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ACT No. 636
Regular Session, 2014
HOUSE BILL NO. 766
BY REPRESENTATIVE PONTI
AN ACT1
To amend and reenact R.S. 9:3557(B), 3560(A)(8), 3561(A), 3561.1(G)(1), 3578.4(A)(2),2
and 3578.7, to enact R.S. 9:3518.4, 3561.2, and 3578.4.1, and to repeal R.S.3
9:3560(A)(9), relative to record maintenance for and licensees of consumer credit4
transactions; to nullify certain consumer transactions and deferred presentment5
transactions; to provide relative to the location of offices of makers of consumer6
loans; to provide relative to records retention of makers of consumer loans; to7
provide relative to makers of consumer loans registration with the secretary of state;8
to permit certain licensees to offer extended payment plans prior to default of certain9
consumer credit or deferred presentment transactions; to provide relative to notice10
requirements for certain consumer credit or deferred presentment transactions; to11
provide for an effective date; and to provide for related matters.12
Be it enacted by the Legislature of Louisiana:13
Section 1. R.S. 9:3557(B), 3560(A)(8), 3561(A), 3561.1(G)(1), and 3578.4(A)(2)14
and 3578.7 are hereby amended and reenacted and R.S. 9:3518.4, 3561.2, and 3578.4.1 are15
hereby enacted to read as follows:16
§3518.4. Contract validity; consumer credit transactions; deferred presentment17
transactions18
A.(1) A consumer credit transaction as defined by R.S. 9:3516(13) or19
deferred presentment transaction as defined by R.S. 9:3578.3(2) shall be null, void,20
unenforceable, and uncollectible as being contrary to the policy of this state if the21
creditor has not obtained a license, if required by this Chapter or R.S. 9:3578.1 et22
seq., at the time the transaction is made.23 ENROLLEDHB NO. 766
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(2) The creditor shall forfeit all loans or transactions proceeds, fees, charges,1
and other amounts paid in association with the transaction or loan.2
(3) Upon request of the borrower, the creditor shall return any property taken3
as collateral within thirty days of the request. If the collateral property has been4
disposed of at the time of the request, the creditor shall reimburse the borrower an5
amount equal to the current value of the collateral as determined by any recognized6
market for the type of collateral or, if there is no recognized market, the fair market7
value of any such property as determined by commercially reasonable standards.8
B. Any person who attempts to enforce or collect pursuant to the agreements9
nullified by this Section shall be subject to fines, penalties, assessments, and10
applicable administrative and legal actions at the discretion of the commissioner11
within the powers granted to him under this Chapter.12
C. The provisions of this Section shall not apply to creditors exempt from13
the consumer loan licensing requirements pursuant to R.S. 9:3560, any non-recourse14
consumer financial transaction, or any other creditor not required to obtain a license15
from the Office of Financial Institutions.16
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§3557. Authority to make consumer loans18
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B. Provided that the creditor has one or more offices in this state, a A20
creditor may not take assignments of and undertake direct collection of payments21
from or enforce rights against consumers arising from consumer loans, without first22
having obtained a license from the commissioner as provided under this Part. A23
creditor may, however, collect and enforce consumer loan obligations of which he24
has taken assignment for three months without a license if he notifies the25
commissioner in writing of his intention to take assignments of consumer loans,26
including the name and address of the proposed assignee and assignor, the number27
of loans assigned, the dollar amount of the assignment, and other information the28
commissioner requires at least ten days prior to the time the assignment is made, and29 ENROLLEDHB NO. 766
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the commissioner has not objected, and such creditor promptly applies for a license1
and his application has not been denied.2
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§3560. Licenses not required4
A. Notwithstanding R.S. 9:3557, the following persons shall be exempt from5
the consumer loan licensing requirements under this Part:6
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(8) A creditor having no office within this state offering credit to Louisiana8
consumers through the mails and other means of interstate commerce.9
(9) Unless otherwise provided by rule or regulation of the commissioner,10
persons whose lending activities pertain to federally related mortgage loans, and who11
are subject to licensing, supervision or auditing by the Federal National Mortgage12
Association, the Federal Home Loan Mortgage Corporation, the Governmental13
Government National Mortgage Association, the Veterans Administration United14
States Department of Veterans Affairs, or the United States Department of Housing15
and Urban Development. Such lenders may also make loans secured by a second or16
junior lien or mortgage on owner-occupied one-to-four family residential immovable17
property made contemporaneously with federally related mortgage loans or as part18
of a mortgage revenue bond loan program, or sold on the secondary market to the19
Federal National Mortgage Association, the Federal Home Loan Mortgage20
Corporation, or the Governmental Government National Mortgage Association, and21
the entity sells ten or fewer of such loans over any calendar year.22
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§3561. Single place of business; additional licenses24
A. Each licensee shall maintain a place of business in the state and, unless25
otherwise provided by rule, making consumer loans to Louisiana residents shall26
maintain records of its consumer loans at that the location stated on its license. Not27
more than one place of business shall be maintained under the same license, but the28 ENROLLEDHB NO. 766
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commissioner shall issue additional licenses to the same licensed lender upon his1
compliance with all the provisions of this Part governing issuance of a license.2
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§3561.1. License; examination; renewal fees; records4
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G.(1) If the lender's records are located outside this state, the lender, at the6
commissioner's option, shall make them available in a format deemed by the7
commissioner to be acceptable to include physical reproductions and digital8
electronically imaged records. The lender shall make these available to the9
commissioner at a location within this state convenient to the commissioner, or via10
electronic transmittal or delivery of optical imaging disc containing electronic copies11
of the records, or pay the reasonable and necessary expenses for the commissioner12
or his representatives to examine them at the place where they are maintained. The13
method of examination and delivery of records will be at the sole discretion of the14
commissioner. The commissioner may designate representatives, including15
comparable officials of the state in which the records are located, to inspect them on16
his behalf.17
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§3561.2. Registration of licensees with the secretary of state19
Any person required to be licensed pursuant to this Chapter shall, prior to20
application for licensure, be duly registered with the Louisiana secretary of state and21
be in possession of a certificate of authority to transact business pursuant to R.S.22
12:304 or 1345 or R.S. 9:3422, as applicable.23
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§3578.4. Finance charge and fees25
A.26
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(2) However, if If the loan remains unpaid at contractual maturity, the28
licensee may charge one of the following:29 ENROLLEDHB NO. 766
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(a) An an amount equal to the rate of thirty-six percent per annum for a1
period not to exceed one year and beginning one year after contractual maturity, the2
rate shall not exceed eighteen percent per annum.3
(b) A one-time delinquency charge as authorized in R.S. 9:3527(A)(1).4
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§3578.4.1. Extended payment plan; terms; conditions6
A.(1) A consumer who is unable to repay either a deferred presentment7
transaction or small loan when due to a licensee, may elect once in any twelve-month8
period to repay the licensee the amount due under the deferred presentment9
transaction or small loan by means of installments, referred to as an extended10
payment plan in this Section.11
(2) A consumer is ineligible for an extended payment plan if the consumer12
previously obtained an extended payment plan from the licensee within the13
preceding twelve months. The twelve-month period shall be measured from the date14
that the extended payment plan is executed between the licensee and the consumer.15
B.(1) To be eligible for an extended payment plan, the consumer shall16
request to enter into the plan before the due date of the outstanding deferred17
presentment transaction or small loan.18
(2) If a consumer is unable to request to enter into the plan prior to the due19
date of the outstanding deferred presentment transaction or small loan because of20
incapacitation that results in or from hospitalization, upon the consumer's21
presentation of proof of hospitalization, the lender shall allow the consumer to22
request to enter into the plan within seventy-two hours from the discharge of the23
consumer from the hospital.24
(3) The licensee and consumer shall execute an agreement, in writing, that25
modifies the terms of the outstanding small loan or deferred presentment transaction26
and establishes the terms of the extended payment plan.27
C.(1) The terms of the extended payment plan shall provide for the28
following:29 ENROLLEDHB NO. 766
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(a) Allow the consumer to repay the outstanding deferred presentment1
