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S.B. 110

             1     

DEFERRED DEPOSIT LENDING AND FORUM

             2     
REQUIREMENTS

             3     
2012 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Benjamin M. McAdams

             6     
House Sponsor: ____________

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies the Check Cashing and Deferred Deposit Lending Registration Act to
             11      address forum requirements.
             12      Highlighted Provisions:
             13          This bill:
             14          .    prohibits a deferred deposit lender from imposing certain forum requirements; and
             15          .    makes technical amendments.
             16      Money Appropriated in this Bill:
             17          None
             18      Other Special Clauses:
             19          None
             20      Utah Code Sections Affected:
             21      AMENDS:
             22          7-23-401, as last amended by Laws of Utah 2010, Chapter 102
             23     
             24      Be it enacted by the Legislature of the state of Utah:
             25          Section 1. Section 7-23-401 is amended to read:
             26           7-23-401. Operational requirements for deferred deposit loans.
             27          (1) If a deferred deposit lender extends a deferred deposit loan, the deferred deposit


             28      lender shall:
             29          (a) post in a conspicuous location on its premises that can be viewed by a person
             30      seeking a deferred deposit loan:
             31          (i) a complete schedule of any interest or fees charged for a deferred deposit loan that
             32      states the interest and fees using dollar amounts;
             33          (ii) a number the person can call to make a complaint to the department regarding the
             34      deferred deposit loan; and
             35          (iii) a list of states where the deferred deposit lender is registered or authorized to offer
             36      deferred deposit loans through the Internet or other electronic means;
             37          (b) enter into a written contract for the deferred deposit loan;
             38          (c) conspicuously disclose in the written contract:
             39          (i) that under Subsection (3)(a), a person receiving a deferred deposit loan may make a
             40      partial payment in increments of at least $5 on the principal owed on the deferred deposit loan
             41      without incurring additional charges above the charges provided in the written contract;
             42          (ii) that under Subsection (3)(b), a person receiving a deferred deposit loan may rescind
             43      the deferred deposit loan on or before 5 p.m. of the next business day without incurring any
             44      charges;
             45          (iii) that under Subsection (4)(b), the deferred deposit loan may not be rolled over
             46      without the person receiving the deferred deposit loan requesting the rollover of the deferred
             47      deposit loan;
             48          (iv) that under Subsection (4)(c), the deferred deposit loan may not be rolled over if the
             49      rollover requires the person to pay the amount owed by the person under the deferred deposit
             50      loan in whole or in part more than 10 weeks after the day on which the deferred deposit loan is
             51      executed; and
             52          (v) (A) the name and address of a designated agent required to be provided the
             53      department under Subsection 7-23-201 (2)(d)(vi); and
             54          (B) a statement that service of process may be made to the designated agent;
             55          (d) provide the person seeking the deferred deposit loan:
             56          (i) a copy of the written contract described in Subsection (1)(c); and
             57          (ii) written notice that if the person seeking the deferred deposit loan is eligible to enter
             58      into an extended payment plan, the deferred deposit lender provides an extended payment plan


             59      described in Section 7-23-403 ;
             60          (e) orally review with the person seeking the deferred deposit loan the terms of the
             61      deferred deposit loan including:
             62          (i) the amount of any interest rate or fee;
             63          (ii) the date on which the full amount of the deferred deposit loan is due;
             64          (iii) that under Subsection (3)(a), a person receiving a deferred deposit loan may make
             65      a partial payment in increments of at least $5 on the principal owed on the deferred deposit
             66      loan without incurring additional charges above the charges provided in the written contract;
             67          (iv) that under Subsection (3)(b), a person receiving a deferred deposit loan may
             68      rescind the deferred deposit loan on or before 5 p.m. of the next business day without incurring
             69      any charges;
             70          (v) that under Subsection (4)(b), the deferred deposit loan may not be rolled over
             71      without the person receiving the deferred deposit loan requesting the rollover of the deferred
             72      deposit loan; and
             73          (vi) that under Subsection (4)(c), the deferred deposit loan may not be rolled over if the
             74      rollover requires the person to pay the amount owed by the person under the deferred deposit
             75      loan in whole or in part more than 10 weeks after the day on which the deferred deposit loan is
             76      executed; and
             77          (f) comply with the following as in effect on the date the deferred deposit loan is
             78      extended:
             79          (i) Truth in Lending Act, 15 U.S.C. Sec. 1601 et seq., and its implementing federal
             80      regulations;
             81          (ii) Equal Credit Opportunity Act, 15 U.S.C. Sec. 1691, and its implementing federal
             82      regulations;
             83          (iii) Bank Secrecy Act, 12 U.S.C. Sec. 1829b, 12 U.S.C. Sec. 1951 through 1959, and
             84      31 U.S.C. Sec. 5311 through 5332, and its implementing regulations; and
             85          (iv) Title 70C, Utah Consumer Credit Code.
             86          (2) If a deferred deposit lender extends a deferred deposit loan through the Internet or
             87      other electronic means, the deferred deposit lender shall provide the information described in
             88      Subsection (1)(a) to the person receiving the deferred deposit loan:
             89          (a) in a conspicuous manner; and


