SB974 Summary - Small Dollar Loans and Consumer Protection

• Establishes new small dollar loan program effective July 1, 2023, allowing installment loans up to $1,500 with 36% annual interest rate cap and single monthly maintenance fee (up to $50 depending on loan size).

• Requires licensure for small dollar lenders through the Division of Financial Institutions with surety bond ($30,000-$250,000), application fees ($900), and annual renewal fees ($600).

• Imposes strict consumer protections including 4-24 month loan terms, full amortization requirements, prohibition on prepayment penalties, maximum 60% total fees on principal, and right to rescind within 3 business days.

• Mandates check cashers obtain licenses and offer voluntary payment plans for customers with three consecutive deferred deposit transactions or experiencing financial hardship.

• Directs Division of Financial Institutions to analyze payday lending regulation impact and report findings to legislature by 2023.