversight. Existing law imposes both criminal and civil penalties for violations of the Banking Law and the California Credit Union Law. Existing law requires a state-chartered bank or a credit union when making or extending a refund anticipation loan to comply with the provision of the John Warner National Defense Authorization Act for Fiscal Year 2007 that added the Military Lending Act. Existing law, the California Finance Lenders Law, provides for the licensure and regulation of finance lenders and brokers by the commissioner of Business Oversight. Existing law, the California Deferred Deposit Transaction Law, provides for the licensure and regulation by the commissioner of persons engaged in the business of making or arranging deferred deposit transactions. A willful violation of either the California Finance Lenders Law or the California Deferred Deposit Transaction Law is a crime. Existing law makes it unlawful under the California Finance Lenders Law and the California Deferred Deposit Transaction Law to violate the provision of the John Warner National Defense Authorization Act for Fiscal Year 2007 that added the Military Lending Act. This bill amends the laws described above to update the references to the Military Lending Act in order to incorporate amendments to that act, and its applicable regulations. (2) Existing law provides that any person who violates specified provisions prohibiting discrimination against a member of the military or naval forces of this state or the United States, including discrimination with respect to the terms of a loan or financing based on that person’s membership in the military or naval forces of this state or of the United States, is guilty of a misdemeanor. Existing law exempts from the discrimination provisions, with respect to loans and transactions covered by the section of the John Warner National Defense Authorization Act for Fiscal Year 2007 that added the Military Lending Act, any person who does not market or extend consumer loans to specified covered borrowers, and any person who does not market deferred deposit transactions to, or enter into such transactions with, specified covered borrowers. This bill updates the references to the Military Lending Act in order to incorporate amendments to that act, and its applicable regulations. (3) This bill incorporates additional changes to §394 of the Military and Veterans Code proposed by AB 1710 to be operative only if this bill and AB 1710 are enacted and this bill is enacted last.

California S.B. 325

Existing law, the California Finance Lenders Law, generally 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. That law, until Jan. 1, 2023, establishes the Pilot Program for Increased Access to Responsible Small Dollar Loans, which requires licensees and other entities that wish to participate in the program to file an application and pay a specified fee to the commissioner to participate in the program. The program authorizes a licensee approved by the commissioner to participate in the program to impose specified alternative interest rates and charges, including an administrative fee and delinquency fees, on unsecured loans of at least $300 and less than $2,500, subject to certain requirements. The program permits a licensee to use a finder, which is defined as an entity that, at its physical location for business, brings together a borrower and a licensee to negotiate a loan under the program. The program requires the commissioner, annually until July 1, 2021, as specified, to post a report on his or her Internet Web site summarizing utilization of the program. Existing law requires licensed finance lenders to perform specified actions when a loan is repaid, including providing a borrower with certain documents marked paid or an optical reproduction of them. This bill permits a licensee that consummates electronically an unsecured loan under the Pilot Program for Increased Access to Responsible Small Dollar Loans to satisfy the requirements to provide a borrower with documents marked “paid” by providing the borrower or person making final payment with a receipt, as specified. The bill eliminates the upper limit on the amount of a permissible loan under the pilot program and make corresponding changes. The bill revises the statement of legislative findings for the program and specifies the applicability of certain pilot program requirements on licensees and specified associates, when making loans above $2,500. The bill revises the term finder to instead be referral partner and makes various conforming changes in this regard. The bill revises the conditions under which a licensee may refinance a loan under the pilot program to apply to borrowers who have been current on their loans for a minimum of eight consecutive months. The bill permits a referral agent’s activities to be done through other means and not necessarily at his or her physical business location. The bill deletes other provisions connected to an entity who uses an electronic access point, as specified, or personally contacts a borrower at a physical business location, among other things. The bill prohibits a referral partner from performing unsolicited door-to-door or telephonic solicitation. The bill requires licensees who that use referral agents to provide them training, as specified, and to implement procedures to ensure that referral partners act in compliance with the law. The bill also eliminates the requirement that a licensee provide a borrower of a consummated loan a written copy of a specified disclosure notice within two weeks of consummation. The bill revises requirements on compensating finders by eliminating a limit on total compensation paid over the life of a loan and prescribes limits on compensation with reference to the contractual lengths of loans. The bill revises the content of the report that the commissioner of Business Oversight is required to provide to include certain information on loan applicants who were denied loans and for borrowers who did and did not have credit scores when they obtained loans, among other things.

