To provide relative to certain consumer credit transactions. (8/1/14) (OR INCREASE SG EX See Note)
This legislation has significant implications for state laws governing consumer lending. By enforcing a licensing requirement for lenders, it intends to prevent unregulated lending practices and protects borrowers from predatory lending. The bill restricts lenders from engaging with consumers who have taken out more than five loans within a twelve-month period or whose total monthly loan payments exceed a quarter of their gross monthly income, thus aiming to provide a safeguard against over-indebtedness.
Senate Bill 679, introduced by Senator Nevers, aims to amend and reenact various statutes related to consumer credit transactions, specifically focusing on deferred presentment transactions and small loans. The bill establishes stricter regulations requiring lenders to obtain a license from the Office of Financial Institutions before engaging in credit transactions. It also enforces limits on the number of loans a consumer can take within a year and ensures that lenders maintain accurate records and comply with laws aimed at consumer protection.
The sentiment surrounding SB 679 appears largely supportive, particularly among consumer advocacy groups who argue that the changes promote fairness and transparency in lending. However, there may also be concerns voiced by some lenders about the potential impacts on their business operations and the ability to serve consumers needing quick access to credit.
Notable points of contention include the stipulation that lenders cannot renew or roll over small loans and the requirement for a real-time access database that allows lenders to track borrowers' loan history effectively. Some stakeholders may argue that these provisions could limit access to credit for those in need and place additional burdens on lenders in terms of compliance. The balance between consumer protection and access to financial services is a central theme in the discourse surrounding SB 679.