US Introduced Payday Lending Legislation Resources – 2004 Session in United States
US Introduced Payday Lending Legislation Resources – 2004 Session
| State: | Bill Summary: |
| Alaska | S.B. 113 Requires periodic examinations of licensees engaged in the business of making loans of money, credit, goods or things in action. |
| Arizona | H.B. 2404 Amends requirements for deferred presentment companies. |
| H.B. 2406 Prohibits extensions on deferred presentment transactions. |
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| Delaware | H.B. 393 Withdrawn from further consideration 6/16/04 Substantially reenacts, as part of Title 10, the civil bad check statute (formerly 6 Del. C. § 3-806), which was repealed in 1995, and adjusts damages to reflect current costs. It expressly provides that damages or fees may not be obtained under this Act in any action for repayment of a short-term consumer loan, also known as a pay-day loan, made by a bank and subject to 5 Del. C. § 978 or made by a licensed lender and subject to 5 Del. C. § 2235. Recognizes that the drawer and the plaintiff can by agreement vary the limits reflected in this statute but that any such agreement would remain subject to other provisions of Delaware law. |
| H.B. 474 Substantially reenacts the civil bad check statute (formerly 6 Del. C. § 3-806) which was repealed in 1995, and sets damages at $50.00 for the first bad check, draft, or order for the payment of money by a drawer to the plaintiff within one year. Damages are set at triple the amount of the bad check, draft or order for the second or subsequent bad check, draft, or order within one year not to exceed $250.00. Further specifies that the fee for a dishonored check prior to commencement of an action shall be $40. Expressly provides that damages or fees may not be obtained under this Act in any action for repayment of a short-term consumer loan, also known as a pay-day loan, made by a bank and subject to 5 Del. C. § 978 or made by a licensed lender and subject to 5 Del. C. § 2235A. |
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| Georgia | H.B. 1713 Creates the Deferred Presentment Act, provides for licensing of persons who provide deferred presentment services; defines certain terms; provides for licenses, qualifications, and application therefore; provides for fees; provides for limitations; provides for consumer notices; provides for rules and regulations; provides for penalties and hearings; provides for complaint investigation; provides for annual reports. |
| Hawaii | S.B. 2393 Allows a check casher to enter into multiple agreements for deferred deposits with a customer; provided that the combined multiple agreements do not exceed a total of $600. |
| Illinois | H.B. 4002 Amends the Consumer Installment Loan Act. Provides that, during the 30-day period beginning with the date the loan is commenced, a short-term lender may not impose fees of more than 25 percent of the principal amount of a short-term or title-secured loan. |
| H.B. 4062 Creates the Payday Loan Act. Contains only a short title provision. |
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| H.B. 4110 Creates the Deferred Presentment Services Act. Contains only a short title provision. |
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| H.B. 4111 Creates the Consumer Protection and Payday Lenders Regulation Act. Contains only a short title provision. |
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| H.B. 4112 Creates the Payday Loan Consumer Protection Act. Contains only a short title provision. |
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| H.B. 4460 Creates the Payday Loan Act. Contains only a short title provision. |
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| H.B. 4876 Creates the Illinois Short-Term Loan and Title Loan Regulation Act. Provides that the Department of Financial Institutions shall license and regulate entities that offer short-term loans (loans under which a lender accepts either: a post-dated check, authorization to debit a borrower’s bank account, or future wages by the wage assignment) or title loans (loans wherein, at commencement, a borrower provides to the lender, as security for the loan, physical possession of the obligor’s title to a motor vehicle, a boat, or any other personal property). Establishes requirements and restrictions applicable to license applications and licensing. Sets forth limitations, requirements and disclosures applicable to loan agreements, terms of loans, finance charges, and renewal of loans. Provides for: revocation, suspension, and surrender of licenses; information to be available to the public; complaint handling, hearings, books and records; reports; advertising; prohibited acts; requirements and restrictions applicable to vehicle and boat titles; liens; penalties; enforcement; bonding; administrative rules; and other matters. Amends the Financial Institutions Code to provide that the Department of Financial Institutions shall administer the Illinois Short-Term and Title Loan Regulation Act. Amends the Consumer Installment Loan Act to provide that the Act does not apply to short-term and title loans. Provides that a violation of the Illinois Short-Term and Title Loan Regulation Act constitutes a violation of the Consumer Fraud and Deceptive Business Practices Act. |