Colorado None  
Connecticut None  
Delaware H.B. 54

This bill imposes a cap on the interest rate that may be charged for “alternative financial services” at an annual rate of interest of 100 percent. “Alternative financial services” is a term sometimes used for payday loans, installment loans, and other credit products generally targeted towards working class people without access to more traditional banking or credit card services. By placing a cap on interest rate in Chapter 22, the purpose of this bill is to circumscribe the ability of short-term, sub-prime lenders to take advantage of unsophisticated borrowers – regardless of the name or structure they may give the credit products. By its terms, Chapter 22 does not apply to more traditional financial products offered by banks, credit unions, credit card companies, and the like. Traditional financial products are already extensively regulated by state and federal law, and are less amenable to abuse. The bill also prohibits the use of automated withdrawals on short-term loans regulated by Chapter 22 for delinquency payments or accelerated default payments. It prohibits repeat attempts to make an automated withdrawal for at least five days after a declined payment, unless the borrower authorizes another attempt in writing. This will prevent borrowers from being charged multiple fees by their banks for overdrafts or declined withdrawals when licensees try repeatedly in a short time frame to process an automated withdrawal.

District of Columbia None  
Florida

H.B. 595

Died in committee 5/8/17

Creates "Access to Responsible Credit Pilot Program" within the Office of Financial Regulation (OFR); provides requirements and conditions for lenders to make loans under the program; requires lenders and the OFR to file certain reports.

Florida

S.B. 522

Died in committee 5/8/17

Revises the maximum limit on interest, fees, and charges that a deferred presentment provider may charge, collect, or receive in a deferred presentment transaction.

Florida

S.B. 872

Died in committee 5/8/17

Establishes the Access to Responsible Credit Pilot Program within the Office of Financial Regulation; prohibits a person from certain activities relating to program loans unless the person obtains a pilot program license from the office; provides requirements for and limitations on program loans; requires arrangements between a program licensee and a referral partner to be specified in a written agreement; requires the office to examine program licensees at specified intervals beginning on a specified date, etc.

Georgia None  
Guam Not available  
Hawaii H.B. 81

Specifies that the minimum term of a deferred deposit, or payday loan, shall be no less than six months with no penalty for early redemption. Caps the allowable interest rate at 45 per cent and requires reimbursement of the prorated interest amount charged upon prepayment.

Hawaii

H.B. 380

S.B. 118

Reduces the maximum fee a check casher may charge under a payday loan agreement for deferring the deposit of a check from 15 percent to 7 percent of the face value of the check.

Hawaii S.B. 286

Specifies a customer has the right to rescind a deferred deposit by returning the principal amount used to fund the deferred deposit within a specified time frame. Permits customers to convert a deferred deposit into an installment loan plan in certain circumstances and specifies requirements for the installment loan plan. Protects against harmful collection practices. Defines annual percentage rate. Requires a check casher to post a notice informing customers that additional options may be available for safe, regulated, lower-cost, small dollar loans. Requires a check casher to provide a written agreement to a customer that clearly discloses specific information relating to the cost and fees associated with the deferred deposit, among other things. Caps the annual percentage rate at 36 per cent for deferred deposit of a personal check. Permits prepayment of deferred deposit agreements with no additional fees.

Idaho None  
Illinois H.B. 100

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

Illinois H.B. 101

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

Illinois H.B. 700

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

Illinois H.B. 1564

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

Illinois H.B. 2091

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

Illinois H.B. 2768

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

Illinois S.B. 665

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

Illinois S.B. 857

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

Illinois S.B. 971

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

Indiana None  
Iowa H.F. 196

Requires the licensure of flexible credit lenders, and makes civil penalties applicable.

