Payday Lending 2018 Legislation

Heather Morton 5/29/2019

Payday 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 2018 legislative session, 21 states and Puerto Rico addressed legislation regarding payday lending and payday lending alternatives. California, Florida, Illinois, Indiana, Mississippi, Nebraska, New Hampshire, Ohio and South Dakota enacted payday lending legislation. Colorado amended its payday lending laws through the initiative process, 2018 Proposition 111.

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.

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Payday Lending 2018 Legislation
State Bill Number Bill Summary
Alabama

SB 138
Passed Senate 3/8/18

This bill sets the term of all deferred presentment transactions at 30 calendar days.

Alaska None  
Arizona None  
Arkansas No regular 2018 session  
California

AB 237
Signed by governor 9/30/18, Chapter 1016

(1) Existing law, the California Financing Law, generally provides for the licensure and regulation of finance lenders, brokers, and, beginning on Jan. 1, 2019, program administrators, by the commissioner of Business Oversight. The CFL makes a willful violation of specified provisions a crime. The CFL, until Jan. 1, 2023, establishes the Pilot Program for Increased Access to Responsible Small Dollar Loans (pilot program), which requires licensees and other entities that wish to participate in the pilot program to file an application and pay a specified fee to the commissioner to participate in the pilot program. The pilot program authorizes a licensee approved by the commissioner to participate in the pilot 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 increases the upper limit on the amount of a permissible loan under the pilot program from $2,500 to $7,500 and make corresponding changes. (2) Under the pilot program, a licensee is prohibited from making a loan if that licensee determines, through its underwriting, that the borrower’s total monthly debt service payments exceed 50% of the borrower’s monthly gross income. This bill instead prohibits a licensee from making a loan under these circumstances if the borrower’s total monthly debt service payments exceed 50% of the borrower’s gross monthly income for a loan of no more than $2,500, or exceed 36% of the borrower’s gross monthly income for a loan in excess of $2,500. (3) The pilot program establishes that a loan with a principal balance, upon origination, of at least $1,500 is required to have a term of not less than 180 days. As an alternative to other authorized charges, a licensee approved by the commissioner to participate in the pilot program may contract for and receive charges at an annual simple interest rate not exceeding specified amounts. This bill additionally requires a loan under the pilot program that has a principal balance exceeding $2,500 to have a minimum term of one year and a maximum term of five years. The bill also requires licensees to reduce the interest rates on each subsequent loan to the same borrower by a minimum of one percentage point and subject to additional reductions, if specified conditions are satisfied. (4) Under the pilot program, licensees are required to develop and implement policies and procedures designed to respond to questions raised by applicants and borrowers regarding their loans, including those involving finders. Existing law describes a finder as an entity that brings a licensee and a prospective borrower together for the purpose of negotiating a loan contract. This bill also requires licensees to perform reasonable background checks on any finders associated with a licensee’s participation in the pilot program. (5) The pilot program authorizes a licensee who is approved to participate in the program to use the services of one or more finders. Existing law defines a “finder” for these purposes as an entity that, at the finder’s physical location for business, brings a licensee and a prospective borrower together for the purpose of negotiating a loan contract. This bill authorizes the commissioner to charge a licensee participating in the program an additional fee to offset the commissioner’s costs to oversee and examine the activities of that licensee’s finder or finders. (6) Existing law requires the commissioner of Business Oversight to examine each licensee that is accepted into the program at least once every 24 months. This bill requires the commissioner also to examine each finder whose services were used by the licensee at least once every 24 months. (7) Existing law requires the commissioner of Business Oversight to post reports containing specified information on his or her internet website that summarize utilization of the Pilot Program for Increased Access to Responsible Small Dollar Loans. If more than one licensee is approved to participate in the program, existing law requires that information in the report to be stated in aggregate to avoid identifying data by specific licensee. This bill requires that these reports also contain specified information for each finder whose services were used by a licensee in connection with the loans or loan applications, along with the finder’s identity.
California