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| H.B. 4935 Creates the Payday Loan Act. Contains only a short title provision. |
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| H.B. 4936 Creates the Payday Loan Act. Contains only a short title provision. |
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| H.B. 6375 Creates the Payday Loan Act. Contains only a short title provision. |
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| H.B. 6641 Amends the Consumer Installment Loan Act. Provides that a short-term lender may not charge interest on a short-term loan at an annual percentage rate exceeding 32 percent. Requires the Department of Financial Institutions to conform its rules to the new provisions. |
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| H.B. 6762 Creates the Payday Loan Act. Contains only a short title provisions. |
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| H.R. 962 Urges the federal regulatory authorities, in considering the announced merger of JP Morgan Chase and Bank One Corporation, to only approve the merger with adequate conditions to protect Illinois consumers and small business, and urges the treasurer to deny contracts for state deposit of monies with banks that provide financing of payday loans. |
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| S.B. 2477 Creates the Consumer Protection and Payday Lenders Regulation Act. Contains only a short title provision. |
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| S.B. 2478 Creates the Payday Loan Consumer Protection Act. Contains only a short title provision. |
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| S.B. 2479 Creates the Deferred Presentment Services Act. Contains only a short title provision. |
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| S.B. 2723 Creates the Illinois Short-Term Loan and Title Loan Regulation Act. Provides that the Department of Financial Institutions shall license and regulate entities that offer short-term loans (loans under which a lender accepts either: a post-dated check, authorization to debit a borrower’s bank account, or future wages by the wage assignment) or title loans (loans wherein, at commencement, a borrower provides to the lender, as security for the loan, physical possession of the obligor’s title to a motor vehicle, a boat, or any other personal property). Establishes requirements and restrictions applicable to license applications and licensing. Sets forth limitations, requirements and disclosures applicable to loan agreements, terms of loans, finance charges, and renewal of loans. Provides for: revocation, suspension, and surrender of licenses; information to be available to the public; complaint handling, hearings, books and records; reports; advertising; prohibited acts; requirements and restrictions applicable to vehicle and boat titles; liens; penalties; enforcement; bonding; administrative rules; and other matters. Amends the Financial Institutions Code to provide that the Department of Financial Institutions shall administer the Illinois Short-Term and Title Loan Regulation Act. Amends the Consumer Installment Loan Act to provide that the Act does not apply to short-term and title loans. Provides that a violation of the Illinois Short-Term and Title Loan Regulation Act constitutes a violation of the Consumer Fraud and Deceptive Business Practices Act. |
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| Kansas | S.B. 439 Sets the maximum amount allowed for consumer loans at $500. |
| Louisiana | H.B. 716 Eliminates reimbursement of N.S.F. charges and adds prohibition on financing services in connection with a deferred presentment transaction or small loan. |
| S.B. 285 Provides for the Louisiana Pay Day Loan Act in order to provide for comprehensive regulation of the deferred deposit loan or payday loan business; provides for civil and criminal penalties; provides for civil remedies. |
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| S.B. 590 Withdrawn from further consideration 4/5/04 Relates to the Louisiana Deferred Presentment and Small Loan Act; provides for an increase in the maximum fee that may be charged on a deferred presentment transaction or small loan; provides for other fees that may be charged by the licensee; provides for prohibited acts by the licensee. |
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| S.B. 686 Withdrawn from further consideration 4/19/04 Relates to the Louisiana Presentment and Small Loan Act; eliminates authority for certain reimbursements; provides for fee for returned checks and preparation of certain documents; adds prohibited acts. |
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| Massachusetts | H.B. 663 Relates to cashing checks for deferred deposit. |
| H.B. 664 Allows consumer check cashing for deferred deposit. |
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| Michigan | H.B. 4944 Regulates the business of deferred presentment services; requires the licensing of providers of deferred presentment services; prescribes powers and duties of certain state agencies and officials; and prescribes penalties and provides remedies. |
| H.B. 4985 Creates the Deferred Deposit Loan Act, provides for licensing and fees; prescribes the powers and duties of certain state agencies and officials; and provides for penalties. |
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| S.B. 21 Creates the Deferred Deposit Loan Act; regulates deferred deposit loans for issued checks; provides for licensing and fees; prescribes the powers and duties of certain state agencies and officials; and provides for penalties. |
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| S.B. 474 Vetoed by governor 1/9/04 Requires the licensing of providers of deferred presentment services; prescribes powers and duties of certain state agencies and officials; and prescribes penalties and provides remedies. |
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| Missouri | H.B. 964 Limits the interest and fees that may be charged for unsecured loans less than $500. Limits the interest and other charges to a total of $15 per $100 of principal for the first 31 days of the loan, and interest of not more than three percent per month thereafter, including any loan extensions by any affiliated lender. Repeals language that permits lenders to issue a new loan to pay off the original loan, which allows the lender to once again charge 75 percent interest. |
| H.B. 1236 Revises the laws governing unsecured loans of $500 or less. The bill: (1) Limits the interest and other fees that may be charged on the loans to $15 for the first $100 of principal for the first 30 days of the loan, and thereafter not more than one-and-a-half times the maximum rate established for credit cards, pursuant to Section 408.145, which is an annual percentage rate of approximately 36 percent; (2) Prohibits repeated renewals of loans to circumvent interest rate restrictions; (3) Grants jurisdiction to the attorney general to issue cease and desist orders against violators; (4) Allows the attorney general to sue for injunctions, rescission of loan contracts and restitution and civil penalties for violations; and (5) Clarifies that the limitations apply to all lenders, whether or not they are properly licensed pursuant to Chapter 408. |
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| Nebraska | L.B. 847 Indefinitely postponed 2/11/04 Relates to the Delayed Deposit Services Licensing Act, authorizes electronic automated clearinghouse transactions. |
| New Jersey | A.B. 972 Allows licensed check cashers to make small unsecured emergency advance or “payday” consumer loans of up to $500 and regulates those loan transactions. Limits the fee rate chargeable by the licensee to 10 percent of the total amount of the customer’s personal check, and specifies that the deferment must be for not less than seven days and not more than 30 days. Prohibits more than one outstanding payday loan to a borrower; provides for a cooling off period between payday loans to a customer; limits the total annual transaction fees chargeable per customer; prohibits payday loans to customers whose sole means of support is Social Security or government benefits payments; and provides for the right to rescind a payday loan by the close of the next business day. |
| New York | A.B. 3480 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. |
| S.B. 7299 Defines “payday loan” as a short-term cash advance made in exchange for issuance of a check for the amount of the advance plus a fee when it is agreed that the check will not be cashed until a date in the future, or authorization to debit the account of the debtor for the amount of the advance plus a fee at a date in the future; requires every person who provides payday loans to provide a written disclosure form which contain the terms of the loans and such form shall be signed by the consumer; requires persons providing payday loans to report to the consumer protection board on a quarterly basis; establishes civil fines for violations of such provisions. |
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| Oklahoma | S.B. 1524 Amends statute related to the Deferred Deposit Lending Act. |
| Pennsylvania | H.B. 1808 Reduces or eliminates the most serious problems associated with short-term loans; creates an avenue for emergency short-term loans by incorporating significant consumer protections; prevents the use or threat to use the criminal courts to collect short-term loans; and provides for licensure of short-term lenders and short-term brokers by the Department of Banking and for examination and regulation of the short-term loan industry by the Department of Banking. |
| H.B. 2150 Reduces or eliminates the most serious problems associated with short-term loans; creates an avenue for emergency short-term loans by incorporating significant consumer protections; prevents the use or threat to use the criminal courts to collect short-term loans; and provides for licensure of short-term lenders and short-term brokers by the Department of Banking, for examination and regulation of the short-term loan industry by the Department of Banking and for penalties. |
