US Introduced Payday Lending Legislation Resources – 2006 Session in United States
US Introduced Payday Lending Legislation Resources – 2006 Session
| State: | Bill Summary: |
| Arizona | H.B. 2330 Prescribes requirements for renewing deferred presentment loans. |
| H.B. 2498 Prescribes procedures for deferred presentment licensees pertaining to military service members, requires a deferred presentment agreement be translated into Spanish and repeals the sunset date of deferred presentment services. |
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| H.B. 2546 Prescribes requirements for deferred presentment loans; requires a real-time database be created that contains information on all deferred presentment transactions. |
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| H.B. 2688 Prescribes requirements and procedures for deferred presentment transactions. |
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S.B. 1422 Prescribes procedures for deferred presentment transactions pertaining to military service members. |
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| California | A.B. 207 Died pursuant to Art. IV, Sec. 10(c) of the Constitution 1/31/06 Prohibits the fee for specified deferred deposit transactions from exceeding an effective annual rate greater than 10 percent. Requires a check from a customer for these deferred deposit transactions to be made payable to the actual name of the licensee. Prohibits a check that has been held by a licensee for more than 31 days from being presented to a bank for payment. |
| A.B. 1965 Passed Assembly 4/27/06 As of January 1, 2007, authorizes a military borrower, as defined, to defer payments and to enter into a repayment plan with respect to deferred deposit transactions, as provided. Prohibits licensees making deferred deposit transactions from engaging in specified practices with respect to military borrowers and requires those licensees, before entering into such a transaction with a military borrower, to provide a statement to the borrower explaining his or her rights, as specified. Requires the commissioner of Corporations to enact regulations to implement these provisions and to give notice to licensees, as specified. Provides that a licensee who does not enter into deferred deposit transactions with service members shall not be guilty of or liable for discrimination, as specified. Repeals these provisions on January 1, 2009, unless that date is extended by a subsequently enacted statute. |
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| Florida | H.B. 499 Died in committee 5/5/06 S.B. 462 Died in committee 5/5/06 Restricts actions of a deferred presentment provider under a deferred presentment transaction agreement with a member of the United States armed forces or a spouse of a servicemember; prohibits a deferred presentment provider from entering into a transaction agreement with a servicemember under certain circumstances. |
| S.B. 1584 Laid on table 5/2/06 Provides a public-records exemption for information contained in the database maintained by the Office of Financial Regulation for deferred presentment providers which identifies or is specific to a particular drawer or said provider; authorizes a court to order access to such information upon showing of good cause; provides for future review and repeal of exemption under the OGSR Act. |
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| Hawaii | H.B. 2768 Requires check cashing businesses to post deferred deposit agreement fees in a conspicuous place, provides a blank percentage to modify the maximum fee that a check cashing business may charge for a deferred deposit agreement, and requires check cashing businesses to register with the Department of Commerce and Consumer Affairs. |
| S.B. 2908 Requires check cashing businesses to post deferred deposit agreement fees in a conspicuous place, provides a blank percentage to modify the maximum fee that a check cashing business may charge for a deferred deposit agreement, and requires check cashing and rapid anticipation loan businesses to register with the Department of Commerce and Consumer Affairs. |
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| Illinois | H.B. 4929 Creates the Short-Term Lending Reform Act. Contains only a short title provision. |
| H.B. 4962 Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title. |
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| H.B. 5426 Amends the Payday Loan Reform Act. Makes a technical change in a section concerning the short title. |
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| H.B. 5831 Amends Consumer Installment Loan Act. Restricts lending practices by licensees to members of the military or spouses of the members of the military including that: (i) a licensee may not garnish the wages or salaries of a borrower who is a member of the military or is the spouse of a member of the military; (ii) in addition to any rights and obligations provided under the federal Servicemembers Civil Relief Act, a licensee shall suspend and defer collection activity against a borrower who is a member of the military and who has been deployed to a combat or combat support posting, or to the spouse of a borrower who is a member of the military and who has been deployed to a combat or combat support posting, for the duration of the deployment; (iii) a licensee may not knowingly contact the military chain of command of a borrower who is a member of the military in an effort to collect on any loan; (iv) licensees must honor the terms of any repayment plan that they have entered into with any borrower who is a member of the military, including a repayment agreement negotiated through military counselors or third-party credit counselors; and (v) a licensee may not use any military design or insignia on any advertising material or other material distributed to a member of the military or the spouse of member of the military that suggests military approval or endorsement of any product of that licensee. Defines “member of the military”. Amends the Payday Loan Reform Act. Provides that the prohibitions and restrictions on lenders of payday loans to members of the military apply to the spouses of the members of the military. Prohibits a lender from using any military design or insignia on any advertising material or other material distributed to a member of the military or the spouse of a member of the military that suggests military approval or endorsement of any product of that lender. |
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| H.B. 5833 Amends the Consumer Installment Loan Act. Provides provisions concerning consumer protections, prohibited acts, required disclosures, and members of the military for loans under the Act with a finance charge exceeding an annual percentage rate of 36 percent for which the lender accepts any of the following as security for the loan: (1) one or more checks dated on the date written with an agreement to hold them for a period of days before deposit or presentment or one or more checks dated subsequent to the date written with an agreement to hold them for deposit; (2) one or more authorizations to debit a consumer’s bank account; or (3) an interest in a consumer’s wages, including, but not limited to, a wage assignment. |
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| S.B. 3081 Creates the Short-Term Lending Reform Act. Contains only a short title provision. |
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| Iowa | H.F. 2003 Relates to payday lending services by providing for the licensing and regulation of payday loan lenders in new Code chapter 533E. The bill defines a “payday loan” as a loan with a finance charge that exceeds a 36 percent annual percentage rate with a term not more than 120 days and pursuant to which the lender either accepts a personal check, a debit authorization, or a wage assignment for repayment of the loan. The regulation of payday loans in the bill does not extend to banks, savings and loan associations, credit unions, insurance companies, or similar entities licensed in this state and primarily engaged in lending or investing funds, but does extend to agents of such entities except with regard to the regulation of finance charges. |
| S.F. 2060 Relates to payday lending services by providing for the licensing and regulation of payday loan lenders in new Code chapter 533E. The bill defines a “payday loan” as a loan with a finance charge that exceeds a 36 percent annual percentage rate with a term not more than 120 days and pursuant to which the lender either accepts a personal check, a debit authorization, or a wage assignment for repayment of the loan. The regulation of payday loans in the bill does not extend to banks, savings and loan associations, credit unions, insurance companies, or similar entities licensed in this state and primarily engaged in lending or investing funds, but does extend to agents of such entities except with regard to the regulation of finance charges. |
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| Louisiana | H.B. 341 Prohibits payday lending and provides for penalties and fines for violation. Prohibits certain venue and arbitration provisions in certain loan contracts. Provides for special rules for military personnel. |
| S.B. 434 Creates the Louisiana Pay Day Loan Act, to regulate “pay day loans” and requires the law to be liberally construed in order to protect consumers. |
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| Maryland | H.B. 694 Withdrawn from further consideration 2/27/06 Creates a Short-Term Small Consumer Loan Study Commission; provides for the membership and cochairs of and staff for the Study Commission; requires the Study Commission to perform specified duties, including reporting to the General Assembly on or before December 1, 2007; and provides for the termination of the Act. |
| H.B. 696 Establishes a Short-Term Small Consumer Loan Study Commission; provides for the membership and cochairs of and staff for the Study Commission; requires the Study Commission to perform specified duties, including reporting to the General Assembly on or before June 1, 2007; and provides for the termination of the Act. |
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| Mississippi | S.B. 2134 Died in committee 1/31/06 Creates the Mississippi Deferred Deposit Loan Act; defines certain terms; provides for licensing and examination of persons engaging in the business of making deferred deposit loans; requires certain disclosures to consumers; requires certain acts; prohibits certain acts; requires reporting to the commissioner of banking and consumer finance; provides penalties for violations of the act; repeals §§75-67-501 through 75-67-539, Mississippi Code of 1972, which create the Mississippi Check Cashers Act. |
| S.B. 2342 Died in committee 1/31/06 Requires check casher licensees to file annual reports with the commissioner of banking and consumer finance; requires the commissioner to compile an annual report containing certain data regarding all deferred deposit loans made in the preceding year. |
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| Missouri | H.B. 1227 Expands the crime of passing a bad check to include checks that are postdated or held for later presentment. |
| New Jersey | A.B. 349 Allows licensed check cashers to make small unsecured emergency advance or “payday” consumer loans of up to $500 and regulates those loan transactions. The bill 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. In addition, the bill 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. |
| S.B. 1245 Provides that, in addition to any other penalties provided by law, it is an unlawful practice under the consumer fraud act, P.L.1960, c.39 (C.56:8-1 et seq.), for any person to engage in the business of making deferred deposit or “payday” loans. Although the annual percentage rates associated with payday loans may violate existing usury statues and other laws, this bill expressly prohibits payday loans by making this practice a violation of the consumer fraud act. An “unlawful practice” under the consumer fraud act is punishable by a monetary penalty of not more than $10,000 for a first offense and not more than $20,000 for any subsequent offense. In addition, a violation can result in cease and desist orders issued by the attorney general, the assessment of punitive damages and the awarding of treble damages and costs to the injured party. |
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| New Mexico | H.B. 409 Passed House Provides for the limitation of fees and regulation of payday loans. |
| S.B. 448 Provides for the limitation of fees and regulation of payday loans; provides penalties. |
