Kansas 2023-2024 Regular Session

Kansas House Bill HB2242 Compare Versions

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

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1	1	Session of 2023
2	2	HOUSE BILL No. 2242
3	3	By Committee on Financial Institutions and Pensions
4	4	1-31
5	5	AN ACT concerning the uniform consumer credit code; relating to
6	6	consumer loans; providing restrictions and requirements for certain
7	7	alternative small installment loans; requiring lender reporting;
8	8	amending K.S.A. 16a-2-308, 16a-2-401, 16a-2-404 and 16a-2-501 and
9	9	repealing the existing sections.
10	10	Be it enacted by the Legislature of the State of Kansas:
11	11	Section 1. K.S.A. 16a-2-308 is hereby amended to read as follows:
12	12	16a-2-308. (1) If consumer loans in which the finance charge exceeds
13	13	twelve percent (12%), not made pursuant to open end credit or lender
14	14	credit cards issued by a licensed lender, and in which the amount financed
15	15	is one thousand dollars ($1,000) or less are payable in installments, they
16	16	shall be scheduled to be payable in substantially equal installments at
17	17	substantially equal periodic intervals except to the extent that the schedule
18	18	of payments is adjusted to the seasonal or irregular income of the debtor,
19	19	and:
20	20	(a) Over a period of not more than thirty-seven (37) calendar months
21	21	if the amount financed is more than three hundred dollars ($300),; or
22	22	(b) over a period of not more than twenty-five (25) calendar months
23	23	if the amount financed is three hundred dollars ($300) or less. The debtor's
24	24	schedule of payments may be extended to a longer repayment period
25	25	subsequent to the execution of the loan agreement pursuant to K.S.A. 16a-
26	26	2-502 or 16a-2-503, and amendments thereto. The default of the borrower
27	27	shall not be considered as having extended the loan beyond the prescribed
28	28	time limits.
29	29	(2) This section shall not apply to a consumer loan transaction
30	30	governed by K.S.A. 16a-2-404, and amendments thereto.
31	31	Sec. 2. K.S.A. 16a-2-401 is hereby amended to read as follows: 16a-
32	32	2-401. (1) For any consumer loan incurred pursuant to open end credit,
33	33	including, without limitation, a loan pursuant to a lender credit card, a
34	34	lender may charge a periodic finance charge at any rate agreed to by the
35	35	parties, calculated according to the actuarial method, not to exceed 36%
36	36	per annum, subject, however, to the limitations on prepaid finance charges
37	37	set forth in subsection (6). This subsection does not apply to a consumer
38	38	loan secured by a first mortgage or a second mortgage.
39	39	(2) For any consumer loan incurred pursuant to closed end credit, a
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76	76	lender may charge a periodic finance charge, calculated accordingly
77	77	according to the actuarial method, not to exceed: (a) 36% per annum on
78	78	the portion of the unpaid balance which is $860 or less, and (b) 21% per
79	79	annum on the portion of the unpaid balance which exceeds $860, subject,
80	80	however to the limitations on prepaid finance charges set forth in
81	81	subsection (6). This subsection does not apply to a consumer loan secured
82	82	by a first mortgage or a second mortgage.
83	83	(3) For any consumer loan secured by a second mortgage or a
84	84	consumer loan secured by an interest in a manufactured home as defined
85	85	by 42 U.S.C. § 5402(6), a lender may charge a periodic finance charge,
86	86	calculated according to the actuarial method, not to exceed 18% per
87	87	annum, subject, however to the limitations on prepaid finance charges set
88	88	forth in subsection (6). This subsection does not apply if the lender and the
89	89	consumer agree in writing that the finance charge for the loan is governed
90	90	by K.S.A. 16-207(b)(a), and amendments thereto.
91	91	(4) If the parties to a consumer loan secured by a first mortgage or a
92	92	consumer loan secured by an interest in a manufactured home as defined
93	93	by 42 U.S.C. § 5402(6) agree in writing to make the transaction subject to
94	94	the uniform consumer credit code, then the periodic finance charge for the
95	95	loan, calculated according to the actuarial method, may not exceed 18%
96	96	per annum, subject, however to the limitations on prepaid finance charges
97	97	set forth in subsection (6).
98	98	(5) This section does not limit or restrict the manner of calculating the
99	99	finance charge, whether by way of add-on, discount or otherwise, so long
100	100	as the rate and the amount of the finance charge does not exceed that
101	101	permitted by this section.
