CS/HB 123 - Consumer Finance Loans Summary

• Allows applicants and licensees to provide a surety bond (minimum $25,000), certificate of deposit, or irrevocable letter of credit in lieu of the $25,000 liquid asset requirement for consumer finance loan licenses.

• Companies with existing licensed locations may provide a $5,000 surety bond rider for each additional license, with aggregate surety bonds not exceeding $100,000.

• Prohibits licensed consumer finance lenders from charging prepayment penalties when borrowers pay all or part of loan principal early.

• Requires surety bonds, certificates of deposit, and letters of credit to remain in place for 2 years after a licensee ceases operations, with potential reductions as outstanding loans are paid down.

• Effective date: October 1, 2022.