HLS 14RS-1364 ORIGINAL
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are additions.
Regular Session, 2014
HOUSE BILL NO. 687
BY REPRESENTATIVE BARROW
FINANCIAL INSTITUTIONS: Requires online pay day lenders and out-of-state lenders
to be licensed in the state
AN ACT1
To amend and reenact R.S. 9:3557(B), 3560(A)(8) and (9), 3561(A), and 3561.1(G)(1) and2
to enact R.S. 9:3518.4 and 3561.2, relative to licensing and record maintenance for3
consumer credit transactions; to nullify certain consumer transactions and deferred4
presentment transactions; to provide relative to the location of offices of makers of5
consumer loans; to provide relative to records retention of makers of consumer6
loans; to provide relative to makers of consumer loans registration with the secretary7
of state; and to provide for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. R.S. 9:3557(B), 3560(A)(8) and (9), 3561(A), and 3561.1(G)(1) are10
hereby amended and reenacted and R.S. 9:3518.4 and 3561.2 are hereby enacted to read as11
follows:12
§3518.4. Contract validity; consumer credit transactions; deferred presentment13
transactions14
A.(1) A consumer credit transaction as defined by R.S. 9:3516(13) or15
deferred presentment transaction as defined by R.S. 9:3578(2) shall be null, void,16
unenforceable, and uncollectible as being contrary to the policy of this state if the17
creditor has not obtained a license, if required by this Chapter or 9:3578.1, et seq.,18
at the time the transaction is made.19
(2) The creditor shall forfeit all loans or transaction proceeds, fees, charges,20
and other amounts paid in association with the transaction or loan.21 HLS 14RS-1364 ORIGINAL
HB NO. 687
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(3) Upon request of the borrower, the creditor shall return any property taken1
as collateral within thirty days of the request. If the collateral property has been2
disposed of at the time of the request, the creditor shall reimburse the borrower an3
amount equal to the current value of the collateral as determined by any recognized4
market for the type of collateral or, if there is no recognized market, the fair market5
value of any such property as determined by commercially reasonable standards.6
B. Any person who attempts to enforce or collect pursuant to the agreements7
nullified by this Section shall be subject to fines, penalties, assessments, and8
applicable administrative and legal actions at the discretion of the commissioner9
within the powers granted to him under this Chapter.10
C. The provisions of this Section shall not apply to creditors exempt from11
the consumer loan licensing requirements pursuant to R.S. 9:3560 or any other12
creditor not required to obtain a license from the office of financial institutions.13
* * *14
§3557. Authority to make consumer loans15
* * *16
B. Provided that the creditor has one or more offices in this state, a A17
creditor may not take assignments of and undertake direct collection of payments18
from or enforce rights against consumers arising from consumer loans, without first19
having obtained a license from the commissioner as provided under this Part. A20
creditor may, however, collect and enforce consumer loan obligations of which he21
has taken assignment for three months without a license if he notifies the22
commissioner in writing of his intention to take assignments of consumer loans,23
including the name and address of the proposed assignee and assignor, the number24
of loans assigned, the dollar amount of the assignment, and other information the25
commissioner requires at least ten days prior to the time the assignment is made, and26
the commissioner has not objected, and such creditor promptly applies for a license27
and his application has not been denied.28
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§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 creditor having no office within this state offering credit to Louisiana5
consumers through the mails and other means of interstate commerce.6
(9) Unless otherwise provided by rule or regulation of the commissioner,7
persons whose lending activities pertain to federally related mortgage loans, and who8
are subject to licensing, supervision or auditing by the Federal National Mortgage9
Association, the Federal Home Loan Mortgage Corporation, the Governmental10
National Mortgage Association, the Veterans Administration, or the United States11
Department of Housing and Urban Development. Such lenders may also make loans12
secured by a second or junior lien or mortgage on owner-occupied one-to-four family13
residential immovable property made contemporaneously with federally related14
mortgage loans or as part of a mortgage revenue bond loan program, or sold on the15
secondary market to the Federal National Mortgage Association, the Federal Home16
Loan Mortgage Corporation, or the Governmental National Mortgage Association,17
and the entity sells ten or fewer of such loans over any calendar year.18
* * *19
§3561. Single place of business; additional licenses20