102	102	(6) Prepaid finance charges on consumer loans are limited as follows:
103	103	(a) For a consumer loan secured by a first mortgage or a second
104	104	mortgage, or a consumer loan secured by an interest in a manufactured
105	105	home as defined by 42 U.S.C. § 5402(6), prepaid finance charges in an
106	106	amount not to exceed 8% of the amount financed may be charged,
107	107	provided that the aggregate amount of prepaid finance charges payable to
108	108	the lender or any person related to the lender do not exceed 5% of the
109	109	amount financed; and
110	110	(b) for any other consumer loan, prepaid finance charges in an
111	111	amount not to exceed the lesser of 2% of the amount financed or $100 may
112	112	be charged.
113	113	Prepaid finance charges permitted under this subsection are in addition
114	114	to finance charges permitted under subsection (1), (2), (3) and (4), as
115	115	applicable. Prepaid finance charges permitted under this subsection are
116	116	fully earned when paid and are non-refundable, unless the parties agree
117	117	otherwise in writing.
118	118	(7) The finance charge limitations in subsections (3) and (4) do not
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162	162	apply to a consumer loan the finance charge for which is governed by
163	163	subsection (h) of K.S.A. 16-207(g), and amendments thereto.
164	164	(8) If a loan secured by a first mortgage constitutes a "consumer loan"
165	165	under subsection (17) of K.S.A. 16a-1-301(17), and amendments thereto,
166	166	by virtue of the loan-to-value ratio exceeding 100% at the time the loan is
167	167	made, then the periodic finance charge for the loan shall not exceed that
168	168	authorized by subsection (b) of K.S.A. 16-207(a), and amendments
169	169	thereto, but the loan is subject to the limitations on prepaid finance charges
170	170	set forth in paragraph (a) of subsection (6)(a), which prepaid finance
171	171	charges may be charged in addition to the finance charges permitted under
172	172	subsection (b) of K.S.A. 16-207(a), and amendments thereto.
173	173	(9) If, within 12 months after the date of the original loan, a lender or
174	174	a person related to the lender refinances a loan with respect to which a
175	175	prepaid finance charge was payable to the same lender pursuant to
176	176	subsection (6), then the following apply:
177	177	(a) If a prepaid finance charge with respect to the original loan was
178	178	payable to the lender pursuant to paragraph (a) of subsection (6)(a), then
179	179	the aggregate amount of prepaid finance charges payable to the lender or
180	180	any person related to the lender with respect to the new loan may not
181	181	exceed 5% of the additional amount financed.
182	182	(b) If a prepaid finance charge with respect to the original loan was
183	183	payable to the lender pursuant to paragraph (b) of subsection (6)(b), then
184	184	the aggregate amount of prepaid finance charges payable to the lender or
185	185	any person related to the lender with respect to the new loan may not
186	186	exceed the lesser of 2% of the additional amount financed or $100.
187	187	(c) For purposes of this subsection, "additional amount financed"
188	188	means the difference between: (i) The amount financed for the new loan,
189	189	less the amount of all closing costs incurred in connection with the new
190	190	loan which are not included in the prepaid finance charges for the new
191	191	loan; and (ii) the unpaid principal balance of the original loan.
192	192	(10) For any period in which a finance charge is due on a consumer
193	193	loan pursuant to open end credit, the parties may agree on a minimum
194	194	amount.
195	195	(11) If the parties to a contract for deed to real estate agree in writing
196	196	to make the transaction subject to the uniform consumer credit code, then
197	197	the transaction is subject to the same limitations as set forth in subsections
198	198	(4) and (6) for a consumer loan secured by a first mortgage.
199	199	(12) This section does not apply to a payday consumer loan
200	200	transaction governed by K.S.A. 16a-2-404, and amendments thereto.