Kansas H.B. 2267

Amends current law relating to consumer loans and imposes a cap of 36 percent annual percentage rate on all consumer loans with open ended credit, including all fees, interest and charges. The bill also amends the definition of consumer loans, rules relating to how consumer loans can be repaid by borrowers and how many consumer loans a single borrower can have outstanding from a single lender. The bill also creates maximum monthly fees and disclosures that lenders would be required to provide to borrowers. The bill also caps required monthly payments from borrowers to lenders at the greater of either 5 percent of a borrower’s gross income or 6 percent of the borrower’s net income. The bill also requires lenders to track and report certain statistics regarding outstanding loans to the State Bank commissioner; the State Bank commissioner would be required produce an annual aggregate report on those statistics.

Kansas S.B. 234

Sets a 36 percent per annum rate cap, inclusive of all fees, interest, and charges contained in the loan contract, including costs of ancillary products on consumer loans under the Uniform Consumer Credit Code for open-end products. The bill sets a 36 percent per annum rate cap for consumer loan transactions made under current law. In addition, the bill amends current law to define consumer loans as those in which a lender, for a fee, finance charge, or other consideration does the following: 1. Accepts an instrument from the borrower as security for a loan; 2. Agrees to hold the instrument for a period of time prior to deposit or negotiation of the instrument; 3. Pays to the borrower, credits to the borrower’s account or pays to another person on the borrower’s behalf the amount of the instrument, less charges permitted; and 4. Issues a loan equal to or less than $500. The bill restricts loans to the number of months equal to the sum of the loan principal and all applicable charges, divided by the maximum allowable monthly payment. The bill specifies that a consumer may only have one loan outstanding at any time. Prior to making the loan, the bill requires that the lender disclose periodic payments, total repayment, total loan costs, notice of the borrower’s right to revoke ACH payment authorization, and right to rescind. The bill provides a maximum monthly fee of or charge for any loan under KSA §16a-2-1404 of 5 percent of the original loan principal or $20, whichever is less. These fees would not be added to the original contracted loan for purposes of calculating interest. Loans made may be refinanced; however, any refinanced loan would have a maximum rate of 36 percent per annum and would not be subject to any monthly fee or charges. The total loan charges for any loan would not exceed 50 percent of the loan principal. The bill permits a returned check of 5 percent of the original loan principal or $20, whichever is less, plus any amount passed from another financial institution. Under the bill, the total required monthly payment of a loan would not exceed the greater of 5 percent of the borrower’s verified gross monthly income or 6 percent of the borrower’s verified net monthly income. No prepayment penalty would be allowed. If a loan is prepaid, all finance charges, including interest and fees, are pro rata refundable. The bill requires loans to be precomputed and requires full amortization of balance to zero with all payments reducing principal. A lender may accelerate the loan balance if any payment is more than ten days delinquent, but could only collect prorated interest and fees earned to date. The bill requires the Office of the State Bank Commissioner (OSBC) to publish an aggregate report to the public of all the information provided by lenders. The required information is specified in the bill.

Kentucky H.B. 320

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 and establishes a maximum annual percentage rate of 36 percent for deferred deposit transactions; provides that making a deferred deposit transaction in violation of the maximum interest provisions is an unfair, false, misleading, and deceptive practice in violation of the Consumer Protection Act and subject to its rights and remedies; prohibits a licensee from engaging in deceptive practices to evade the requirements of Subtitle 9 of KRS Chapter 286; amends KRS 286.9-102 to require a licensee to conspicuously display interest charges for services; creates a new section of Subtitle 9 of KRS Chapter 286 to provide that knowing violation of the maximum allowable interest rate provisions 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.

Kentucky H.B. 321

Amends KRS 286.9-991 to increase civil penalties under Subtitle 9 of KRS Chapter 286.

