First Regular Session
Seventy-fourth General Assembly
STATE OF COLORADO
ENGROSSED
This Version Includes All Amendments Adopted
on Second Reading in the House of Introduction
LLS NO. 23-0766.01 Josh Schultz x5486
HOUSE BILL 23-1229
House Committees Senate Committees
Finance
A BILL FOR AN ACT
C
ONCERNING CHANGES TO CONSUM ER LENDING LAWS TO LIMIT101
CHARGES TO CONSUMERS .102
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov
.)
The bill amends the Colorado "Uniform Consumer Credit Code"
to change the terms and interest rates that a lender may charge in a
consumer credit transaction.
The bill amends the calculation of the total amount of the finance
charge that a supervised lender or seller may contract for and receive to
include the total cost of specific additional charges in connection with a
HOUSE
Amended 2nd Reading
April 10, 2023
HOUSE SPONSORSHIP
Weissman and Mabrey, Amabile, Bacon, Boesenecker, Brown, deGruy Kennedy, Epps,
Froelich, Garcia, Gonzales-Gutierrez, Jodeh, Joseph, Kipp, Lieder, Lindstedt, Michaelson
Jenet, Ortiz, Parenti, Sharbini, Sirota, Story, Titone, Velasco, Vigil, Willford, Woodrow,
Young
SENATE SPONSORSHIP
Gonzales, Fields
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law. consumer credit transaction.
The bill modifies the requirements for alternative charges for loans
not exceeding $1,000 as follows:
! Reduces the permissible acquisition charge on the original
loan or any refinanced loan to 5% of the amount financed;
! Reduces the permissible amount for a monthly installment
account handling charge;
! Increases the minimum loan term;
! Eliminates delinquency charges for the loan;
! Amends the conditions upon which an acquisition charge
must be refunded to the consumer;
! Details the requirements for an application for the loan and
specifies how the loan application requirements impact a
determination of unconscionability of the loan; and
! Limits the number of times a lender may refinance a
consumer loan to once in a year.
The bill also opts Colorado out of the amendments to the "Federal
Deposit Insurance Act", the federal "National Housing Act", and the
"Federal Credit Union Act" and specifies that rates established in the
Colorado "Uniform Consumer Credit Code" apply to consumer credit
transactions in this state.
Be it enacted by the General Assembly of the State of Colorado:1
2
SECTION 1. In Colorado Revised Statutes, 5-2-214, amend (1),3
(2), (3), (5), and (8); repeal (4); and add (5.5) as follows:4
5-2-214. Alternative charges for loans not exceeding one5
thousand dollars. (1) For a consumer loan where the amount financed6
is not more than one thousand dollars, a supervised lender may charge, in7
lieu of the loan finance charges permitted by section 5-2-201, the8
following finance charges:9
(a) An acquisition charge for making the original loan
OR ANY10
REFINANCED LOAN, not to exceed ten
EIGHT percent of the amount11
financed;
AND12
(a.5) An acquisition charge for making any refinanced loan, not
13
1229-2- to exceed seven and one-half percent of the amount financed; and1
(b) A monthly installment account handling charge, not to exceed2
the following amounts:3
Amount financedPer month charge4
$100.00 - $300$12.50 $8.505
$300.01 - $500$15.00 $11.506
$500.01 - $750$17.50 $14.507
$750.01 - $1,000$20.00 $17.508
(2) The minimum term of a loan made pursuant to this section9
shall be ninety days IS SIX MONTHS. The maximum term of a loan made10
pursuant to this section shall be IS twelve months. All loans shall be11
scheduled to be payable in substantially equal installments at equal12
periodic intervals.13
(3) On a loan subject to the alternative charges authorized by this14
section, no other finance charge or any other charge or fee is permitted15
except as specifically provided for in this section and except for the16
delinquency charges provided for in section 5-2-203, reasonable attorney17
fees provided for in section 5-5-112 and the fee for a dishonored check18
provided for in section 5-2-202 (1)(e)(II).19
(4) The acquisition charge authorized in this section shall be fully20
earned at the time the loan is made and shall not be subject to refund;21
except that, if the loan is prepaid in full, refinanced, or consolidated22
