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2002 SESSION

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HB 940 Payday lending; usury, penalties.

Introduced by: Harvey B. Morgan | all patrons    ...    notes | add to my profiles

SUMMARY AS PASSED: (all summaries)

Payday lending; usury; penalties. Establishes requirements for the conduct of payday lending. A "payday loan" is a transaction where the lender (i) accepts a check or similar instrument from the borrower; (ii) agrees to hold the check for a period of time prior to negotiation or presentment; and (iii) gives the borrower the amount of the check less the permitted interest charge. If the borrower does not pay the loan by the due date, the lender may obtain repayment by cashing the borrower's check. The measure caps the fee that a payday lender may charge at $15 per $100 advanced to the borrower. The minimum term is 7 days. Lenders are prohibited from renewing or "rolling over" such loans. Payday lenders are required to be licensed with the State Corporation Commission. A violation of the measure is a prohibited practice under the Consumer Protection Act. Violators are subject to civil and criminal penalties. Making unlicensed loans, or arranging or brokering payday loans, is punishable as a Class 6 felony.


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