Relating to delayed deposit services by limiting the annual percentage rate for fees, requiring a delayed deposit repayment option in certain circumstances, and making penalties applicable

This bill modifies provisions applicable to delayed deposit services. The bill limits the annual percentage rate applicable to a delayed deposit services transaction to percent, as computed pursuant to the federal Truth in Lending Act. The bill requires a licensee holding multiple checks from one maker at any one time to enter into an extended repayment plan agreement if the maker of the multiple checks requests to enter into such agreement prior to the date upon which the checks are to be negotiable. The licensee may not initiate debt collection, civil court proceedings, or arbitration to collect on the unpaid checks during the term of the extended repayment plan agreement. A licensee need only enter into one extended repayment plan agreement with a maker of multiple checks in a 12-month period. A licensee cannot charge a fee, interest charge, or other charge as a result of entering into an extended repayment plan agreement. During the duration of the agreement, the obligations that the maker owes on the unpaid checks are not delinquent and the licensee cannot charge penalties for a delinquent obligation. The bill allows a maker obtaining more than four delayed deposit service loans from one licensee in a two-month period to enter into an extended repayment plan agreement with the licensee if the maker requests to enter into such an agreement prior to the date upon which the last check accepted by the licensee is to be negotiable. The licensee may not initiate debt collection, civil court proceedings, or arbitration to collect on any unpaid checks during the term of the extended repayment plan agreement. A licensee need only enter into one extended repayment plan agreement with a maker in a 12-month period. A licensee cannot charge a fee, interest charge, or other charge as a result of entering into an extended repayment plan agreement. During the duration of the agreement, the obligations that the maker owes on any unpaid checks are not delinquent and the licensee cannot charge penalties for a delinquent obligation. The bill requires the extended repayment plan agreement to be in writing, signed by the maker and the licensee, and contain the schedule for payment of the total unpaid check obligations. The schedule must allow the maker to pay the checks in at least four substantially equal installments. The bill requires the licensee to return any postdated checks that the maker has given to the licensee for the original transactions. The licensee may then either require the maker to provide a new check for the balance on the unpaid checks or provide multiple checks for each scheduled payment under the agreement.9(2), and may initiate debt collection, civil court proceedings, or arbitration to collect on the unpaid checks. A violation of the bill may result in an administrative fine of not more than $5,000 for each violation and the cost of investigation.