within the first sixty days, the first ten dollars of the acquisition charge23
shall be retained by the lender and the remainder of the acquisition charge24
shall be refunded at a rate of one-sixtieth of the remainder of the25
acquisition charge per day, beginning on the day after the date of the26
prepayment, refinancing, or consolidation and ending on the sixtieth day27
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(5) Upon the prepayment of a loan made pursuant to this section,2
the unearned portion of the installment account ACQUISITION CHARGE AND3
THE TOTAL MONTHLY INSTALLMENT handling charge shall be refunded to4
the consumer. The unearned portion of the installment account handling5
charge that is refunded THESE CHARGES shall be calculated pursuant to the6
provisions on rebate upon prepayment contained in section 5-2-211 on the7
date of refinancing; except that, for the purpose of computing this8
amount, no A minimum FINANCE charge described in section 5-2-2019
shall be OF NO MORE THAN TEN DOLLARS IS allowed IF CONTRACTED WITH10
THE CONSUMER IN THE LOAN AGREEMENT .11
(5.5) (a) A
LENDER SHALL REQUIRE A CONSUMER TO FILL OUT A12
LOAN APPLICATION FOR EVERY LOAN UNDER THIS SECTION AND SHALL13
MAINTAIN THE APPLICATION ON FILE. THE APPLICATION MUST BE SIGNED14
AND DATED BY THE CONSUMER .15
(b) A
LENDER SHALL REQUIRE THE CONSUMER TO PROVIDE A PAY16
STUB OR OTHER EVIDENCE OF INCOME IN EVERY APPLICATION FOR A LOAN17
UNDER THIS SECTION AND SHALL MAINTAIN THIS APPLICATION ON FILE .18
T
HE PAY STUB OR OTHER EVIDENCE OF INCOME MUST HAVE BEEN ISSUED19
OR DATED WITHIN FORTY -FIVE DAYS BEFORE THE DATE OF THE20
APPLICATION. IF A LENDER REQUIRES A CONSUMER TO PRESENT A BANK21
STATEMENT TO SECURE A LOAN , THE LENDER SHALL ALLOW THE22
CONSUMER TO DELETE FROM THE STATEMENT THE INFORMATION23
REGARDING TO WHOM THE DEBITS LISTED ON THE STATEMENT WERE24
PAYABLE. IF THE AMOUNT BORROWED IS NOT MORE T HAN TWENTY -FIVE25
PERCENT OF THE CONSUMER'S MONTHLY GROSS INCOME AND BENEFITS , AS26
EVIDENCED BY A PAYCHECK STUB OR OTHERWISE SUBSTANTIATED , A27
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DEBT POSITION, AND THE CONSUMER'S ABILITY TO REPAY THE LOAN NEED2
NOT BE FURTHER DEMONSTRATED .3
(c) I
F A LENDER COMPLIES WITH THE REQUIREMENTS OF4
SUBSECTIONS (5.5)(a) AND (5.5)(b) OF THIS SECTION, AND THE LOAN5
OTHERWISE COMPLIES WITH THIS ARTICLE 2 AND OTHER APPLICABLE LAW,6
NEITHER THE CONSUMER 'S INABILITY TO REPAY THE LOAN NOR THE7
LENDER'S DECISION TO OBTAIN OR NOT OBTAIN ADDITIONAL INFORMATION8
CONCERNING THE CONSUMER 'S CREDITWORTHINESS SHALL BE CAUSE TO9
DETERMINE THAT A LOAN IS UNCONSCIONABLE .10
(8) A lender may not refinance a loan made pursuant to this11
section more than three times
ONCE in one year.12
SECTION 2. In Colorado Revised Statutes, add 5-13-106 as13
follows:14
5-13-106. Other loans - legislative declaration. I
N ACCORDANCE15
WITH SECTION 525 OF THE FEDERAL "DEPOSITORY INSTITUTIONS16
D
EREGULATION AND MONETARY CONTROL ACT OF 1980", PUB.L. 96-221,17
THE GENERAL ASSEMBLY DECLARES THAT
THE STATE OF COLORADO DOES18
NOT WANT THE AMENDMENTS TO THE "FEDERAL DEPOSIT INSURANCE19
A
CT", 12 U.S.C. SEC. 1811 ET SEQ.; THE FEDERAL "NATIONAL HOUSING20
A
CT", 12 U.S.C. SEC. 1701 ET SEQ.; AND THE "FEDERAL CREDIT UNION21
A
CT", 12 U.S.C. SEC. 1757, MADE BY SECTIONS 521 TO 523 OF THE22
FEDERAL "DEPOSITORY INSTITUTIONS DEREGULATION AND MONETARY23
C
ONTROL ACT OF 1980", PUB.L. 96-221, PRESCRIBING INTEREST RATES24
AND PREEMPTING STATE INTEREST RATES
TO APPLY TO CONSUMER CREDIT25
TRANSACTIONS IN THIS STATE. THE RATES ESTABLISHED IN ARTICLES 1 TO26
9
OF THIS TITLE 5 CONTROL CONSUMER CREDIT TRANSACTIONS IN THIS27
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SECTION 3. Effective date - applicability. This act takes effect2
upon passage and applies to loans made or renewed on or after the3
applicable effective date of this act; except that section 1 of this act takes4
effect January 1, 2024, and applies to loans made or renewed on or after5
January 1, 2024.6
SECTION 4. Safety clause. The general assembly hereby finds,7
determines, and declares that this act is necessary for the immediate8
preservation of the public peace, health, or safety. 9
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