Kentucky S.B. 168

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 and establish a maximum annual percentage rate of 36 percent for deferred deposit transactions; provides that making a deferred deposit transaction in violation of the maximum interest provisions is an unfair, false, misleading, and deceptive practice in violation of the Consumer Protection Act and subject to its rights and remedies; prohibits a licensee from engaging in deceptive practices to evade the requirements of Subtitle 9 of KRS Chapter 286; amends KRS 286.9-102 to require a licensee to conspicuously display interest charges for services; creates a new section of Subtitle 9 of KRS Chapter 286 to provide that knowing violation of the maximum allowable interest rate provisions 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.

Kentucky S.B. 169

Amends KRS 286.9-991 to increase civil penalties under Subtitle 9 of KRS Chapter 286.

Louisiana None  
Maine None  
Maryland None  
Massachusetts None  
Michigan S.B. 430

Revises definition of financial licensing acts in consumer financial services act to include the small loan regulatory act.

Michigan S.B. 431

Regulates the business of providing certain small loans; requires the licensing of providers of small loans; prescribes powers and duties of certain state agencies and officials; and prescribes penalties and provides remedies.

Michigan S.B. 432

Amends the Delayed Presentment Services Transactions Act; revises provisions regulating the business of deferred presentment service transactions.

Minnesota

H.F. 1081

S.F. 942

Amends provisions regarding consumer small loans; requires the creation of a database to verify whether any consumer small loan or short-term loan transactions are outstanding for a particular person.

Mississippi

H.B. 12

Died in committee 1/31/17

Amends §75-67-519 to require licensed check cashers to extend one check to cover the amount of the loan for all loans exceeding $100.

Mississippi

H.B. 14

Died in committee 1/31/17

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. 54

Died in committee 1/31/17

Amends §75-67-419 to prohibit title pledge lenders from having an office located within a five-mile radius of a postsecondary institution; amends §75-67-505 to prohibit check cashing businesses from having an office located within a five-mile radius of a postsecondary institution.

Mississippi

S.B. 2800

Died in committee 1/31/17

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.

Mississippi

S.B. 2815

Died in committee 1/31/17

Reenacts §§75-67-601 through 75-67-637, which create the Mississippi credit availability act; amends reenacted §75-67-619 to authorize licensees to charge fees and costs relating to the repossession and sale of collateral; amends §22, chapter 500, laws of 2016, to remove the sections of law subject to repeal which pertain to the check cashers act and the title pledge loan act, and extends the date of repeal on the Mississippi credit availability act.

Missouri H.B. 120

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. 625

This bill changes the laws regarding consumer credit interest rates. In its main provisions, the bill: (1) Requires any person making or offering a consumer credit loan to contract for and receive interest and fees in accordance with §§408.100, 408.140, and 408.170, RSMo, relating to small loans (§367.105); (2) Specifies that it is the intention of the people of Missouri to prevent lenders of payday loans, car title loans, and installment loans from charging excessive fees and interest rates that can lead families into a cycle of debt by: (a) Reducing the annual percentage rate for payday, title, installment, and other high-cost consumer credit and small loans from triple-digit interest rates to 36 percent per year; (b) Extending to veterans and others the same 36 percent rate limit in place for payday and title loans to active military families as enacted by the 109th U.S. Congress in 10 U.S.C. §987; and (c) Preserving fair lending by prohibiting lenders from structuring other transactions to avoid the rate limit through subterfuge (§408.100); (3) Prohibits any lender of small loans, subject to §408.100, from charging interest, fees, and finance charges at an annual percentage rate greater than 36 percent (§408.100); and (4) Prohibits a person from engaging in any device or subterfuge intended to evade the requirements of Chapter 408, relating to legal tender and interest, through any method including, but not limited to, mail, telephone, Internet, or any electronic means (§408.100). The bill contains a referendum clause and will be submitted to qualified voters in November 2018.

