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H.B. 466

             1     

FORUM REQUIREMENTS

             2     
2012 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Brian Doughty

             5     
Senate Sponsor: ____________

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Check Cashing and Deferred Deposit Lending Registration Act to
             10      address forum requirements.
             11      Highlighted Provisions:
             12          This bill:
             13          .    prohibits a deferred deposit lender from imposing certain forum requirements; and
             14          .    makes technical amendments.
             15      Money Appropriated in this Bill:
             16          None
             17      Other Special Clauses:
             18          None
             19      Utah Code Sections Affected:
             20      AMENDS:
             21          7-23-401, as last amended by Laws of Utah 2010, Chapter 102
             22     
             23      Be it enacted by the Legislature of the state of Utah:
             24          Section 1. Section 7-23-401 is amended to read:
             25           7-23-401. Operational requirements for deferred deposit loans.
             26          (1) If a deferred deposit lender extends a deferred deposit loan, the deferred deposit
             27      lender shall:


             28          (a) post in a conspicuous location on its premises that can be viewed by a person
             29      seeking a deferred deposit loan:
             30          (i) a complete schedule of any interest or fees charged for a deferred deposit loan that
             31      states the interest and fees using dollar amounts;
             32          (ii) a number the person can call to make a complaint to the department regarding the
             33      deferred deposit loan; and
             34          (iii) a list of states where the deferred deposit lender is registered or authorized to offer
             35      deferred deposit loans through the Internet or other electronic means;
             36          (b) enter into a written contract for the deferred deposit loan;
             37          (c) conspicuously disclose in the written contract:
             38          (i) that under Subsection (3)(a), a person receiving a deferred deposit loan may make a
             39      partial payment in increments of at least $5 on the principal owed on the deferred deposit loan
             40      without incurring additional charges above the charges provided in the written contract;
             41          (ii) that under Subsection (3)(b), a person receiving a deferred deposit loan may rescind
             42      the deferred deposit loan on or before 5 p.m. of the next business day without incurring any
             43      charges;
             44          (iii) that under Subsection (4)(b), the deferred deposit loan may not be rolled over
             45      without the person receiving the deferred deposit loan requesting the rollover of the deferred
             46      deposit loan;
             47          (iv) that under Subsection (4)(c), the deferred deposit loan may not be rolled over if the
             48      rollover requires the person to pay the amount owed by the person under the deferred deposit
             49      loan in whole or in part more than 10 weeks after the day on which the deferred deposit loan is
             50      executed; and
             51          (v) (A) the name and address of a designated agent required to be provided the
             52      department under Subsection 7-23-201 (2)(d)(vi); and
             53          (B) a statement that service of process may be made to the designated agent;
             54          (d) provide the person seeking the deferred deposit loan:
             55          (i) a copy of the written contract described in Subsection (1)(c); and
             56          (ii) written notice that if the person seeking the deferred deposit loan is eligible to enter
             57      into an extended payment plan, the deferred deposit lender provides an extended payment plan
             58      described in Section 7-23-403 ;


             59          (e) orally review with the person seeking the deferred deposit loan the terms of the
             60      deferred deposit loan including:
             61          (i) the amount of any interest rate or fee;
             62          (ii) the date on which the full amount of the deferred deposit loan is due;
             63          (iii) that under Subsection (3)(a), a person receiving a deferred deposit loan may make
             64      a partial payment in increments of at least $5 on the principal owed on the deferred deposit
             65      loan without incurring additional charges above the charges provided in the written contract;
             66          (iv) that under Subsection (3)(b), a person receiving a deferred deposit loan may
             67      rescind the deferred deposit loan on or before 5 p.m. of the next business day without incurring
             68      any charges;
             69          (v) that under Subsection (4)(b), the deferred deposit loan may not be rolled over
             70      without the person receiving the deferred deposit loan requesting the rollover of the deferred
             71      deposit loan; and
             72          (vi) that under Subsection (4)(c), the deferred deposit loan may not be rolled over if the
             73      rollover requires the person to pay the amount owed by the person under the deferred deposit
             74      loan in whole or in part more than 10 weeks after the day on which the deferred deposit loan is
             75      executed; and
             76          (f) comply with the following as in effect on the date the deferred deposit loan is
             77      extended:
             78          (i) Truth in Lending Act, 15 U.S.C. Sec. 1601 et seq., and its implementing federal
             79      regulations;
             80          (ii) Equal Credit Opportunity Act, 15 U.S.C. Sec. 1691, and its implementing federal
             81      regulations;
             82          (iii) Bank Secrecy Act, 12 U.S.C. Sec. 1829b, 12 U.S.C. Sec. 1951 through 1959, and
             83      31 U.S.C. Sec. 5311 through 5332, and its implementing regulations; and
             84          (iv) Title 70C, Utah Consumer Credit Code.
             85          (2) If a deferred deposit lender extends a deferred deposit loan through the Internet or
             86      other electronic means, the deferred deposit lender shall provide the information described in
             87      Subsection (1)(a) to the person receiving the deferred deposit loan:
             88          (a) in a conspicuous manner; and
             89          (b) prior to the person entering into the deferred deposit loan.


             90          (3) A deferred deposit lender that engages in a deferred deposit loan shall permit a
             91      person receiving a deferred deposit loan to:
             92          (a) make partial payments in increments of at least $5 on the principal owed on the
             93      deferred deposit loan at any time prior to maturity without incurring additional charges above
             94      the charges provided in the written contract; and
             95          (b) rescind the deferred deposit loan without incurring any charges by returning the
             96      deferred deposit loan amount to the deferred deposit lender on or before 5 p.m. the next
             97      business day following the deferred deposit loan transaction.
             98          (4) A deferred deposit lender that engages in a deferred deposit loan may not:
             99          (a) collect additional interest on a deferred deposit loan with an outstanding principal
             100      balance 10 weeks after the day on which the deferred deposit loan is executed;
             101          (b) roll over a deferred deposit loan without the person receiving the deferred deposit
             102      loan requesting the rollover of the deferred deposit loan;
             103          (c) roll over a deferred deposit loan if the rollover requires a person to pay the amount
             104      owed by the person under a deferred deposit loan in whole or in part more than 10 weeks from
             105      the day on which the deferred deposit loan is first executed;
             106          (d) extend a new deferred deposit loan to a person on the same business day that the
             107      person makes a payment on another deferred deposit loan if the payment:
             108          (i) is made at least 10 weeks after the day on which that deferred deposit loan is
             109      extended; and
             110          (ii) results in the principal of that deferred deposit loan being paid in full;
             111          (e) threaten to use or use the criminal process in any state to collect on the deferred
             112      deposit loan; or
             113          (f) in connection with the collection of money owed on a deferred deposit loan,
             114      communicate with a person who owes money on a deferred deposit loan at the person's place of
             115      employment if the person or the person's employer communicates, orally or in writing, to the
             116      deferred deposit lender that the person's employer prohibits the person from receiving these
             117      communications.
             118          (5) Notwithstanding Subsections (4)(a) and (e), a deferred deposit lender that is the
             119      holder of a check used to obtain a deferred deposit loan that is dishonored may use the
             120      remedies and notice procedures provided in Chapter 15, Dishonored Instruments, except that


             121      the issuer, as defined in Section 7-15-1 , of the check may not be:
             122          (a) asked by the holder to pay the amount described in Subsection 7-15-1 (6)(a)(iii) as a
             123      condition of the holder not filing a civil action; or
             124          (b) held liable for the damages described in Subsection 7-15-1 (7)(b)(vi).
             125          (6) (a) It is a violation of this chapter for a deferred deposit lender to require a person
             126      to bring an action or defend against an action related to a dispute arising under a deferred
             127      deposit loan in a forum that violates the forum or venue requirements of applicable statute,
             128      court rules of procedure, or the Code of Judicial Administration.
             129          (b) If a court finds that a deferred deposit lender has a pattern or practice of violating
             130      this Subsection (6), the court may order the deferred deposit lender to pay to the party that
             131      asserts a violation of this Subsection (6):
             132          (i) attorney fees; and
             133          (ii) court costs.




Legislative Review Note
    as of 2-10-12 3:04 PM


Office of Legislative Research and General Counsel


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