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H.B. 459

             1     

AMENDMENTS TO DEFERRED DEPOSIT LENDING

             2     
2012 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: James A. Dunnigan

             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 reporting requirements and the requirement to register.
             11      Highlighted Provisions:
             12          This bill:
             13          .    modifies what a deferred deposit lender is required to report as part of its operations
             14      statement;
             15          .    makes void a deferred deposit loan issued by a person required to be registered but
             16      who is not registered under the chapter;
             17          .    requires the department to report certain information regarding complaints; and
             18          .    makes technical and conforming amendments.
             19      Money Appropriated in this Bill:
             20          None
             21      Other Special Clauses:
             22          None
             23      Utah Code Sections Affected:
             24      AMENDS:
             25          7-23-201, as last amended by Laws of Utah 2010, Chapter 102
             26          7-23-503, as enacted by Laws of Utah 2008, Chapter 96
             27     


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


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


             90          [(vii) of the persons to whom the deferred deposit lender extended a deferred deposit
             91      loan, the percentage that entered into an extended payment plan under Section 7-23-403 .]
             92          (v) the total number of extended payment plans entered into under Section 7-23-403 by
             93      the deferred deposit lender.
             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          (7) A deferred deposit loan that is made by a person who is required to be registered
             132      under this chapter but who is not registered is void, and the person may not collect, receive, or
             133      retain any principal or other interest or fees in connection with the deferred deposit loan.
             134          Section 2. Section 7-23-503 is amended to read:
             135           7-23-503. Reporting by commissioner.
             136          (1) Subject to Subsection (2), as part of the commissioner's annual report to the
             137      governor and Legislature under Section 7-1-211 , the commissioner shall report to the governor
             138      and Legislature on the operations on an aggregate basis of deferred deposit lenders operating in
             139      the state.
             140          (2) In preparing the report required by Subsection (1), the commissioner:
             141          (a) shall include in the report for the immediately preceding calendar year aggregate
             142      information from the one or more operations statements filed under Subsection 7-23-201 (2)(e)
             143      by deferred deposit lenders for that calendar year; [and]
             144          (b) shall include in the report:
             145          (i) the total number of written complaints concerning issues material to deferred
             146      deposit loan transactions received by the department in a calendar year from persons who have
             147      entered into a deferred deposit loan with a deferred deposit lender;
             148          (ii) for deferred deposit lenders who are registered with the department:
             149          (A) the number of the complaints described in Subsection (2)(b)(i) that the department
             150      considers resolved; and
             151          (B) the number of the complaints described in Subsection (2)(b)(i) that the department


             152      considers unresolved; and
             153          (iii) for deferred deposit lenders who are not registered with the department:
             154          (A) the number of the complaints described in Subsection (2)(b)(i) that the department
             155      considers resolved; and
             156          (B) the number of the complaints described in Subsection (2)(b)(i) that the department
             157      considers unresolved; and
             158          [(b)] (c) may not include in the report information from an operations statement filed
             159      with the department that could identify a specific deferred deposit lender.




Legislative Review Note
    as of 2-13-12 12:10 PM


Office of Legislative Research and General Counsel


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