Arizona 2023 Regular Session

Arizona House Bill HB2729 Compare Versions

Only one version of the bill is available at this time.

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1	1	REFERENCE TITLE: consumer credit; military; federal law State of Arizona House of Representatives Fifty-sixth Legislature First Regular Session 2023 HB 2729 Introduced by Representative Blattman An Act amending sections 6-101 and 6-122, Arizona Revised Statutes; amending title 6, chapter 1, Arizona Revised Statutes, by adding article 6; amending title 6, chapter 5, article 2, Arizona Revised Statutes, by adding section 6-640; amending title 6, chapter 14, article 1, Arizona Revised Statutes, by adding section 6-1420; amending title 44, Arizona Revised Statutes, by adding chapter 32; relating to consumer credit. (TEXT OF BILL BEGINS ON NEXT PAGE)
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9	9	REFERENCE TITLE: consumer credit; military; federal law
10	10	State of Arizona House of Representatives Fifty-sixth Legislature First Regular Session 2023
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64	64	An Act
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68	68	amending sections 6-101 and 6-122, Arizona Revised Statutes; amending title 6, chapter 1, Arizona Revised Statutes, by adding article 6; amending title 6, chapter 5, article 2, Arizona Revised Statutes, by adding section 6-640; amending title 6, chapter 14, article 1, Arizona Revised Statutes, by adding section 6-1420; amending title 44, Arizona Revised Statutes, by adding chapter 32; relating to consumer credit.
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78	78	Be it enacted by the Legislature of the State of Arizona: Section 1. Section 6-101, Arizona Revised Statutes, is amended to read: START_STATUTE6-101. Definitions In this title, unless the context otherwise requires: 1. "Automated teller machine" means an automated device that is established by a bank, savings and loan association or credit union and that facilitates customer-bank communications activities, including taking deposits and disbursing cash drawn against a customer's deposit account or a customer's preapproved loan account, at a location separate from the home office or a branch. 2. "Bank" means a corporation that holds a banking permit issued pursuant to chapter 2 of this title. 3. "Banking office": (a) Means any place of business of the bank at which deposits are received, checks are paid or money is loaned. but (b) Does not include the premises used for computer operations, proofing, record keeping, accounting, storage, maintenance or other administrative or service functions. 4. "Branch" means any banking office other than the principal banking office. 5. "Department" means the department of insurance and financial institutions. 6. "Deputy director" means the deputy director of the financial institutions division of the department. 7. "Director" has the same meaning prescribed in section 20-102. 8. "Division" means the financial institutions division within the department. 9. "Enterprise" means any person under the jurisdiction of the department other than a financial institution. 10. "Federal deposit insurance corporation" includes any successor to the corporation or other agency or instrumentality of the United States that undertakes to discharge the purposes of the corporation. 11. "Financial institution" means banks, trust companies, savings and loan associations, credit unions, consumer lenders, international banking facilities and financial institution holding companies under the jurisdiction of the department. 12. "Home state" means the state that has granted the bank its charter, permit or license to operate. 13. "Host state" means the state in which a financial institution is doing business and not the state that has granted the bank its charter, permit or license to operate. 14. "In-state financial institution" means a state or federal bank, savings bank, savings and loan association or holding company with its home office located in this state. 15. "International banking facility" means a facility that is represented by a set of asset and liability accounts segregated on the books and records of a commercial bank, the principal office of which is located in this state, and that is incorporated and doing business under the laws of the United States or of this state, a United States branch or agency of a foreign bank, an edge corporation organized under section 25(a) of the federal reserve act (12 United States Code sections 611 through 631) or an agreement corporation having an agreement or undertaking with the board of governors of the federal reserve system under section 25 of the federal reserve act (12 United States Code sections 601 through 604(a)) that includes only international banking facility time deposits and international banking facility extensions of credit as defined in 12 Code of Federal Regulations part 204. 16. "National credit union administration" includes any successor to the organization or other agency or instrumentality of the United States that undertakes to discharge the purposes of the organization. 17. "Out-of-state bank" means a bank, savings bank or savings and loan association that is approved by the deputy director pursuant to section 6-322 and that has a charter, a permit or any other license to operate that is issued by a state other than this state. 18. "Out-of-state financial institution" means a state or federal bank, savings bank, savings and loan association or holding company with its home office in a state other than this state. 19. "Same-day lender" means a lending company that lends $3,000 or less for a short period of time with finance charges set higher than as prescribed in section 6-632. 19. 20. "Title" includes this title, title 32, chapters 9 and 36 and title 44, chapter 2.1. END_STATUTE Sec. 2. Section 6-122, Arizona Revised Statutes, is amended to read: START_STATUTE6-122. Deputy director; authority; duties A. The deputy director has the authority and responsibility for the to discharge of all duties imposed by law on the division. B. The deputy director shall: 1. Examine or cause to be examined each financial institution annually, except financial institution holding companies, banks, savings and loan associations, credit unions and consumer lenders, and more frequently if the deputy director considers it necessary. 