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2009 SESSION

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HB 1709 Payday lenders; prohibited from making an unsecured loan, etc., with interest rate in excess of 36%.

Introduced by: G. Glenn Oder | all patrons    ...    notes | add to my profiles | history

SUMMARY AS ENACTED WITH GOVERNOR'S RECOMMENDATION:

Open-end loans by payday lenders.  Prohibits licensed payday lenders from extending credit under open-end credit plans. Third parties are prohibited from making such loans at a payday lender's place of business.  The prohibition does not apply to such loans if secured by a lien on a motor vehicle title.  If a licensed payday lender relinquishes its license and then makes open-end loans, it may not be re-licensed to make payday loans for a period of 10 years.  The measure is emergency legislation that will take effect upon passage.  SB 1470 is identical. 

SUMMARY AS PASSED:

Open-end loans by payday lenders.  Prohibits licensed payday lenders from extending credit under open-end credit plans. Third parties are prohibited from making such loans at a payday lender's place of business.  The prohibition does not apply to such loans if secured by a lien on a motor vehicle title.  If a licensed payday lender relinquishes its license and then makes open-end loans, it may not be re-licensed to make payday loans for a period of 10 years.  SB 1470 is identical. 

SUMMARY AS PASSED HOUSE:

Payday loans.  States that any unsecured loan or extension of credit with an annual interest rate in excess of 36 percent, that involves the licensee holding a check, or the borrower granting the licensee the right to obtain funds electronically through an automated clearing house, shall be deemed to be a payday loan. 

SUMMARY AS INTRODUCED:

Payday lenders prohibited from making open-ended loans.  Prohibits any person licensed as a lender under the Payday Loan Act from making an extension of credit under an open-end credit or similar plan. Any loan made in violation of this prohibition will be unenforceable against the borrower. Currently, any seller or lender who extends credit under such a plan may impose finance charges and such other charges and fees at such rates and in such amounts and manner as the parties may agree, if the plan provides a 25-day billing cycle.