SB 1696 Summary

• Establishes the Increased Access to Responsible Small Dollar Loans Pilot Program to provide consumer finance installment loans of $300-$3,000 with enhanced consumer protections.

• Requires program licensees to limit interest rates to 36% maximum (fixed, simple-interest), charge origination fees capped at 7% for first loans and 6% for subsequent loans, and impose delinquency charges of no more than $15 per payment.

• Mandates program loans be unsecured with minimum 90-day terms, no prepayment penalties, 1-day rescission rights, and required credit education and credit reporting to national credit bureaus.

• Allows program licensees to work with referral partners who market and process loans, with compensation limited to $60 per loan plus $2 per payment received, subject to specific underwriting and disclosure requirements.

• Requires Office of Financial Regulation to examine program licensees at least every 24 months, post annual reports by January 1, 2018, and conduct borrower surveys; program sunsets January 1, 2022 unless reenacted.