Print Friendly SENATE BILL NO. 1405 – Loan/credit sale, finance charge
SENATE BILL NO. 1405
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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
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
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.
No fiscal impact.
Name: Sen. Lin Whitworth
STATEMENT OF PURPOSE/FISCAL NOTE S 1405