HB 2471 - Small Dollar Installment Loans

• Transitions payday lending industry from lump-sum deferred deposit transactions to installment-based small dollar loans with maximum loan amount of $1,000

• Establishes consumer protections including: maximum monthly payment of 5% of verified gross income or 6% of verified net income (whichever is greater), total fees capped at 50% of principal, monthly maintenance fees up to $25, and 36% annual interest rate cap

• Requires licensure for all small dollar lenders effective January 1, 2019, with application fees of $900 (initial) and $600 (annual renewal), plus surety bond requirements of $30,000-$250,000

• Prohibits multiple outstanding loans per consumer and limits loan renewal to once before full payment required; allows one-time deferment of installments without fee

• Authorizes Division of Financial Institutions to hire one full-time examiner position funded through compliance resolution fund to oversee the small dollar loan program