Substitute House Bill 123 Summary

• Prohibits licensees from making short-term loans of $1,000 or less or with a duration of one year or less under the Small Loan Law and General Loan Law.

• Requires licensees to verify borrower income before loan origination using recent pay stubs or bank statements dated within 45 days of the loan transaction.

• Caps short-term loan interest rates at 28% annual percentage rate and limits total loan fees and charges to 60% of the originally contracted loan amount.

• Restricts credit services organizations from brokering extensions of credit under $5,000, with repayment terms of one year or less, or with interest rates exceeding 28% annually.

• Effective 180 days after the bill's effective date for all newly made loans and extensions of credit.