transaction or small loan, including any fees due prior to entering into the plan, in at2
least four substantially equal installments.3
(b) Allow the consumer to prepay sums due pursuant to an extended4
payment plan in full at any time without penalty.5
(c) Prohibit the licensee from charging the consumer any interest, or6
additional charges or fees during the term of the plan.7
(d) Require that the first plan installment shall be due no sooner than thirty8
days following the execution of the plan, unless a shorter period of time is agreed to9
by the consumer and licensee based on when the consumer receives income. The10
dollar amount of each installment shall be substantially the same and the installment11
due dates shall be spread out substantially evenly over the term of the extended12
payment plan.13
(2) The terms of the extended payment plan may permit the licensee to do14
either of the following:15
(a) With each payment under the plan by a consumer, provide for the return16
of the consumer's previously held check and require a new check for the remaining17
balance under the plan.18
(b) Require the consumer to provide multiple checks, one for each of the19
installments in the amounts of each installment at the time the plan is executed.20
D. A licensee shall immediately provide consumer receipts, signed and dated21
by the licensee, for any payments made in connection with the extended payment22
plan. The receipts shall also state the balance due under the extended payment plan23
after each payment.24
E.(1) If the consumer fails to pay any extended payment plan installment25
when due, the consumer shall be in default of the extended payment plan, and the26
licensee may immediately accelerate payment on only the remaining balance of the27
extended payment plan.28
(2) Upon default, the licensee may take action to collect only the amount29
outstanding on the extended payment plan. A licensee is prohibited from collecting30 ENROLLEDHB NO. 766
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any amount on an extended payment plan other than what the consumer owes1
pursuant to the plan on the date of default.2
F. If a consumer enters into an extended payment plan, the consumer and3
licensee are prohibited from entering into a subsequent deferred presentment4
transaction or small loan until repayment in full of the extended payment plan.5
G.(1) At each licensed location or on the homepage of a licensee's website,6
the licensee shall prominently post a notice visible to the public and all those visiting7
the website stating that if a consumer is unable to repay either a deferred presentment8
transaction or small loan when due, the consumer may enter into one extended9
payment plan for either a deferred presentment transaction or small loan if he notifies10
the licensee as required by Paragraph (B)(1) of this Section before the payment is11
due of his inability to make payment.12
(2)(a) A licensee shall also notify a person of his right to enter into an13
extended payment plan by including the following statement, in at least sixteen point14
bold type, on the first page of each deferred presentment or small loan agreement:15
"IF YOU CANNOT MAKE PAYMENT WHEN DUE, YOU CAN ASK TO ENTER16
INTO AN EXTENDED PAYMENT PLAN ONCE IN A TWELVE-MONTH17
PERIOD, BUT THE REQUEST MUST BE MADE BEFORE PAYMENT IS DUE.18
SHOULD YOUR LENDER (LICENSEE) REFUSE TO ENTER INTO AN19
EXTENDED PAYMENT PLAN UPON YOUR REQUEST BEFORE THE DUE20
DATE, CONTACT THE OFFICE OF FINANCIAL INSTITUTIONS AT 1-888-21
525-9414."22
(b) In addition, a consumer shall sign the following statement acknowledging23
that he has been informed of the extended payment plan. The statement shall be in24
at least twelve point bold type, on the first page of each deferred presentment25
transaction or small loan agreement below the statement required by Subparagraph26
(a) of this Paragraph:27
"I acknowledge that I understand that I may be eligible to enter into an28
extended payment plan if I cannot make payment when due. In order to be29
potentially eligible for an extended payment plan, I understand that it is my30 ENROLLEDHB NO. 766
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responsibility to notify my lender that I cannot make payment before payment is due.1
I have asked any questions I have about the extended payment plan and my lender2
(licensee) answered all questions to my satisfaction."3
[SIGNATURE BLOCK]4
[DATE]5
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§3578.7. Posting of notice; toll-free number7
The commissioner may provide a notice, which includes a toll-free number8
to the commissioner's office, which shall be posted, along with the fees as allowed9
under this Chapter, in a conspicuous place and manner by the licensee at the lending10
location or on the homepage of the website of the licensee, or both if the licensee has11
a physical location in the state and a website.12
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Section 2. R.S. 9:3560(A)(9) is hereby repealed in its entirety.14
Section 3. This Act shall become effective on January 1, 2015.15
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: