HLS 14RS-2919 ORIGINAL
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Regular Session, 2014
HOUSE CONCURRENT STUDY REQUEST NO. 3
BY REPRESENTATIVE BURRELL
CREDIT/CONSUMER LOANS: Requests a study of laws and best practices in other states
that limit the number of payday loans received by consumers, and the
implementation of statewide databases for lenders' compliance with such laws
A CONCURRENT STUDY REQUEST1
To the House Committee on Commerce and the Senate Committee on Commerce,2
Consumer Protection, and International Affairs to meet and to function as a joint3
committee to study the laws and best practices in other states that limit the number4
of payday loans a consumer can receive on a yearly basis, the implementation of5
databases used to regulate such laws as they apply to the payday loan industry, and6
the fees that support such databases, and to report the findings of the joint committee7
to the legislature by February 1, 2015.8
WHEREAS, states are more frequently using databases in efforts to regulate the9
payday loan industry; and10
WHEREAS, some states have laws that limit the number and dollar amount of11
payday loans a consumer can have at a single time, as well as laws that limit the number of12
loans a consumer can receive in any twelve-month period, and the use of a statewide13
database makes it easier to enforce such laws; and14
WHEREAS, lenders in a respective state are required to check the database prior to15
making new loans to ensure that consumers are eligible according to any state laws that limit16
the dollar amount or number of loans that a consumer can have at a single time; and17
WHEREAS, in 2002, Florida became the first state to enact a statewide database, and18
other states have since followed suit; and19 HCSR NO. 3
HLS 14RS-2919 ORIGINAL
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WHEREAS, a total of thirteen states within the United States of America have a1
database that tracks the use of consumer payday loans that oftentimes carry high, upfront2
fees; and3
WHEREAS, some states with databases allow for payday lenders to add an extra fee4
to consumer transactions to cover the costs required to be paid by the lender for using the5
database, and generally the added extra fee averages one dollar; and6
WHEREAS, databases are deemed to provide transparency of the payday lending7
industry for purposes of state agencies who regulate and conduct examinations of payday8
lenders; and 9
WHEREAS, database proponents assert that these systems ensure that lenders are10
following laws intended to prevent consumers from incurring more debt than they can11
handle; and12
WHEREAS, Florida and the other twelve states with databases that monitor the13
number and dollar amount of consumer payday loans rely on certain companies that develop14
and manage the databases; and15
WHEREAS, some companies also operate call centers to which lenders can refer16
consumers who are denied loans so they may obtain more information about the denial; and17
WHEREAS, conversations have taken place regarding database technology with the18
Consumer Financial Protection Bureau, the federal agency established by the Dodd-Frank19
Wall Street Reform and Consumer Protection Act (Pub. L. 111–203, H.R. 4173); however,20
the agency has not indicated whether it will require a database at the federal level; and21
WHEREAS, as it currently stands, each state has the discretion to regulate the22
payday loan industry through laws that limit the number of consumer transactions at any23
single time, and to create and implement a statewide database for this purpose.24
THEREFORE, the Legislature of Louisiana requests the House Committee on25
Commerce and the Senate Committee on Commerce, Consumer Protection, and International26
Affairs to meet and to function as a joint committee to study the laws and best practices in27
other states that limit the number of payday loans a consumer can receive on a yearly basis,28
the implementation of databases used to regulate such laws as they apply to the payday loan29 HCSR NO. 3
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industry, and the fees that support such databases, and to report the findings of the joint1
committee to the legislature by February 1, 2015. 2
BE IT FURTHER RESOLVED that in undertaking the study and issuing findings,3
the joint committee may request documents or data, conduct public hearings, hear the4
testimony of witnesses, and take any other actions that it deems necessary to carry out its5
functions.6
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)]
Burrell HCSR No. 3
Requests the House Committee on Commerce and the Senate Committee on Commerce,
Consumer Protection, and International Affairs to study the laws and best practices in other
states that limit the number of payday loans a consumer can receive on a yearly basis and
the implementation of statewide databases for lenders' compliance with such laws.