SB773 Summary - Small Loan Act

• Creates the "Small Loan Act" establishing a regulatory framework for installment lenders making small loans of $250 to $5,000 to underserved consumers who lack access to traditional banking and credit.

• Requires lenders to obtain a license from the Securities Commissioner, pay a $250 application fee and $1,000 annual license fee per location, maintain a $5,000-$50,000 surety bond, and demonstrate $50,000 in net assets.

• Caps interest rates at 17% annually with loans lasting 6-48 months; allows additional charges for late payments (up to 5% or $15), dishonored checks ($25), and reasonable attorney's fees; prohibits early payment penalties and vehicle title security.

• Mandates lenders conduct ability-to-pay assessments including credit reports and budgets, provide 5-day rescission rights, report loan status to major credit bureaus monthly, and comply with federal lending laws including Truth in Lending and Fair Credit Reporting Acts.

• Establishes the Small Loan Fund to receive all license fees and penalties for administration by the Securities Commissioner, with violations making loans void as to principal and interest.