HB 5571 - Banking and Consumer Protections Summary

• Establishes new licensing and regulatory framework for small loan lenders, including APR caps (36% for loans under $5,000; 25% for loans $5,000-$15,000), prohibitions on certain fees and practices, and requirements for loan servicers to maintain records and comply with lead generation restrictions.

• Creates loss mitigation options for underwater mortgages, including modification, deed-in-lieu conveyance, and third-party sales through judicial process with court approval of fair market value determinations.

• Expands consumer collection agency regulations to include federal income tax and property tax debtors, strengthens documentation requirements for purchased debt litigation, and prohibits collection actions after statute of limitations expires.

• Implements comprehensive mortgage servicer standards prohibiting misapplication of payments, fraudulent insurance placement, and misrepresentation of loan terms; requires escrow account management and timely payment of taxes and insurance.

• Establishes security freeze protections for consumer credit reports, including new provisions allowing parents to place freezes on minor children's credit records without requiring PIN/password disclosures for removal.