201	201	Sec. 3. K.S.A. 16a-2-404 is hereby amended to read as follows: 16a-
202	202	2-404. (1) On consumer loan transactions in which cash is advanced:
203	203	(a) With a short term,
204	204	(b) a single payment repayment is anticipated, and
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248	248	(c) such cash advance is equal to or less than $500 a closed end loan
249	249	that meets all of the requirements of this section, a licensed or supervised
250	250	lender may charge an amount not to exceed 15% of the amount of the cash
251	251	advance:
252	252	(a) Interest, calculated according to the actuarial method, not to
253	253	exceed 36% per annum;
254	254	(b) subject to subsection (21), a monthly maintenance fee that does
255	255	not exceed the lesser of 8% of the originally contracted loan amount or
256	256	$30, as long as such fee is not added to the loan balance on which interest
257	257	is charged;
258	258	(c) if the loan is subject to a security interest in a motor vehicle in
259	259	accordance with the provisions of subsection (16), charges for reasonable
260	260	expenses arising from realizing on a security interest authorized under
261	261	K.S.A. 84-9-615, and amendments thereto, except that the total amount of
262	262	such charges shall not exceed an amount equal to 5% of the originally
263	263	contracted loan amount;
264	264	(d) delinquency charges permitted under K.S.A. 16a-2-502, and
265	265	amendments thereto;
266	266	(e) service charges for insufficient checks permitted under K.S.A 16a-
267	267	2-501(1)(e), and amendments thereto;
268	268	(f) if the originally contracted loan amount is $400 or more and the
269	269	originally contracted loan term is four months or more, an underwriting
270	270	fee not to exceed $25; and
271	271	(g) except as provided in subsection (16), charges for collection costs
272	272	and attorney fees permitted under K.S.A. 16a-2-507, and amendments
273	273	thereto. No insurance charges or any other charges shall be permitted in
274	274	connection with the loan, including any other charges described in K.S.A
275	275	16a-2-501, and amendments thereto, and charges for cashing the loan
276	276	proceeds if they are given in check form. Permissible charges under this
277	277	subsection are subject to the limitations described in subsection (9).
278	278	(2) Subject to subsection (21), the amount financed on any loan
279	279	under this section shall be $2,500 or less.
280	280	(2)(3) (a) The minimum term of any loan under this section shall be 7
281	281	days three calendar months, except as provided in subsection (3)(b), and
282	282	the maximum term of any loan made under this section shall be 30 days 24
283	283	calendar months.
284	284	(b) The minimum duration of the loan may be less than three
285	285	calendar months if the total monthly payment on the loan does not exceed
286	286	an amount that is 5% of the borrower's verified gross monthly income or
287	287	6% of verified funds the borrower actually receives monthly net of taxes or
288	288	other deductions. If the duration of the loan is less than three calendar
289	289	months, the lender shall make a reasonable attempt to verify the
290	290	borrower's income or funds received, which shall include, at a minimum,
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334	334	obtaining from the borrower one or more recent pay stubs or other written
335	335	evidence of such borrower's recurring income or funds received, such as a
336	336	bank statement. For purposes of this subsection, written evidence shall
337	337	include at least one document that, when presented to the lender, is dated
338	338	not earlier than 45 days prior to the borrower's initiation of the loan
339	339	transaction and not later than the time the loan is made.
340	340	(3)(4) A lender and related interest shall not have more than two loans
341	341	one loan made under this section outstanding to the same borrower at any
342	342	one time and shall not make more than three loans to any one borrower
343	343	within a 30 calendar day period. Each lender shall maintain a journal of
344	344	loan transactions for each borrower which shall include at least the
345	345	following information:
346	346	(a) Name, address and telephone number of each borrower; and
347	347	(b) date made and due date of each loan.
348	348	(4)(5) Each loan agreement made under this section shall contain be
349	349	made pursuant to a written loan contract that sets forth the terms and
350	350	conditions of the loan. A copy of the loan contract shall be provided to the
351	351	borrower. The loan contract shall disclose in a clear and concise manner
352	352	all of the following:
353	353	(a) The total amount of fees and charges the borrower will be
354	354	required to pay in connection with the loan pursuant to the loan contract;
355	355	(b) the total amount of each payment, when each payment is due, and
356	356	the total number of payments that the borrower will be required to make
357	357	under the loan contract;
358	358	(c) the annual percentage rate, inclusive of monthly fees;
359	359	(d) all disclosures required under the truth in lending act, 15 U.S.C.
360	360	1601, et seq.; and
361	361	(e) the following notice notices in at least 10-point bold face type:
362	362	(i) "NOTICE TO BORROWER: This is an alternative small
363	363	installment loan made under K.S.A. 16a-2-404, which allows lenders to
364	364	charge higher-than-average rates if they follow special consumer
365	365	protection rules. KANSAS LAW PROHIBITS THIS LENDER AND
366	366	THEIR RELATED INTEREST INTERESTS FROM HAVING MORE
367	367	THAN TWO LOANS ONE SUCH LOAN OUTSTANDING TO YOU AT
368	368	ANY ONE TIME. A LENDER CANNOT DIVIDE THE AMOUNT YOU
369	369	WANT TO BORROW INTO MULTIPLE LOANS IN ORDER TO
370	370	INCREASE THE FEES YOU PAY."
