HB1846 Summary

• Creates the Small Loan Act to regulate installment loans between $250 and $5,000 made by licensed lenders to consumers lacking access to traditional credit

• Requires lenders to be licensed by the Securities Commissioner, maintain a $50,000 net asset minimum, provide a surety bond of $5,000-$50,000, and pay $250 application fee plus $1,000 per location annual license fee

• Caps interest rates at 17% annually with loan terms of 6-48 months; permits delinquent fees up to 5% or $15, dishonored check fees up to $25, and reasonable attorney's fees for collection

• Mandates lenders assess borrower ability to pay through credit reports and budgets, provide financial literacy information, allow 5-day rescission rights, report to credit bureaus monthly, and prohibit predatory practices including title liens, electronic account access for payment, and more than 3 renewals per year

• Creates a Small Loan Fund administered by the Securities Commissioner, funded by license fees, renewal fees, and penalties, to support enforcement and administration of the Act