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| S.B. 475 Provides for the limitation of fees and regulation of payday loans; provides penalties. |
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| S.B. 548 Provides for the limitation of fees and regulation of payday loans; provides penalties. |
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| S.B. 636 Provides for the limitation of fees and regulation of payday loans. |
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| New York | A.B. 850 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. |
| A.B. 7288 Passed Assembly 4/3/06 Sets forth procedures for licensed lenders and payday loans by military borrowers; provides that a licensee shall not garnish any wages or salary paid for service in the armed forces when collecting any delinquent payday loan, defer all collection activity against a military borrower, honor the terms of any repayment agreement between a licensee and military borrower and make no loans to a military borrower if a commander has declared a specific location of the licensee’s business is off limits to military personnel. |
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| Ohio | S.B. 286 Prohibits check-cashing businesses from making loans to a customer who has an outstanding loan with another licensee, to create a statewide database of open loans at check-cashing licensees, and to change the permitted interest rate, fees, and duration of such loans. |
| S.B. 375 Amends §1315.39 of the Revised Code to limit interest charged on loans by licensed check-cashing businesses to members of the armed forces and their dependents. |
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| Oklahoma | S.B. 1062 Relates to the Deferred Deposit Lending Act; modifies minimum loan term; prohibits certain practices for specified borrowers; modifies the maximum finance charge. |
| S.B. 1920 Relates to the Deferred Deposit Lending Act; prohibits certain acts for specified borrowers. |
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| Rhode Island | H.B. 7381 Decreases the amount a licensee could charge for deferred deposit transaction fees to 10 percent of the amount of funds advanced. |
| S.B. 2907 Decreases the amount a licensee could charge for deferred deposit transaction fees to 10 percent of the amount of funds advanced. |
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| South Dakota | H.B. 1179 Regulates certain consumer small loans and payday loans. |
| Utah | H.B. 462 Enacting clause struck 3/1/06 Requires a check casher or title lender extending a loan to post a current certificate of examination; imposes limitations on interest that may be charged on a deferred deposit or title loan; limits what a check casher or title lender may recover if a check, draft, order, or other instrument used in a deferred deposit or title loan is dishonored; modifies examination requirements including requiring the Department of Financial Institutions to provide certificates of examination; and makes technical changes. |
| S.B. 76 Enacting clause struck 3/1/06 Provides for an administrative fine under certain circumstances related to the failure to be registered under the registration acts; expands the disclosures required for a deferred deposit loan; expands requirements for contracts of loans under the registration acts; establishes requirements for rolling over a deferred deposit loan; adds to the operational requirements of lenders under the registration acts; addresses the use of a check casher’s name on an application and promissory note; addresses transactions involving persons other than the check casher; provides for enforcement by the department of specified federal statutes and regulations incorporated into the registration acts and of administrative rules; addresses the timing of check casher’s responding to certain complaints. |
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| Virginia | H.B. 225 Incorporated into H.B. 912 Requires the State Corporation Commission on or before July 1, 2007, to contract with a third party to establish and administer a database with real-time access through an Internet connection to ensure compliance with the Payday Loan Act. The measure also prohibits payday lenders from entering into a payday loan with a person who has an outstanding payday loan with that licensee or affiliate or with any other payday lender, or with a person whose previous payday loan has been terminated for less than 30 days, and from extending or continuing a payday loan where the lender continues to hold the borrower’s check or substitutes a new check. |
| H.B. 619 Continued to 2007 Repeals the Payday Loan Act. |
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| H.B. 626 Incorporated into H.B. 912 Increases the minimum term of a payday loan from seven to 60 days. Provisions requiring the posting of fees for sample loans are amended to reflect the extended minimum term. |
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| H.B. 912 Stricken from House Calendar 2/13/06 Requires the State Corporation Commission on or before July 1, 2007, to contract with a third party to establish and administer a database with real-time access through an Internet connection to ensure compliance with the Payday Loan Act. The measure also (i) increases the minimum length of a payday loan from seven to 15 days; (ii) prohibits a payday lender from making a payday loan to a borrower if the borrower has another payday loan outstanding or within 48 hours following the borrower’s payment of another payday loan; (iii) making a payday loan to a borrower if the proceeds of the payday loan will be used in whole or in part to repay an outstanding payday loan; (iv) prohibits a lender from instituting collection proceedings against a borrower until 60 days after the date of default; (v) prohibits a lender from engaging in any unfair, misleading, deceptive, or fraudulent acts or practices in the making or collecting of a payday loan; (vi) requires a lender, when collecting or attempting to collect a payday loan when the check given as security for such loan is dishonored, to comply with the provisions of the Fair Debt Collection Practices Act that apply to debt collectors; (vii) increases the maximum fine or penalty for a violation from $1,000 to $2,500; and (viii) provides that any provision of a written loan agreement that violates the Payday Loan Act is unenforceable against the borrower. |
