HLS 14RS-2556 ORIGINAL
Page 1 of 6
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Regular Session, 2014
HOUSE BILL NO. 1187
BY REPRESENTATIVE HUNTER
CONSUMERS: Provides relative to consumer credit transactions
AN ACT1
To amend and reenact R.S. 9:3560(A)(8), 3578.4(A)(1), 3578.5, and 3578.6(A)(7) and to2
enact R.S. 9:3537, 3578.4(A)(3), and 3578.6(A)(9) and (C), relative to consumer3
credit transactions; to prohibit preliminary check holding in certain municipalities;4
to provide for definitions; to modify relative to refunds and deferred presentment5
transactions or small loans made in certain municipalities; to provide modifications6
relative to creditor provisions and chargeable interest in conjunction with7
transactions in certain municipalities; to provide for creditor and transactional8
prohibitions in conjunction with transactions in certain municipalities; and to provide9
for related matters.10
Be it enacted by the Legislature of Louisiana:11
Section 1. R.S. 9:3560(A)(8), 3578.4(A)(1), 3578.5, and 3578.6(A)(7) are hereby12
amended and reenacted and R.S. 9:3537, 3578.4(A)(3), and 3578.6(A)(9) and (C) are hereby13
enacted to read as follows:14
§3537. Prohibition; check holding15
With respect to a consumer credit transaction in a municipality with a16
population in excess of forty-eight thousand seven hundred and less than fifty17
thousand as determined by the latest federal decennial census, an extender of credit18
shall not accept a check, as defined in R.S. 9:3516, from the issuer and agree to hold19
the check for a period of time in exchange for payment to the issuer.20
* * *21 HLS 14RS-2556 ORIGINAL
HB NO. 1187
Page 2 of 6
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
§3560. Licenses not required1
A. Notwithstanding R.S. 9:3557, the following persons shall be exempt from2
the consumer loan licensing requirements under this Part:3
* * *4
(8) A Except in conjunction with transactions in a municipality with a5
population in excess of forty-eight thousand seven hundred and less than fifty6
thousand as determined by the latest federal decennial census, a creditor having no7
office within this state offering credit to Louisiana consumers through the mails and8
other means of interstate commerce.9
* * *10
§3578.4. Finance charge and fees11
A.(1) In Except as provided in Paragraph (3) of this Subsection, in12
conjunction with a deferred presentment transaction or small loan, a licensee may13
charge a fee not to exceed sixteen and seventy-five one hundredths percent of the14
face amount of the check issued or in the case of a small loan, the equivalent rate of15
interest, provided however that such fee or interest does not exceed forty-five dollars,16
regardless of the name or type of charge.17
* * *18
(3)(a) Notwithstanding any other provision of law, in conjunction with a19
deferred presentment transaction or small loan in a municipality with a population20
in excess of forty-eight thousand seven hundred and less than fifty thousand as21
determined by the latest federal decennial census, a licensee may charge a fee not to22
exceed thirty-six percent interest annually. Any transaction or loan made or23
collected in violation of this Paragraph is void and the licensee shall not have the24
right to collect, receive, or retain any principal, interest, fees, or other charges.25
(b) For the purposes of this Paragraph, "interest" means all charges and fees26
assessed, payable directly or indirectly, including fees pursuant to R.S. 9:3530(C) in27
connection with or as a condition of a deferred presentment transaction or small loan.28
* * *29 HLS 14RS-2556 ORIGINAL
HB NO. 1187
Page 3 of 6
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
§3578.5. Rebate upon prepayment1
A. Upon Except as provided in Subsection B of this Section, upon the2
prepayment in full of a deferred presentment transaction or small loan, during the3
first five days of the term of such transaction or loan only, the licensee shall refund4
any and all unearned charges by a method no less favorable to the consumer than the5
actuarial method, less twenty dollars of the original fee, which shall be considered6
earned and shall not be subject to refund. Should the consumer make prepayment7
after the first five days of the term of the transaction or loan, the licensee shall not8
be required to make any refund.9
B. In conjunction with a transaction in a municipality with a population in10
excess of forty-eight thousand seven hundred and less than fifty thousand as11
determined by the latest federal decennial census, upon the prepayment in full of a12
deferred presentment transaction or small loan, the licensee shall refund any and all13
unearned charges by a method no less favorable to the consumer than the actuarial14
method.15
§3578.6. Prohibited acts16
A. A licensee shall not:17
* * *18
(7) Renew or roll over a deferred presentment transaction or small loan.19
However, except in a municipality with a population in excess of forty-eight20
thousand seven hundred and less than fifty thousand as determined by the latest21
federal decennial census, a licensee may accept a partial payment of twenty-five22
percent of the amount advanced plus fees charged and enter into a new deferred23
presentment transaction or renew the small loan for the remaining balance owed.24
Once a deferred presentment transaction or small loan has been completed, a25
consumer may enter into a new transaction or loan with the licensee. A deferred26
presentment transaction or small loan shall be considered completed when the27
amount advanced has been paid in full by the consumer.28
* * *29 HLS 14RS-2556 ORIGINAL
HB NO. 1187
Page 4 of 6
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
(9) In a municipality with a population in excess of forty-eight thousand1
seven hundred and less than fifty thousand as determined by the latest federal2
decennial census, engage in any device or subterfuge intended to evade the3
requirements of this Chapter through any method, including but not limited to mail,4
telephone, Internet, or any electronic means, or by doing any of the following:5
(a) Offering, making, assisting a borrower to obtain, or brokering a deferred6
presentment transaction or small loan at a rate of interest prohibited by Louisiana7
law, or acting as an agent for a third party in such a transaction.8
(b) Making deferred presentment transactions or small loans disguised as9
personal property sales, consumer credit sales, and leaseback transactions.10
(c) Disguising deferred presentment transaction or small loan proceeds as11
cash rebates for the pretextual installment sale of goods or services.12
(d) Disguising a deferred presentment transactions or small loan as a13
revolving line of credit, or making or assisting a borrower to obtain a revolving line14
of credit for the purpose of avoiding the provisions of Subsection A of this Section.15
* * *16
C. A violation of this Section, in conjunction with a transaction in a17
municipality with a population in excess of forty-eight thousand seven hundred and18
less than fifty thousand as determined by the latest federal decennial census, is a19
violation of the Unfair Trade Practices and Consumer Protection Law, R.S. 51:140120
et seq.21
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Hunter HB No. 1187
Abstract: Modifies various provisions relative to consumer credit loans and creditors in
certain municipalities.
Present law (R.S. 9:3516) defines "check" as any check, draft, item, orders or requests for
payment of money, negotiable orders, withdrawal, or any other instrument used to pay a debt
or transfer money from one to another. HLS 14RS-2556 ORIGINAL
HB NO. 1187
Page 5 of 6
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Proposed law provides that, with respect to a consumer transaction in a municipality with
a population in excess of 48,700 and less than 50,000, an extender of credit shall not accept
an issuer's check as defined in present law (R.S. 9:3516) from the issuer and agree to hold
the check for a period of time in exchange for payment to the issuer.
Present law provides that a creditor having no office in the state of La. offering credit to La.
consumers through mail and other means of interstate commerce is exempt from consumer
loan licensing requirements. Proposed law retains present law but provides that the
exception to licensure does not apply to creditors participating in transactions in a
municipality with a population in excess of 48,700 and less than 50,000.
Present law provides that in conjunction with a deferred presentment transaction or small
loan, a licensee may charge a fee not to exceed 16.75% of the face amount of the check
issued or, in the case of a small loan, the equivalent rate of interest, provided that such fee
or interest does not exceed $45, regardless of the name or type of charge.
Proposed law retains present law but prohibits a licensee in a municipality with a population
in excess of 48,700 and less than 50,000 from charging a fee in excess of 36% interest
annually. Proposed law further voids any transaction or loan made or collected in violation
of proposed law and further provides that a licensee in violation has no right to collect,
receive, or retain any principal, interest, fees, or other charges.
Proposed law defines "interest" as all charges and fees assessed, payable directly or
indirectly, including a documentation fee not to exceed $10 under present law (R.S.
9:3530(C)) in connection with or as a condition of a deferred presentment transaction or
small loan.
Present law provides that upon the consumer's prepayment in full of a deferred presentment
transaction or small loan during the first five days of the term of the transaction or loan, a
licensee shall refund any and all unearned charges by a method no less favorable to the
consumer than the actuarial method, minus $20 of the original fee, which shall be considered
earned by the licensee and not subject to refund.
Proposed law retains present law but removes the time limit for transactions in a
municipality with a population in excess of 48,700 and less than 50,000 and requires the
licensee to refund any and all unearned charges by a method no less favorable than the
actuarial method upon the consumer's prepayment in full of a deferred presentment
transaction or small loan.
Present law prohibits a licensee from renewing or rolling over a deferred presentment
transaction or small loan; however, present law provides that a licensee may accept a partial
payment of 25% of the amount advanced plus fees charged and enter into a new deferred
presentment transaction or renew the small loan for the remaining balance owed.
Proposed law deletes the authorization in present law to accept a partial payment before
entering into a new deferred presentment transaction for transactions in a municipality with
a population in excess of 48,700 and less than 50,000.
Proposed law adds that a licensee in a municipality with a population in excess of 48,700
and less than 50,000 shall not engage in any device or subterfuge intended to evade the
requirements of law through any method, including but not limited to mail, telephone,
Internet, or any electronic means, or by doing any of the following:
(1)Offering, making, assisting a borrower to obtain, or brokering a deferred presentment
transaction or small loan at a rate of interest prohibited by La. law, or acting as an
agent for a third party in such a transaction. HLS 14RS-2556 ORIGINAL
HB NO. 1187
Page 6 of 6
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
(2)Making deferred presentment transactions or small loans disguised as personal
property sales, consumer credit sales, and leaseback transactions.
(3)Disguising deferred presentment transactions or small loan proceeds as cash rebates
for the pretextual installment sale of goods or services.
(4)Disguising a deferred presentment transaction or small loan as a revolving line of
credit, or making or assisting a borrower to obtain a revolving line of credit for the
purpose of avoiding the licensee's provision under present law (R.S. 9:3578.6(A)(1))
pursuant to proposed law (R.S. 9:3578.4(A)(1)).
Proposed law further provides that a violation of the provisions relative to prohibited acts,
in conjunction with a transaction in a municipality with a population in excess of 48,700 and
less than 50,000, is a violation of the Unfair Trade Practices and Consumer Protection Law
(R.S. 51:1401 et seq.).
(Amends R.S. 9:3560(A)(8), 3578.4(A)(1), 3578.5, and 3578.6(A)(7); Adds R.S. 9:3537,
3578.4(A)(3), and 3578.6(A)(9) and (C))