SB 3008 Summary - Small Dollar Installment Loans

• Transitions payday lending from lump-sum deferred deposit transactions to installment-based small dollar loans with consumer protections effective January 1, 2019.

• Establishes maximum loan amount of $1,000, caps monthly payments at 5% of gross monthly income or 6% of net monthly income, and limits total fees to 50% of principal with monthly maintenance fees not exceeding $25.

• Requires small dollar lenders to obtain state licensure through the Commissioner of Financial Institutions, with registration through NMLS and compliance with background check and financial responsibility standards.

• Mandates detailed disclosures in written loan agreements, prohibits prepayment penalties, permits one renewal only, and allows up to 36% annual interest rate on precomputed installment loans.

• Establishes comprehensive collection restrictions including prohibitions on harassment, threats of criminal prosecution, unlawful communications with consumers' family members or employers, and limits dishonored check charges to $25 per loan.