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)]
Ponti HB No. 766
Abstract: Provides relative to makers of consumer loans, credit transaction, and deferred
presentment transactions 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 (OFI) 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 OFI.
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 mail 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 La. 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 La. 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.
Proposed law authorizes certain finance charges and fees in conjunction with a deferred
presentment transaction or small loan.
Present law provides that if the loan remains unpaid at contractual maturity, then the licensee
may charge (1) an amount equal to the rate of 36% per annum for a period not to exceed one year
and beginning one year after contractual maturity, the rate shall not exceed 18% per annum, or
(2) a one-time delinquency charge of 5% of the unpaid amount or $10, whichever is greater. Proposed law removes that authority of the licensee to charge the one-time delinquency charge of
5% of the unpaid amount or $10, whichever is greater.
Proposed law permits a consumer who is unable to repay either a deferred presentment
transaction or small loan when due to a licensee to elect once in any 12-month period to repay the
licensee the amount due by means of installments, referred to as an extended payment plan.
Proposed law provides that a consumer is ineligible for an extended payment plan if the
consumer previously obtained an extended payment plan from the licensee within the preceding
12 months.
Proposed law requires the consumer to request to enter into the plan before the due date of the
outstanding deferred presentment transaction or small loan.
Proposed law provides that if a consumer is unable to request to enter into an extended payment
plan prior to the due date of the outstanding deferred presentment transaction or small loan
because of incapacitation that results in or from hospitalization, upon the consumer's presentation
of proof of hospitalization, the lender shall allow the consumer to request to enter into the plan
within 72 hours from the discharge of the consumer from the hospital.
Proposed law requires the licensee and consumer to execute an agreement, in writing, that
modifies the terms of the outstanding small loan or deferred presentment plan and establishes the
terms of the extended payment plan.
Proposed law provides that the terms of the extended payment plan shall:
(1)Allow the consumer to repay the outstanding deferred presentment transaction or small
loan, including any fees due prior to entering into the plan, in at least four substantially
equal installments.
(2)Allow the consumer to prepay sums due pursuant to an extended payment plan in full at
any time without penalty.
(3)Prohibit the licensee from charging the consumer any interest, or additional charges or
fees during the term of the plan.
(4)Require that the first plan installment shall be due no sooner than thirty days following
the execution of the plan, unless a shorter period of time is agreed to by the consumer and
licensee based on when the consumer receives income. The dollar amount of each
installment shall be substantially the same and the installment due dates shall be spread
out substantially evenly over the term of the extended payment plan.
Proposed law provides that the terms of the extended payment plan may permit the licensee to do
either of the following: (1)With each payment under the plan by a consumer, provide for the return of the
consumer's previously held check and require a new check for the remaining balance
under the plan.
(2) Require the consumer to provide multiple checks, one for each of the installments in the
amounts of each installment at the time the plan is executed.
Proposed law requires that a licensee immediately give a consumer receipts, signed and dated by
the licensee, for any payments made in connection with the extended payment plan. The receipts
shall also state the balance due under the extended payment plan after each payment.
Proposed law provides that if the consumer fails to pay any extended payment plan installment
when due, the consumer shall be in default of the extended payment plan and the licensee may
immediately accelerate payment on only the remaining balance of the extended payment plan.
Proposed law provides that upon default, the licensee may take action to collect only the amount
outstanding on the extended payment plan.
Proposed law provides that a licensee is prohibited from collecting any amount on an extended
payment plan other than what the consumer owes pursuant to the plan on the date of default.
Proposed law provides that if a consumer enters into an extended payment plan, the consumer
and licensee are prohibited from entering into a subsequent deferred presentment transaction or
small loan until repayment in full of the extended payment plan.
Proposed law provides that at each licensed location or on the homepage of a licensee's website,
a licensee shall prominently post a notice visible to the public and all those visiting the website
stating that if a consumer is unable to repay either a deferred presentment transaction or small
loan when due, the consumer can enter into one extended payment plan for either a deferred
presentment transaction or small loan if he notifies the licensee before the payment is due of his
inability to make payment.
Proposed law provides that a licensee shall also notify a person of his right to enter into an
extended payment plan by including the following statement, in at least sixteen-point bold type,
on the first page of each deferred presentment transaction or small loan agreement: "IF YOU
CANNOT MAKE PAYMENT WHEN DUE, YOU CAN ASK TO ENTER I NTO AN
EXTENDED PAYMENT PLAN ONCE I N A TWELVE-MONTH PERIOD, BUT THE
REQUEST MUST BE MADE BEFORE PAYMENT I S DUE. SHOULD YOUR LENDER
(LICENSEE) REFUSE TO ENTER INTO AN EXTENDED PAYMENT PLAN UPON YOUR
REQUEST BEFORE THE DUE DATE, CONTACT THE OFFI CE OF FINANCIAL
INSTITUTIONS AT 1-888-525-9414."
Proposed law requires a consumer to sign a statement acknowledging that he has been informed
of the extended payment plan. The statement shall be in at least twelve-point bold type, on the
first page of each deferred presentment transaction or small loan agreement. Present law provides that the commissioner may provide a notice, which includes a toll-free
number to the commissioner's office, which shall be posted, along with the fees as allowed under
present law, in a conspicuous manner by the licensee at the lending location.
Proposed law provides that the commissioner may provide a notice, which includes a toll-free
number to the commissioner's office, which shall be posted, along with the fees as allowed under
present law, in a conspicuous place and manner by the licensee at the lending location or on the
homepage of the website of the licensee, or both if the licensee has both a physical location in the
state and a website.
Effective Sept. 30, 2014.
(Amends R.S. 9:3557(B), 3560(A)(8), 3561(A), 3561.1(G)(1), 3578.4(A)(2) and 3578.7; Adds
R.S. 9:3518.4, 3561.2, and 3578.4.1); Repeals R.S. 9:3560(A)(9))
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Commerce to the original bill.
1. Removed the authorization for the maker of a deferred presentment transaction or
small loan to charge a one-time delinquency charge of 5% of the unpaid amount or
$10, whichever is greater, if the loan remains unpaid at contractual maturity.
2. Authorized a consumer to enter into an extended payment plan with a deferred
presentment transaction or small loan licensee if certain conditions are met.
House Floor Amendments to the engrossed bill.
1. Made technical changes.
2. Provided that if a consumer is unable to request to enter into an extended payment
plan prior to the due date of the outstanding deferred presentment transaction or small
loan because of incapacitation that results in or from hospitalization, upon the
consumer's presentation of proof of hospitalization, the lender shall allow the
consumer to request to enter into the plan within 72 hours from the discharge of the
consumer from the hospital.
3. Required a consumer to sign a statement acknowledging that he has been informed of
the extended payment plan. The statement shall be in at least twelve- point bold type,
on the first page of each deferred presentment transaction or small loan agreement.