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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 once every three years the department 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


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