HB 656 Summary

• Requires lenders making unsecured loans of $500 or less to obtain a license from the director of finance with an annual fee of $300 per location.

• Limits accumulated interest and fees to 60% of the initial loan amount for the entire loan term and all renewals.

• Allows borrowers to enter an extended payment plan of up to four equal installments over 60 days with no accruing interest, limited to once per 12-month period per lender.

• Changes loan renewal limits from six times to three times maximum, with principal reduction requirement changed from 5% to $25 per renewal.

• Establishes a statewide real-time compliance system for payday lenders to record transactions and verify borrower eligibility, with implementation deadline of September 1, 2011 and sunset date of August 31, 2012.