The new provisions provide the following protections:
* The amount of a payday loan is now restricted to 25 percent of a borrower's gross monthly income and also cannot exceed a total loan amount of
* Payday lenders are limited in the number of times they may present a borrower's check for payment. A payday lender may only make one initial presentment of a check and two subsequent re-presentments if the check remains unpaid.
* Payday lenders are required to provide an extended payment plan for borrowers who experience difficulties paying off their loans. An extended payment plan must be timely requested by the borrower and involves no additional fees. An extended payment plan allows borrowers to repay a payday loan over a 60-day period in four equal installments. Borrowers may request an extended payment plan only once per 12-month period.
* The law's new amendments enhance existing consumer protection disclosures and require all such disclosures to be in 12-point bold and capitalized type. A list of these required disclosures is attached.
Senator Heider stated, "Our objective with this legislation was to help those individuals who may be trapped in the payday loan cycle to find a way out with no further costs, interest or fees. This legislation informs potential borrowers in advance of the risks associated with payday borrowing and helps them to understand their options, prior to signing. I feel this legislation is beneficial and will provide cost savings for the citizens of
From data provided to the department by
In addition to the new requirements of Senate Bill 1314, the Idaho Payday Loan Act prohibits payday lenders from engaging in certain activities, including:
* Making a payday loan in
* Accepting payment for a payday loan through the proceeds of another payday loan made by the same payday lender;
* Engaging in unfair or deceptive acts or practices in advertising or conducting business;
* Accepting any property, title to property, or any other type of collateral, aside from a postdated check or its electronic equivalent, for a payday loan;
* Renewing a payday loan more than three (3) consecutive times. After three (3) renewals the loan must be paid in full before another payday loan is extended; and,
* Imposing any other fee to a payday loan borrower other than the agreed-upon finance charge.
Payday lenders doing business in
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