(HB 1049)

Payday loans regulated.

         ENTITLED, An Act to  establish the definition of a payday loan and to establish limitations on such transactions.


     Section  1.  That § 54-4-36 be amended to read as follows:

     54-4-36.   Terms used in § §   54-4-36 to 54-4-63, inclusive, and sections 2 and 3 of this Act mean:

             (1)      "Advertisement," a commercial message in any medium that aids, promotes, or assists, directly or indirectly, the sale of products or services;

             (1A)      "Commission," the State Banking Commission;

             (1B)      "Director," the director of the Division of Banking of the Department of Commerce and Regulation;

             (1C)      "Division," the Division of Banking;

             (3)      "Finance charge," the amount, however denominated, which is paid or payable for the privilege of paying for goods or services in one or more installments at the beginning of the transaction;

             (4)      "Financing institutions," any person engaged in the business of creating and holding or purchasing or acquiring retail installment contracts;

             (6)      "Installment loan," a loan made to be repaid in specified amounts over a certain number of months;

             (7)      "License," a license provided by § §   54-4-36 to 54-4-63, inclusive;

             (8)      "Installment loan contract" or "contract," an agreement evidencing a installment loan transaction;

             (9)      "Licensee," any person holding a license;

             (10)      "Loan," any installment loan, single pay loan, or open-end loan which may be unsecured or secured by real or personal property ; and

             (11)    "Payday loan," any small, short-maturity loan on the security of a check, any assignment of an interest in the account of a person at a depository institution, any authorization to debit the person's deposit account, or any assignment of salary or wages payable to a

person. A short-maturity loan made in anticipation of an income tax refund is not a payday loan for purposes of this chapter .

     Section  2.  That § 54-4-65 be amended to read as follows:

     54-4-65.   No licensee may renew, rollover, or flip a deferred presentment service transaction payday loan more than four times. No renewal, rollover, or flip may be allowed is valid unless the maker of the check debtor pays the outstanding fee at the time of the renewal.

     Section  3.  That § 54-4-66 be amended to read as follows:

     54-4-66.   A licensee may not disburse more than five hundred dollars to the maker of a check in a deferred presentment service transaction. No payday loan disbursed by a licensee may exceed five hundred dollars. A violation of this section is a Class 1 misdemeanor.

     Signed February 25, 2004.