Payday Lending 2020 Legislation

Heather Morton 7/13/2020

Cash

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 2020 legislative session, 22 states and Puerto Rico have pending legislation regarding payday lending and payday lending alternatives. Utah enacted legislation amending registration requirements, reporting requirements and operational requirements for deferred deposit lenders, amending reporting requirements for the commissioner of Financial Institutions regarding deferred deposit lenders, amending provisions relating to bail bonds, amending provisions related to damages to party aggrieved, and made technical and conforming changes. Virginia enacted legislation replacing references to payday loans with the term "short-term loans." The measure caps the interest and fees that may be charged under a short-term loan at an annual rate of 36%, plus a maintenance fee; increases the maximum amount of such loans from $500 to $2,500; and sets the duration of such loans at a minimum of four months, subject to exceptions, and a maximum of 24 months.

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.

 

Payday Lending 2020 Legislation
State Bill Number Bill Summary
Alabama SB 58 Under existing law, the term of a deferred presentment transaction is between 10 and 31 calendar days. This bill requires the term of a deferred presentment transaction to be a minimum of 30 calendar days.
Alaska None  
Arizona

HB 2312
Passed House 2/10/20

Deletes the requirement that a deferred presentment licensee shall post its license to engage in the business of deferred presentment services at each location that is licensed pursuant to this chapter.
Arkansas None  
California

AB 2196
Passed Assembly 6/8/20

Existing law, the California Financing 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, except as provided. That law, until Jan. 1, 2023, establishes the Pilot Program for Increased Access to Responsible Small Dollar Loans. This bill extends the sunset date for that program until Jan. 1, 2028, requires the commissioner to include in a certain report recommendations regarding whether the program should continue after Jan. 1, 2028, and makes conforming changes.
California AB 2501 This bill enacts the COVID-19 Homeowner, Tenant, and Consumer Relief Law of 2020. This bill, during the COVID-19 emergency and the 180-day period thereafter, prohibits a fee for a deferred deposit transaction from exceeding 5% of the face amount of the check. The bill requires a licensee under that law to offer a customer the option to enter into a payment plan that provides an extension of time for repayment of an existing deferred deposit transaction in accordance with specified procedures.
California AB 2561

This bill prohibits a licensee under the Money Transmission Act or the California Deferred Deposit Transaction Law from arranging a loan, referring, directly or indirectly, a person to a provider of a loan, or distributing or sharing marketing materials or any similar information with a person related to a provider of a loan if that loan contains charges that exceed the limits described above in the California Financing Law.

California AB 3010

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, 2021, 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 allow 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, 2021, 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 or has taken out 4 or more deferred deposit transactions in the preceding 365 days. The bill requires the licensee to adhere to generally accepted security safeguards to maintain the confidentiality and security of information transmitted to the database.

Colorado None  
Connecticut None  
Delaware None  
District of Columbia None  
Florida HB 857

Died in committee 3/14/20

Creates Access to Responsible Credit Pilot Program within the Office of Financial Regulation to provide consumer loans; requires persons to obtain program license from office before engaging in certain actions relating to program loans; requires program licensee's program branch offices to be licensed; provides requirements for program licensees, program loans, loan repayments, loan rescissions, interest rates, program loan refinancing, receipts, disclosures & statements provided by program licensees to borrowers, origination fees, insufficient funds fees, and delinquency charges; authorizes program licensees to provide program loans only to residents of specified counties; specifies program loan underwriting requirements for program licensees.

Florida SB 894

Died in committee 3/14/20

Creates the Access to Responsible Credit Pilot Program within the Office of Financial Regulation; requires a program license from the office to advertise, offer, or make program loans or to impose certain charges or fees; specifies requirements for program licensees, program loans, loan repayments, rescissions, interest rates, program loan refinancing, receipts, disclosures and statements provided by program licensees to borrowers, origination fees, insufficient funds fees, and delinquency charges, etc.

Georgia None  
Guam None  
Hawaii HB 79
SB 537
To conference committee 4/17/19
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, 2020, 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 2.0 FTE examiner positions, funded via the compliance resolution fund, to carry out the purposes of the small dollar installment loan program. Requires check cashers to be registered with DCCA and to offer a voluntary payment plan to customers under certain circumstances. Establishes the terms of voluntary payment plans. Clarifies that a customer may only have one outstanding deferred deposit transaction from any source. Amends notices to customers required of check cashers. Removes the exemption for persons engaged in the bona fide retail sale of goods or services. Requires the auditor to conduct a sunrise analysis of the regulation of payday lenders and deferred deposit agreements in the state.
Hawaii

HB 332
Passed House 3/1/19
SB 613

Requires check cashers to be registered with DCCA and to offer a voluntary payment plan to customers under certain circumstances. Establishes the terms of voluntary payment plans. Clarifies that a customer may only have one outstanding deferred deposit transaction from any source. Amends notices to customers required of check cashers. Removes the exemption for persons engaged in the bona fide retail sale of goods or services. Requires the auditor to conduct a sunrise analysis of the regulation of payday lenders and deferred deposit agreements in the state.

Hawaii HB 1058

Restricts the fees a check casher may charge in connection with a deferred deposit agreement to an annual percentage rate not to exceed 36% per year. Establishes a licensing scheme for check cashers that enter into deferred deposit agreements.

Hawaii

HB 1883
SB 2587
Passed Senate 3/3/20

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, 2022, 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 2.0 FTE examiner positions, funded via the compliance resolution fund, to carry out the purposes of the small dollar installment loan program. Requires check cashers to be registered with DCCA and to offer a voluntary payment plan to customers under certain circumstances. Establishes the terms of voluntary payment plans. Clarifies that a customer may only have 1 outstanding deferred deposit transaction from any source. Amends notices to customers required of check cashers. Removes the exemption for persons engaged in the bona fide retail sale of goods or services. Requires the Division of Financial Institutions of the Department of Commerce and Consumer Affairs to conduct an analysis of the regulation of payday lenders and deferred deposit agreements in the state.

Hawaii HCR 66

Request the auditor to conduct a follow-up analysis to Report No. 05-11 on payday loans.

Hawaii SB 106

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

Hawaii SB 1073

Establishes licensure and licensure renewal requirements for certain persons or entities to engage in the business of cashing checks for a fee to persons in the state.

Hawaii SB 1074

Requires check cashers to register with the department of commerce and consumer affairs. Requires check cashers to offer customers 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 customers. mends 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 HB 400

Amends existing law to revise the licensing requirements for regulated lenders and payday lenders and to revise administrative and civil remedies for persons offering consumer credit.

Idaho HB 585

Amends existing law to revise the licensing requirements for regulated lenders and payday lenders and to revise administrative and civil remedies for persons offering consumer credit.

Illinois HB 768

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

Illinois HB 1917

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

Illinois HB 3002

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

Illinois HB 4430

Amends the Illinois Credit Union Act, the Transmitters of Money Act, the Sales Finance Agency Act, the Debt Management Service Act, the Consumer Installment Loan Act, the Debt Settlement Consumer Protection Act, and the Payday Loan Reform Act. Requires applicants for a license or renewal of a license to operate a credit union, operate as a transmitter of money, engage in the business of a sales finance agency, engage in a debt management service, make consumer installment loans, operate as a debt settlement provider, or operate as a lender of payday loans to provide an email address of record to the Department of Financial and Professional Regulation. In provisions concerning service of certain notices and orders, allows service by email to the email address of record. Provides that service to an email address of record is deemed complete when sent. Provides that service by certified mail shall be deemed completed when the notice is deposited in the U.S. mail. Defines the term "email address of record". Makes other changes.

Illinois HB 4989

Amends the Currency Exchange Act, the Sales Finance Agency Act, the Debt Management Service Act, the Consumer Installment Loan Act, and the Payday Loan Reform Act. Changes application fees, license fees, initial license fees, and fees to operate under those Acts. Changes the fine for late annual consumer installment loan reports to $500 (instead of $25) for each day beyond March 1 such report is filed. Establishes an initial license fee to operate as a payday lender in the amount of $1,250. Changes the fine for late annual payday lender reports to $500 (instead of $25) for each day beyond March 1 such report is filed. In the Sales Finance Agency Act, the Consumer Installment Loan Act, and the Payday Loan Reform Act, makes changes to the expiration date of licenses under those Acts and adds a fee to reinstate an expired license.

Illinois HB 5341

Amends the Payday Loan Reform Act. Provides that the finance charge for a payday loan shall not exceed an annual percentage rate of 39%.

Illinois HB 5523

Amends the Payday Loan Reform Act. Provides that lenders must verify the identity of borrowers before making a loan under the Act. Requires inspection and copying of a government-issued identification document. Allows identifications to be made by licensees under the Currency Exchange Act and other licensees approved by the Department of Financial and Professional Regulation on behalf of lenders under the Payday Loan Reform Act.

Illinois HB 5561

Amends various Acts to eliminate the changes made by Public Acts 101-30, 101-31, and 101-32. Includes the Payday Loan Reform Act and Consumer Installment Loan Act. Makes other changes.

Illinois SB 389

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

Illinois SB 999

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

Illinois SB 1701

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

Illinois SB 3178

Amends the Illinois Credit Union Act, the Transmitters of Money Act, the Sales Finance Agency Act, the Debt Management Service Act, the Consumer Installment Loan Act, the Debt Settlement Consumer Protection Act, and the Payday Loan Reform Act. Requires applicants for a license or renewal of a license to operate a credit union, operate as a transmitter of money, engage in the business of a sales finance agency, engage in a debt management service, make consumer installment loans, operate as a debt settlement provider, or operate as a lender of payday loans to provide an email address of record to the Department of Financial and Professional Regulation. In provisions concerning service of certain notices and orders, allows service by email to the email address of record. Provides that service to an email address of record is deemed complete when sent. Provides that service by certified mail shall be deemed completed when the notice is deposited in the U.S. mail. Defines the term "email address of record". Makes other changes.

Illinois SB 3195

Amends the Currency Exchange Act, the Sales Finance Agency Act, the Debt Management Service Act, the Consumer Installment Loan Act, and the Payday Loan Reform Act. Changes application fees, license fees, initial license fees, and fees to operate under those Acts. Changes the fine for late annual consumer installment loan reports to $500 (instead of $25) for each day beyond March 1 such report is filed. Establishes an initial license fee to operate as a payday lender in the amount of $1,250. Changes the fine for late annual payday lender reports to $500 (instead of $25) for each day beyond March 1 such report is filed. In the Sales Finance Agency Act, the Consumer Installment Loan Act, and the Payday Loan Reform Act, makes changes to the expiration date of licenses under those Acts and adds a fee to reinstate an expired license.

Illinois SB 3450 Amends the Payday Loan Reform Act. Provides that lenders must verify the identity of borrowers before making a loan under the Act. Requires inspection and copying of a government-issued identification document. Allows identifications to be made by licensees under the Currency Exchange Act and other licensees approved by the Department of Financial and Professional Regulation on behalf of lenders under the Payday Loan Reform Act.
Indiana SB 26

Changes the current incremental finance charge limits that apply to a small loan to a maximum annual rate. Prohibits making, or taking other actions with respect to, a small loan with a greater rate or amount of interest, or other fees and charges, than allowed under the statute governing small loans. Prohibits a credit services organization from providing certain functions with respect to a small loan and makes a violation a deceptive act.

Indiana SB 407

Amends the Uniform Consumer Credit Code (UCCC) as follows: (1) Specifies that the UCCC applies to any consumer credit transaction entered into by a creditor and a resident of Indiana regardless of whether: (A) the creditor has a physical presence in any state; or (B) the transaction is conducted, in whole or in part, by means of the Internet. (2) Specifies that the licensing requirements under the UCCC apply to any person that regularly engages in making consumer loans in Indiana regardless of whether: (A) the person has a physical presence in any state; or (B) the loan transactions are conducted, in whole or in part, by means of the internet. (3) Provides that after June 30, 2020, a lender may not contract for or receive the authorized minimum finance charge upon a borrower's prepayment of the second or any subsequent refinancing of a consumer loan made to that borrower by the lender. (4) Provides that after June 30, 2020, a lender may not assess the authorized nonrefundable prepaid finance charge on the second or any subsequent refinancing of a consumer loan made to a borrower by the lender. (5) Provides that a creditor: (A) who is licensed with the department of financial institutions (department) under the UCCC or is required to be licensed with the department; and (B) who violates the UCCC; commits a deceptive act that is actionable by the attorney general or a consumer under the deceptive consumer sales act.

Indiana SB 415

Changes the current incremental finance charge limits that apply to a small loan to a maximum annual rate. Prohibits making, or taking other actions with respect to, a small loan with a greater rate or amount of interest, or other fees and charges, than allowed under the statute governing small loans.

Iowa None

 

Kansas None  
Kentucky None  
Louisiana HB 221

Amends and reenacts R.S. 9:3578.3(3) through (6), 3578.4(A)(1), 3578.5, and 3578.6(A)(7) and enacts R.S. 9:3537, 3578.3(7), and 3578.6(A)(9) and (C), relative to consumer credit transactions; provides relative to preliminary check holding; provides for definitions; provides relative to refunds; provides relative to time limitations; provides for fees; provides for prepayment; provides for rebates; provides for deferred presentment transactions; provides for small loans; provides relative to creditor provisions; provides for interest; provides for prohibitions; provides relative to evasion; and provides for penalties.

Maine LD 1767

Clarifies the jurisdiction of the Department of Professional and Financial Regulation, Bureau of Consumer Credit Protection to regulate transactions entered into by mail, telephone or electronic mail or using a creditor's website when the consumer is located in Maine.

Maryland None  
Massachusetts None  
Michigan HB 4251

Prohibits service fees deferred presentment transactions greater than 36% annual.

Michigan HB 5097

Passed House 5/27/20

Amends the Deferred Presentment Service Transactions Act to allow the authorized licensed providers of deferred presentment service transactions (commonly called payday lenders) to make certain small loans to their customers. The bill would further allow lenders to offer small loans with a principal amount of $2,500 or less to their customers. Specifically, a small loan made under the bill would have to meet the following requirements: The loan is made to one or more individuals for personal, family, or household use (i.e., is a personal loan). The principal amount of the loan does not exceed $2,500. The maturity date for the loan is not less than 90 days after the date of the transaction. The loan is unsecured and payable in installments.

Michigan HB 5253
Passed House 5/27/20
Amends the Deferred Presentment Service Transactions Act to require the director of the Department of Insurance and Financial Services (DIFS) to submit a report on deferred presentment service transactions (i.e., payday loans) to the House and Senate committees concerned with banking and financial services. The report would have be submitted within 90 days after the bill took effect and would have to include the following information: The number of persons engaged in the business of providing deferred presentment service transactions in Michigan on June 30, 2007, and the number of such persons on the last day of the calendar month in which the bill took effect. A general report on the business of providing deferred presentment service transactions in Michigan as of the last day of the calendar month in which the bill took effect. This report would have to include information about the number of licensees, the number of customers, and the number and amount of transactions, reported in the following format: A summary of the deferred presentment service transaction program fees received by DIFS. Statewide statistics concerning transaction volumes by month, transaction amounts, fees, and averages, active license locations, the total number of customers of providers, consumer usage of deferred presentment service transactions, and consumer usage of repayment plans. Statistics, reported by zip code, concerning provider locations, identification of the county in which the zip code is located, transaction volumes, total amount of advances, total fees for advances, average advance amounts, average advance fees, and the total number of licensee locations. The number of complaints filed with DIFS against licensees in the period from Nov. 28, 2005, to the last day of the calendar month in which the bill took effect.
Minnesota HF 1501
SF 1648

Relates to financial institutions; regulates interest rates for consumer short-term and small loans.

Minnesota

HF 1507
Passed House 5/7/20

Establishes the COVID-19 Economic Security Act; modifies loans during public health emergency, including consumer small loans and consumer short-term loans; provides for small business loans and grants; provides grants for expanding broadband and telemedicine; provides housing assistance; expanding personal care assistance services; increases personal care assistant rates; provides penalties and appropriates money.

Mississippi

None

 

Missouri HB 1438

This bill modifies the law relating to unsecured loans of $500 or less, commonly referred to as payday loans. The bill requires a lender to provide a borrower with a notice of the borrower's right to contact the Division of Finance regarding the lender. Currently, the maximum number of loan renewals is six. This bill lowers the maximum number of renewals to two. The bill also allows a lender to decline to renew a loan. 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 based on the dates the borrower receives his or her paycheck; (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 borrower must enter into the EPP by the close of business on the day the loan is due; and (7) The lender must post a notice in the lobby that the borrower can use an EPP. Currently, the total amount of accumulated interest and fees are limited to 75% of the initial loan amount. 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 HB 2152

This bill prohibits lenders of consumer credit loans, title loans, consumer installment loans, and unsecured loans of $500 or less (commonly called payday loans) from charging interest, fees, and finance charges in excess of 36% of the unpaid balance of the loan. Lenders are prohibited from intentionally evading statutory requirements through any method, including but not limited to mail, telephone, Internet, or any electronic means. This bill requires voter approval.

