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Prepared by Michelle Ducharme.
Ponti HB No. 766
(KEYWORD, SUMMARY, AND DIGEST as amended by Senate committee
amendments)
FINANCIAL INSTITUTIONS. Provides relative to consumer credit transactions.
DIGEST
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 Page 2 of 4
Prepared by Michelle Ducharme.
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. Page 3 of 4
Prepared by Michelle Ducharme.
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 INTO AN
EXTENDED PAYMENT PLAN ONCE IN A TWELVE-MONTH PERIOD, BUT THE
REQUEST MUST BE MADE BEFORE PAYMENT IS DUE. SHOULD YOUR LENDER
(LICENSEE) REFUSE TO ENTER INTO AN EXTENDED PAYMENT PL AN UPON
YOUR REQUEST BEFORE THE DUE DATE, CONTACT THE OFFICE 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 January 1, 2015.
(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)) Page 4 of 4
Prepared by Michelle Ducharme.
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.
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Commerce, Consumer
Protection, and International Affairs to the reengrossed bill
1. Changes the effective date from September 30, 2014 to January 1, 2015.