HB 359 Summary

• Establishes the "Payday Loan Protection Act" requiring lenders (other than banks, credit unions, and savings institutions) making unsecured loans of $500 or less to obtain a license from the Division of Finance at an annual fee of $300 per location.

• Caps interest charges at 18% simple annual rate with a maximum of $80 per loan, and allows origination and documentation fees; prohibits total accumulated interest and fees from exceeding 75% of the initial loan amount.

• Requires lenders to provide borrowers with disclosure notices including annual percentage rates and finance charges, allow cancellation within one business day, and limit loan renewals to a maximum of six times with mandatory 5% principal reduction on each renewal.

• Restricts loans to a maximum of 31-day terms and prohibits multiple loans to the same borrower exceeding $500 outstanding at any time; allows borrowers to repay in either one lump sum or four equal 25% installment payments.

• Authorizes the Division of Finance to suspend or revoke licenses for non-compliance and assess civil penalties up to $1,000 per day for violations; prohibits state officials and judges from enforcing contracts that violate the act's provisions.