Missouri HB 2348

This bill enacts into state statute federal payday loan regulations that were recently repealed by the Consumer Financial Protection Bureau. The bill prevents a lender from making a short-term loan without first making a reasonable determination that the consumer will have the ability to repay the loan. The lender must make the determination of ability to repay every 90 days. A short-term loan is defined as a loan where the consumer is required to repay substantially the entire amount of the loan within 45 days. To determine ability to repay, the lender must calculate the consumer's debt-to-income ratio and residual income and estimate the consumer's basic living expenses. The consumer must give a written statement of his or her income and current major financial obligations. The lender is required to obtain verification evidence as reasonably necessary. The lender does not have to make a determination on ability to repay if: (1) The first loan is less than $500; for the second loan, 2/3 of the principal amount of the first loan; or for the third loan, 1/3 of the principal amount of the first loan; (2) The loan amortizes completely during the term of the loan and the payment schedule allocates payments to outstanding principal, interest, and fees as they accrue through a fixed periodic rate of interest; (3) The loan is not open-end credit; (4) The loan does not require vehicle security as a condition of the loan; (5) The consumer has not had an outstanding loan in the past 30 days; (6) The loan will not result in the consumer having a loan sequence of more than 3 short-term loans; and (7) The loan will not result in the consumer having more than 6 short-term loans outstanding in any 12-month period or any outstanding short-term loans for a period of more than 90 days. A lender cannot make subsequent short-term loans while a loan is outstanding or for 30 days after the repayment of the loan. The lender must disclose to the consumer certain information about the loan before giving out a loan. The lender must also disclose to the consumer certain information after a loan ceases to be outstanding. The lender must retain the loan paperwork for 36 months after a loan ceases to be outstanding.

Montana No regular 2020 session  
Nebraska LB 265

Adopts the Unsecured Consumer Loan Licensing Act and clarify licensing provisions under the Delayed Deposit Services Licensing Act and the state's Installment Loan Act.

Nebraska LB 379

Changes provisions under the Delayed Deposit Services Licensing Act and the State Installment Loan Act.

Nebraska LB 908

Changes provisions of the Delayed Deposit Services Licensing Act; updates a definition, defines a term, adds a processing fee, and changes licensing provisions; harmonizes provisions; and repeals the original sections.

Nevada No regular 2020 session  
New Hampshire None  
New Jersey AB 2730
SB 1922

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

New Mexico None  
New York

AB 6506
Enacting clause stricken 2/11/20

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 SB 3241

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 No regular 2020 session  
N. Mariana Islands Not available  
Ohio None  
Oklahoma HB 2864

Relates to debtor and creditor; creates the Payday Loan Prohibition Act of 2020; prohibits certain loans; limits interest rate allowable for certain transactions; states applicability to all parties of certain transactions; specifies certain unlawful acts; specifies certain interest rate maximums for transactions; provides for the promulgation of rules; provides certain penalties; provides for codification.

Oklahoma HB 3696

Creates the Payday Lending Act.

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 7055

This bill caps the annual percentage rate (APR) for payday loans to 28%; requires a maturity date of more than 90 days from closing; prohibits fees and interest payments of more than 60% of the principal amount; and requires that payments be made monthly with each payment being no more than 25% of the loan's original principal.

Rhode Island SB 2170

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

South Carolina HB 3067

Adds §16-13-490 so as to create the crime of engaging in the business of deferred presentment in this state, to provide that a violation is a felony, and provides for a mandatory minimum penalty; and repeals chapter 39, title 34 relating to the South Carolina Deferred Presentment Services Act.

South Carolina HB 3193

Adds §39-5-45 so as 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 Carolina HB 3208

Amends §34-39-180, relating 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%.

South Carolina SB 56

Amends chapter 5, title 39 of the 1976 code, relating 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 Carolina SB 62

Amends §34-39-180(e) of the 1976 code, relating 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%.

South Dakota None  
Tennessee None

 

Texas No regular 2020 session  
Utah HB 319

This bill amends Title 7, Chapter 23, Check Cashing and Deferred Deposit Lending Registration Act, and Title 78B, Chapter 6, Part 3, Contempt. This bill: amends registration requirements for deferred deposit lenders; amends reporting requirements for deferred deposit lenders; amends operational requirements for deferred deposit lenders; amends reporting requirements for the commissioner of Financial Institutions regarding deferred deposit lenders; amends provisions relating to bail bonds; amends provisions related to damages to party aggrieved; and makes technical and conforming changes.