371	371	(ii) "You have the right to rescind this loan by returning the originally
372	372	contracted loan amount by 5:00 p.m. of the third business day immediately
373	373	following the day you enter into this contract."; and
374	374	(iii) "Electronic payment is optional. You have the right to revoke or
375	375	remove your authorization for electronic payment at any time."
376	376	(6) Prior to consummation of the loan transaction, the lender must
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420	420	shall:
421	421	(a) Provide the notice notices set forth in this subsection (5)(e) in
422	422	both English and Spanish; and
423	423	(b) obtain the borrower's signature or initials next to the English
424	424	version of the each such notice or, if the borrower advises the lender that
425	425	the borrower is more proficient in Spanish than in English, then next to the
426	426	Spanish version of the each such notice.
427	427	(5) The contract rate of any loan made under this section shall not be
428	428	more than 3% per month of the loan proceeds after the maturity date. No
429	429	insurance charges or any other charges of any nature whatsoever shall be
430	430	permitted, except as stated in subsection (7), including any charges for
431	431	cashing the loan proceeds if they are given in check form.
432	432	(6) Any loan made under this section shall not be repaid by proceeds
433	433	of another loan made under this section by the same lender or related
434	434	interest.
435	435	(7) The proceeds from any loan made under this section shall not be
436	436	applied to any other loan from the same lender or related interest, except
437	437	that a lender may refinance a loan made under this section if the
438	438	refinanced loan is also a loan made under this section.
439	439	(7)(8) On a consumer loan transaction in which cash is advanced in
440	440	exchange for a personal check, one return check charge may be charged if
441	441	the check is deemed insufficient as defined in paragraph (e) of subsection
442	442	(1) of K.S.A. 16a-2-501, and amendments thereto. Upon the lender shall
443	443	not accept a check dated earlier than the date of the first required loan
444	444	payment shown in the loan agreement, and upon receipt of the check from
445	445	the consumer, the lender shall immediately stamp the back of the check
446	446	with an endorsement that states: "Negotiated as part of a loan made under
447	447	K.S.A. 16a-2-404. Holder takes subject to claims and defenses of maker.
448	448	No criminal prosecution."
449	449	(8)(9) Notwithstanding any provision of law to the contrary, a lender
450	450	may not contract for, charge or collect or receive in connection with a
451	451	loan made under this section a total amount of fees and charges that
452	452	exceeds either:
453	453	(a) 60% of the originally contracted loan amount, if the originally
454	454	contracted loan amount was $1,500 or less; or
455	455	(b) 75% of the originally contracted loan amount, if the originally
456	456	contracted loan amount was greater than $1,500. For purposes of this
457	457	subsection, all charges made in connection with the loan shall be included
458	458	when calculating the total loan charges except for the delinquency charges
459	459	and service charges for insufficient checks described in subsection (1).
460	460	(10) In determining whether a consumer loan transaction made under
461	461	the provisions of this section is unconscionable conduct under K.S.A. 16a-
462	462	5-108, and amendments thereto, consideration shall be given, among other
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506	506	factors, to:
507	507	(a) The ability of the borrower to repay within the terms of the loan
508	508	made under this section; or
509	509	(b) the original request of the borrower for amount and term of the
510	510	loan are within the limitations under this section.
511	511	(9)(11) A consumer may rescind any consumer loan transaction made
512	512	under the provisions of this section without cost not later than the end of
513	513	the 5:00 p.m. of the third business day immediately following the day on
514	514	which the loan transaction was made. To rescind the loan transaction:
515	515	(a) A consumer shall inform the lender that the consumer wants to
516	516	rescind the loan transaction;
517	517	(b) the consumer shall return the cash amount of the principal of the
518	518	loan transaction to the lender; and
519	519	(c) the lender shall return any fees that have been collected in
520	520	association with the loan.
521	521	(10)(12) A loan made under this section shall be a precomputed loan
522	522	payable in substantially equal installments consisting of principal, fees
523	523	and interest combined.
524	524	(13) (a) Subject to subsection (11), if a loan made under this section
525	525	is prepaid in full or refinanced prior to the loan's maturity date, the lender
526	526	shall refund to the borrower the following fees and charges if such fees
527	527	and charges apply to the loan transaction:
528	528	(i) A portion of the interest charges described in subsection (1)(a),
529	529	determined by applying, according to the actuarial method, the rate of
530	530	interest that was required to be disclosed in the transaction to the unpaid
531	531	balance for the actual time remaining for the period following prepayment
532	532	as originally scheduled;
533	533	(ii) a portion of the monthly maintenance fees described in subsection
534	534	(1)(b), calculated such that each monthly maintenance fee shall be fully
535	535	earned by the lender and nonrefundable as of the first day of each month;
536	536	and
537	537	(iii) a portion of the underwriting fee described in subsection (1)(f),
538	538	calculated such that ¼ of the fee shall be nonrefundable on the transaction
539	539	date and an additional ¼ of the fee shall be nonrefundable on the first day
540	540	of each month thereafter, such that the fee is fully earned by the lender and
541	541	nonrefundable as of the first day of the fourth month following the
542	542	transaction date.
543	543	(b) For purposes of this subsection, "time remaining for the period
544	544	following prepayment" means the same as provided in K.S.A. 16a-2-
545	545	201(5), and amendments thereto.
546	546	(c) If the maturity is accelerated by any reason and judgment is
547	547	obtained, the consumer is entitled to the same rebate as if payment had
548	548	been made on the date that the maturity is accelerated.
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592	592	(14) A lender shall not fail to accept cash or other good funds from
593	593	the borrower, or a third party when submitted on behalf of the borrower,
594	594	for full or partial repayment of a loan made under this section. For
595	595	purposes of this subsection, good funds includes a certified check,
596	596	cashier's check, official bank check or other negotiable instrument on
597	597	which payment cannot be stopped by the paying party.
598	598	(15) A person shall not commit or cause to be committed any of the
599	599	following acts or practices in connection with a consumer loan transaction
600	600	subject to the provisions of this section:
601	601	(a) Use any device or agreement that would have the effect of
602	602	charging or collecting more fees, charges or interest, or which results in
603	603	more fees, charges, or interest being paid by the consumer, than allowed
604	604	by the provisions of this section, including, but not limited to:
605	605	(i) Entering into a different type of transaction with the consumer;
606	606	(ii) entering into a sales/leaseback or rebate arrangement;
607	607	(iii) catalog sales; or
608	608	(iv) entering into any other transaction with the consumer or any
609	609	other person that is designed to evade the applicability of this section;
610	610	(b) use, or threaten to use the criminal process in any state to collect
611	611	on the loan;
612	612	(c) sell any other product of any kind in connection with the making
613	613	or collecting of the loan;
614	614	(d) include any of the following provisions in a loan document:
615	615	(i) A hold harmless clause;
616	616	(ii) a confession of judgment clause;
617	617	(iii) a provision in which the consumer agrees not to assert a claim or
618	618	defense arising out of the contract; or
619	619	(iv) a provision by which a person acting on behalf of the lender is
620	620	treated as an agent of the borrower in connection with the loan
621	621	transaction other than for purposes of filing or releasing a lien on a motor
622	622	vehicle title permitted under subsection (16);
623	623	(e) accept real or personal property or any interest in any property in
624	624	connection with a loan other than a check as described in subsection (8)
625	625	or a motor vehicle title as described in subsection (16);
626	626	(f) create or accept any remotely created check, as defined in 12
627	627	C.F.R. § 229.2(fff), in connection with a loan;
628	628	(g) draft funds electronically from a borrower's account without
629	629	express written authorization from the borrower;
630	630	(h) fail to stop attempts to draft funds electronically from a
631	631	borrower's account upon request from the borrower or the borrower's
632	632	agent;
633	633	(i) attempt to draft funds electronically from a borrower's account
634	634	after two consecutive attempts have failed, unless the lender obtains new
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678	678	written authorization from the borrower to transfer or withdraw funds
679	679	electronically from the borrower's account; or
680	680	(j) require or accept from a borrower a set of keys to a motor vehicle
681	681	that secures a loan. Nothing in this subsection shall prohibit the
682	682	conversion of a negotiable instrument into an electronic form for
683	683	processing through the automated clearing house system.
684	684	(16) With respect to a consumer loan transaction under this section,
685	685	a licensed lender may take a security interest in the title of one motor
686	686	vehicle that the borrower owns prior to the transaction, except that:
687	687	(a) The lender shall not accept a check in exchange for making the
688	688	loan;
689	689	(b) the lender shall not take the security interest if, on the date the
690	690	loan agreement is signed by the borrower, the motor vehicle's certificate of
691	691	title evidences that the motor vehicle is security for another loan or
692	692	otherwise is encumbered by a lien;
693	693	(c) the lender shall promptly release the security interest when the
694	694	borrower's obligations under the loan agreement are satisfied in full,
695	695	which shall include providing the borrower with written confirmation that
696	696	the loan contract was "paid" or "canceled" and taking any action
697	697	necessary to reflect termination of the lender's lien on the motor vehicle's
698	698	certificate of title;
699	699	(d) borrowers shall be permitted to recover promptly and at no cost
700	700	personal items from a repossessed motor vehicle;
701	701	(e) the lender shall not charge collection costs, attorney fees or any
702	702	other fees otherwise permitted under K.S.A 16a-2-507, and amendments
703	703	thereto, except when the lender becomes entitled to seek a personal money
704	704	judgment against the borrower as provided in subsection (16)(f);
705	705	(f) the lender shall not seek or obtain a personal money judgment
706	706	against the borrower for any amount owed under the loan agreement or
707	707	any deficiency resulting after the sale of a motor vehicle, except that, upon
708	708	default by the borrower, the lender may seek a personal money judgment
709	709	against the borrower for any amounts owed under the loan agreement if
710	710	the borrower impairs the lender's security interest by:
711	711	(i) Intentionally damaging or destroying the motor vehicle;
712	712	(ii) intentionally concealing the motor vehicle;
713	713	(iii) giving the lender a lien in a motor vehicle that is already
714	714	encumbered by an undisclosed prior lien; or
715	715	(iv) subsequently giving a security interest in, or selling, a motor
716	716	vehicle that secures a title loan to a third party without the lender's written
717	717	consent;
718	718	(g) in addition to the information required in subsection (5), the loan
719	719	contract shall include:
720	720	(i) The make, model year and vehicle identification number of the
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764	764	motor vehicle in which a security interest is being given as security for the
765	765	loan and the fair market value of the vehicle which value the lender shall
766	766	determine by reference to the value for the motor vehicle specified in a
767	767	recognized pricing guide if the motor vehicle is included in a recognized
768	768	pricing guide; and
769	769	(ii) a statement, printed in at least 14-point bold type immediately
770	770	above the borrower's signature, as follows: "YOU ARE PLEDGING
771	771	YOUR MOTOR VEHICLE AS COLLATERAL FOR THIS LOAN. IF YOU
772	772	FAIL TO REPAY THE LOAN ACCORDING TO THIS AGREEMENT, WE
773	773	MAY REPOSSESS YOUR MOTOR VEHICLE. Unless you conceal or
774	774	intentionally damage the motor vehicle or otherwise impair our security
775	775	interest under the law, your liability for defaulting under this loan is
776	776	limited to the loss of the motor vehicle. If your motor vehicle is sold due to
777	777	your default, you are entitled to any surplus obtained at sale beyond what
778	778	is owed under this agreement plus reasonable costs of collection, recovery
779	779	or sale not to exceed 5% of the originally contracted loan amount."; and
780	780	(h) a security interest taken in violation of this subsection is void.
781	781	(11) As used in this section, "related interest" shall have the same
782	782	meaning as "person related to" in K.S.A. 16a-1-301, and amendments
783	783	thereto.
784	784	(12)(17) Any person who facilitates, enables or acts as a conduit or
785	785	agent for any third party who enters into a consumer loan transaction with
786	786	the characteristics set out in paragraphs (a) and (b) of subsection (1)
787	787	governed by this section shall be required to obtain a supervised loan
788	788	license pursuant to K.S.A. 16a-2-301, and amendments thereto, regardless
789	789	of whether the third party may be exempt from licensure provisions of the
790	790	Kansas uniform consumer credit code.
791	791	(13)(18) Notwithstanding that a person may be exempted by virtue of
792	792	federal law from the interest rate, finance charge and licensure provisions
793	793	of the Kansas uniform consumer credit code, all other provisions of the
794	794	code shall apply to both the person and the loan transaction.
795	795	(14)(19) Any person who enters into a consumer loan transaction
796	796	under this section shall file a report with the administrator each year
797	797	under oath or affirmation, in a uniform manner prescribed by the
798	798	administrator, such information as the administrator may require
799	799	concerning the person's business and operation for the preceding year.
800	800	The provisions of this subsection do not apply to a lender that is a
801	801	supervised financial organization.
802	802	(20) The administrator shall publish and make available to the
803	803	public, at least annually, an analysis of the information required in
804	804	subsection (19). The published analysis shall include all of the following:
805	805	(a) Total number of borrowers;
806	806	(b) total number of loans;
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850	850	(c) average loan size;
851	851	(d) total contracted finance charges;
852	852	(e) total actual finance charges paid;
853	853	(f) number of defaulted loans;
854	854	(g) number of charged-off loans;
855	855	(h) dollar value of charged-off loans;
856	856	(i) total number and dollar value of each of the following:
857	857	(i) Delinquency charges; and
858	858	(ii) service charges for insufficient checks;
859	859	(j) average contracted annual percentage rate;
860	860	(k) total number of locations;
861	861	(l) average number of borrowers per location;
862	862	(m) average number of days in contracted loan duration;
863	863	(n) average number of days in experienced loan duration; and
864	864	(o) total number of lenders that included a security interest in a
865	865	contract for a loan made under this section during the period and the
866	866	following information regarding such loans:
867	867	(i) The total number of loans subject to a security interest;
868	868	(ii) the total number of loans that resulted in repossession or
869	869	surrender of a motor vehicle;
870	870	(iii) the total number of loans that resulted in a borrower redeeming
871	871	a repossessed or surrendered motor vehicle;
872	872	(iv) the total number of repossessed or surrendered motor vehicles
873	873	that were sold;
874	874	(v) the total amount lenders received from the sale of repossessed or
875	875	surrendered vehicles; and
876	876	(vi) the unpaid amount of debt associated with loans that resulted in
877	877	the sale of repossessed or surrendered vehicles.
878	878	(21) The administrator may, from time to time, by regulation, adjust
879	879	the following amounts to reflect the rate of inflation from the previous date
880	880	that the dollar amount was established, as measured by the consumer
881	881	price index or other method of measuring the rate of inflation that the
882	882	administrator determines is reliable and generally accepted:
883	883	(a) The dollar amount of $30 specified in subsection (1)(b); and
884	884	(b) the dollar amount of $2,500 specified in subsection (2).
885	885	(22) As used in this section:
886	886	(a) "Charged-off loan" means a loan on which a lender has stopped
887	887	pursuing first-party collection efforts;
888	888	(b) "motor vehicle" means and includes all motor vehicles required to
889	889	be registered under the provisions of article 1 of chapter 8 of the Kansas
890	890	Statutes Annotated, and amendments thereto; and
891	891	(c) "related interest" means the same as "person related to" as
892	892	defined in K.S.A. 16a-1-301, and amendments thereto.
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936	936	(23) This section shall be supplemental to and a part of the uniform
937	937	consumer credit code.
938	938	Sec. 4. K.S.A. 16a-2-501 is hereby amended to read as follows: 16a-
939	939	2-501. (1) In addition to the finance charge permitted by the parts of this
940	940	article on maximum finance charges for consumer credit sales and
941	941	consumer loans (parts 2 and 4), a creditor may contract for and receive the
942	942	following additional charges in connection with a consumer credit
943	943	transaction:
944	944	(a) Official fees and taxes;
945	945	(b) charges for insurance as described in subsection (2);
946	946	(c) delinquency charges permitted under K.S.A. 16a-2-502, and
947	947	amendments thereto, and service charges for insufficient checks permitted
948	948	under paragraph (e);
949	949	(d) charges for other benefits, including insurance, conferred on the
950	950	consumer, if the benefits are of value to the consumer and if the charges
951	951	are reasonable in relation to the benefits, are of a type which is not for
952	952	credit, and are excluded as permissible additional charges from the finance
953	953	charge by rules and regulations adopted by the administrator;
954	954	(e) a service charge for an insufficient check as defined and
955	955	authorized by this subsection:
956	956	(i) For the purposes of this subsection, "insufficient check" means any
957	957	check, order or draft drawn on any bank, credit union, savings and loan
958	958	association, or other financial institution for the payment of money and
959	959	delivered in payment, in whole or in part, of preexisting indebtedness of
960	960	the drawer or maker, which is refused payment by the drawee because the
961	961	drawer or maker does not have sufficient funds in or credits with the
962	962	drawee to pay the amount of the check, order or draft upon presentation,
963	963	provided that any check, order or draft which is postdated or delivered to a
964	964	payee who has knowledge at the time of delivery that the drawer or maker
965	965	did not have sufficient funds in or credits with the drawee to pay the
966	966	amount of the check, draft or order upon presentation shall not be deemed
967	967	an insufficient check.
968	968	(ii) "Written notice" shall be presumed to have been given a drawer or
969	969	maker of an insufficient check when notice is sent by first class mail
970	970	addressed to the person to be given notice of such person's address as it
971	971	appears on the insufficient check or to such person's last known address or
972	972	notice provided on a regular monthly statement provides clear notice of the
973	973	insufficient check charge being assessed.
