Enacted Payday Lending Legislation - 2007 Session

Last updated:  March 14, 2008

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

 State:  Bill Summary:

A.B. 7
Signed by governor 10/9/07, Chapter 358
On or after October 1, 2007, makes it unlawful under the California Finance Lenders Law and the California Deferred Deposit Transaction Law to violate specified provisions of the John Warner National Defense Authorization Act for Fiscal Year 2007, relating to the armed forces. Exempts from the discrimination provisions, with respect to loans and transactions covered by the John Warner National Defense Authorization Act, any person who does not market or extend consumer loans to armed services members and any person who does not market deferred deposit transactions to, or enter into such transactions with, armed services members.


A.B. 634
Signed by governor 9/26/07, Chapter 235
Existing law, the California Deferred Deposit Transaction Law, provides for the licensure and regulation by the commissioner of Corporations of persons engaged in the business of making or negotiating deferred deposit transactions. Existing law defines "deferred deposit transaction" for the purpose of that law. This bill modifies that definition.


S.B. 998
Signed by governor 7/20/07, Chapter 101
Existing law provides for the regulation, by the commissioner of Corporations, of issuers of securities, franchises, persons engaged in the business of making deferred deposit transactions, finance lenders, and check sellers, bill payers, and proraters. A willful violation of the laws regulating these individuals is a crime. This bill authorizes the commissioner of Corporations, with respect to those individuals, to issue an order censuring, suspending, or barring from any position of employment, management, or control, specified licensees or other persons , and prohibiting licensees or persons  from participating in the business, as specified, for prescribed cause. Makes it unlawful to knowingly alter, destroy, mutilate, conceal, cover up, falsify, or make a false entry in any record, document, or tangible object with specified intent. The bill also makes it unlawful for any person to knowingly make an untrue statement to the commissioner during the course of licensing, investigation, or examination, with specified intent. 


H.B. 1261
Signed by governor 4/2/07, Chapter 98
Requires a deferred deposit lender to offer, in writing, a voluntary payment plan to a consumer who has received 4 or more consecutive deferred deposit loans from the lender or an affiliate of the lender. Requires the plan to allow for at least 6 equal payments that coincide with the consumer's pay dates. Prohibits a lender from collecting a fee from the consumer for participation in the payment plan. Grants remedies to the lender if a consumer fails to make payments pursuant to the plan. 

District of Columbia

Approved 1/4/08, Law L17-0042
Amends the Check Cashers Act of 1998 in order to restrict certain lending practices conducted by payday loan businesses. 


H.B. 1557
Signed by governor 5/10/07, Public Law 217
Amends definition of small loan; amends the small loan amounts; allows for a repayment plan. 


S.B. 559
Signed by governor 5/10/07, Public Law 213
Amends definition of small loan; amends the small loan amounts; allows for a repayment plan. 


H.F. 2056
Indefinitely postponed 4/25/07
S.F. 1920
Signed by governor 5/4/07, Chapter 44
Relates to financial institutions; regulates certain charges for returned check fees, expenses, electronic financial terminals, and investments. 


H.B. 660
Signed by governor 3/27/07, Chapter 488
Reenacts §§75-67-501 through 75-67-537, Mississippi Code of 1972, which create the Mississippi Check Cashers Act; amends reenacted §75-67-505, to delete provisions that allow the change of ownership of a licensed check cashing business without obtaining a new license for the business; amends §75-67-539, to extend the repealer on the Mississippi Check Cashers Act. 


S.B. 165
Signed by governor 5/8/07, Chapter 451
Revises the Montana Deferred Deposit Loan Act; includes deferred deposit lenders in the definition of regulated lenders; increases licensing fees; removes the requirement that the Department of Administration annually examine each deferred deposit lender's operation; modifies bookkeeping requirements for deferred deposit lenders; prohibits additional deferred deposit loans to consumers with an outstanding deferred deposit loan; authorizes the Department to conduct investigations and issue subpoenas and cease and desist orders; authorizes the Department to seek court-ordered injunctions. 