Vermont None  
Virginia

HB 789
Signed by governor 4/22/20, Chapter 1215
SB 421
Signed by governor 4/22/20, Chapter 1258

Replaces references to payday loans with the term "short-term loans." The measure caps the interest and fees that may be charged under a short-term loan at an annual rate of 36%, plus a maintenance fee; increases the maximum amount of such loans from $500 to $2,500; and sets the duration of such loans at a minimum of four months, subject to exceptions, and a maximum of 24 months. Short-term loan licensees are required to make a reasonable attempt to verify a borrower's income and may not collect fees and charges that exceed 50% of the original loan amount if such amount is equal to or less than $1,500 and 60% of the original loan amount if such amount is greater than $1,500. The measure amends the requirements for motor vehicle title loans, including requiring licensed lenders to use a database to determine a prospective borrower's eligibility for a loan and prohibiting loans to a borrower who has an outstanding short-term loan. The measure sets a 36% annual interest rate cap on open-end credit plans and allows a $50 annual participation fee. A violation of these provisions is made a prohibited practice under the Virginia Consumer Protection Act. The measure amends provisions of the Consumer Finance Act to, among other things, allow licensed lenders to use the services of access partners and establish requirements that loans be between $300 and $35,000; be repayable in substantially equal installment payments; have a term of no fewer than six and no more than 120 months; charge not more than 36% annual interest and a loan processing fee; and require licensees to post a bond. The measure prohibits credit service businesses from advertising, offering, or performing other services in connection with an extension of credit that has an annual interest rate exceeding 36%, is for less than $5,000, has a term of less than one year, or is provided under an open-end credit plan. The bill has a delayed effective date of Jan. 1, 2021, and requires any person who would be required to be licensed under the provisions of the act to apply for a license by Oct. 1, 2020.
Virginia HB 843

Substituted by HB 789 1/21/20

Caps the rate of interest that may be charged on motor vehicle title loans, payday loans, and open-end credit plans at 36% per year. The bill prohibits a lender from charging a membership fee, participation fee, or transaction fee in connection with any such extension of credit. The bill also caps the maximum rate of interest that a licensed consumer finance company may charge on any loan at 36 percent annually and eliminates the existing provision that permits such licensees to charge any agreed-upon amount of interest on consumer finance loans over $2,500.

Virginia

HB 1265
Incorporated into HB 789 1/21/20

Requires the State Corporation Commission, as a condition of licensing a consumer finance company, to find that the applicant will not make consumer finance loans at the same location at which the applicant makes payday loans or motor vehicle title loans. The measure also (i) sets the minimum and maximum amounts of a consumer finance loan at $500 and $35,000, respectively; (ii) requires that such loans be installment loans with a term that is not less than six months nor more than 120 months; (iii) sets the maximum annual interest rate on such loans at 36 percent; (iv) authorizes late payment fees of $20, provided that they are set forth in a contract; (v) authorizes loan processing fees of the greater of $75 or five percent of the principal amount of the loan but not to exceed $150; and (vi) increases from $15 to $25 the amount of a bad check fee.

Virginia SB 33

Requires the State Corporation Commission, as a condition of licensing a consumer finance company, to find that the applicant will not make consumer finance loans at the same location at which the applicant makes payday loans or motor vehicle title loans. The measure also (i) sets the minimum and maximum amounts of a consumer finance loan at $500 and $35,000, respectively; (ii) requires that such loans be installment loans with a term that is not less than 6 months nor more than 120 months; (iii) sets the maximum annual interest rate on such loans at 36%; (iv) authorizes late payment fees of $20, provided that they are set forth in a contract; (v) authorizes loan processing fees of the greater of $75 or 5% of the principal amount of the loan but not to exceed $150; and (vi) increases from $15 to $25 the amount of a bad check fee.

U.S. Virgin Islands None  
Washington None  
West Virginia None  
Wisconsin AB 770

Failed to pass pursuant to SJR 1 4/1/20

This bill limits the maximum interest rate that may be charged on a payday loan or a consumer loan by a licensed lender and modifies the criteria under which a person that makes consumer loans must be licensed by the Department of Financial Institutions. This bill limits the interest rate that a payday loan licensee may charge, before the maturity date, on a payday loan to an annual percentage rate of 36%. A payday loan on which a greater rate of interest is charged is not enforceable.

Wisconsin SB 703

Failed to pass pursuant to SJR 1 4/1/20

This bill limits the maximum interest rate that may be charged on a payday loan or a consumer loan by a licensed lender and modifies the criteria under which a person that makes consumer loans must be licensed by the Department of Financial Institutions. This bill limits the interest rate that a payday loan licensee may charge, before the maturity date, on a payday loan to an annual percentage rate of 36%. A payday loan on which a greater rate of interest is charged is not enforceable.

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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