Download Zipped Introduced WordPerfect HB0329.ZIP
[Status][Bill Documents][Fiscal Note][Bills Directory]

H.B. 329

             1     

DEFERRED DEPOSIT LOANS

             2     
2007 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: LaWanna Lou Shurtliff

             5     
Senate Sponsor: ____________

             6      Cosponsor:Phil Riesen              7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies provisions related to deferred deposit loans.
             11      Highlighted Provisions:
             12          This bill:
             13          .    addresses operational restrictions including:
             14              .    the contents of the required written contract;
             15              .    prohibitions on the number, term, and amount of a deferred deposit loan; and
             16              .    prohibitions on unfair, deceptive, or fraudulent practices;
             17          .    addresses treatment of payments;
             18          .    requires recordkeeping;
             19          .    requires annual reports related to deferred deposit loans by check cashers and the
             20      department; and
             21          .    makes technical changes and conforming amendments.
             22      Monies Appropriated in this Bill:
             23          None
             24      Other Special Clauses:
             25          None
             26      Utah Code Sections Affected:
             27      AMENDS:

             28          7-23-103, as last amended by Chapter 69, Laws of Utah 2003
             29          7-23-105, as last amended by Chapter 165, Laws of Utah 2006
             30          7-23-105.1, as enacted by Chapter 236, Laws of Utah 2003
             31          7-23-106, as last amended by Chapter 69, Laws of Utah 2003
             32          7-23-108, as last amended by Chapter 165, Laws of Utah 2006
             33      ENACTS:
             34          7-23-105.2, Utah Code Annotated 1953
             35     
             36      Be it enacted by the Legislature of the state of Utah:
             37          Section 1. Section 7-23-103 is amended to read:
             38           7-23-103. Registration -- Rulemaking.
             39          (1) (a) It is unlawful for a person to engage in the business of a check casher in Utah or
             40      with a Utah resident unless the person:
             41          (i) registers with the department in accordance with this chapter; and
             42          (ii) maintains a valid registration.
             43          (b) It is unlawful for a person to operate a mobile facility in this state to engage in the
             44      business of a check casher.
             45          [(c) Notwithstanding Subsection (1)(a), a person that is engaged in the business of a
             46      check casher in this state on May 3, 1999, is not required to be registered under this section
             47      until July 1, 1999.]
             48          (2) (a) A registration and a renewal of a registration expires on April 30 of each year
             49      unless on or before that date the person renews the registration.
             50          (b) To register under this section, a person shall:
             51          (i) pay an original registration fee established under Subsection 7-1-401 (8); and
             52          (ii) submit a registration statement containing the information described in Subsection
             53      (2)(d).
             54          (c) To renew a registration under this section, a person shall:
             55          (i) pay the annual fee established under Subsection 7-1-401 (5); [and]
             56          (ii) submit a renewal statement containing the information described in Subsection
             57      (2)(d)[.]; and
             58          (iii) file an annual report in accordance with Section 7-23-105.2 .

             59          (d) A registration or renewal statement shall state:
             60          (i) the name of the person;
             61          (ii) the name in which the business will be transacted if different from that required in
             62      Subsection (2)(d)(i);
             63          (iii) the address of the person's principal business office, which may be outside this
             64      state;
             65          (iv) the addresses of all offices in this state at which the person conducts the business
             66      of a check casher;
             67          (v) if the person conducts the business of a check casher in this state but does not
             68      maintain an office in this state, a brief description of the manner in which the business is
             69      conducted;
             70          (vi) the name and address in this state of a designated agent upon whom service of
             71      process may be made;
             72          (vii) disclosure of any injunction, judgment, administrative order, or conviction of any
             73      crime involving moral turpitude with respect to that person or any officer, director, manager,
             74      operator, or principal of that person; and
             75          (viii) any other information required by the rules of the department.
             76          (3) If the information in a registration [or], renewal statement, or annual report required
             77      under Subsection (2) becomes inaccurate after filing, a person is not required to notify the
             78      department until:
             79          (a) that person is required to renew the registration; or
             80          (b) the department specifically requests earlier notification.
             81          (4) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             82      department may make rules consistent with this section providing for the form, content, and
             83      filing of a registration and renewal statement.
             84          Section 2. Section 7-23-105 is amended to read:
             85           7-23-105. Operational requirements for deferred deposit loans.
             86          (1) If a check casher extends a deferred deposit loan, the check casher shall:
             87          (a) post in a conspicuous location on its premises that can be viewed by a person
             88      seeking a deferred deposit loan:
             89          (i) a complete schedule of any interest or fees charged for a deferred deposit loan that