A.B. 478
Signed by governor 6/1/07, Chapter 265
Revises the applicability of the standards and procedures to make them applicable to any person who makes a loan pursuant to a loan agreement that charges an annual percentage rate of more than 40 percent regardless of the term of the loan. This bill redefines such a loan as a provides that the original term of a deferred deposit loan or a 10 high-interest loan must not exceed 30 days. Existing federal law imposes limitations on the terms of consumer credit that are extended to members of the armed forces of the United States who are on active duty and their dependents, including, without limitation, a prohibition against a lender imposing an interest rate greater than 36 percent. The federal law preempts any state law that is inconsistent with the federal law. (Section 670 of the John Warner National Defense Authorization Act for Fiscal Year 2007, Public Law 109-364) This bill provides that any violation of the federal law shall be deemed to be a violation of chapter 604A of NRS, thereby making violators subject to the remedies and penalties set forth in that chapter, including the imposition of an administrative fine of not more than $10,000 for each violation, the revocation or suspension of a license issued pursuant to that chapter and civil actions for damages. 

 New Mexico

H.B. 92
Signed by governor 3/30/07, Chapter 86
Relates to financial transactions; provides for the limitation of fees and regulation of payday loans; amends, repeals and enacts certain provisions of the New Mexico Small Loan Act of 1955. 


S.M. 41
Passed Senate 3/6/07
Requests the regulation and licensing department to conduct a study of the existing regulatory framework for consumer lending, consumer lending practices and consumer lending needs. 


H.B. 2203
Signed by governor 6/19/07, Chapter 472
Applies provisions of Oregon Consumer Finance Act to lenders that make loans to consumers in this state. Authorizes the director of the Department of Consumer and Business Services to develop and implement system to permit lenders to comply with lenders' obligations under law. Establishes minimum requirements for system. Prohibits lenders from charging consumers fees greater than fees that vendor or service provider charges to lenders for access to or use of system. Permits lenders to recover amounts associated with collection of defaulted loan. Prohibits lenders from collecting loan principal, interest or fees unless lenders have or obtain license. 


H.B. 2871
Signed by governor 6/27/07, Chapter 603
Sets maximum finance charge or interest rate at charge or rate not to exceed 36 percent per annum or 30 percentage points in excess of discount rate on 90-day commercial paper in effect at Federal Reserve Bank of San Francisco, established annually by the director of the Department of Consumer and Business Services, for all consumer finance, payday and title loans of $50,000 or less.  Permits lenders to charge only one origination fee of not more than $10 of each $100 of loan amount of title or payday loans, or $30, whichever is less. Subjects open-end loan plans to 36 percent per annum interest cap. Restricts title lenders from making or renewing title loans for terms of less than 31 days and from renewing title loans more than two times. Prohibits title lenders from charging certain fees for dishonored checks. Requires brokers making payday, title or consumer finance loans to be licensed by Department of Consumer and Business Services. 

South Dakota

H.B. 1172
Signed by governor 3/1/07
Provides that the maximum principal amount of any payday loan, or the total outstanding principal balances of all payday loans made by a licensee to a single borrower, may not exceed $500 at any time.


H.J.R. 14
Adopted 3/13/07
Gives the Legislative Management Committee items of study it may assign to the appropriate interim committee. Authorizes a study of the treatment of payments and operational restrictions, including the contents of the required written contract and prohibitions on the number, term, and the amount of a deferred deposit loan.


S.B. 16
Signed by governor 3/8/07, Chapter 87
Addresses dishonored instrument remedies available to a check casher; provides for an administrative fine under certain circumstances related to the failure to be registered under the registration acts; expands requirements for contracts of loans under the registration acts; adds to the operational requirements of lenders under the registration acts, including requirements for rolling over a deferred deposit loan; addresses timing of examinations; addresses enforcement, including providing for the imposition of administrative fines in general.


H.B. 1027
S.B. 5199
Signed by governor 4/18/07, Chapter 81
Adds enforcement provisions regarding fraud, deception, and unlicensed Internet lending to the chapter governing check cashers and sellers.