The bill amends the Regulatory Loan Act of 1939 by updating the interest rate cap for loans made by licensees. Specifically, it establishes that the maximum interest rate cannot exceed 36% per annum, replacing the previous reference to the rate permitted by the credit reform act of 1995. Additionally, the bill clarifies that charges on loans must not be paid or deducted in advance and must be computed based on the unpaid principal balance. It also introduces a loan processing fee that may not exceed 5% of the principal, capped at $250, which will be adjusted every two years according to changes in the Consumer Price Index.

Furthermore, the bill includes several provisions regarding fees and charges associated with loans. It mandates that no other amounts can be charged beyond lawful fees paid to governmental entities for filing or recording related documents. Licensees are allowed to charge handling fees for returned checks and may recover costs related to personal property in accordance with the Uniform Commercial Code. The bill also specifies that violations of this act are subject to penalties under the credit reform act, ensuring compliance with both sets of regulations.

Statutes affected:
House Introduced Bill: 493.13