AB 784
Died pursuant to Art. IV, Sec. 10(c) of the Constitution 2/1/18

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

AB 3010
Passed Assembly 5/30/18

(1) The California Financing Law (CFL) provides for the licensure and regulation of finance lenders and brokers by the Commissioner of Business Oversight. The CFL prohibits anyone from engaging in the business of a finance lender or broker without obtaining a license. A willful violation of the CFL is a crime, except as specified. Under the CFL, a licensee who lends any sum of money is authorized to contract for and receive charges at a maximum rate that does not exceed specified sums on the unpaid principal balance per month, ranging from 2.5% to 1%, based on the consumer loan amount, as specified. The CFL also authorizes a licensee, as an alternative to these rate charges, to instead contract for and receive charges at the greater of a rate not exceeding 1.6% per month on the unpaid principal balance or a rate not exceeding 5/6 of 1% per month, plus a specified percentage per month, as established by the Federal Reserve Bank of San Francisco, on advances to member banks under federal law, or if there is no single determinable rate, the closest counterpart of this rate. These provisions do not apply to a loan of a bona fide principal amount of $2,500 or more, as specified. This bill authorizes a licensee under the CFL, as another alternative to the above-described rate charges, to contract for and receive charges of a note rate of interest not to exceed 36%, and a monthly servicing fee of 5% of the originally contracted amount, not to exceed $25 per month, subject to certain conditions, including a prohibition on the total loan charges, including interest and servicing fees, exceeding 50% of the original loan principal. The bill also prohibits the total required monthly payment from exceeding the greater of 5% of the borrower’s verified gross monthly income or 6% of the borrower’s verified net monthly income, as specified. These provisions would not apply to certain loans of a bona fide principal amount of $2,500 or more. Additionally, active duty military personnel of the U.S. armed forces and their dependents would be exempted from any monthly maintenance fees. The bill requires a licensee engaged in lending under these provisions to comply with certain written notice, disclosure, collection, loan origination, and related requirements. (2) The California Deferred Deposit Transaction Law provides for the licensure and regulation by the commissioner of Business Oversight of persons engaged in the business of making or arranging deferred deposit transactions. Existing law, among other things, 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. A knowing and willful violation of the provisions of this law is a crime. This bill requires the commissioner, by July 1, 2019, to develop operate, and maintain an internet website and common database in which a licensee would be required to, by the time period described below, record each deferred deposit transaction for the purpose of preventing violations of the California Deferred Deposit Transaction Law. The bill requires the database to meet certain requirements, including that it allows real-time access to information entered into the database via an internet connection. The bill, alternatively, authorizes the commissioner to contract with a provider to develop, operate, or maintain the database. The bill requires, on or after July 1, 2019, a licensee to conduct a search on the database before entering into any deferred deposit transaction and prohibits the licensee from entering into that transaction if the database reveals the customer has any outstanding deferred deposit transactions. The bill requires the licensee to adhere to generally accepted security safeguards to maintain the confidentiality and security of information transmitted to the database. The bill provides that the information contained in the database is confidential and not subject to public inspection, and the database and its contents are not subject to requests under the California Public Records Act, except as specified.

Colorado None  
Connecticut None  
Delaware None  
District of Columbia None  
Florida

HB 239
Substituted by SB 386 3/6/18

Provides maximum delinquency charges that may be charged for consumer loans; revises installment requirements for consumer loans.

Florida

HB 555
Died in committee 3/10/18

Relates to deferred presentment transactions; revises the maximum interest, fees, and charges that deferred presentment providers or their affiliates may charge, collect, or receive in deferred presentment transactions; relates to prohibited acts.

Florida

HB 747
Died in committee 3/10/18

Establishes Access to Responsible Credit Pilot Program; specifies requirements for licensees, referral partners and borrowers relating to consumer loans; requires examinations and reports; provides for disciplinary action; provides for future repeal of program.