             90      states the interest and fees using dollar amounts;
             91          (ii) a number the person can call to make a complaint to the department regarding the
             92      deferred deposit loan; and
             93          (iii) a list of states where the check casher is registered or authorized to offer deferred
             94      deposit loans through the Internet or other electronic means;
             95          (b) enter into a written contract for the deferred deposit loan[;] that includes:
             96          (i) the check casher's name, address, and phone number; and
             97          (ii) the name and title of the individual who signs the written contract on behalf of the
             98      check casher;
             99          (c) conspicuously disclose in the written contract:
             100          (i) that, under Subsection (4)(b), the deferred deposit loan may not be rolled over
             101      beyond 12 weeks after the day on which the deferred deposit loan is executed; and
             102          (ii) in at least 14-point bold typeface, a statement placed immediately preceding the
             103      signature of the person obtaining the deferred deposit loan that "you cannot be criminally
             104      prosecuted to collect this loan";
             105          (d) provide the person seeking the deferred deposit loan a copy of the deferred deposit
             106      contract;
             107          (e) orally review with the person seeking the deferred deposit loan the terms of the
             108      deferred deposit loan including:
             109          (i) the amount of any interest rate or fee;
             110          (ii) the date on which the full amount of the deferred deposit loan is due; and
             111          (iii) the fact that the deferred deposit loan may not be rolled over beyond 12 weeks
             112      after the day on which the deferred deposit loan is executed; and
             113          (f) comply with the following as in effect on the date the deferred deposit loan is
             114      extended:
             115          (i) Truth in Lending Act, 15 U.S.C. Sec. 1601 et seq., and its implementing federal
             116      regulations;
             117          (ii) Equal Credit Opportunity Act, 15 U.S.C. Sec. 1691, and its implementing federal
             118      regulations;
             119          (iii) Bank Secrecy Act, 12 U.S.C. Sec. 1829b, 12 U.S.C. Sec. 1951 through 1959, and
             120      31 U.S.C. Sec. 5311 through 5332, and its implementing regulations; and

             121          (iv) Title 70C, Utah Consumer Credit Code.
             122          (2) If a check casher extends a deferred deposit loan through the Internet or other
             123      electronic means, the check casher shall provide the information described in Subsection (1)(a)
             124      to the person receiving the deferred deposit loan in a conspicuous manner prior to the
             125      [completion of] person entering into the deferred deposit loan.
             126          (3) A check casher that engages in a deferred deposit loan shall permit a person
             127      receiving a deferred deposit loan to:
             128          (a) make partial payments in increments of at least $5 on the principal owed on the
             129      deferred deposit loan at any time prior to maturity without incurring additional charges above
             130      the charges provided in the written contract; and
             131          (b) rescind the deferred deposit loan without incurring any charges by returning the
             132      deferred deposit loan amount to the check casher on or before 5 p.m. the next business day
             133      following the deferred deposit loan transaction.
             134          (4) A check casher that engages in a deferred deposit loan may not:
             135          (a) collect additional interest on a deferred deposit loan with an outstanding principal
             136      balance 12 weeks after the day on which the deferred deposit loan is executed;
             137          (b) [rollover] roll over a deferred deposit loan if the rollover requires a person to pay
             138      the amount owed by the person under a deferred deposit loan in whole or in part more than 12
             139      weeks from the day on which the deferred deposit loan is first executed; [or]
             140          (c) threaten to use or use the criminal process in any state to collect on the deferred
             141      deposit loan[.];
             142          (d) extend a deferred deposit loan to a person who on the day on which the deferred
             143      deposit loan is extended owes money on another deferred deposit loan extended by that check
             144      casher;
             145          (e) extend a deferred deposit loan for an original term of less than 30 calendar days;
             146          (f) extend a deferred deposit loan if the principal owed under the deferred deposit loan
             147      exceeds $500; or
             148          (g) engage in any unfair, deceptive, or fraudulent practice in extending or collecting a
             149      deferred deposit loan, including the following:
             150          (i) altering the date or any other information on a check used in a deferred deposit loan
             151      transaction;

             152          (ii) using a device or agreement that would have the effect of charging or collecting
             153      more interest or fees than allowed under this chapter, including entering into a different type of
             154      transaction with the person that seeks or obtains a deferred deposit loan; or
             155          (iii) engaging in a deferred deposit loan transaction that is unconscionable as provided
             156      in Section 70C-7-106 .
             157          (5) Notwithstanding Subsections (4)(a) and (4)(c), a check casher that is the holder of a
             158      check, draft, order, or other instrument that has been dishonored may use the remedies and
             159      notice procedures provided in Chapter 15, Dishonored Instruments.
             160          Section 3. Section 7-23-105.1 is amended to read:
             161           7-23-105.1. Disbursement and collections.
             162          (1) A check casher shall after each payment made under a deferred deposit loan give
             163      the person making the payment a written receipt that:
             164          (a) is signed:
             165          (b) is dated; and
             166          (c) shows the amount paid and the balance due on the deferred deposit loan.
             167          (2) If a check casher collects payment on a deferred deposit loan through an electronic
             168      payment, the check casher shall[,]:
             169          (a) on the day the loan is executed:
             170          [(1)] (i) credit the amount of the deferred deposit loan through an electronic payment to
             171      the person receiving the deferred deposit loan; or
             172          [(2)] (ii) make the amount of the deferred deposit loan immediately available to the
             173      person receiving the deferred deposit loan[.]; and
             174          (b) comply with Subsection (1) as soon as reasonably possible.
             175          Section 4. Section 7-23-105.2 is enacted to read:
             176          7-23-105.2. Books, accounts, and records related to deferred deposits -- Annual
             177      reports.
             178          (1) A check casher that extends a deferred deposit loan shall keep the books, accounts,
             179      and records necessary for the commissioner to determine if the check casher complies with this
             180      chapter.
             181          (2) The commissioner shall make rules in accordance with Title 63, Chapter 46a, Utah
             182      Administrative Rulemaking Act:

