SB671 Summary

• Establishes the Arkansas Traditional Installment Loan Act creating a regulatory framework for consumer installment loans of $5,000 or less administered by the Securities Commissioner.

• Requires lenders to obtain a license with $500 application fee, $500 per-location license fee, and maintain a $50,000 surety bond per location; applicants must show $1,000,000 in net assets and pass criminal background checks.

• Sets maximum interest rate at 17% per annum with loan terms between 18-36 months; limits monthly handling charges based on loan amount ($14-$36); prohibits application fees and limits closing costs to 10% of amount borrowed.

• Imposes consumer protections including mandatory credit report review, budget analysis of borrower's ability to pay, 5-business-day rescission period, credit bureau reporting within 90 days, and limits borrowers to three active loans simultaneously.

• Creates the Traditional Installment Loan Fund to collect licensing fees, examination costs, fines, and penalties for administering the act; declares the legislation an emergency measure effective upon gubernatorial approval.