Florida

HB 857
Substituted by SB 920 3/6/18

Authorizes deferred presentment transactions to be repaid in installments; provides requirements and procedures for customers, providers, and OFR for such transactions; revises restrictions and conspicuous disclosures; revises conditions for deposit or redemption of checks.

Florida

SB 640
Died on calendar 3/10/18

Establishes the Access to Responsible Credit Pilot Program within the Office of Financial Regulation; prohibits a person from certain actions relating to program loans unless the person obtains a pilot program license from the office; provides that only one pilot program license is required for a person to make program loans, etc.

Florida

SB 642
Died in committee 3/10/18

Relates to deferred presentment transactions; revises the maximum interest, fees, and charges that deferred presentment providers or their affiliates may charge, collect, or receive in deferred presentment transactions; relates to prohibited acts.

Florida

SB 920
Signed by governor 3/19/18, Chapter 26

Specifies the maximum face amount of checks that may be taken for deferred presentment installment transactions, exclusive of fees; specifies the maximum rate and frequency of fees that deferred presentment providers or their affiliates may charge on deferred presentment installment transactions; authorizes providers of deferred presentment installment transactions to accept additional checks subject to certain limitations, etc.

Georgia None  
Guam Not available  
Hawaii HB 2471

Transitions from lump sum deferred deposit transactions to installment-based small dollar loan transactions. Specifies various consumer protection requirements for small dollar loans. Beginning Jan. 1, 2019, requires licensure for small dollar lenders that offer small dollar loans to consumers. Specifies licensing requirements for small dollar lenders. Authorizes the division of financial institutions to appoint 1.0 FTE examiner position, funded via the compliance resolution fund, to carry out the purposes of the small dollar installment loan program.

Hawaii HB 2513
SB 3008
Passed Senate 3/6/18
 

Transitions from lump sum deferred deposit transactions to installment-based small dollar loan transactions. Specifies various consumer protection requirements for small dollar loans. Beginning Jan. 1, 2019, requires licensure for small dollar lenders that offer small dollar loans to consumers. Specifies licensing requirements for small dollar lenders.

Hawaii SB 2028

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% for deferred deposit of a personal check. Permits prepayment of deferred deposit agreements with no additional fees.

Hawaii SB 2840

Requires check cashers to register with the department of commerce and consumer affairs. Requires check cashers to offer consumers the option to participate in a payment plan, if certain conditions are met. Requires posting of certain information and written notice containing specific information to be provided to consumers. Amends the limit, deposit deferral, and fees charged for deferred deposit transactions. Removes the exemption for entities engaged in the retail sale of good or services that periodically cash items for a fee.

Idaho None  
Illinois HB 4731

Amends the Illinois Credit Union Act, the Currency Exchange Act, the Transmitters of Money Act, the Sales Finance Agency Act, the Debt Management Service Act, the Title Insurance Act, the Debt Settlement Consumer Protection Act, the Payday Loan Reform Act, and the Consumer Installment Loan Act. Defines "email address of record". Eliminates references to "certified mail". Provides that a chartered institution, licensee, or applicant shall provide the Department of Financial and Professional Regulation with an accurate and up-to-date email address. Permits the Department to send official notices to the chartered institution, licensee, or applicant's email address of record. Provides that service to the email address of record is completed when sent. Provides that service by mail is completed when the notice is deposited in the U.S. Mail. Makes other changes.

Illinois

HB 4873
Signed by governor 1/4/19, Public Act 100-1168

Amends the Payday Loan Reform Act; authorizes a lender to charge a borrower for the verification that the proposed loan agreement is permissible.

Illinois HB 5438

Amends the Payday Loan Reform Act. Limits interest on payday loans to an annual percentage rate of 36%.

