The original instrument and the following digest, which constitutes no part of the
legislative instrument, were prepared by Julie J. Baxter
DIGEST
Nevers (SB 84)
Proposed law provides that, with respect to a consumer credit transaction, an extender of credit
shall not accept a check, as defined by R.S. 9:3516, from the issuer and agree to hold the check
for a period of time in exchange for payment to the issuer.
Present law provides that a creditor having no office in this state offering credit to Louisiana
consumers through the mails and other means of interstate commerce shall be exempt from the
consumer loan licensing requirements under the licensing provisions of the Louisiana Consumer
Credit Law.
Proposed law deletes present law.
Proposed law adds to the definition of "deferred presentment transaction" that no consumer shall
enter into more than ten deferred presentment transactions within twelve consecutive months.
Present law in Louisiana's Deferred Presentment and Small Loan Act defines "partial payment"
as a payment of fifty dollars or more on a deferred presentment transaction or small loan.
Proposed law deletes the definition of "partial payment" in present law.
Proposed law adds to the definition of "small loans" that no consumer shall enter into more than
ten small loan transactions within twelve consecutive months.
Present law provides that upon the prepayment in full of a deferred presentment transaction or
small loan, during the first five days of the term of such transaction or loan only, the licensee
shall refund any and all unearned charges by a method no less favorable to the consumer than the
actuarial method, less $20 of the original fee, which shall be considered earned and shall not be
subject to refund. Present law further provides that, should the consumer make prepayment after
the first five days of the term of the transaction or loan, the licensee shall not be required to make
any refund.
Proposed law provides that upon the prepayment in full of a deferred presentment transaction or
small loan, the licensee shall refund any and all unearned charges by a method no less favorable
to the consumer than the actuarial method.
Present law provides that a licensee under Louisiana's Deferred Presentment and Small Loan Act
shall not renew or roll over a deferred presentment transaction or small loan, but that a licensee
may accept a partial payment of 25% of the amount advanced plus fees charged and enter into a
new deferred presentment transaction or renew the small loan for the remaining balance owed. Proposed law provides that a licensee under Louisiana's Deferred Presentment and Small Loan
Act shall not renew or roll over a deferred presentment transaction or small loan.
Proposed law provides that a licensee under Louisiana's Deferred Presentment and Small Loan
Act shall not engage in any device or subterfuge intended to evade the requirements of the Act
through any means, including but not limited to mail, telephone, Internet or any electronic means,
by offering, making, assisting a borrower to obtain, or brokering a deferred presentment
transaction or small loan at a rate of interest prohibited by Louisiana law, or acting as an agent
for a third party in such a transaction; making deferred presentment transactions or small loans
disguised as personal property sales, consumer credit sales, and leaseback transactions;
disguising preferred presentment transactions or small loan proceeds as cash rebates for the
pretextual installment sale of goods or services; or disguising a preferred presentment transaction
or small loan as a revolving line of credit, or making or assisting a borrower to obtain a revolving
line of credit for the purpose of avoiding the requirements of present law.
Proposed law provides that the performance of one of the prohibited acts under Louisiana's
Deferred Presentment and Small Loan Act shall constitute a violation of Louisiana's Unfair Trade
Practices and Consumer Protection Law.
Proposed law provides that the commissioner of the Office of Financial Institutions shall
implement as provided in proposed law a single common database with real-time access through
an Internet connection for licensed lenders who make deferred presentment transactions and
small loans pursuant to present law. Provides that the database shall be accessible to the
commissioner and to the licensees so that the commissioner shall be able to verify the number
and nature of transactions that are outstanding for a particular consumer. Provides that on or
before August 1, 2015, the commissioner shall provide by rules and regulations through the
Administrative Procedures Act for the implementation of this real-time access common database.
Proposed law provides that no licensee shall engage in lending activity with a consumer who has
taken out more than ten loans under present law in the previous twelve consecutive month.
Proposed law provides that licensees shall submit such loan transaction data before entering into
each transaction in such format as required by the commissioner, including but not limited to the
borrower's name, social security number of employment authorization alien number, address,
driver's license number, amount of transaction, date of transaction, the date the transaction is
closed, data reporting requirements of R.S. 9:3554(A(6) and such additional information as
required by the commissioner.
Proposed law removes the exemption in present law for the applicability of the Louisiana Unfair
Trade Practices and Consumer Protection Act to deferred presentment transactions and small
loans.
Effective August 1, 2014.
(Amends R.S. 9:3560(A), 3578.3, 3578.5 and 3578.6, and R.S. 51:1406(1); adds R.S. 9:3537 and 3578.8(E))
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Judiciary A to the engrossed
bill
1. Provides that no consumer shall enter into more than ten deferred presentment
transactions within twelve consecutive months.
2. Provides that no consumer shall enter into more than ten small loans within
twelve consecutive months.
3. Deletes proposed definition of "interest."
4. Deletes proposed changes to current finance charges allowed in deferred
presentment transactions and small loans.
5. Adds law providing that the commissioner of the Office of Financial Institutions
shall implement a single common database with real-time access through an
Internet connection for licensed lenders who make deferred presentment
transactions and small loans.
6. Adds that no licensed lender shall engage in lending activity with a consumer who
has taken out more than ten loans under the Louisiana Deferred Presentment and
Small Loans Act in the previous twelve consecutive months.
7. Removes the current exemption in the Louisiana Unfair Trade Practices and
Consumer Protection Act for deferred presentment transactions and small loans.