Relating to fees paid to the consumer credit commissioner and to fees and interest charged in connection with consumer credit transactions.
Impact
If enacted, SB1127 would significantly affect the finance code in relation to how fees are established and adjusted for creditors engaging in various forms of consumer credit. This includes modifications to the ceilings on interest rates that can be charged, as well as the potential adjustment of penalties and fees that lenders may impose on borrowers, which could lead to changes in lending practices across the state. Ultimately, SB1127 aims to ensure that the administration of these processes can be more efficient and reflective of current market behaviors.
Summary
SB1127 pertains to the regulation of fees paid to the consumer credit commissioner and modifications to the fees and interest charged during consumer credit transactions. The bill aims to streamline the existing finance code by revising various sections related to fees for lenders, including requirements for registration and annual fees that vary based on the volume of business. SB1127 proposes to modernize the existing framework governing consumer credit while ensuring that the finance commission can adequately cover its administrative costs through appropriately set fees.
Sentiment
The general sentiment around SB1127 appears to be cautiously supportive among industry stakeholders who recognize the need for regulatory updates to keep pace with market trends. However, concerns have been raised by consumer advocacy groups regarding the potential for increased fees and interest rates, which could disproportionately impact low-income borrowers. Discussions indicate a balance between providing a flexible regulatory environment for lenders while safeguarding consumer rights during credit transactions.
Contention
Notable points of contention surrounding SB1127 include the sufficiency of consumer protections in light of increased latitude for lenders, particularly in how fees are structured and applied. Critics fear that allowing lenders more discretion in charging fees could lead to predatory lending practices or financial strain on borrowers already facing economic hardships. Proponents of the bill argue that it is necessary to foster a healthier lending climate that can adapt to evolving economic conditions without overly burdensome regulations.
Relating to credit services organizations and extensions of consumer credit facilitated by credit services organizations; increasing a criminal penalty.
Relating to a restriction on total charges charged for extensions of consumer credit that a credit services organization obtains for a consumer or assists a consumer in obtaining.
Relating to a restriction on total charges charged for certain extensions of consumer credit that are facilitated by credit access businesses and entered into by consumers residing in disaster areas.
Relating to small business recovery funds and insurance tax credits for certain investments in those funds; imposing a monetary penalty; authorizing fees.