974	974	(iii) When an insufficient check has been given to a payee, the payee
975	975	may charge and collect a $10 insufficient check service charge from the
976	976	drawer or maker, subject to limitations contained in this subsection or, if a
977	977	larger amount is provided within the contract, the larger amount, if the
978	978	payee has given the drawer or maker oral or written notice of demand that
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1022	1022	the amount of the insufficient check plus the insufficient check service
1023	1023	charge be paid to the payee within 14 days from the giving of notice. In no
1024	1024	event shall the amount of such insufficient check service charge exceed
1025	1025	$30.
1026	1026	(iv) If the drawer or maker of an insufficient check does not pay the
1027	1027	amount of the insufficient check plus the insufficient check service charge
1028	1028	provided for in subsection (iii) to the payee within 14 days from the giving
1029	1029	of notice as provided in subsection (iii), the payee may add the insufficient
1030	1030	check service charge to the outstanding balance of the preexisting
1031	1031	indebtedness of the drawer or maker to draw interest at the contract rate
1032	1032	applicable to the preexisting indebtedness.
1033	1033	(v) Notwithstanding the provisions of subparagraph (iii), if an
1034	1034	insufficient check has been given to a creditor under a lender credit card,
1035	1035	the creditor may charge a service charge for the insufficient check in an
1036	1036	amount not to exceed the amount agreed to by the drawer or maker.
1037	1037	(f) This subsection shall not apply to consumer loans pursuant to
1038	1038	open end credit by persons required to be licensed under this act, unless
1039	1039	such loans are secured by:
1040	1040	(i) A first mortgage;
1041	1041	(ii) a second mortgage; or
1042	1042	(iii) an interest in a manufactured home as defined by 42 U.S.C. §
1043	1043	5402(6).
1044	1044	(2) An additional charge may be made for insurance written in
1045	1045	connection with the transaction, including vendor's single interest
1046	1046	insurance with respect to which the insurer has no right of subrogation
1047	1047	against the consumer but excluding other insurance protecting the creditor
1048	1048	against the consumer's default or other credit loss:
1049	1049	(a) With respect to insurance against loss of or damage to property, or
1050	1050	against liability, if the creditor furnishes a clear and specific statement in
1051	1051	writing to the consumer setting forth the cost of the insurance if obtained
1052	1052	from or through the creditor and stating that the consumer may choose the
1053	1053	person through whom the insurance is to be obtained; and
1054	1054	(b) with respect to consumer credit insurance providing life, accident
1055	1055	and health, or loss of employment coverage, if the insurance coverage is
1056	1056	not a factor in the approval by the creditor of the extension of credit, and
1057	1057	this fact is clearly disclosed in writing to the consumer, and if, in order to
1058	1058	obtain the insurance in connection with the extension of credit, the
1059	1059	consumer gives specific affirmative written indication of the consumer's
1060	1060	desire to do so after written disclosure to the consumer of the cost thereof.
1061	1061	(3) With respect to a consumer loan or a consumer credit sale in
1062	1062	either case pursuant to open end credit, a creditor may charge the
1063	1063	following fees in an amount not to exceed that agreed to by the consumer:
1064	1064	(a) Fees on a monthly or annual basis;
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1108	1108	(b) over-limit fees; and
1109	1109	(c) cash advance fees. The fees permitted under this subsection are in
1110	1110	addition to any finance charges, additional charges or other charges
1111	1111	permitted by the uniform consumer credit code. Notwithstanding the
1112	1112	foregoing, with respect to a consumer loan pursuant to open end credit
1113	1113	that is not a loan secured by a dwelling as described in subsection (1)(f), a
1114	1114	person required to be licensed under this act may not charge the fees
1115	1115	permitted under this subsection, other than fees on a monthly or annual
1116	1116	basis in an amount not to exceed $50 per year.
1117	1117	(4) A charge not exceeding $5 per payment, if the borrower makes a
1118	1118	single installment payment by authorizing a creditor, verbally or in
1119	1119	writing, to write a check or process a payment through use of the
1120	1120	automated clearing house procedures on the borrower's checking account,
1121	1121	subject to the following limitations:
1122	1122	(A)(a) No charge shall be assessed if the creditor also collects a
1123	1123	delinquency fee on the same installment; and
1124	1124	(B)(b) no charge shall be assessed where the consumer has agreed in
1125	1125	writing with the creditor to make all scheduled payments through the use
1126	1126	of the automated clearing house procedures.
1127	1127	Sec. 5. K.S.A. 16a-2-308, 16a-2-401, 16a-2-404 and 16a-2-501 are
1128	1128	hereby repealed.
1129	1129	Sec. 6. This act shall take effect and be in force from and after
1130	1130	January 1, 2024, and its publication in the statute book.
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