SB 1146 Summary

• Establishes the Pilot Program for Affordable Credit-Building Opportunities through January 1, 2015, to increase access to low-dollar loans ($250-$2,500) for underbanked individuals, requiring lender licensure and commissioner approval to participate.

• Authorizes participating licensees to charge interest rates up to 2.5% per month on the first $1,000 of principal and 2.17% per month on amounts exceeding $1,000, with administrative fees capped at 5% or $65 (whichever is less) and delinquency fees limited to $12-$18 depending on delinquency period.

• Permits approved licensees to use "finders" (entities that bring lenders and borrowers together at the finder's physical location) under written agreements, with finder compensation capped at $45 per loan for the first 40 loans monthly and $40 for subsequent loans, subject to commissioner registration and oversight.

• Requires participating licensees to report borrower payment performance to national credit agencies, conduct underwriting ensuring borrowers' debt-to-income ratios do not exceed 50%, and offer credit education programs; prohibits credit insurance sales and waiver of borrower legal rights.

• Mandates the commissioner examine each program licensee at least every 24 months and submit a comprehensive report to the Legislature by January 1, 2014, regarding program utilization, borrower outcomes, and recommendations for continuation.