HLS 14RS-620 ORIGINAL
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are additions.
Regular Session, 2014
HOUSE BILL NO. 239
BY REPRESENTATIVES JAMES, ALFRED WILLIAMS, AND HONORE AND
SENATOR BROOME
CONSUMERS: Provides relative to consumer credit loans and transactions
AN ACT1
To amend and reenact R.S. 9:3578.3(3) through (6), 3578.4(A)(1), 3578.5, and2
3578.6(A)(7), to enact R.S. 9:3537, 3578.3(7), and 3578.6(A)(9) and (C), and to3
repeal R.S. 9:3560(A)(8) and 3578.3(4), relative to consumer credit transactions; to4
prohibit preliminary check holding; to provide for definitions; to modify relative to5
refunds and deferred presentment transactions or small loans; to provide6
modifications relative to creditor provisions and chargeable interest; to provide for7
creditor and transactional prohibitions; and to provide for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. R.S. 9:3578.3(3) through (6), 3578.4(A)(1), 3578.5, and 3578.6(A)(7) are10
hereby amended and reenacted and R.S. 9:3537, 3578.3(7), and 3578.6(A)(9) and (C) are11
hereby enacted to read as follows: 12
§3537. Prohibition; check holding13
With respect to a consumer credit transaction, an extender of credit shall not14
accept a check, as defined in R.S. 9:3516, from the issuer and agree to hold the check15
for a period of time in exchange for payment to the issuer.16
* * *17
§3578.3. Definitions18
As used in this Chapter, the following terms have the following meanings19
ascribed to them:20
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(3) "Interest" means all charges and fees assessed, payable directly or1
indirectly, including fees pursuant to R.S. 9:3530(C) in connection with or as a2
condition of a deferred presentment transaction or small loan.3
(3)(4) "Licensee" means a person licensed pursuant to this Chapter that4
offers deferred presentment transactions or small loans, or both.5
(4)(5) "Partial payment" means a payment of fifty dollars or more on a6
deferred presentment transaction or small loan.7
(5)(6) "Prepayment" means payment in full of the deferred presentment8
transaction or small loan amount prior to the end of the term of that transaction or9
loan.10
(6)(7) "Small loan" means a consumer loan, as defined in R.S. 9:3516(14),11
of three hundred fifty dollars or less, made for a term of sixty days or less.12
§3578.4. Finance charge and fees13
A.(1) In conjunction with a deferred presentment transaction or small loan14
Notwithstanding any other provision of law, a licensee may charge a fee not to15
exceed sixteen and seventy-five one hundredths percent of the face amount of the16
check issued or in the case of a small loan, the equivalent rate of interest, provided17
however that such fee or interest does not exceed forty-five dollars, regardless of the18
name or type of charge thirty-six percent interest annually. Any transaction or loan19
made or collected in violation of this Paragraph is void and the licensee shall not20
have the right to collect, receive, or retain any principal, interest, fees, or other21
charges. 22
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§3578.5. Rebate upon prepayment24
Upon the prepayment in full of a deferred presentment transaction or small25
loan, during the first five days of the term of such transaction or loan only, the26
licensee shall refund any and all unearned charges by a method no less favorable to27
the consumer than the actuarial method, less twenty dollars of the original fee, which28
shall be considered earned and shall not be subject to refund. Should the consumer29 HLS 14RS-620 ORIGINAL
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make prepayment after the first five days of the term of the transaction or loan, the1
licensee shall not be required to make any refund.2
§3578.6. Prohibited acts3
A. A licensee shall not:4
* * *5
(7) Renew or roll over a deferred presentment transaction or small loan.6
However, a licensee may accept a partial payment of twenty-five percent of the7
amount advanced plus fees charged and enter into a new deferred presentment8
transaction or renew the small loan for the remaining balance owed. Once a deferred9
presentment transaction or small loan has been completed, a consumer may enter10
into a new transaction or loan with the licensee. A deferred presentment transaction11
or small loan shall be considered completed when the amount advanced has been12
paid in full by the consumer.13
* * *14
(9) Engage in any device or subterfuge intended to evade the requirements15
of this Chapter through any method, including but not limited to mail, telephone,16
Internet, or any electronic means, or by doing any of the following:17
(a) Offering, making, assisting a borrower to obtain, or brokering a deferred18
presentment transaction or small loan at a rate of interest prohibited by Louisiana19
law, or acting as an agent for a third party in such a transaction.20
(b) Making deferred presentment transactions or small loans disguised as21
personal property sales, consumer credit sales, and leaseback transactions.22
(c) Disguising deferred presentment transaction or small loan proceeds as23
cash rebates for the pretextual installment sale of goods or services.24
(d) Disguising a deferred presentment transactions or small loan as a25
revolving line of credit, or making or assisting a borrower to obtain a revolving line26
of credit for the purpose of avoiding the provisions of Subsection A of this Section.27
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C. A violation of this Section is a violation of the Unfair Trade Practices and1
Consumer Protection Law, Chapter 13 of Title 51 of the Louisiana Revised Statutes2
of 1950.3
Section 2. R.S. 9:3560(A)(8) and 3578.3(4) are hereby repealed in their entirety.4
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)]
James HB No. 239
Abstract: Modifies various provisions relative to consumer credit loans and creditors.
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.
Proposed law provides that 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.
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 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 deletes present law.
Present law defines "partial payment" as a payment of $50 or more on a deferred
presentment transaction or small loan. Proposed law deletes "partial payment" as a
definition.
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
deletes present law and provides that a licensee may charge a fee not to exceed 36% interest
annually.
Proposed law 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.
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 deletes present law. HLS 14RS-620 ORIGINAL
HB NO. 239
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Proposed law provides that a licensee shall 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 present law.
Proposed law adds that a licensee 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.
(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 provides that a violation of a provision under R.S. 9:3578.6 is a violation of
the Unfair Trade Practices and Consumer Protection Law (R.S. 51:1401 et seq.).
(Amends R.S. 9:3578.3(3)-(6), 3578.4(A)(1), 3578.5, and 3578.6(A)(7); Adds R.S. 9:3537,
3578.3(7), and 3578.6(A)(9) and (C); Repeals R.S. 9:3560(A)(8) and 3578.3(4))