SB537 Summary

• Establishes new regulatory framework for small dollar installment loans, requiring lenders to be licensed by the Division of Financial Institutions starting January 1, 2020.

• Caps interest rates at 36% per annum and monthly maintenance fees at $10-$25 depending on loan size, with maximum loan amount of $1,000 and monthly payments limited to 5% of verified gross income.

• Requires small dollar loans to be fully amortized with monthly installments, prohibits multiple outstanding loans per borrower, and allows only one renewal before loan must be paid in full.

• Transitions payday lending from lump-sum deferred deposit transactions to installment-based small dollar loans with enhanced consumer protections including written disclosures, right of rescission, and restrictions on collection practices.

• Requires check cashers to register with the Department of Commerce and Consumer Affairs and offer voluntary payment plans to customers after three consecutive deferred deposit transactions.