Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 adam.c.proffitt@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Adam Proffitt, Director Laura Kelly, Governor


February 22, 2021


The Honorable Jeff Longbine, Chairperson
Senate Committee on Financial Institutions
Statehouse, Room 235A-E
Topeka, Kansas 66612
Dear Senator Longbine:
SUBJECT: Fiscal Note for SB 218 by Senate Committee on Federal and State Affairs
In accordance with KSA 75-3715a, the following fiscal note concerning SB 218 is
respectfully submitted to your committee.
HB 218 would amend the Uniform Consumer Credit Code. Under current law, open-end
credit finance charges are determined by the agreement of the involved parties. The bill would
establish an annual maximum of 36.0 percent for open-end credit. The bill would also limit
monthly maintenance fees and other fees on open-end consumer credit. Currently, closed-end
credit finance charges are generally calculated at a maximum annual rate of 36.0 percent for the
portion of credit under $860 and 21.0 percent for a credit over $860. HB 218 would establish an
annual maximum of 36.0 percent for closed-end credit. Under current law, a cash advance loan
less than $500 cannot be assessed more than 15.0 percent per week or per month of the amount of
the cash advance, which translates to a higher annual percentage rate. The bill would cap that rate
at 36.0 percent annually, along with other charges described in the bill. The bill would replace the
payday loan section by establishing a small loan that would not exceed $2,500 with a minimum
term of three calendar months and a maximum term of 24 months.
HB 218 would also add new language for loan disclosure information and provide for more
restrictions relating to the new small closed-end loans. The bill would create provisions regarding
when a lender could accept an interest in a vehicle, which would include a prohibition on the lender
seeking or obtaining a personal money judgment against the borrower for any amount owed under
the loan agreement or for any deficiency resulting after the sale of a motor vehicle. A lender would
be allowed to seek a personal money judgment against the borrower for any amounts owed under
the loan agreement if the borrower impairs the lender's security interest in certain instances. The
bill would require annual reports to be filed with the State Bank Commissioner. The
The Honorable Jeff Longbine, Chairperson
Page 2—SB 218

Commissioner would publish certain information required by the bill annually and would make it
available to the public.

Estimated State Fiscal Effect
FY 2021 FY 2021 FY 2022 FY 2022
SGF All Funds SGF All Funds
Revenue -- -- -- ($182,693)
Expenditure -- -- -- --
FTE Pos. -- -- -- --
Because of the new provisions of the bill, the Office of the State Bank Commissioner
anticipates a decline in “payday” lenders who currently license with the agency. The Office
estimates the bill could reduce revenues by $182,693 in the Bank Commissioner Fee Fund. The
agency indicates that the current staff would be able to administer the provisions of the bill and
provide training on the new provisions within existing resources.
The Office of Judicial Administration states that the bill would not have a fiscal effect.
Any fiscal effect associated with HB 218 is not reflected in The FY 2022 Governor’s Budget
Report.


Sincerely,

Adam Proffitt
Director of the Budget

cc: Vickie Hurt, Credit Unions
Melissa Wangemann, Office of Banking Commissioner


Statutes affected:
As introduced: 2-308, 2-401, 2-404, 2-501