2. Examine or cause to be examined each bank, credit union and savings and loan association at the deputy director's discretion but at least once in every twenty-four month twenty-four-month period. 3. except as provided in paragraph 8 of this subsection, examine or cause to be examined the business and affairs of any enterprise and any consumer lender for the purpose of administering and enforcing this title at the deputy director's discretion. 4. Examine or cause to be examined financial institution holding companies as frequently as the deputy director considers necessary to administer and enforce this title. 5. Notwithstanding paragraph 3 of this subsection, examine or cause to be examined the accounts held in trust by each escrow agent at least once in every two-year period and examine or cause to be examined each escrow agent at least once in every four-year period or more frequently if the deputy director considers it necessary. 6. Publish a consumer information brochure that includes: (a) The finance charges allowed by this state. (b) The types of insurance that may be offered but that are not required by law to be purchased with the granting of a loan. (c) Interest rate limitations on all lenders including amounts that may not be charged to borrowers. (d) Consumer rights and means of recourse from unfair practitioners. 7. Make it a priority to encourage the growth of state-chartered financial institutions in this state and by February 1 of each calendar year notify the governor, the president of the senate and the speaker of the house of representatives if the total number of state-chartered banks or state-chartered credit unions decreases during the prior calendar year. 8. examine or cause to be examined consumer lenders and same-day lenders at least once in every five-year period to ensure compliance with 10 united states code section 987 and 32 code of federal regulations part 232. C. Notwithstanding subsection B, paragraph 5 of this section, an escrow agent shall be examined within twelve months when an escrow agent's license is transferred or assigned pursuant to section 6-813 or when control of the license is otherwise acquired. END_STATUTE Sec. 3. Title 6, chapter 1, Arizona Revised Statutes, is amended by adding article 6, to read: ARTICLE 6. COMPLIANCE WITH FEDERAL LAW START_STATUTE6-171. Compliance with federal law; military lending; enforcement by attorney general; definitions A. An enterprise that extends consumer credit to a covered member or dependent of a covered member shall comply with 10 United States code section 987 and 32 code of federal regulations part 232. B. In addition to the penalties prescribed in section 6-132, any violation of this article is an unlawful act or practice pursuant to section 44-1522. The attorney general may investigate the act or practice and take appropriate action pursuant to Title 44, chapter 10, article 7. C. For the purposes of this section, "Consumer credit" and "Covered member" have the same meanings prescribed in 32 code of Federal Regulations section 232.3. END_STATUTE Sec. 4. Title 6, chapter 5, article 2, Arizona Revised Statutes, is amended by adding section 6-640, to read: START_STATUTE6-640. Compliance with federal law; military lending; enforcement by attorney general; definitions A. A Licensee that extends consumer credit to a covered member or dependent of a covered member shall comply with 10 United States code section 987 and 32 code of federal regulations part 232. B. In addition to the penalties prescribed in section 6-132, any violation of this article is an unlawful act or practice pursuant to section 44-1522. The attorney general may investigate the act or practice and take appropriate action pursuant to title 44, chapter 10, article 7. C. For the purposes of this section, "consumer credit" and "Covered member" have the same meanings prescribed in 32 Code of Federal Regulations section 232.3. END_STATUTE Sec. 5. Title 6, chapter 14, article 1, Arizona Revised Statutes, is amended by adding section 6-1420, to read: START_STATUTE6-1420. Compliance with federal law; military lending; enforcement by attorney general; definitions A. A premium finance company that extends consumer credit to a covered member or dependent of a covered member shall comply with 10 United States code section 987 and 32 code of federal regulations part 232. B. In addition to the penalties prescribed in section 6-132, any violation of this article is an unlawful act or practice pursuant to section 44-1522. The attorney general may investigate the act or practice and take appropriate action pursuant to title 44, chapter 10, article 7. C. For the purposes of this section, "Consumer credit" and "Covered member" have the same meanings prescribed in 32 Code of Federal Regulations section 232.3. END_STATUTE Sec. 6. Title 44, Arizona Revised Statutes, is amended by adding chapter 32, to read: CHAPTER 32 MILITARY LENDING ARTICLE 1. GENERAL PROVISIONS START_STATUTE44-7501. Military lending; compliance with federal law; enforcement by attorney general; definitions A. A creditor that extends consumer credit to a covered member or dependent of a covered member shall comply with 10 United States code section 987 and 32 code of federal regulations part 232. B. Any violation of this article is an unlawful act or practice pursuant to section 44-1522. The attorney general may investigate the act or practice and take appropriate action pursuant to chapter 10, article 7 of this title. C. For the purposes of this section, "Consumer credit", "Covered member" and "creditor" have the same meanings prescribed in 32 Code of Federal Regulations section 232.3. END_STATUTE
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80	80	Be it enacted by the Legislature of the State of Arizona:
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82	82	Section 1. Section 6-101, Arizona Revised Statutes, is amended to read:
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84	84	START_STATUTE6-101. Definitions
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86	86	In this title, unless the context otherwise requires:
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88	88	1. "Automated teller machine" means an automated device that is established by a bank, savings and loan association or credit union and that facilitates customer-bank communications activities, including taking deposits and disbursing cash drawn against a customer's deposit account or a customer's preapproved loan account, at a location separate from the home office or a branch.