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| H.B. 1224 Clarifies that a locality may provide in its zoning or subdivision ordinance standards, conditions, and criteria for the dispersal of business establishments of persons engaged in any of the following businesses: (i) cashing checks, drafts, or money orders for compensation; (ii) making payday loans to any consumer residing in the Commonwealth; and (iii) lending money secured by a bailment of a certificate of title to a motor vehicle or by a security interest in a motor vehicle. |
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| Washington | H.B. 2852 Provides that any small loan agreement or contract made between a borrower and a licensee without the licensee first obtaining a small loan endorsement is void and unenforceable. Does not apply to a loan made by a private party to another private party if the interest rate charged is less than the usury rate in RCW 19.52.020. |
| H.B. 2881 Passed House 2/7/06 Provides that a licensee shall: (1) Not contact, or threaten to contact, either orally or in writing, the military chain of command of a military borrower in an effort to collect a delinquent small loan; (2) Not communicate with a military borrower in such a manner as to harass, intimidate, threaten, or embarrass the military borrower, including but not limited to communication at an unreasonable hour, with unreasonable frequency, by threats of force or violence, by threats of criminal prosecution, and by use of offensive language. Provides that communication is presumed to have been made for the purposes of harassment when: (1) It is made with a military borrower in any form, manner, or place, more than three times in a single week; (2) It is made with a military borrower at his or her place of employment more than one time in a single week; or (3) It is made with a military borrower at his or her place of residence between the hours of 9:00 p.m. and 7:30 a.m. Applies to any person who has notified the licensee in writing that they are the legal spouse of such a member of the armed forces, National Guard, or reserve. |
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| H.B. 2997 Requires the director to develop an Internet-based education program for the employees of a licensee that has a small loan endorsement. The program must instruct employees about applicable state laws that pertain to payday lending. Applies only to those employees who make small loans and are involved in the making, approval, or collection of a small loan. New employees must complete the program within six months after the date they are hired. All employees must complete the program at least once every two years. Appropriates the sum of $40,000, or as much thereof as may be necessary, for the fiscal year ending June 30, 2007, from the general fund to the Department of Financial Institutions for the purposes of this act. |
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| West Virginia | H.B. 2529 Creates the Deferred Deposit Loan Act. |
| H.B. 2665 Prohibits the use of checks, bank account debit authorizations, or share drafts as security for loans or cash advances made for personal, family or household purposes. |
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| H.B. 4083 S.B. 248 Prohibits the use of checks, bank account debit authorizations, or share drafts as security for loans or cash advances made for personal, family or household purposes. |
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| H.B. 4567 Regulates deferred deposit loans by establishing the Deferred Deposit Loan Act. |
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| S.B. 56 Establishes the Deferred Deposit Loan Act. |
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| S.B. 457 Creates the Payday Lending Act. |
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| S.B. 486 Establishes the Deferred Deposit Loan Act. |
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| S.B. 559 Regulates deferred deposit loans by establishing the Deferred Deposit Loan Consumer Protection Act. |
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| S.C.R. 82 Requests the Joint Committee on Government and Finance study payday lending. |
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| Wisconsin | A.B. 914 Failed to pass pursuant to Senate Joint Resolution 1 5/11/06 Creates a maximum finance charge for payday loans. Under the 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, which the bill defines as a “payday loan provider,” may not assess a finance charge that exceeds two percent per month. In addition, a payday loan provider must obtain the lender license. Also, the bill requires the division to enforce the bill’s prohibition. |
| S.B. 465 Failed to pass pursuant to Senate Joint Resolution 1 5/11/06 Under current law, a person may not issue a check if he or she intends that it not be paid. A person who violates this prohibition is guilty of a misdemeanor or a felony, depending on the face value of the check or checks involved. This prohibition, however, does not apply to a postdated check or a check given for something previously received (except a payroll check). This bill eliminates the exception in the worthless check statute for postdated checks and checks given for past consideration. |
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| S.B. 674 Failed to pass pursuant to Senate Joint Resolution 1 5/11/06 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. The bill also requires a payday loan provider to give each borrower copies of educational brochures prepared by the Department of Financial Institutions (DFI) regarding the operation and potential costs of payday loans, to make annual reports to the Division of Banking in DFI, and to pay annually any reasonable filing fee imposed by the Division of Banking in DFI. |
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| Wyoming | H.B. 58 Designated Inactive 3/8/06 Relates to the Uniform Consumer Credit Code; provides for notification of pay-day check cashing laws; provides for a limit on amount financed; modifies interest charges and maximum term; allows for suspension of post-dated check casher’s license; provides an appropriation. |
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