HB 1478: Payday Loans

H.B. 1478, P.N. 1796 (ROSS) This would amend Title 7 (Banks and Banking) and Title 18 (Crimes and Offenses).
This would amend the manner in which the Banking Department regulates payday loans, which are short term loans or money advances where the lender charges a fee or other consideration. A person must obtain a license from the Banking Department to provide payday loans. A person must have a minimum tangible net worth of $250,000 and a surety bond of $100,000.
The interest on finance charges for a payday loan could not be larger than 17.5%. A payday loan could not be larger than $500 or one-quarter of a borrower’s gross monthly income, whichever is less. A borrower could rescind a loan before the close of business on the following business day. A payday loan could only be renewed once. A payday lender could not issues a loan to the same borrower within seven days from repayment for a previous loan, nor could such a lender issue a payday loan if the borrower would become indebted to two or more payday lenders for over 60 consecutive days. Violating this Act would be a felony punishable by $2,000 or less per offense plus subject to a $2,000 civil penalty from the Banking Department.