Illinois

SB 3060
Passed Senate 4/23/18

Amends the Illinois Credit Union Act, the Currency Exchange Act, the Transmitters of Money Act, the Sales Finance Agency Act, the Debt Management Service Act, the Title Insurance Act, the Debt Settlement Consumer Protection Act, the Payday Loan Reform Act, and the Consumer Installment Loan Act. Defines "email address of record". Eliminates references to "certified mail". Provides that a chartered institution, licensee, or applicant shall provide the Department of Financial and Professional Regulation with an accurate and up-to-date email address. Permits the Department to send official notices to the chartered institution, licensee, or applicant's email address of record. Provides that service to the email address of record is completed when sent. Provides that service by mail is completed when the notice is deposited in the U.S. Mail. Makes other changes.

Illinois SB 3083

Amends the Consumer Installment Loan Act. Provides that the date of renewal for a license is Dec. 1 (rather than Dec. 15). Amends the Payday Loan Reform Act. Provides that the date of renewal for a license is Dec. 1 (rather than Dec. 31).

Indiana SB 325

Changes the current incremental finance charge limits that apply to a small loan to a maximum annual rate. Prohibits certain acts with respect to financing of a small loan and makes a violation a deceptive act and subject to penalties.

Indiana

SB 377
Signed by governor 3/13/18, Public Law 60

Allows the director of the department of financial institutions to take certain actions concerning the use of technology for oversight and enforcement of compliance with the law concerning small loans.

Iowa SF 2025

Current law allows a person licensed to operate a delayed deposit services business to charge certain fees, charges, and penalties in connection with a delayed deposit services transaction. This bill limits the annual percentage rate applicable to a delayed deposit services transaction to 36%, as computed pursuant to the federal Truth in Lending Act. A violation of the bill may result in an administrative fine of not more than $5,000 for each violation and the cost of investigation.

Kansas None  
Kentucky HB 317

Creates a new section of Subtitle 9 of KRS Chapter 286 to establish definitions for "available resources," "expenses," and "relevant period"; requires deferred deposit service business licensees to verify a customer's available resources and expenses during each relevant period; prohibits licensees from entering into a deferred deposit transaction if the licensee determines that a customer's expenses exceed a customer's available resources during any relevant period.

Kentucky SB 225 Establishes Subtitle 12 of KRS Chapter 286 and creates new sections of that subtitle relating to credit; defines terms; requires a license to make credit access loans; requires locations to be physically located in Kentucky with at least one full-time employee; establishes qualifications of an applicant for a license to offer credit access loans; requires the commissioner of the Department of Financial Institutions to periodically review a licensee's compliance with licensure qualifications; establishes form requirements for an application to offer credit access loans and a $500 filing fee; provides commissioner with discretion to establish a nonrefundable supervision fee in lieu of other fees; require that licensees maintain an agent in Kentucky for service of process and notify the commissioner in writing at least five days prior to any change in the status of an agent; establishes the filing fee for a license and establish requirements for additional materials to accompany the application, including a surety bond or irrevocable letter of credit of $25,000 per location not to exceed $200,000 for a single licensee; allows the commissioner to require background checks at the expense of the applicant; requires the commissioner to investigate completed applications for compliance and issue licenses if requirements have been satisfied; requires licenses to be conspicuously posted; provides for annual expiration and renewals of licenses upon showing of continued compliance; establishes due process procedures for the denial of a license; establishes license renewal fee of $500; provides commissioner with discretion to establish a biennial license; prohibits transfer or assignment of a license, and sets out requirements for a change of a control of a licensee; requires five days' notice to the commissioner of a change in principal place of business, location, or name of a licensee; allows for the collection of certain interest, fees, and charges on a credit access loan and limits the term of each loan to not more than 12 months; limits credit access loan plans to an aggregate principal balance of $1,500, and provides for other specific loan plan terms; allows for the collection of fees after a default by a customer and for returned or dishonored checks; establishes requirements for disclosures made by licensees to customers; requires licensees to provide customers with a periodic billing statement; establishes requirements for recordkeeping by a licensee; prohibits unfair or deceptive acts by a licensee; prohibits customers from having more than one outstanding credit access loan plan and requires licensees to inquire about the plan prior to the database becoming fully operational; prohibits licensees from using certain devices or agreements and requires licensees to comply with certain state and federal laws; prohibits certain provisions in a credit access loan plan; provides that credit access loan plans made with an unlicensed person are void; exempts credit access loans from certain other statutes; grants authority to commissioner to promulgate administrative regulations; grants examination, investigatory, and subpoena powers to the commissioner and remedies for enforcement; requires licensees and other persons to pay reasonable examination and investigation costs; allows for written complaints to be submitted to the commissioner and vest exclusive administrative power to investigate complaint with commissioner; allows commissioner to suspend or revoke a license, issue cease and desist orders, order refunds and civil penalties, censure or bar persons from the business of a licensee, and establish due process procedures; allows commissioner authority to enter into consent orders, seek civil penalties and make criminal referrals, and take enforcement action without opportunity for prior hearing in extraordinary circumstances; requires licensees to report certain events within 15 days of occurrence; requires the filing of an annual report by a licensee and exempts the reports from disclosure or discovery; requires the commissioner to prepare an annual report and analysis reflecting the results of operations of licensees; allows the commissioner to license applicants through a multistate licensing system and extends federal and state privileges to information disclosed to the licensing system; establishes a database for credit access loan plans and reporting requirements for licensees; establishes requirements for operation and use of database and conduct of third-party providers; establishes the information a licensee may access in the database and exempts certain reported information from disclosure or discovery; prohibits local government units from regulating or having authority over the business of making credit access loans; makes licenses available to certain persons chartered, organized, or licensed pursuant to KRS Chapter 286 as of Jan. 1, 2018; establishes the name of this subtitle as the "Kentucky Credit Access Act"; amends KRS 286.1-011 to specify that the Department of Financial Institutions regulates matters under KRS Chapter 286 and 292.
Louisiana None  
Maine None  
Maryland None  
Massachusetts None  
Michigan HB 5389

