HB3143 S JUD AM #1 3-4
The Committee on the Judiciary moved to amend the bill by striking out everything after the enacting clause and inserting in lieu thereof the following:
ARTICLE 4. REGULATED CONSUMER LENDERS.
§46A-4-107. Loan finance charge for regulated consumer lenders.
(1) With respect to a regulated consumer loan, including a revolving loan account, a regulated consumer lender may contract for and receive a loan finance charge not exceeding that permitted by this section.
(2) On a loan of
$2,000 $3,500 or less which
is unsecured by real property, the loan finance charge, calculated according to
the actuarial method, may not exceed 31 percent per year on the unpaid balance
of the principal amount.
(3) On a loan greater than
$2,000 $3,500 but
less than or equal to $15,000, or which is secured by real property, the
loan finance charge, calculated according to the actuarial method, may not
exceed 27 percent per year on the unpaid balance of the principal amount:
Provided, That the loan finance charge on any loan greater than $10,000
$15,000 may not exceed 18 percent per year on the unpaid balance of the
principal amount. Loans made by regulated consumer lenders shall be subject to
the restrictions and supervision set forth in this article irrespective of
their rate of finance charges.
(4) Where the loan is nonrevolving and is greater than
$3,500, the permitted finance charge may include a charge of not more
than a total of two percent of the amount financed for any origination fee,
points, or investigation fee: Provided, That where any loan, revolving or
nonrevolving, is secured by real estate, the permitted finance charge may
include a charge of not more than a total of five percent of the amount
financed for any origination fee, points, or investigation fee. In any loan
secured by real estate, the charges may not be imposed again by the same or
affiliated lender in any refinancing of that loan made within 24 months
thereof, unless these earlier charges have been rebated by payment or credit to
the consumer under the actuarial method or the total of the earlier and
proposed charges does not exceed five percent of the amount financed. Charges
permitted under this subsection shall be included in the calculation of the
loan finance charge. The financing of the charges may be is permissible
and may does not constitute charging interest on interest. In a
revolving home equity loan, the amount of the credit line extended shall
is, for purposes of this subsection, constitute the amount
financed. Other than herein provided, no points, origination fee, investigation
fee, or other similar prepaid finance charges attributable to the lender or its
affiliates may be levied. Except as provided for by §46A‑3‑109 of
this code, no additional charges may be made; nor may any charge permitted by
this section be assessed unless the loan is made. To the extent that this
section overrides the preemption on limiting points and other charges on first
lien residential mortgages contained in Section 501 of the United States
Depository Institutions Deregulation and Monetary Control Act of 1980, the
state law limitations contained in this section shall apply. If the loan is
(a) The loan finance charge may be calculated on the assumption that all scheduled payments will be made when due; and
(b) The effect of prepayment, refinancing, or consolidation is governed by the provisions on rebate upon prepayment, refinancing, or consolidation contained in §46A-3-111 of this code.
(5) For the purposes of this section, the term of a loan commences on the date the loan is made. Differences in the lengths of months are disregarded and a day may be counted as one thirtieth of a month. Subject to classifications and differentiations the licensee may reasonably establish, a part of a month in excess of 15 days may be treated as a full month if periods of 15 days or less are disregarded and if that procedure is not consistently used to obtain a greater yield than would otherwise be permitted.
(6) With respect to a revolving loan account:
(a) A charge may be made by a regulated consumer lender in each monthly billing cycle which is one-twelfth of the maximum annual rates permitted by this section computed on an amount not exceeding the greatest of:
(i) The average daily balance of the debt; or
(ii) The balance of the debt at the beginning of the first day of the billing cycle, less all payments on and credits to such debt during such billing cycle and excluding all additional borrowings during the billing cycle.
For the purpose of this subdivision, a billing cycle is monthly if the billing statement dates are on the same day each month or do not vary by more than four days therefrom.
(b) If the billing cycle is not monthly, the maximum loan finance charge which may be made by a regulated consumer lender is that percentage which bears the same relation to an applicable monthly percentage as the number of days in the billing cycle bears to 30.
(c) Notwithstanding subdivisions (a) and (b) of this subsection, if there is an unpaid balance on the date as of which the loan finance charge is applied, the licensee may contract for and receive a charge not exceeding 50 cents if the billing cycle is monthly or longer or the pro rata part of 50 cents which bears the same relation to 50 cents as the number of days in the billing cycle bears to 30 if the billing cycle is shorter than monthly, but no charge may be made pursuant to this subdivision if the lender has made an annual charge for the same period as permitted by the provisions on additional charges.
(7) As an alternative to the loan finance charges allowed
by subsections (2) and (4) of this section, a regulated consumer lender may on
a loan not secured by real estate of
$2,000 $3,500 or less
contract for and receive interest at a rate of up to 31 percent per year on the
unpaid balance of the principal amount, together with a nonrefundable loan
processing fee of not more than two percent of the amount financed: Provided,
That no other finance charges are imposed on the loan. The processing fee permitted
under this subsection shall be included in the calculation of the loan finance
charge and the financing of the fee shall be permissible and may not constitute
charging interest on interest.
(8) Notwithstanding any contrary provision in this section, a licensed regulated consumer lender who is the assignee of a nonrevolving consumer loan unsecured by real property located in this state, which loan contract was applied for by the consumer when he or she was in another state, and which was executed and had its proceeds distributed in that other state, may collect, receive, and enforce the loan finance charge and other charges, including late fees, provided in the contract under the laws of the state where executed: Provided, That the consumer was not induced by the assignee or its in-state affiliates to apply and obtain the loan from an out-of-state source affiliated with the assignee in an effort to evade the consumer protections afforded by this chapter. Such charges may not be considered to be usurious or in violation of the provisions of this chapter or any other provisions of this code.