Provides relative to a deferred presentment or small loan transaction. (8/1/16)
The passage of SB108 is expected to enhance consumer protection within the realm of small loans, ensuring that borrowers are made aware of their options in times of financial difficulty. The provision for an extended payment plan could help alleviate some of the burdens faced by consumers who may struggle with timely repayments due to unforeseen circumstances. By mandating clear communication about payment options, the bill seeks to promote a more transparent lending environment.
Senate Bill 108 aims to amend existing regulations regarding deferred presentment and small loans in Louisiana. The bill introduces an explicit requirement for lenders to inform borrowers of their right to request an extended payment plan. This right can be exercised once within a twelve-month period when a borrower is unable to make a payment on time. The bill stipulates that such requests must be made prior to the payment due date and can be communicated via several means including written requests in person or through electronic channels.
General sentiment around SB108 appears positive, particularly among consumer advocacy groups and entities focused on financial transparency. Supporters view the bill as a step toward better protecting borrower rights and promoting responsible lending practices. However, there may also be concerns from lenders about the administrative burden this may impose on their operations, although such apprehensions were not prominently highlighted in the discussions available.
One notable point of contention surrounding SB108 relates to the implications of requiring lenders to provide written notices regarding extended payment plans. Critics may argue that the enforcement of such a requirement could lead to increased compliance costs for financial institutions, potentially affecting the availability of small loans for consumers. There remains a balance to be struck between protecting consumer rights and ensuring that financial service providers can maintain operational viability.