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S1080.......................................by COMMERCE AND HUMAN RESOURCES
LOANS - CREDIT SALES - 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, the rate of finance charge
stated as an annual percentage rate shall not exceed 36% per year; to
provide that fees and charges are considered interest and are subject to
the 36% limitation; and to provide an exemption for pawnbrokers.
02/07 Senate intro - 1st rdg - to printing
02/08 Rpt prt - to Com/HuRes
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE SENATE
SENATE BILL NO. 1080
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 UNDER ONE THOUSAND DOLLARS, THE RATE OF FINANCE CHARGE STATED AS AN ANNUAL
7 PERCENTAGE RATE SHALL NOT EXCEED THIRTY-SIX PERCENT PER YEAR, TO PROVIDE
8 THAT FEES AND CHARGES ARE CONSIDERED INTEREST AND ARE SUBJECT TO THE
9 THIRTY-SIX PERCENT LIMITATION, TO PROVIDE AN EXEMPTION FOR PAWNBROKERS AND
10 TO DEFINE THE TERM "PAWNBROKERS."
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) With respect to a loan or credit sale, including a loan or
16 credit sale for the deferred presentment of a check, of one thousand dol-
17 lars ($1,000) or more, the rate of finance charge shall be that which is
18 agreed upon between the parties to the transaction. In addition to the
19 finance charge permitted herein, a creditor may contract for and receive
20 any other charge, except to the extent expressly prohibited or limited by
21 this act.
22 (b) With respect to a loan or credit sale, including a loan or credit
23 sale for the deferred presentment of a check, under one thousand dollars
24 ($1,000), the rate of finance charge stated as an annual percentage rate
25 shall not exceed thirty-six percent (36%) per year; provided however, that
26 this paragraph shall not apply to a loan or credit sale made by a pawnbro-
27 ker, as defined in paragraph (c) of this subsection. Any and all fees and
28 charges to the borrower to obtain the loan or credit, irrespective of how
29 those fees and charges are identified, are considered interest and are
30 subject to the thirty-six percent (36%) limitation.
31 (c) As used in this section, "pawnbroker" means a person who is engaged
32 in the business of loaning money on deposit or purchase of tangible per-
33 sonal property and who maintains such tangible personal property in his
34 possession until such time as it is redeemed or resold or until such time
35 as otherwise provided by applicable local law.
36 (2) This section does not limit or restrict the manner of calculating the
37 finance charge, whether by way of add-on, discount, single annual percentage
38 rate, or otherwise. If the credit transaction is precomputed:
39 (a) The finance charge may be calculated on the assumption that all
40 scheduled payments will be made when due; and
41 (b) The effect of prepayment is governed by the provisions on rebate upon
42 prepayment, section 28-42-307, Idaho Code.
43 (3) Except as provided in subsection (4) of this section, the term of a
2
1 credit transaction for purposes of this section commences on the day the
2 credit transaction is made. The administrator may adopt rules with respect to
3 treating as regular minor irregularities in amount or time.
4 (4) With respect to an insurance premium loan, the term of the loan com-
5 mences on the earliest inception date of a policy or contract of insurance,
6 payment of the premium on which is financed by the loan.
STATEMENT OF PURPOSE
RS 10859
This measure is needed to stop the excessive interest rates
and fees being charged to people who are caught in a financial
position of needing money on short term and are being destroyed by
these fees and interest rates.
FISCAL IMPACT
There is no fiscal impact to the General Fund.
Contact
Name: Sen. Lin Whitworth
Phone: (208)332-1351
STATEMENT OF PURPOSE/FISCAL NOTE S 108