Revises legislative report requirement concerning deferred presentment service providers and transactions.

Michigan HB 6215

Prohibits deferred presentment service transactions that charge service fees greater than an annual rate of 36%.

Michigan HCR 20

Urges the U.S. Congress to repeal the rule on payday and certain other loans submitted by the Consumer Financial Protection Bureau.

Michigan SR 145

Urges the U.S. Congress to repeal the rule on payday and certain other loans submitted by the Consumer Financial Protection Bureau.

Minnesota HF 4345

Relates to commerce; regulates payday lending.

Mississippi

HB 530
Died in committee 1/30/18

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

HB 571
Died in committee 1/30/18

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

HB 578
Died in committee 1/30/18

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% per annum on the face amount of the check.

Mississippi

HB 811
Signed by governor 3/19/18, Chapter 404

Reenacts §§75-67-601 through 75-67-637, which are the Mississippi Credit Availability Act; reenacts §75-67-403, which defines certain terms used under the Mississippi Title Pledge Act; reenacts §75-67-505, which establishes licensing requirements for check cashers under the Mississippi Check Cashers Act; creates new §75-67-639 to codify and extend the date of the repealer on the Mississippi Credit Availability Act and those reenacted sections under the Mississippi Title Pledge Act and the Mississippi Check Cashers Act; repeals §22, chapter 500, laws of 2016, which provides for the repeal of the reenacted sections and is not codified.

Mississippi

SB 2540
Died on calendar 2/8/18

Reenacts §§75-67-601, 75-67-603, 75-67-605, 75-67-607, 75-67-609, 75-67-611, 75-67-613, 75-67-615, 75-67-617, 75-67-619, 75-67-621, 75-67-623, 75-67-625, 75-67-627, 75-67-629, 75-67-631, 75-67-633, 75-67-635 and 75-67-637, which create the Mississippi Credit Availability Act; reenacts §75-67-403, which defines certain terms used in the Mississippi Title Pledge Act; reenacts §75-67-505, which provides licensing requirements under the Mississippi Check Cashers Act; reenacts and amends §22, chapter 500, laws of 2016, to extend the date of repeal on the foregoing sections.