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90	90	2. "Bank" means a corporation that holds a banking permit issued pursuant to chapter 2 of this title.
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92	92	3. "Banking office":
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94	94	(a) Means any place of business of the bank at which deposits are received, checks are paid or money is loaned. but
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96	96	(b) Does not include the premises used for computer operations, proofing, record keeping, accounting, storage, maintenance or other administrative or service functions.
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98	98	4. "Branch" means any banking office other than the principal banking office.
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100	100	5. "Department" means the department of insurance and financial institutions.
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102	102	6. "Deputy director" means the deputy director of the financial institutions division of the department.
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104	104	7. "Director" has the same meaning prescribed in section 20-102.
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106	106	8. "Division" means the financial institutions division within the department.
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108	108	9. "Enterprise" means any person under the jurisdiction of the department other than a financial institution.
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110	110	10. "Federal deposit insurance corporation" includes any successor to the corporation or other agency or instrumentality of the United States that undertakes to discharge the purposes of the corporation.
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112	112	11. "Financial institution" means banks, trust companies, savings and loan associations, credit unions, consumer lenders, international banking facilities and financial institution holding companies under the jurisdiction of the department.
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114	114	12. "Home state" means the state that has granted the bank its charter, permit or license to operate.
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116	116	13. "Host state" means the state in which a financial institution is doing business and not the state that has granted the bank its charter, permit or license to operate.
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118	118	14. "In-state financial institution" means a state or federal bank, savings bank, savings and loan association or holding company with its home office located in this state.
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120	120	15. "International banking facility" means a facility that is represented by a set of asset and liability accounts segregated on the books and records of a commercial bank, the principal office of which is located in this state, and that is incorporated and doing business under the laws of the United States or of this state, a United States branch or agency of a foreign bank, an edge corporation organized under section 25(a) of the federal reserve act (12 United States Code sections 611 through 631) or an agreement corporation having an agreement or undertaking with the board of governors of the federal reserve system under section 25 of the federal reserve act (12 United States Code sections 601 through 604(a)) that includes only international banking facility time deposits and international banking facility extensions of credit as defined in 12 Code of Federal Regulations part 204.
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122	122	16. "National credit union administration" includes any successor to the organization or other agency or instrumentality of the United States that undertakes to discharge the purposes of the organization.
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124	124	17. "Out-of-state bank" means a bank, savings bank or savings and loan association that is approved by the deputy director pursuant to section 6-322 and that has a charter, a permit or any other license to operate that is issued by a state other than this state.
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126	126	18. "Out-of-state financial institution" means a state or federal bank, savings bank, savings and loan association or holding company with its home office in a state other than this state.
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128	128	19. "Same-day lender" means a lending company that lends $3,000 or less for a short period of time with finance charges set higher than as prescribed in section 6-632.
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130	130	19. 20. "Title" includes this title, title 32, chapters 9 and 36 and title 44, chapter 2.1. END_STATUTE
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132	132	Sec. 2. Section 6-122, Arizona Revised Statutes, is amended to read:
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134	134	START_STATUTE6-122. Deputy director; authority; duties
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136	136	A. The deputy director has the authority and responsibility for the to discharge of all duties imposed by law on the division.
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138	138	B. The deputy director shall:
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140	140	1. Examine or cause to be examined each financial institution annually, except financial institution holding companies, banks, savings and loan associations, credit unions and consumer lenders, and more frequently if the deputy director considers it necessary.
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142	142	2. Examine or cause to be examined each bank, credit union and savings and loan association at the deputy director's discretion but at least once in every twenty-four month twenty-four-month period.
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144	144	3. except as provided in paragraph 8 of this subsection, examine or cause to be examined the business and affairs of any enterprise and any consumer lender for the purpose of administering and enforcing this title at the deputy director's discretion.
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146	146	4. Examine or cause to be examined financial institution holding companies as frequently as the deputy director considers necessary to administer and enforce this title.
