HOUSE BILL 23-1229
BY REPRESENTATIVE(S) 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, Dickson, Duran, English, Hamrick,
Herod, Lindsay, McCormick, Snyder, Valdez, Ricks;
also SENATOR(S) Gonzales, Fields, Buckner, Cutter, Kolker, Moreno,
Priola, Rodriguez, Sullivan.
C
ONCERNING CHANGES TO CONSUMER LENDING LAWS TO LIMIT CHARGES TO
CONSUMERS
.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. In Colorado Revised Statutes, repeal and reenact,
with amendments, 5-2-213 as follows:
5-2-213. General-purpose credit cards - definitions. (1) A
S USED
IN THIS SECTION
:
(a) "G
ENERAL-PURPOSE CREDIT CARD" MEANS ANY CARD, PLATE, OR
OTHER SINGLE CREDIT DEVICE THAT MAY BE USED FROM TIME TO TIME TO
NOTE: This bill has been prepared for the signatures of the appropriate legislative
officers and the Governor. To determine whether the Governor has signed the bill
or taken other action on it, please consult the legislative status sheet, the legislative
history, or the Session Laws.
________
Capital letters or bold & italic numbers indicate new material added to existing law; dashes
through words or numbers indicate deletions from existing law and such material is not part of
the act. OBTAIN CONSUMER CREDIT UNDER AN OPEN -END CREDIT PLAN OFFERED BY
A SUPERVISED FINANCIAL ORGANIZATION
, AS DEFINED IN SECTION 5-1-301
(45),
THAT:
(I) I
S ACCEPTED BY ANY MERCHANT THAT PARTICIPATES IN A WIDELY
ACCEPTED PAYMENT CARD NETWORK AND IS ACCEPTED UPON PRESENTATION
AT MULTIPLE
, UNAFFILIATED MERCHANTS FOR GOODS OR SERVICES ;
(II) D
OES NOT CHARGE FEES, INCLUDING PRE-ACCOUNT OPENING
FEES
, WHICH EXCEED FIFTEEN PERCENT OF THE CREDIT LINE ; AND
(III) DOES NOT INCLUDE AN OVERDRAFT LINE OF CREDIT THAT IS
ACCESSED BY A DEBIT OR PREPAID CARD OR AN ACCOUNT NUMBER
.
(b) "O
PEN-END CREDIT PLAN" MEANS CONSUMER CREDIT EXTENDED
BY A CREDITOR UNDER A PLAN IN WHICH
:
(I) T
HE CREDITOR REASONABLY CONTEMPLATES REPEATED
TRANSACTIONS
;
(II) T
HE CREDITOR MAY IMPOSE A FINANCE CHARGE FROM TIME TO
TIME ON AN OUTSTANDING UNPAID BALANCE
; AND
(III) THE AMOUNT OF CREDIT THAT MAY BE EXTENDED TO THE
CONSUMER DURING THE TERM OF THE PLAN
, UP TO ANY LIMIT SET BY THE
CREDITOR
, IS GENERALLY MADE AVAILABLE TO THE EXTENT THAT ANY
OUTSTANDING BALANCE IS REPAID
.
(2) L
IMITATIONS IN STATE LAW ON FINANCE CHARGES AND FEES
APPLICABLE TO CONSUMER CREDIT TRANSACTIONS IN SECTIONS
5-2-201,
5-2-202,
AND 5-2-203 SHALL NOT APPLY TO GENERAL -PURPOSE CREDIT
CARDS
.
SECTION 2. In Colorado Revised Statutes, 5-2-214, amend (1),
(2), (3), (5), and (8); repeal (4); and add (5.5) as follows:
5-2-214. Alternative charges for loans not exceeding one
thousand dollars. (1) For a consumer loan where the amount financed is
not more than one thousand dollars, a supervised lender may charge, in lieu
of the loan finance charges permitted by section 5-2-201, the following
PAGE 2-HOUSE BILL 23-1229 finance charges:
(a) An acquisition charge for making the original loan
OR ANY
REFINANCED LOAN
, not to exceed ten
EIGHT percent of the amount financed;
AND
(a.5) An acquisition charge for making any refinanced loan, not to
exceed seven and one-half percent of the amount financed; and
(b) A monthly installment account handling charge, not to exceed
the following amounts:
Amount financed Per month charge
$100.00 - $300 $12.50
$8.50
$300.01 - $500 $15.00 $11.50
$500.01 - $750 $17.50 $14.50
$750.01 - $1,000 $20.00 $17.50
(2) The minimum term of a loan made pursuant to this section shall
be ninety days IS SIX MONTHS. The maximum term of a loan made pursuant
to this section shall be IS twelve months. All loans shall be scheduled to be
payable in substantially equal installments at equal periodic intervals.
(3) On a loan subject to the alternative charges authorized by this
section, no other finance charge or any other charge or fee is permitted
except as specifically provided for in this section and except for the
delinquency charges provided for in section 5-2-203, reasonable attorney
fees provided for in section 5-5-112 and the fee for a dishonored check
provided for in section 5-2-202 (1)(e)(II).
(4) The acquisition charge authorized in this section shall be fully
earned at the time the loan is made and shall not be subject to refund; except
that, if the loan is prepaid in full, refinanced, or consolidated within the first
sixty days, the first ten dollars of the acquisition charge shall be retained by
the lender and the remainder of the acquisition charge shall be refunded at
a rate of one-sixtieth of the remainder of the acquisition charge per day,
PAGE 3-HOUSE BILL 23-1229 beginning on the day after the date of the prepayment, refinancing, or
consolidation and ending on the sixtieth day after the loan was made.
(5) Upon the prepayment of a loan made pursuant to this section, the
unearned portion of the installment account ACQUISITION CHARGE AND THE
TOTAL MONTHLY INSTALLMENT
handling charge shall be refunded to the
consumer. The unearned portion of the installment account handling chargethat is refunded THESE CHARGES shall be calculated pursuant to the
provisions on rebate upon prepayment contained in section 5-2-211 on the
date of refinancing; except that, for the purpose of computing this amount,
no
A minimum FINANCE charge described in section 5-2-201 shall be OF NO
MORE THAN TEN DOLLARS IS
allowed IF CONTRACTED WITH THE CONSUMER
IN THE LOAN AGREEMENT
.
(5.5) (a) A
LENDER SHALL REQUIRE A CONSUMER TO FILL OUT A LOAN
APPLICATION FOR EVERY LOAN UNDER THIS SECTION AND SHALL MAINTAIN
THE APPLICATION ON FILE
. THE APPLICATION MUST BE SIGNED AND DATED
BY THE CONSUMER
.
(b) A
LENDER SHALL REQUIRE THE CONSUMER TO PROVIDE A PAY
STUB OR OTHER EVIDENCE OF INCOME IN EVERY APPLICATION FOR A LOAN
UNDER THIS SECTION AND SHALL MAINTAIN THIS APPLICATION ON FILE
. THE
PAY STUB OR OTHER EVIDENCE OF INCOME MUST HAVE BEEN ISSUED OR
DATED WITHIN FORTY
-FIVE DAYS BEFORE THE DATE OF THE APPLICATION. IF
A LENDER REQUIRES A CONSUMER TO PRESENT A BANK STATEMENT TO
SECURE A LOAN
, THE LENDER SHALL ALLOW THE CONSUMER TO DELETE
FROM THE STATEMENT THE INFORMATION REGARDING TO WHOM THE DEBITS
LISTED ON THE STATEMENT WERE PAYABLE
. IF THE AMOUNT BORROWED IS
NOT MORE THAN TWENTY
-FIVE PERCENT OF THE CONSUMER 'S MONTHLY
GROSS INCOME AND BENEFITS
, AS EVIDENCED BY A PAYCHECK STUB OR
OTHERWISE SUBSTANTIATED
, A LENDER IS NOT OBLIGATED TO INVESTIGATE
THE CONSUMER
'S CONTINUED DEBT POSITION, AND THE CONSUMER'S ABILITY
TO REPAY THE LOAN NEED NOT BE FURTHER DEMONSTRATED
.
(c) I
F A LENDER COMPLIES WITH THE REQUIREMENTS OF SUBSECTIONS
(5.5)(a) AND (5.5)(b) OF THIS SECTION, AND THE LOAN OTHERWISE COMPLIES
WITH THIS ARTICLE
2 AND OTHER APPLICABLE LAW , NEITHER THE
CONSUMER
'S INABILITY TO REPAY THE LOAN NOR THE LENDER'S DECISION TO
OBTAIN OR NOT OBTAIN ADDITIONAL INFORMATION CONCERNING THE
CONSUMER
'S CREDITWORTHINESS SHALL BE CAUSE TO DETERMINE THAT A
PAGE 4-HOUSE BILL 23-1229 LOAN IS UNCONSCIONABLE.
(8) A lender may not refinance a loan made pursuant to this section
more than three times ONCE in one year.
SECTION 3. In Colorado Revised Statutes, add 5-13-106 as
follows:
5-13-106. Other loans - legislative declaration. I
N ACCORDANCE
WITH SECTION
525 OF THE FEDERAL "DEPOSITORY INSTITUTIONS
DEREGULATION AND MONETARY CONTROL ACT OF 1980", PUB.L. 96-221,
THE GENERAL ASSEMBLY DECLARES THAT THE STATE OF COLORADO DOES
NOT WANT THE AMENDMENTS TO THE
"FEDERAL DEPOSIT INSURANCE ACT",
12
U.S.C. SEC. 1811 ET SEQ.; THE FEDERAL "NATIONAL HOUSING ACT", 12
U.S.C.
SEC. 1701 ET SEQ.; AND THE "FEDERAL CREDIT UNION ACT", 12
U.S.C.
SEC. 1757, MADE BY SECTIONS 521 TO 523 OF THE FEDERAL
"DEPOSITORY INSTITUTIONS DEREGULATION AND MONETARY CONTROL
ACT OF 1980", PUB.L. 96-221, PRESCRIBING INTEREST RATES AND
PREEMPTING STATE INTEREST RATES TO APPLY TO CONSUMER CREDIT
TRANSACTIONS IN THIS STATE
. THE RATES ESTABLISHED IN ARTICLES 1 TO 9
OF THIS TITLE 5 CONTROL CONSUMER CREDIT TRANSACTIONS IN THIS STATE .
SECTION 4. In Colorado Revised Statutes, 5-1-107, amend (1) as
follows:
5-1-107. Effect of code on powers of organizations. (1) This code
prescribes maximum charges for all creditors extending consumer credit
except lessors and those excluded in sections 5-1-202 and 5-2-213 (2)(b)
and displaces existing limitations on the powers of those creditors based on maximum charges.
SECTION 5. In Colorado Revised Statutes, 5-1-303, amend the
"Credit card bank or financial institution" line as follows:
5-1-303. Index of definitions in code. Definitions in this code and
the sections in which they appear are:
"Credit card bank or
financial institution" section 5-2-213 (1)
SECTION 6. Effective date - applicability. (1) Except as
PAGE 5-HOUSE BILL 23-1229 otherwise provided in this section, this act takes effect on passage.
(2) Sections 1, 4, and 5 of this act take effect July 1, 2024, and apply
to consumer credit transactions made or renewed on or after July 1, 2024.
(3) Section 2 of this act takes effect January 1, 2024, and applies to
consumer credit transactions made or renewed on or after January 1, 2024.
(4) Section 3 of this act takes effect July 1, 2024, and applies to
consumer credit transactions made or renewed on or after July 1, 2024.
SECTION 7. Safety clause. The general assembly hereby finds,
PAGE 6-HOUSE BILL 23-1229 determines, and declares that this act is necessary for the immediate
preservation of the public peace, health, or safety.
____________________________ ____________________________
Julie McCluskie Steve Fenberg
SPEAKER OF THE HOUSE PRESIDENT OF
OF REPRESENTATIVES THE SENATE
____________________________ ____________________________
Robin Jones Cindi L. Markwell
CHIEF CLERK OF THE HOUSE SECRETARY OF
OF REPRESENTATIVES THE SENATE
APPROVED________________________________________
(Date and Time)
_________________________________________
Jared S. Polis
GOVERNOR OF THE STATE OF COLORADO
PAGE 7-HOUSE BILL 23-1229