Missouri H.B. 1105

This bill changes the laws regarding consumer credit interest rates. In its main provisions, the bill: (1) Requires any person making or offering a consumer credit loan to contract for and receive interest and fees in accordance with §§408.100, 408.140, and 408.170, RSMo, relating to small loans (§367.105); (2) Specifies that it is the intention of the people of Missouri to prevent lenders of payday loans, car title loans, and installment loans from charging excessive fees and interest rates that can lead families into a cycle of debt by: (a) Reducing the annual percentage rate for payday, title, installment, and other high-cost consumer credit and small loans from triple-digit interest rates to 36 percent per year; (b) Extending to veterans and others the same 36 percent rate limit in place for payday and title loans to active military families as enacted by the 109th U.S. Congress in 10 U.S.C. §987; and (c) Preserving fair lending by prohibiting lenders from structuring other transactions to avoid the rate limit through subterfuge (§408.100); (3) Prohibits any lender of small loans, subject to §408.100, from charging interest, fees, and finance charges at an annual percentage rate greater than 36 percent (§408.100); and (4) Prohibits a person from engaging in any device or subterfuge intended to evade the requirements of Chapter 408, relating to legal tender and interest, through any method including, but not limited to, mail, telephone, Internet, or any electronic means (§408.100). The bill contains a referendum clause and will be submitted to qualified voters in November 2018.

Missouri S.B. 151

This act prohibits lenders of consumer credit loans, title loans, consumer installment loans, and unsecured loans of $500 or less (commonly known as payday loans) from contracting for or receiving interest, fees, and finance charges on the unpaid principal balance of a loan in excess of 36 percent. Such lenders are prohibited from evading the requirements of this act through any method, including but not limited to mail, telephone, internet, or any electronic means. Such lenders are further subjected to several provisions of current law regulating interest on small loans. This act contains a referendum clause.

Montana None  
Nebraska L.B. 194

Changes provisions of the Credit Services Organization Act, Delayed Deposit Services Licensing Act and Nebraska Installment Loan Act.

Nebraska L.B. 286

Adopts the Nebraska Flexible Loan Act and changes provisions of the Delayed Deposit Services Licensing Act.

Nevada

A.B. 163

Signed by governor 6/1/17, Chapter 274

Requires a person who is licensed to operate certain loan services to verify a customer’s ability to repay the loan before making certain short-term loans to the customer; requires a person who makes a deferred deposit loan to offer an extended payment plan under certain circumstances; provides that certain contracts for the lease of an animal are subject to certain requirements imposed on high-interest loans; revises provisions governing defaults, lengths of term and grace periods relating to certain short-term loans; requires certain notices to be posted by a person who is licensed to operate certain loan services; revises the requirements for making a title loan.

Nevada A.B. 222

Revises provisions governing payday loans, title loans and installment loans.

Nevada

A.B. 255

Signed by governor 5/26/17, Chapter 168

Provides that provisions governing the licensing and regulation of certain short-term loans and installment loans do not apply to the extension of credit to any person who is not a resident of this state for any business, commercial or agricultural purpose that is located outside of this state.

Nevada A.B. 515

Requires the commissioner of Financial Institutions to develop, implement and maintain a database storing certain information relating to deferred deposit loans, title loans and high-interest loans made to customers in this state; provides that information in such a database is confidential under certain circumstances.

Nevada S.B. 17

Prohibits a person who is licensed to operate certain loan services from making certain short-term loans to a customer under certain circumstances; requires the commissioner of Financial Institutions to develop, implement and maintain a database storing certain information relating to short-term loans made to customers in this state; provides that information in such a database is confidential; revises requirements for the contents of written loan agreements between licensees and customers; revises various provisions governing short-term loans.

New Hampshire

H.B. 457

Signed by governor 6/8/17, Chapter 103

Adds certain requirements for mortgage services. Expands the definition of small loans.

New Jersey None  
New Mexico H.B. 26

Relates to lending; enacts new sections of the New Mexico Bank Installment Loan Act of 1959 and the New Mexico Small Loan Act of 1955; imposes a cap on interest rates; voids contracts that exceed the interest rate cap; repeals a section of the New Mexico Small Loan Act of 1955.