Mississippi

SB 2819
Died in committee 1/30/18

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 HB 1541

This bill changes the laws regarding consumer credit interest rates. The bill requires that any person making or offering a consumer credit loan to contract for and receive interest and fees in accordance with Sections 408.100, 408.140, and 408.170, RSMo, relating to small loans. The bill also reduces the annual percentage rate for payday, title, installment, and other high-cost consumer credit and small loans from triple-digit interest rates to 36% per year, including for veterans and active-duty military families, as required under federal law. A person may not engage in any 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.

Missouri HB 1547

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 HB 1932

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% per year; (b) Extending to veterans and others the same 36% 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% (§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).

Missouri HB 2657

This bill modifies the law relating to unsecured loans of $500 or less, commonly referred to as payday loans. Currently, payday lenders are required to pay an annual licensing fee of $500 per location. This bill reduces that amount to $300 per location. Currently, the number of loan renewals to six times. This bill lowers the number of renewals to two. Borrowers may pay outstanding loans by means of an extended payment plan (EPP) with the following conditions: (1) A borrower is not eligible to enter into more than one EPP in any 12-month period with an individual lender; (2) A borrower must sign a written agreement to repay the amount owed in four or less equal installments over 60 or less days if the borrower receives bi-monthly paychecks or over 120 or less days if the borrower receives monthly paychecks; (3) Interest does not accrue on the loan during the EPP and the borrower may prepay an EPP in full at any time without penalty; (4) If the borrower fails to pay the amount due under the EPP, the lender can immediately accelerate the unpaid balance; (5) If a borrower enters into an EPP, the lender cannot make another loan to the borrower until the loan is re-paid in full; (6) The lender must post a notice in the lobby that the borrower can use an EPP; and (7) The borrower must enter into the EPP by the close of business on the day before the due date of the loan. If a borrower fails to pay off the loan, the lender cannot charge additional fees or interest on the outstanding loan. Currently, the total amount of accumulated interest and fees are limited to 75%. This bill reduces that amount to 35%. Lenders are required to comply with the Fair Debt Collection Practices Act regarding harassment or abuse, false or misleading misrepresentations, and unfair practices when collecting on a payday loan.

Missouri SB 738

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%. 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.

Montana No regular 2018 session  
Nebraska

LB 194
Signed by governor 4/19/18

Amends the Credit Services Organization Act; prohibits certain fees; amends the Delayed Deposit Services Licensing Act; revises and expands prohibited acts by licensees and their affiliates; relates to notices, fees, collection of returned checks, prepayment, rescission of a delayed deposit transaction, payment of proceeds, distribution and amount of fines, and cease and desist orders; provides for extended payment plans; provides reporting duties for licensees; relates to installment loans.

Nebraska LB 1105

Changes the transaction loan period under the Delayed Deposit Services Licensing Act.

Nevada No regular 2018 session  
New Hampshire

HB 1687
Signed by governor 6/8/18, Chapter 196

This bill clarifies the applicability of various banking and consumer credit laws and makes technical corrections.

New Jersey AB 2349

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

New Mexico SB 48

Relates to state employees; provides for a program through which participates state employees have portions of their salaries or wages deducted and disbursed for the repayment of personal loans under the small loan act.

New York None  
North Carolina None  
North Dakota No regular 2018 session  
N. Mariana Islands Not available  
Ohio

HB 123
Signed by governor 7/30/18, Session 92

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, 1321.391, 1321.401, 1321.402, 1321.403, 1321.411, 1321.592, and 4712.071, and repeals §§1321.46 and 1321.461 of the Revised Code to modify the Short-Term Loan Act, specifies a minimum loan amount and duration for loans made under the Small Loan Law and General Loan Law, and limits the authority of credit services organizations to broker extensions of credit for buyers.

Oklahoma HB 1404

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

Oklahoma HB 1596

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

Oklahoma HB 2915

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

Oklahoma SB 1504

Relates to the Deferred Deposit Lending Act; relates to right of rescission; extends time period to rescind certain transaction.

