CHAPTER 291
(HB 1049)
Payday loans regulated.
ENTITLED, An Act to
establish the definition of a payday loan and to establish limitations on
such transactions.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
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.