SB 640 Summary

• Establishes the Access to Responsible Credit Pilot Program within the Office of Financial Regulation to provide consumer finance loans between $300 and $10,000 with enhanced consumer protections.

• Requires program licensees to obtain a pilot program license, pay a $1,000 nonrefundable application fee and $1,000 biennial renewal fee, and be accepted as data furnishers by consumer reporting agencies before approval.

• Caps interest rates tiered by loan amount: 36% for loans up to $3,000, 30% for $3,001-$4,000, and 24% for $4,001-$10,000, with origination fees limited to 6% or $75 and no prepayment penalties allowed.

• Requires licensees to conduct debt-to-income underwriting (35% maximum ratio), direct borrowers to credit counseling, report payment performance to consumer reporting agencies, and prohibit borrowers from waiving legal rights as loan conditions.

• Authorizes use of referral partners with strict limitations on compensation ($60 per loan average plus $2 per payment received) and requires annual program reports to the office with program repeal scheduled for December 31, 2023 unless reenacted.