A. Each licensee shall maintain a place of business in the state and, unless21
otherwise provided by rule, making consumer loans to Louisiana residents shall22
maintain records of its consumer loans at that the location stated on its license. Not23
more than one place of business shall be maintained under the same license, but the24
commissioner shall issue additional licenses to the same licensed lender upon his25
compliance with all the provisions of this Part governing issuance of a license.26
* * *27
§3561.1. License; examination; renewal fees; records28
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G.(1) If the lender's records are located outside this state, the lender, at the1
commissioner's option, shall make them available in a format deemed by the2
commissioner to be acceptable to include physical reproductions and digital3
electronically imaged records, to the commissioner at a location within this state4
convenient to the commissioner, or via electronic transmittal or delivery of optical5
imaging disc containing electronic copies of the records, pay the reasonable and6
necessary expenses for the commissioner or his representatives to examine them at7
the place where they are maintained. The method of examination and delivery of8
records will be at the sole discretion of the commissioner. The commissioner may9
designate representatives, including comparable officials of the state in which the10
records are located, to inspect them on his behalf.11
* * *12
§3561.2. Registration of licensees with the secretary of state13
Any person required to be licensed pursuant to this Chapter shall, prior to14
application for licensure, be duly registered with the Louisiana Secretary of State and15
be in possession of a certificate of authority to transact business pursuant to R.S.16
12:304 or 1345, or R.S. 9:3422, as applicable.17
Section 2. This Act shall be effective September 30, 2014.18
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)]
Barrow HB No. 687
Abstract: Provides relative to licensing and record maintenance pursuant to the Louisiana
Consumer Credit Law and the Louisiana Deferred Presentment and Small Loan Act.
Proposed law provides that a consumer credit transaction as defined by present law (R.S.
9:3516(13)) or deferred presentment transaction as defined by present law (R.S. 9:3578(2))
shall be null, void, unenforceable, and uncollectible as being contrary to the policy of this
state if the creditor has not obtained a license from the office of financial institutions if
required to do so.
Present law prohibits a creditor from taking assignments of and undertaking direct collection
of payments from or enforcing rights against consumers arising from consumer loans
without an office in this state and first having obtained a license from the commissioner of
the office of financial institutions (OFI). HLS 14RS-1364 ORIGINAL
HB NO. 687
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are additions.
Proposed law retains present law and removes requirement that the creditor have an office
in this state.
Present law provides that a creditor having no office within this state who offers credit to
Louisiana consumers through the mails and other means of interstate commerce is not
required to be licensed by OFI.
Proposed law removes present law.
Present law provides that each licensee shall maintain a place of business in the state and,
unless otherwise provided by rule, shall maintain records of its consumer loans at that
location.
Proposed law provides that each licensee making consumer loans to Louisiana residents,
shall maintain records of its consumer loans at the location stated on its license.
Present law provides that if the lender's records are located outside this state, the lender, at
the commissioner's option, shall make them available to the commissioner at a location
within this state convenient to the commissioner, or, pay the reasonable and necessary
expenses for the commissioner or his representatives to examine them at the place where
they are maintained. The commissioner may designate representatives, including comparable
officials of the state in which the records are located, to inspect them on his behalf.
Proposed law adds that if the lender's records are located outside this state, the lender, at the
commissioner's option, shall make them available in a format deemed by the commissioner
to be acceptable to include physical reproductions and digital electronically imaged records,
or via electronic transmittal or delivery of optical imaging disc containing electronic copies
of the records. The method of examination and delivery of records will be at the sole
discretion of the commissioner.
Proposed law provides that any person required to be licensed pursuant to this Chapter shall,
prior to application for licensure, be duly registered with the Louisiana Secretary of State
and be in possession of a certificate of authority to transact business pursuant to present law
(R.S. 12:304 or 1345, or R.S. 9:3422), as applicable.
(Amends R.S. 9:3557(B), 3560(A)(8) and (9), 3561(A), and 3561.1(G)(1); Adds R.S.
9:3518.4 and 3561.2)