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S1405.......................................by COMMERCE AND HUMAN RESOURCES LOAN/CREDIT SALE - Amends existing law to provide that the rate of finance charge for a loan or credit sale of $1,000 or more shall be that which is agreed upon between the parties to the transaction; to provide that for a loan or credit sale under $1,000, including loans or credit for deferred presentment of a check, the finance charge stated as an annual percentage rate shall not exceed thirty-six percent per year; and to provide that fees and charges are considered interest and are subject to the thirty-six percent limitation. 02/11 Senate intro - 1st rdg - to printing 02/14 Rpt prt - to Com/HuRes
|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature Second Regular Session - 2000 IN THE SENATE SENATE BILL NO. 1405 BY COMMERCE AND HUMAN RESOURCES COMMITTEE 1 AN ACT 2 RELATING TO COMMERCIAL TRANSACTIONS; AMENDING SECTION 28-42-201, IDAHO CODE, 3 TO PROVIDE THAT THE RATE OF FINANCE CHARGE FOR A LOAN OR CREDIT SALE OF 4 ONE THOUSAND DOLLARS OR MORE SHALL BE THAT WHICH IS AGREED UPON BETWEEN 5 THE PARTIES TO THE TRANSACTION, TO PROVIDE THAT FOR A LOAN OR CREDIT SALE, 6 INCLUDING LOANS OR CREDIT FOR DEFERRED PRESENTMENT OF A CHECK, UNDER ONE 7 THOUSAND DOLLARS, THE RATE OF FINANCE CHARGE STATED AS AN ANNUAL PERCENT- 8 AGE RATE SHALL NOT EXCEED THIRTY-SIX PERCENT PER YEAR AND TO PROVIDE THAT 9 FEES AND CHARGES ARE CONSIDERED INTEREST AND ARE SUBJECT TO THE THIRTY-SIX 10 PERCENT LIMITATION. 11 Be It Enacted by the Legislature of the State of Idaho: 12 SECTION 1. That Section 28-42-201, Idaho Code, be, and the same is hereby 13 amended to read as follows: 14 28-42-201. MAXIMUM FINANCE CHARGE. 15 (1) (a) Except as provided in paragraph (b) of this subsection, w With 16 respect to a loan or credit sale of one thousand dollars ($1,000) or more, 17 the rate of finance charge shall be that which is agreed upon between the 18 parties to the transaction. In addition to the finance charge permitted 19 herein, a creditor may contract for and receive any other charge, except 20 to the extent expressly prohibited or limited by this act. 21 (b) With respect to a loan or credit sale, including loans or credit for 22 deferred presentment of a check, under one thousand dollars ($1,000), the 23 rate of finance charge stated as an annual percentage rate shall not 24 exceed thirty-six percent (36%) per year. Any and all fees and charges to 25 the borrower to obtain the loan or credit, irrespective of how those fees 26 and charges are identified, are considered interest and are subject to the 27 thirty-six percent (36%) limitation. 28 (2) This section does not limit or restrict the manner of calculating the 29 finance charge, whether by way of add-on, discount, single annual percentage 30 rate, or otherwise. If the credit transaction is precomputed: 31 (a) The finance charge may be calculated on the assumption that all 32 scheduled payments will be made when due; and 33 (b) The effect of prepayment is governed by the provisions on rebate upon 34 prepayment, section 28-42-307, Idaho Code. 35 (3) Except as provided in subsection (4) of this section, the term of a 36 credit transaction for purposes of this section commences on the day the 37 credit transaction is made. The administrator may adopt rules with respect to 38 treating as regular minor irregularities in amount or time. 39 (4) With respect to an insurance premium loan, the term of the loan com- 40 mences on the earliest inception date of a policy or contract of insurance, 41 payment of the premium on which is financed by the loan.
STATEMENT OF PURPOSE RS 09900 The purpose of this legislation is to provide protection from excessive usury rates and charges beyond reason for citizens who find it necessary to borrow funds. FISCAL IMPACT No fiscal impact. Contact Name: Sen. Lin Whitworth Phone: (208)332-1351 STATEMENT OF PURPOSE/FISCAL NOTE S 1405