House Commerce Minutes 2/18/2009 10:00 AM

The division shall implement a common database with real-time access through an internet connection for licensed providers. The database shall be accessible to the division and the licensed providers in order to verify whether any loan transaction is outstanding for a particular person. The information contained in the database is confidential and may not be released to the public. No licensed provider may enter into a loan transaction unless the provider has first submitted such data in such a format as required by the division in rules promulgated pursuant to chapter 1-26, including the person's name, social security number or employment authorization alien number, address, driver's license number, amount of the transaction, date of transaction, the due date of the transaction, and any other information required by the division. The division may, by rule promulgated pursuant to chapter 1-26, impose a fee of up to one dollar per transaction for data that must be submitted by a licensed provider. A licensed provider may rely on the information contained in the database as accurate. A licensed provider shall notify the division, in a manner as prescribed by rules promulgated pursuant to chapter 1-26, within fifteen business days after ceasing operations or no longer holding a license pursuant to this chapter. Such notification shall include a reconciliation of any open transactions on the database. If the provider fails to provide notice, the division shall take action to administratively release any open or pending transaction in the database after the division becomes aware of the closure. This section does not affect the rights of the licensed provider to enforce the contractual provisions of any loan transaction through any civil action allowed by law. The division shall adopt rules, pursuant to chapter 1-26, to administer this section and to ensure that the database is used by licensed providers in accordance with this section.

Section 4. That § 54-4-65 be amended to read as follows:

54-4-65. No ~~licensee~~ licensed provider may renew, rollover, or flip a ~~short- term consumer loan~~ loan transaction more than four times. No renewal, rollover, or flip is valid unless, at the time of the renewal, rollover, or flip, the debtor pays the outstanding fee and reduces the principal amount of the loan as provided in this section. Upon the first renewal, rollover, or flip and each subsequent renewal, rollover, or flip, the debtor shall reduce the principal amount of the loan by not less than ten percent of the original amount of the loan.

Section 5. That § 54-4-66 be amended to read as follows:

54-4-66. The maximum principal amount of any ~~payday loan~~ loan transaction , or the total outstanding principal balances of all ~~payday loans~~ loan transactions made by a ~~licensee~~ licensed provider to a single borrower, may not exceed five hundred dollars at any time. A violation of this section is a Class 1 misdemeanor.

Section 6. That § 54-4-70 be amended to read as follows:

54-4-70. A title loan shall be evidenced by a written agreement in which a ~~title lender~~ licensed provider agrees to make a title loan to a debtor and the debtor agrees to give the ~~title lender~~ licensed provider a security interest in a motor vehicle owned by the debtor. The debtor shall give the ~~title lender~~ licensed provider possession of the certificate of title to such motor vehicle. Except as otherwise provided in this chapter, the provisions of chapter 57A-9 apply to title loans and to persons engaged in the business of making title loans.

Section 7. That § 54-4-71 be amended to read as follows:

54-4-71. Any title loan shall be for an initial term of no more than one month but may be renewed for additional one-month periods. No title loan may be renewed , rolled over, or flipped more than four times except as provided in this section. Upon the fifth renewal of a title loan, and through the eighth renewal, the debtor shall make payment of at least ten percent of the original principal amount of the title loan, in addition to any finance charges that are due . No renewal, rollover, or flip is valid unless, at the time of the renewal, rollover, or flip, the debtor pays at least ten percent of the original principal amount of the title loan, in addition to any finance charges that are outstanding. If at any renewal requiring a principal reduction, the debtor has not made previous principal reductions adequate to satisfy the current required principal reduction, and the debtor does not pay at least ten percent of the original loan amount, the ~~title lender~~ licensed provider may either declare the debtor in default or renew the title loan and defer the required principal payment for an additional period. However, no further finance charges may accrue or be earned against the principal amount so deferred. For purposes of this section, a renewal is any extension or continuation of a title loan for an additional period without any change to the title loan or its terms other than a reduction in principal. After the ~~eighth~~ fourth renewal the title loan is due in full and no further finance charges or fees may accrue or be earned.

Section 8. That § 54-4-72 be amended to read as follows:

54-4-72. If a debtor defaults in the repayment of a title loan, the ~~title lender's~~ licensed provider's sole remedy is to seek possession and sale of the motor vehicle securing the loan, and the ~~title lender~~ licensed provider may not pursue the debtor personally in any action or proceeding for repayment of the loan or for any deficiency after the sale. The ~~title lender~~ licensed provider shall return to the debtor any surplus obtained after the sale that is in excess of the amount owed on the loan after any reasonable expenses of repossession, storage, and sale, including court costs and attorney's fees have been deducted. The remedy limitation provided in this section does not apply in the following circumstances: