! The Capitol Complex is closed to the public due to COVID-19. All meetings will be held virtually online. View procedures and guidelines for remote public comment

Download Zipped Introduced WordPerfect HB0015.ZIP
[Status][Bill Documents][Fiscal Note][Bills Directory]

H.B. 15

             1     

DEFERRED DEPOSIT LENDING AMENDMENTS

             2     
2010 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: James A. Dunnigan

             5     
Senate Sponsor: Karen Mayne

             6     
             7      LONG TITLE
             8      Committee Note:
             9          The Business and Labor Interim Committee recommended this bill.
             10      General Description:
             11          This bill modifies the Check Cashing and Deferred Deposit Lending Registration Act to
             12      address operational requirements related to deferred deposit lending.
             13      Highlighted Provisions:
             14          This bill:
             15          .    addresses required information in annual operation statements;
             16          .    changes the permissible length of rollovers to 10 weeks;
             17          .    imposes restrictions related to communications at a place of employment;
             18          .    provides for an extended payment plan option; and
             19          .    makes technical and conforming amendments.
             20      Monies Appropriated in this Bill:
             21          None
             22      Other Special Clauses:
             23          None
             24      Utah Code Sections Affected:
             25      AMENDS:
             26          7-23-201, as last amended by Laws of Utah 2008, Chapter 382 and renumbered and
             27      amended by Laws of Utah 2008, Chapter 96


             28          7-23-401, as renumbered and amended by Laws of Utah 2008, Chapter 96
             29          15-1-4, as last amended by Laws of Utah 2008, Chapter 96
             30      ENACTS:
             31          7-23-403, Utah Code Annotated 1953
             32     
             33      Be it enacted by the Legislature of the state of Utah:
             34          Section 1. Section 7-23-201 is amended to read:
             35           7-23-201. Registration -- Rulemaking.
             36          (1) (a) It is unlawful for a person to engage in the business of cashing checks or the
             37      business of deferred deposit lending in Utah or with a Utah resident unless the person:
             38          (i) registers with the department in accordance with this chapter; and
             39          (ii) maintains a valid registration.
             40          (b) It is unlawful for a person to operate a mobile facility in this state to engage in the
             41      business of:
             42          (i) cashing checks; or
             43          (ii) deferred deposit lending.
             44          (2) (a) A registration and a renewal of a registration expires on April 30 of each year
             45      unless on or before that date the person renews the registration.
             46          (b) To register under this section, a person shall:
             47          (i) pay an original registration fee established under Subsection 7-1-401 (8); and
             48          (ii) submit a registration statement containing the information described in Subsection
             49      (2)(d).
             50          (c) To renew a registration under this section, a person shall:
             51          (i) pay the annual fee established under Subsection 7-1-401 (5);
             52          (ii) submit a renewal statement containing the information described in Subsection
             53      (2)(d); and
             54          (iii) if the person engages in the business of deferred deposit lending, submit an
             55      operations statement containing the information described in Subsection (2)(e).
             56          (d) A registration or renewal statement shall state:
             57          (i) the name of the person;
             58          (ii) the name in which the business will be transacted if different from that required in


             59      Subsection (2)(d)(i);
             60          (iii) the address of the person's principal business office, which may be outside this
             61      state;
             62          (iv) the addresses of all offices in this state at which the person conducts the business
             63      of:
             64          (A) cashing checks; or
             65          (B) deferred deposit lending;
             66          (v) if the person conducts the business of cashing checks or the business of deferred
             67      deposit lending in this state but does not maintain an office in this state, a brief description of
             68      the manner in which the business is conducted;
             69          (vi) the name and address in this state of a designated agent upon whom service of
             70      process may be made;
             71          (vii) disclosure of any injunction, judgment, administrative order, or conviction of any
             72      crime involving moral turpitude with respect to that person or any officer, director, manager,
             73      operator, or principal of that person; and
             74          (viii) any other information required by the rules of the department.
             75          (e) An operations statement required for a deferred deposit lender to renew a
             76      registration shall state for the immediately preceding calendar year:
             77          (i) the average deferred deposit loan amount that the deferred deposit lender extended;
             78          (ii) the average number of days a deferred deposit loan is extended by the deferred
             79      deposit lender before the deferred deposit loan is paid in full;
             80          (iii) of the deferred deposit loans that are paid in full 10 weeks or sooner after the day
             81      on which the deferred deposit loan is executed, the average number of days a deferred deposit
             82      loan is extended by the deferred deposit lender before the deferred deposit loan is paid in full;
             83          [(iii)] (iv) the minimum and maximum amount of interest or fees charged by the
             84      deferred deposit lender for a deferred deposit loan:
             85          (A) of $100; and
             86          (B) extended for one week; [and]
             87          [(iv)] (v) the total number of deferred deposit loans rescinded by the deferred deposit
             88      lender at the request of the customer pursuant to Subsection 7-23-401 (3)(b)[.];
             89          (vi) the percentage of deferred deposit loans extended by the deferred deposit lender


             90      that are not paid in full by 10 weeks after the day on which the deferred deposit loan is
             91      executed; and
             92          (vii) of the persons to whom the deferred deposit lender extended a deferred deposit
             93      loan, the percentage that entered into an extended payment plan under Section 7-23-403 .
             94          (3) Information provided by a deferred deposit lender under Subsection (2)(e) is:
             95          (a) confidential in accordance with Section 7-1-802 ; and
             96          (b) not subject to Title 63G, Chapter 2, Government Records Access and Management
             97      Act.
             98          (4) (a) The commissioner may impose an administrative fine determined under
             99      Subsection (4)(b) on a person if:
             100          (i) the person is required to be registered under this chapter;
             101          (ii) the person fails to register or renew a registration in accordance with this chapter;
             102          (iii) the department notifies the person that the person is in violation of this chapter for
             103      failure to be registered; and
             104          (iv) the person fails to register within 30 days after the day on which the person
             105      receives the notice described in Subsection (4)(a)(iii).
             106          (b) Subject to Subsection (4)(c), the administrative fine imposed under this section is:
             107          (i) $500 if the person:
             108          (A) has no office in this state at which the person conducts the business of:
             109          (I) cashing checks; or
             110          (II) deferred deposit lending; or
             111          (B) has one office in this state at which the person conducts the business of:
             112          (I) cashing checks; or
             113          (II) deferred deposit lending; or
             114          (ii) if the person has two or more offices in this state at which the person conducts the
             115      business of cashing checks or the business of deferred deposit lending, $500 for each office at
             116      which the person conducts the business of:
             117          (A) cashing checks; or
             118          (B) deferred deposit lending.
             119          (c) The commissioner may reduce or waive a fine imposed under this Subsection (4) if
             120      the person shows good cause.


             121          (5) If the information in a registration, renewal, or operations statement required under
             122      Subsection (2) becomes inaccurate after filing, a person is not required to notify the department
             123      until:
             124          (a) that person is required to renew the registration; or
             125          (b) the department specifically requests earlier notification.
             126          (6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             127      department may make rules consistent with this section providing for:
             128          (a) the form, content, and filing of a registration and renewal statement described in
             129      Subsection (2)(d); and
             130          (b) the form and filing of an operations statement described in Subsection (2)(e).
             131          Section 2. Section 7-23-401 is amended to read:
             132           7-23-401. Operational requirements for deferred deposit loans.
             133          (1) If a deferred deposit lender extends a deferred deposit loan, the deferred deposit
             134      lender shall:
             135          (a) post in a conspicuous location on its premises that can be viewed by a person
             136      seeking a deferred deposit loan:
             137          (i) a complete schedule of any interest or fees charged for a deferred deposit loan that
             138      states the interest and fees using dollar amounts;
             139          (ii) a number the person can call to make a complaint to the department regarding the
             140      deferred deposit loan; and
             141          (iii) a list of states where the deferred deposit lender is registered or authorized to offer
             142      deferred deposit loans through the Internet or other electronic means;
             143          (b) enter into a written contract for the deferred deposit loan;
             144          (c) conspicuously disclose in the written contract:
             145          (i) that under Subsection (3)(a), a person receiving a deferred deposit loan may make a
             146      partial payment in increments of at least $5 on the principal owed on the deferred deposit loan
             147      without incurring additional charges above the charges provided in the written contract;
             148          (ii) that under Subsection (3)(b), a person receiving a deferred deposit loan may rescind
             149      the deferred deposit loan on or before 5 p.m. of the next business day without incurring any
             150      charges;
             151          (iii) that under Subsection (4)(b), the deferred deposit loan may not be rolled over


             152      without the person receiving the deferred deposit loan requesting the rollover of the deferred
             153      deposit loan;
             154          (iv) that under Subsection (4)(c), the deferred deposit loan may not be rolled over if the
             155      rollover requires the person to pay the amount owed by the person under the deferred deposit
             156      loan in whole or in part more than [12] 10 weeks after the day on which the deferred deposit
             157      loan is executed; and
             158          (v) (A) the name and address of a designated agent required to be provided the
             159      department under Subsection 7-23-201 (2)(d)(vi); and
             160          (B) a statement that service of process may be made to the designated agent;
             161          (d) provide the person seeking the deferred deposit loan:
             162          (i) a copy of the [deferred deposit contract;] written contract described in Subsection
             163      (1)(c); and
             164          (ii) written notice that if the person seeking the deferred deposit loan is eligible to enter
             165      into an extended payment plan, the deferred deposit lender provides an extended payment plan
             166      described in Section 7-23-403 ;
             167          (e) orally review with the person seeking the deferred deposit loan the terms of the
             168      deferred deposit loan including:
             169          (i) the amount of any interest rate or fee;
             170          (ii) the date on which the full amount of the deferred deposit loan is due;
             171          (iii) that under Subsection (3)(a), a person receiving a deferred deposit loan may make
             172      a partial payment in increments of at least $5 on the principal owed on the deferred deposit
             173      loan without incurring additional charges above the charges provided in the written contract;
             174          (iv) that under Subsection (3)(b), a person receiving a deferred deposit loan may
             175      rescind the deferred deposit loan on or before 5 p.m. of the next business day without incurring
             176      any charges;
             177          (v) that under Subsection (4)(b), the deferred deposit loan may not be rolled over
             178      without the person receiving the deferred deposit loan requesting the rollover of the deferred
             179      deposit loan; and
             180          (vi) that under Subsection (4)(c), the deferred deposit loan may not be rolled over if the
             181      rollover requires the person to pay the amount owed by the person under the deferred deposit
             182      loan in whole or in part more than [12] 10 weeks after the day on which the deferred deposit


             183      loan is executed; and
             184          (f) comply with the following as in effect on the date the deferred deposit loan is
             185      extended:
             186          (i) Truth in Lending Act, 15 U.S.C. Sec. 1601 et seq., and its implementing federal
             187      regulations;
             188          (ii) Equal Credit Opportunity Act, 15 U.S.C. Sec. 1691, and its implementing federal
             189      regulations;
             190          (iii) Bank Secrecy Act, 12 U.S.C. Sec. 1829b, 12 U.S.C. Sec. 1951 through 1959, and
             191      31 U.S.C. Sec. 5311 through 5332, and its implementing regulations; and
             192          (iv) Title 70C, Utah Consumer Credit Code.
             193          (2) If a deferred deposit lender extends a deferred deposit loan through the Internet or
             194      other electronic means, the deferred deposit lender shall provide the information described in
             195      Subsection (1)(a) to the person receiving the deferred deposit loan:
             196          (a) in a conspicuous manner; and
             197          (b) prior to the person entering into the deferred deposit loan.
             198          (3) A deferred deposit lender that engages in a deferred deposit loan shall permit a
             199      person receiving a deferred deposit loan to:
             200          (a) make partial payments in increments of at least $5 on the principal owed on the
             201      deferred deposit loan at any time prior to maturity without incurring additional charges above
             202      the charges provided in the written contract; and
             203          (b) rescind the deferred deposit loan without incurring any charges by returning the
             204      deferred deposit loan amount to the deferred deposit lender on or before 5 p.m. the next
             205      business day following the deferred deposit loan transaction.
             206          (4) A deferred deposit lender that engages in a deferred deposit loan may not:
             207          (a) collect additional interest on a deferred deposit loan with an outstanding principal
             208      balance [12] 10 weeks after the day on which the deferred deposit loan is executed;
             209          (b) roll over a deferred deposit loan without the person receiving the deferred deposit
             210      loan requesting the rollover of the deferred deposit loan;
             211          (c) roll over a deferred deposit loan if the rollover requires a person to pay the amount
             212      owed by the person under a deferred deposit loan in whole or in part more than [12] 10 weeks
             213      from the day on which the deferred deposit loan is first executed;


             214          (d) extend a new deferred deposit loan to a person on the same business day that the
             215      person makes a payment on another deferred deposit loan if the payment:
             216          (i) is made at least [12] 10 weeks after the day on which that deferred deposit loan is
             217      extended; and
             218          (ii) results in the principal of that deferred deposit loan being paid in full; [or]
             219          (e) threaten to use or use the criminal process in any state to collect on the deferred
             220      deposit loan[.]; or
             221          (f) in connection with the collection of money owed on a deferred deposit loan,
             222      communicate with a person who owes money on a deferred deposit loan at the person's place of
             223      employment if the person or the person's employer communicates, orally or in writing, to the
             224      deferred deposit lender that the person's employer prohibits the person from receiving these
             225      communications.
             226          (5) Notwithstanding Subsections (4)(a) and [(4)] (e), a deferred deposit lender that is
             227      the holder of a check used to obtain a deferred deposit loan that is dishonored may use the
             228      remedies and notice procedures provided in Chapter 15, Dishonored Instruments, except that
             229      the issuer, as defined in Section 7-15-1 , of the check may not be:
             230          (a) asked by the holder to pay the amount described in Subsection 7-15-1 (6)(a)(iii) as a
             231      condition of the holder not filing a civil action; or
             232          (b) held liable for the damages described in Subsection 7-15-1 (7)(b)(vi).
             233          Section 3. Section 7-23-403 is enacted to read:
             234          7-23-403. Extended payment plan.
             235          (1) (a) If a person who owes money on a deferred deposit loan requests to enter into an
             236      extended payment plan, the deferred deposit lender who extended the deferred deposit loan
             237      shall allow the person to enter into an extended payment plan that meets the requirements of
             238      this section at least once during a 12-month period to pay the money owed.
             239          (b) A deferred deposit lender is not required to enter into an extended payment plan
             240      with a person who owes money on a deferred deposit loan more than one time during a
             241      12-month period.
             242          (2) An extended payment plan shall include the following:
             243          (a) A deferred deposit lender shall require a person who receives a deferred deposit
             244      loan and wants to enter an extended payment plan to enter into a written agreement:


             245          (i) with the deferred deposit lender;
             246          (ii) that is executed:
             247          (A) no sooner than the day before the last day of the initial term of the deferred deposit
             248      loan; and
             249          (B) no later than the end of the deferred deposit lender's business day before the day on
             250      which the deferred deposit loan is due; and
             251          (iii) that states:
             252          (A) a payment schedule; and
             253          (B) the money owed under the extended payment plan.
             254          (b) A payment schedule for an extended payment plan shall provide that the money
             255      owed may be paid:
             256          (i) in at least four equal payments; and
             257          (ii) over a time period that is at least 60 days.
             258          (c) The money owed under an extended payment plan shall equal the money owed
             259      under the deferred deposit loan, including interest and fees, that would be due if the deferred
             260      deposit loan is paid in full on the last day of the most current term of the deferred deposit loan.
             261          (3) A deferred deposit lender may not charge interest or fees as part of an extended
             262      payment plan, except that if the person who receives the deferred deposit loan defaults under
             263      the extended payment plan, the deferred deposit lender may:
             264          (a) accelerate the requirement to pay the money owed under the extended payment
             265      plan;
             266          (b) charge a fee not to exceed $20;
             267          (c) terminate the extended payment plan; and
             268          (d) subject to the other requirements of this chapter, reinstate the original deferred
             269      deposit loan terms.
             270          (4) A deferred deposit loan may not penalize a person who enters into an extended
             271      payment plan for paying to the deferred deposit lender money owed under the extended
             272      payment plan before the money is due.
             273          (5) A deferred deposit lender may not initiate collection activities for a deferred deposit
             274      loan that is subject to an extended payment plan during the period that the person owing money
             275      under the extended payment plan is in compliance with the extended payment plan.


             276          Section 4. Section 15-1-4 is amended to read:
             277           15-1-4. Interest on judgments.
             278          (1) As used in this section, "federal postjudgment interest rate" means the interest rate
             279      established for the federal court system under 28 U.S.C. Sec. 1961, as amended.
             280          (2) (a) Except as provided in Subsection (2)(b), a judgment rendered on a lawful
             281      contract shall conform to the contract and shall bear the interest agreed upon by the parties,
             282      which shall be specified in the judgment.
             283          (b) A judgment rendered on a deferred deposit loan subject to Title 7, Chapter 23,
             284      Check Cashing and Deferred Deposit Lending Registration Act, shall bear interest at the rate
             285      imposed under Subsection (3) on an amount not exceeding the sum of:
             286          (i) the total of the principal balance of the deferred deposit loan;
             287          (ii) interest at the rate imposed by the deferred deposit loan agreement for a period not
             288      exceeding [12] 10 weeks as provided in Subsection 7-23-401 (4);
             289          (iii) costs;
             290          (iv) attorney fees; and
             291          (v) other amounts allowed by law and ordered by the court.
             292          (3) (a) Except as otherwise provided by law, other civil and criminal judgments of the
             293      district court and justice court shall bear interest at the federal postjudgment interest rate as of
             294      January 1 of each year, plus 2%.
             295          (b) The postjudgment interest rate in effect at the time of the judgment shall remain the
             296      interest rate for the duration of the judgment.
             297          (c) The interest on criminal judgments shall be calculated on the total amount of the
             298      judgment.
             299          (d) Interest paid on state revenue shall be deposited in accordance with Section
             300      63A-8-301 .
             301          (e) Interest paid on revenue to a county or municipality shall be paid to the general
             302      fund of the county or municipality.





Legislative Review Note
    as of 11-19-09 8:39 AM


Office of Legislative Research and General Counsel


[Bill Documents][Bills Directory]