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148	148	5. Notwithstanding paragraph 3 of this subsection, examine or cause to be examined the accounts held in trust by each escrow agent at least once in every two-year period and examine or cause to be examined each escrow agent at least once in every four-year period or more frequently if the deputy director considers it necessary.
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150	150	6. Publish a consumer information brochure that includes:
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152	152	(a) The finance charges allowed by this state.
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154	154	(b) The types of insurance that may be offered but that are not required by law to be purchased with the granting of a loan.
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156	156	(c) Interest rate limitations on all lenders including amounts that may not be charged to borrowers.
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158	158	(d) Consumer rights and means of recourse from unfair practitioners.
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160	160	7. Make it a priority to encourage the growth of state-chartered financial institutions in this state and by February 1 of each calendar year notify the governor, the president of the senate and the speaker of the house of representatives if the total number of state-chartered banks or state-chartered credit unions decreases during the prior calendar year.
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162	162	8. examine or cause to be examined consumer lenders and same-day lenders at least once in every five-year period to ensure compliance with 10 united states code section 987 and 32 code of federal regulations part 232.
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164	164	C. Notwithstanding subsection B, paragraph 5 of this section, an escrow agent shall be examined within twelve months when an escrow agent's license is transferred or assigned pursuant to section 6-813 or when control of the license is otherwise acquired. END_STATUTE
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166	166	Sec. 3. Title 6, chapter 1, Arizona Revised Statutes, is amended by adding article 6, to read:
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168	168	ARTICLE 6. COMPLIANCE WITH FEDERAL LAW
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170	170	START_STATUTE6-171. Compliance with federal law; military lending; enforcement by attorney general; definitions
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172	172	A. An enterprise that extends consumer credit to a covered member or dependent of a covered member shall comply with 10 United States code section 987 and 32 code of federal regulations part 232.
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174	174	B. In addition to the penalties prescribed in section 6-132, any violation of this article is an unlawful act or practice pursuant to section 44-1522. The attorney general may investigate the act or practice and take appropriate action pursuant to Title 44, chapter 10, article 7.
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176	176	C. For the purposes of this section, "Consumer credit" and "Covered member" have the same meanings prescribed in 32 code of Federal Regulations section 232.3. END_STATUTE
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178	178	Sec. 4. Title 6, chapter 5, article 2, Arizona Revised Statutes, is amended by adding section 6-640, to read:
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180	180	START_STATUTE6-640. Compliance with federal law; military lending; enforcement by attorney general; definitions
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182	182	A. A Licensee that extends consumer credit to a covered member or dependent of a covered member shall comply with 10 United States code section 987 and 32 code of federal regulations part 232.
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184	184	B. In addition to the penalties prescribed in section 6-132, any violation of this article is an unlawful act or practice pursuant to section 44-1522. The attorney general may investigate the act or practice and take appropriate action pursuant to title 44, chapter 10, article 7.
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186	186	C. For the purposes of this section, "consumer credit" and "Covered member" have the same meanings prescribed in 32 Code of Federal Regulations section 232.3. END_STATUTE
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188	188	Sec. 5. Title 6, chapter 14, article 1, Arizona Revised Statutes, is amended by adding section 6-1420, to read:
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190	190	START_STATUTE6-1420. Compliance with federal law; military lending; enforcement by attorney general; definitions
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192	192	A. A premium finance company that extends consumer credit to a covered member or dependent of a covered member shall comply with 10 United States code section 987 and 32 code of federal regulations part 232.
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194	194	B. In addition to the penalties prescribed in section 6-132, any violation of this article is an unlawful act or practice pursuant to section 44-1522. The attorney general may investigate the act or practice and take appropriate action pursuant to title 44, chapter 10, article 7.
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196	196	C. For the purposes of this section, "Consumer credit" and "Covered member" have the same meanings prescribed in 32 Code of Federal Regulations section 232.3. END_STATUTE
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198	198	Sec. 6. Title 44, Arizona Revised Statutes, is amended by adding chapter 32, to read:
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200	200	CHAPTER 32
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202	202	MILITARY LENDING
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204	204	ARTICLE 1. GENERAL PROVISIONS
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206	206	START_STATUTE44-7501. Military lending; compliance with federal law; enforcement by attorney general; definitions
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208	208	A. A creditor that extends consumer credit to a covered member or dependent of a covered member shall comply with 10 United States code section 987 and 32 code of federal regulations part 232.
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210	210	B. Any violation of this article is an unlawful act or practice pursuant to section 44-1522. The attorney general may investigate the act or practice and take appropriate action pursuant to chapter 10, article 7 of this title.
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212	212	C. For the purposes of this section, "Consumer credit", "Covered member" and "creditor" have the same meanings prescribed in 32 Code of Federal Regulations section 232.3. END_STATUTE