New Mexico H.B. 100

Requires the reporting of positive credit to nationwide consumer reporting agencies by payday, automobile title and installment loan lenders; defines "positive credit" and "nationwide consumer reporting agency".

New Mexico

H.B. 347

Signed by governor 4/6/17, Chapter 110

Limits fees and charges for certain installment loans; provides for reporting to credit agencies; amends chapter 56, article 8 NMSA 1978, the New Mexico Small Loan Act of 1955 and the New Mexico Bank Installment Loan Act of 1959; repeals sections of the New Mexico Small Loan Act of 1955; creates the financial literacy fund; makes an appropriation.

New Mexico H.B. 480

Relates to usury; enacts new sections of the New Mexico Bank Installment Loan Act of 1959 and the New Mexico Small Loan Act of 1955; limits interest rates for small loans; voids contracts that exceed the interest rate cap; repeals a section of the New Mexico Small Loan Act of 1955.

New Mexico S.B. 15

Relates to lending; enacts new sections of the New Mexico Bank Installment Loan Act of 1959 and the New Mexico Small Loan Act of 1955; imposes a cap on interest rates; voids contracts that exceed the interest rate cap; repeals a section of the New Mexico Small Loan Act of 1955.

New Mexico S.B. 388

Relates to financial institutions; limits fees and charges for certain installment loans; provides for reporting to credit agencies; amends the Small Loan Act and the Bank Installment Loan Act; repeals sections of the Small Loan Act; creates the Financial Literacy Fund; makes an appropriation.

New Mexico S.B. 398

Relates to financial institutions; simplifies reporting requirements for licensees pursuant to the New Mexico Small Loan Act of 1955.

New York

A.B. 6511

S.B. 5771

Enacts the "credit creation pilot program act of New York"; directs the superintendent of financial services to create and implement such act; defines terms; provides that a program licensee may not offer or make a program loan or impose any charges or fees without prior approval from the superintendent of financial services to participate in the program; provides for disclosures, statements and receipts, referral partners, permitted services and prohibited activities.

New York S.B. 3699

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 None  
N. Mariana Islands Not available  
Ohio H.B. 123

Amends §§1321.35, 1321.36, 1321.39, 1321.40, 1321.41, 1321.422, 1321.99, and 4712.99, enacts new §1321.46 and §§1321.141, 1321.401, 1321.402, 1321.403, 1321.411, 1321.595, and 4712.071, and repeals §§1321.46 and 1321.461 of the Revised Code to modify the Short-Term Loan Act, to specify a minimum duration requirement for loans made under the Small Loan Law and Mortgage Loan Law, and to limit the authority of credit services organizations to broker extensions of credit for buyers.

Oklahoma H.B. 1404

Relates to the Deferred Deposit Lending Act; relates to finance charges; sets maximum interest rate for deferred deposit loans.

Oklahoma H.B. 1596

Relates to professions and occupations; relates to deferred deposit lenders; limits days of indebtedness; limits number of loans; requires wait period.

Oklahoma

H.B. 1694

Signed by governor 5/16/17, Chapter 279

Relates to financial literacy; relates to the Passport to Financial Literacy Act; modifies areas of instruction of personal financial literacy education; changes grades during which personal financial literacy education is to be taken and provided after certain date; updates statutory language; modifies State Department of Education duties; utilizes funds deposited into the Personal Financial Literacy Education Revolving Fund; relates to the Free Application for Federal Student Aid.

Oklahoma S.B. 108

Relates to deferred deposit loans; relates to determination of outstanding loans; prohibits certain loans; sets maximum debt period for consumer.

Oregon

H.B. 3184

Signed by governor 6/6/17, Chapter 215

Requires the Department of Consumer and Business Services to establish a loan counseling program for residents of this state; specifies required elements of program; requires information regarding the loan counseling program to remain secured against public disclosure.

Pennsylvania None  
Puerto Rico None  
Rhode Island H.B. 5331

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

Rhode Island H.B. 5614

Requires licensed financial institutions to post signage advising of fraudulent financial schemes and need for caution in related financial transactions effective Jan. 1, 2018.

Rhode Island S.B. 94

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

South Carolina S.B. 12

Relates to restrictions and requirements for deferred presentment or deposit of checks, to provide that the effective annual percentage rate charged on a deferred presentment transaction cannot exceed 36 percent.

South Carolina S.B. 184

Relates to the South Carolina unfair trade practices act, to provide that a person who accepts a check for a deferred presentment transaction violates the South Carolina unfair trade practices act, and repeals chapter 39, title 34, relating to deferred presentment services.

South Dakota

H.B. 1090

Signed by governor 3/10/17, Chapter 205

Defines certain fees incident to the extension of credit; provides for the licensee may engage in the business of making loans and contract for and receive interest charges and other fees at rates, amounts, and terms as agreed to by the parties.

Tennessee

H.B. 1305

S.B. 1140

Requires the department, in collaboration with the Tennessee financial literacy commission, to report the amounts allocated from fees collected from licensees under the Flexible Credit Act to the commission and whether any of the amounts allocated were used to assist individuals who are susceptible to predatory lending practices; requires that the department report its findings to the insurance and banking committee of the House of Representatives and the commerce and labor committee of the Senate no later than Jan. 15, 2018.

Texas H.B. 365, First Special Session

Relates to regulation of certain credit services organizations.

Texas H.B. 1134

Amends the Finance Code as it relates to credit services organizations and extensions of consumer credit facilitated by credit services organizations. Under the provisions of the bill, each day of a continuing violation of certain chapters of the Finance Code would constitute a separate offense punishable by a Class B misdemeanor.

Texas H.B. 1733

Relates to the maximum permitted sum of fees, interest, and other amounts due under certain extensions of consumer credit.

Texas

H.B. 2008

Signed by governor 6/15/17, Chapter 835

Amends the Finance Code to require a lender who engages in a deferred presentment transaction with a member of the U.S. military or the member's dependent to comply with federal law governing the terms of consumer credit extended to certain members of the U.S. armed forces and their dependents and any regulations adopted under that law, to the extent applicable.

Texas H.B. 3419

Amends the Finance Code to raise from $200 to $300 the cap on the reference base amount used in the computation of the maximum cash advance of a consumer loan that may provide for an acquisition charge that is not more than $10 and an installment account handling charge that is not more than the ratio of $4 a month for each $100 of cash advance.

Utah

H.B. 40

Signed by governor 3/17/17, Chapter 37

This bill modifies provisions related to check cashing and deferred deposit lending. This bill: amends the definition provision; modifies requirements for registration under the Check Cashing and Deferred Deposit Lending Registration Act; grants rulemaking authority; addresses restrictions on extensions of deferred deposit loans; addresses examinations by the Department of Financial Institutions; and makes technical and conforming amendments.

Vermont None  
Virginia H.B. 1620

Prohibits any person licensed to make motor vehicle title loans from engaging in the extension of credit under an open-end credit plan. The measure also prohibits a third party from engaging in the extension of credit under an open-end credit plan at any office, suite, room, or place of business where a person licensed to make payday loans or motor vehicle title loans conducts the business of making payday loans or motor vehicle title loans. Currently, licensed payday lenders are prohibited from extending credit under an open-end credit plan, and a third party is prohibited from extending credit under an open-end credit plan at a location where a licensed payday lender makes payday loans.

Virginia

S.B. 1038

Postponed indefinitely 1/16/17

Prohibits any person licensed to make motor vehicle title loans from engaging in the extension of credit under an open-end credit plan. The measure also prohibits a third party from engaging in the extension of credit under an open-end credit plan at any office, suite, room, or place of business where a person licensed to make payday loans or motor vehicle title loans conducts the business of making payday loans or motor vehicle title loans. Currently, licensed payday lenders are prohibited from extending credit under an open-end credit plan, and a third party is prohibited from extending credit under an open-end credit plan at a location where a licensed payday lender makes payday loans.

Virgin Islands Not available  
Washington None  
West Virginia None  
Wisconsin None  
Wyoming None  
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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