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| S.B. 1045 Regulates the check-cashing industry; provides for the licensing of check cashers, for additional duties of the Department of Banking and for certain terms and conditions of the business of check cashing; and provides penalties for money-laundering activities and violations of the act, provides for additional requirements and prohibitions for licensees, including prohibiting cashing or advancing money for a post-dated check. |
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| South Dakota | H.B. 1259 Tabled 2/3/04 Amends requirements for rolling over a deferred presentment transaction. |
| Utah | S.B. 37 Enacting clause struck 3/3/04 Modifies the Check Cashing Registration Act to address provisions related to deferred deposit loans. Defines terms; requires disclosure of annual percentage rate in advertisements; requires disclosure of interest and fee schedule in the written contract; establishes a cap on interest and fees; limits the number of loans a check casher may extend at any one time to one person; limits the amount of a deferred deposit loan based on the borrower’s monthly gross income; prohibits certain provisions or waivers being a condition for extending a deferred deposit loan; provides for civil action. |
| Virginia | H.B. 518 Stricken from docket 1/27/04 Prohibits a person from making a payday loan unless such person is a financial institution. Requires payday lenders to explain to borrowers the pamphlet that lenders are required to provide to borrowers explaining the rights and responsibilities of the borrower. |
| H.B. 1156 Continued to 2005 Requires the State Corporation Commission on or before July 1, 2005, to implement a common database with real-time access through an Internet connection for payday lenders that would allow payday lenders to determine if a prospective borrower already has a loan outstanding or has closed a loan within the previous 24 hours. The Commission is authorized to charge a $1 fee per transaction. A licensee may rely on the information contained in the database as accurate and is not subject to any administrative penalty or civil liability as a result of relying on inaccurate information contained in the database. Prohibits a payday lender from entering into a payday loan (i) with a person who has an outstanding payday loan with that licensee or affiliate or with any other payday lender, or (ii) with a person whose previous payday loan has been terminated for less than 24 hours, and requires a payday lender to maintain an internal common database and check the Commission’s database to verify compliance with this prohibition. Prohibits a licensee from entering into a loan with a spouse of a member of the armed forces when the loan is secured against that member’s pay unless a special power of attorney signed by the member of the armed forces is provided authorizing the loan. |
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| West Virginia | H.B. 2222 Prohibits any person from engaging in the business of making, arranging, acting as a middleman for, or brokering cash advances or loans to persons for any personal, family or household purpose under any agreement in which checks, share drafts or authorizations to debit accounts of consumers are used as security or as a direct or indirect part of a transaction for an advance, loan or extension of credit, and in which the payment of checks, share drafts or the debit of accounts is deferred. |
| H.B. 2756 Creates the Deferred Deposit Loan Act; defines certain terms; provides for the licensing of deferred deposit lenders; investigations by the commissioner of banking; denial of license; requires specific information regarding location, records and annual reports of licensees; prohibits certain types of advertising by licensees; transaction documentation and notice to consumers required; allows finance charges; loan amount limited to $500; limits deferred deposit loans to one renewal; form of proceeds; required endorsement; right of redemptions; dishonored charges; required posting of charges; assignment or sale of instruments; grounds for suspension or revocation of license; penalties; notice of refusal, suspension or revocation; hearing; judicial review, actions to enjoin violations; voided loans; applicability of the act; and unfair or deceptive practices. |
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| H.B. 4261 Prohibits any person from engaging in the business of making, arranging, acting as a middleman for, or brokering cash advances or loans to persons for any personal, family or household purpose under any agreement in which checks, share drafts or authorizations to debit accounts of consumers are used as security or as a direct or indirect part of a transaction for an advance, loan or extension of credit, and in which the payment of checks, share drafts or the debit of accounts is deferred. |
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| H.B. 4425 Creates the Deferred Deposit Loan Act. |
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| S.B. 98 Prohibits any person from engaging in the business of making, arranging, acting as a middleman for, or brokering cash advances or loans to persons for any personal, family or household purpose under any agreement in which checks, share drafts or authorizations to debit accounts of consumers are used as security or as a direct or indirect part of a transaction for an advance, loan or extension of credit, and in which the payment of checks, share drafts or the debit of accounts is deferred. |
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| S.B. 291 Prohibits any person from engaging in the business of making, arranging, acting as a middleman for, or brokering cash advances or loans to persons for any personal, family or household purpose under any agreement in which checks, share drafts or authorizations to debit accounts of consumers are used as security or as a direct or indirect part of a transaction for an advance, loan or extension of credit, and in which the payment of checks, share drafts or the debit of accounts is deferred. |
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| Wisconsin | A.B. 665 Vetoed by governor 4/15/04 Creates additional notice requirements that specifically apply to payday loans made by these licensed lenders. Under this bill, before disbursing funds pursuant to a payday loan of less than $15,000 with a term of at least three days but not more than 31 days, the payday loan provider must provide the borrower with a notice that compares the cost of the payday loan if it is paid in full when due with the cost of the payday loan if it is paid in full after being refinanced three times. Furthermore, the payday loan provider must notify the borrower that a payday loan is not intended to meet long-term financial needs, that a payday loan should be used only in a financial emergency, that the borrower will be required to pay additional fees if the payday loan is not paid in full when due, and that refinancing the payday loan, or entering into consecutive payday loans to pay an existing payday loan, may cause financial hardship. Requires the payday loan provider to notify the borrower that the borrower may cancel such a payday loan at any time before receiving the loan funds. In addition, the payday loan provider must provide the borrower with materials, obtained from the Department of Financial Institutions, that inform the borrower of the potential costs of entering into a payday loan and of other options for borrowing funds that may be available. |
| S.B. 338 Failed to pass pursuant to Senate Joint Resolution 1 3/31/04 Creates additional notice requirements that specifically apply to payday loans made by these licensed lenders. Under this bill, before disbursing funds pursuant to a payday loan of less than $15,000 with a term of at least three days but not more than 31 days, the payday loan provider must provide the borrower with a notice that compares the cost of the payday loan if it is paid in full when due with the cost of the payday loan if it is paid in full after being refinanced three times. Furthermore, the payday loan provider must notify the borrower that a payday loan is not intended to meet long-term financial needs, that a payday loan should be used only in a financial emergency, that the borrower will be required to pay additional fees if the payday loan is not paid in full when due, and that refinancing the payday loan, or entering into consecutive payday loans to pay an existing payday loan, may cause financial hardship. Requires the payday loan provider to notify the borrower that the borrower may cancel such a payday loan at any time before receiving the loan funds. In addition, the payday loan provider must provide the borrower with materials, obtained from the Department of Financial Institutions, that inform the borrower of the potential costs of entering into a payday loan and of other options for borrowing funds that may be available. |
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| S.B. 345 Failed to pass pursuant to Senate Joint Resolution 1 3/31/04 Creates requirements and prohibitions that apply specifically to payday loan transactions. Under this bill, a lender, other than a bank, saving bank, savings and loan association, or credit union, who makes payday loans in the regular course of business (payday loan provider), may not assess fees or interest in a payday loan transaction in an aggregate amount that exceeds five percent of the amount of the payday loan. In addition, a payday loan provider may not make a payday loan with a term of less than 30 days. Requires a payday loan provider to give each borrower copies of educational brochures prepared by Department of Financial Institutions regarding the operation and potential costs of payday loans, to make annual reports to the division of banking in Department of Financial Institutions, and to pay annually any reasonable filing fee imposed by the Division of Banking in Department of Financial Institutions. |
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