HB 1294 Summary

• Caps annual percentage rates for payday loans, title loans, installment loans, and other high-cost consumer credit at 36 percent, down from triple-digit rates previously allowed.

• Applies the 36 percent rate limit to veterans and other borrowers, extending protections previously limited to active military families under federal law.

• Prohibits lenders from using devices or subterfuge to evade rate limits, including disguising loans as sales-leaseback transactions, using third-party brokers, or charging undisclosed fees.

• Requires payday loans to have minimum 14-day and maximum 31-day terms, limits renewals to six times, and requires principal reduction of at least 5 percent with each renewal.

• Caps total accumulated interest and fees on payday loans at 75 percent of the initial loan amount across the entire loan term and all renewals.

• Submits the measure to voters for approval at the November 2012 general election, becoming effective only upon voter approval.