             90          (b) prior to the person entering into the deferred deposit loan.
             91          (3) A deferred deposit lender that engages in a deferred deposit loan shall permit a
             92      person receiving a deferred deposit loan to:
             93          (a) make partial payments in increments of at least $5 on the principal owed on the
             94      deferred deposit loan at any time prior to maturity without incurring additional charges above
             95      the charges provided in the written contract; and
             96          (b) rescind the deferred deposit loan without incurring any charges by returning the
             97      deferred deposit loan amount to the deferred deposit lender on or before 5 p.m. the next
             98      business day following the deferred deposit loan transaction.
             99          (4) A deferred deposit lender that engages in a deferred deposit loan may not:
             100          (a) collect additional interest on a deferred deposit loan with an outstanding principal
             101      balance 10 weeks after the day on which the deferred deposit loan is executed;
             102          (b) roll over a deferred deposit loan without the person receiving the deferred deposit
             103      loan requesting the rollover of the deferred deposit loan;
             104          (c) roll over a deferred deposit loan if the rollover requires a person to pay the amount
             105      owed by the person under a deferred deposit loan in whole or in part more than 10 weeks from
             106      the day on which the deferred deposit loan is first executed;
             107          (d) extend a new deferred deposit loan to a person on the same business day that the
             108      person makes a payment on another deferred deposit loan if the payment:
             109          (i) is made at least 10 weeks after the day on which that deferred deposit loan is
             110      extended; and
             111          (ii) results in the principal of that deferred deposit loan being paid in full;
             112          (e) threaten to use or use the criminal process in any state to collect on the deferred
             113      deposit loan; [or]
             114          (f) in connection with the collection of money owed on a deferred deposit loan,
             115      communicate with a person who owes money on a deferred deposit loan at the person's place of
             116      employment if the person or the person's employer communicates, orally or in writing, to the
             117      deferred deposit lender that the person's employer prohibits the person from receiving these
             118      communications[.]; or
             119          (g) subject to Subsection (6), require a person to bring an action or defend against an
             120      action related to a dispute arising under a deferred deposit loan in a forum that is outside:


             121          (i) the county in which is located the primary residence of the person seeking the
             122      deferred deposit loan if the deferred deposit lender has a physical presence for making a
             123      deferred deposit loan in that county; or
             124          (ii) the county in which is located the physical location at which the person obtains the
             125      deferred deposit loan if the deferred deposit lender does not have a physical presence for
             126      making a deferred deposit loan in the county in which is located the primary residence of the
             127      person seeking the deferred deposit loan.
             128          (5) Notwithstanding Subsections (4)(a) and (e), a deferred deposit lender that is the
             129      holder of a check used to obtain a deferred deposit loan that is dishonored may use the
             130      remedies and notice procedures provided in Chapter 15, Dishonored Instruments, except that
             131      the issuer, as defined in Section 7-15-1 , of the check may not be:
             132          (a) asked by the holder to pay the amount described in Subsection 7-15-1 (6)(a)(iii) as a
             133      condition of the holder not filing a civil action; or
             134          (b) held liable for the damages described in Subsection 7-15-1 (7)(b)(vi).
             135          (6) If a person obtains a deferred deposit loan through the Internet or other electronic
             136      means, the forum described in Subsection (4)(g) may not be outside the county in which is
             137      located the primary residence of the person seeking the deferred deposit loan.




Legislative Review Note
    as of 1-13-12 7:00 PM


Office of Legislative Research and General Counsel


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