HB 4251 Summary

• Limits deferred presentment service transactions (payday loans) to a maximum loan amount of $600 and caps the service fee at an annual percentage rate of 36%, replacing the previous tiered fee structure.

• Prohibits licensees from entering into transactions with customers who have more than one open deferred presentment service transaction with any licensee, with verification requirements through a database check.

• Requires licensees to determine and document that customers have a reasonable ability to repay before issuing a loan, including verification of income, expenses, and credit history, with a maximum debt-to-income ratio of 41%.

• Mandates that licensees provide customers with a detailed notice in at least 12-point type explaining their rights to dispute violations, the process for filing complaints with the Department of Insurance and Financial Services, and the remedies available including restitution of 5 times the fee charged (minimum $15, maximum face value of check).

• Makes deferred presentment service transactions that violate the law void and uncollectible, and prohibits licensees from retaliating against customers who exercise their rights under the act.