             183          (a) describing:
             184          (i) the books, accounts, and records required by this section; and
             185          (ii) the form of any book, account, or record required by this section; and
             186          (b) consistent with this section and Subsection 7-1-301 (7).
             187          (3) A book, account, or record required to be kept under this section shall be kept:
             188          (a) for at least four years after the day on which the last entry on the deferred deposit
             189      loan recorded in the book, account, or record is made in any book, account, or record of the
             190      check casher; and
             191          (b) in accordance with generally accepted accounting procedures.
             192          (4) A check casher that extends a deferred deposit loan shall file an annual report with
             193      the department:
             194          (a) with a renewal statement required by Section 7-23-103 for the calendar year
             195      immediately proceeding the calendar year on which the renewal statement is filed;
             196          (b) in the form prescribed by the department by rule;
             197          (c) verified by the oath or affirmation of:
             198          (i) the owner of the check casher; or
             199          (ii) an officer, director, manager, operator, or principal of the check casher; and
             200          (d) that includes a detailed disclosure of the following for the calendar year being
             201      reported:
             202          (i) any financial information required by the department by rule;
             203          (ii) the total number of deferred deposit loans extended;
             204          (iii) the total number of deferred deposit loans outstanding as of December 31 of the
             205      calendar year being reported;
             206          (iv) the minimum and maximum dollar amount of a check whose deposit is deferred
             207      during the calendar year;
             208          (v) the minimum and maximum annual percentage rate of a deferred deposit loan
             209      extended by the check casher in the calendar year; and
             210          (vi) the maximum number of days a deposit of a check is deferred during the calendar
             211      year.
             212          (5) The department shall compile an annual report of deferred deposit lending in this
             213      state from the information provided under this section that:

             214          (a) does not include individual identifiers related to:
             215          (i) a deferred deposit loan;
             216          (ii) a check casher; or
             217          (iii) a person that seeks or obtains a deferred deposit loan;
             218          (b) is provided to the governor and the Legislature at the same time as the report
             219      required by Section 7-1-211 ; and
             220          (c) is made available to the public.
             221          Section 5. Section 7-23-106 is amended to read:
             222           7-23-106. Enforcement by department -- Rulemaking.
             223          (1) Subject to the requirements of Title 63, Chapter 46b, Administrative Procedures
             224      Act, the department may:
             225          [(1)] (a) receive and act on complaints;
             226          (b) take action designed to obtain voluntary compliance with this chapter;
             227          (c) commence administrative or judicial proceedings on its own initiative to enforce
             228      compliance with this chapter; or
             229          (d) take action against any check casher that fails to:
             230          (i) respond to the department, in writing within 30 days, to a complaint; or
             231          (ii) submit information as requested by the department[;].
             232          (2) The department may:
             233          [(2)] (a) counsel persons and groups on their rights and duties under this chapter;
             234          [(3)] (b) make rules in accordance with Title 63, Chapter 46a, Utah Administrative
             235      Rulemaking Act, to:
             236          [(a)] (i) subject to Subsection 7-23-105 (4), restrict or prohibit lending or servicing
             237      practices that are [misleading,] unfair, deceptive, fraudulent, or abusive;
             238          [(b)] (ii) promote or assure fair and full disclosure of the terms and conditions of
             239      agreements and communications between check cashers and customers; or
             240          [(c)] (iii) promote or assure uniform application of or to resolve ambiguities in
             241      applicable state or federal laws or federal regulations; and
             242          [(4)] (c) employ hearing examiners, clerks, and other employees and agents as
             243      necessary to perform [its] the department's duties under this chapter.
             244          Section 6. Section 7-23-108 is amended to read:

             245           7-23-108. Penalties.
             246          (1) A person who violates this chapter or who files materially false information with a
             247      registration or renewal under Section 7-23-103 is:
             248          (a) guilty of a class B misdemeanor, except for a violation of:
             249          (i) Subsection 7-23-105 (1)(f)(i), (ii), or (iii); or
             250          (ii) rules made under Subsection 7-23-106 [(3)](2)(b); and
             251          (b) subject to revocation of a person's registration under this chapter.
             252          (2) Subject to Title 63, Chapter 46b, Administrative Procedures Act, if the department
             253      determines that a person is engaging in the business of cashing checks in violation of this
             254      chapter, the department may:
             255          (a) revoke that person's registration under this chapter;
             256          (b) issue a cease and desist order from committing any further violations; or
             257          (c) prohibit the person from continuing to engage in the business of a check casher.




Legislative Review Note
    as of 1-23-07 6:31 AM

Office of Legislative Research and General Counsel

[Bill Documents][Bills Directory]