Oklahoma

SB 1572
Passed Senate 3/13/18

Relates to Deferred Deposit Lending Act; relates to confidential information; clarifies language; deletes language; makes certain information available to the public; requires certain report; states information to be contained in report; provides fee for certain report; allows certain report electronically.

Oregon None  
Pennsylvania None  
Puerto Rico HB 800

Creates to Law of Deferred Deposit Loans with the purpose of authorizing and regulating the industry in Puerto Rico of deferred deposit loans or what in the English language are known as Deferred Deposit Loans or Payday Loans.

Rhode Island HB 7557

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

Rhode Island SB 2173

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

South Carolina None  
South Dakota

HB 1082
Signed by governor 3/1/18, Chapter 271

Revises certain provisions regarding licensure for the lending of money; revises definitions.

Tennessee HB 2307
SB 2186

Prohibits a person who is licensed to provide deferred presentment services from providing such services to individuals who do not physically appear in-person at the licensee's business address as specified in the licensee's application for licensure.

Texas No regular 2018 session  
Utah None  
Vermont None  
Virginia HB 47

Prohibits any person from engaging in any business that consists in whole or in part of making, offering, arranging, or acting as an agent in the making of loans on the security of (i) a check or other draft drawn on the account of an individual at a bank, savings institution, or credit union; (ii) any form of assignment of an interest in the account of an individual at a bank, savings institution, or credit union; or (iii) any form of assignment of income payable to an individual, other than loans based on income tax refunds. The prohibition does not apply to certain lenders subject to the general supervision of or subject to examination by the State Corporation Commission or to banks, savings institutions, or credit unions operating under the laws of the United States or any state. A violation is a Class 1 misdemeanor. Violators are also subject to civil penalties, cease and desist orders, and private actions. Violations are a prohibited practice under the Virginia Consumer Protection Act. Existing provisions providing for the licensing and regulation of payday lenders are repealed.

Virginia HB 466

Prohibits a licensed payday lender or motor vehicle title lender (a licensee) from acquiring a payday loan or motor vehicle title loan from a federally chartered bank or savings institution if the terms of the loan would violate Virginia law if the loan was made by a licensee. The prohibition applies if the loan is made to a Virginia resident and if the licensee, under the terms of its purchase or acquisition of the loan, assumes or acquires rights of the federally chartered bank or savings institution as lender with respect to the loan. The measure provides that such a loan acquired by a licensee in violation of this prohibition is unenforceable against the borrower.

Virginia HB 956

Changes the minimum term of a payday loan from two of the borrower's pay cycles to six months. The measure reduces the maximum amount of the loan fee that a licensee may charge from 20% of the total amount borrowed to 20% of the amount of the first $300 borrowed and 7.5% of any amount borrowed in excess of $300. The measure entitles a borrower to a refund of unearned interest and loan fee if the loan is prepaid in full prior to maturity. The measure adds a requirement that borrowers be given the option of structuring a payday loan as an installment loan payable in substantially equal monthly installments. The measure retains the provision authorizing a borrower to pay any outstanding single payment payday loan by means of an extended payment plan. The measure eliminates the existing provision that authorizes a borrower with five payday loans within 180 days to repay such fifth loan as an extended term loan in four installments over 60 days. The measure prohibits a licensee from refinancing or renewing an existing payday loan or amending the terms of an existing payday loan agreement in order to extend the term of the existing payday loan beyond its original term more than once. The measure allows a person to have more than one payday loan outstanding at any time if his aggregate principal amount does not exceed $500 and there is at least a 30-day period between the dates each payday loan is made. The measure prohibits a licensee from making a payday loan if the purpose of the loan is to enable the borrower to pay off a payday loan made by the licensee or another payday lender. Finally, the measure revises the existing provision that bars a licensee from making a new loan to a borrower on the same day that the borrower repaid a payday loan by stating that such loans are barred if made to pay off a payday loan made by the licensee or another payday lender.

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

 

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

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