H.B. 166

1

PAYDAY LENDING
2 2003 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: Ty McCartney
5 This act modifies the Check Cashing Registration Act by requiring deferred deposit
6 lenders to allow borrowers to make partial payments or to rescind the loan by the next
7 business day. The act prohibits a deferred deposit lender from threatening to use or
8 using the criminal process to collect a loan, and requires the Department of Financial
9 Institutions to examine every check casher at least once every three years.
10 This act affects sections of Utah Code Annotated 1953 as follows:
11 AMENDS:
12 7-23-105, as enacted by Chapter 144, Laws of Utah 1999
13 7-23-107, as enacted by Chapter 144, Laws of Utah 1999
14 Be it enacted by the Legislature of the state of Utah:
15 Section 1. Section 7-23-105 is amended to read:
16 7-23-105. Operational requirements for deferred deposit loans.
17 (1) If a check casher extends a deferred deposit loan, the check casher shall:
18 (a) post in a conspicuous location on its premises that can be viewed by a person
19 seeking a deferred deposit loan:
20 (i) a complete schedule of any interest or fees charged for a deferred deposit loan that
21 states the interest and fees using dollar amounts; and
22 (ii) a number the person can call to make a complaint to the department regarding the
23 deferred deposit loan;
24 (b) enter into a written contract for the deferred deposit loan;
25 (c) provide the person seeking the deferred deposit loan a copy of the deferred deposit
26 contract;
27 (d) orally review with the person seeking the deferred deposit loan the terms of the

28 deferred deposit loan including:
29 (i) the amount of any interest rate or fee; and
30 (ii) the date on which the full amount of the deferred deposit loan is due; and
31 (e) comply with:
32 (i) Truth in Lending Act, 15 U.S.C. Sec. 1601 et. seq.;
33 (ii) Equal Credit Opportunity Act, 15 U.S.C. Sec. 1691; and
34 (iii) Title 70C, Utah Consumer Credit Code.
35 (2) A check casher that engages in a deferred deposit loan [may not] shall permit a
36 person receiving a deferred deposit loan to:
37 (a) make partial payments on the deferred deposit loan at any time without incurring
38 additional charges; and
39 (b) rescind the deferred deposit loan without incurring any charges by returning the
40 deferred deposit loan amount to the check casher on or before 5 p.m. the next business day
41 following the loan transaction.
42 (3) A check casher that engages in a deferred deposit loan may not:
43 (a) rollover a deferred deposit loan if the rollover requires a person to pay the amount
44 owed by the person under a deferred deposit loan in whole or in part more than 12 weeks from
45 the day on which the deferred deposit loan is first executed[.]; or
46 (b) threaten to use or use the criminal process in any state to collect on the deferred
47 deposit loan.
48 (4) Notwithstanding Subsection (3)(b), a check casher that is the holder of a check,
49 draft, order, or other instrument that has been dishonored may use the notice procedures
50 provided in Title 7, Chapter 15, Dishonored Instruments.
51 Section 2. Section 7-23-107 is amended to read:
52 7-23-107. Examination of books, accounts, and records by the department.
53 (1) [The department may] At least h [ once every three years ] ANNUALLY h the department
53a shall, for each
54 premise engaging in the business of a check casher:
55 (a) examine the books, accounts, and records [of a check casher]; and [may]
56 (b) make investigations to determine compliance with this chapter.
57 (2) In accordance with Section 7-1-401 , the [department may charge fees] check casher

58 shall pay a fee for an examination conducted under Subsection (1).

Legislative Review Note
as of 7-18-02 1:24 PM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel