SB 855

Abstract

Financial institutions; small loans; penalty. Prohibits any person from making a small loan unless such person is licensed by the State Corporation Commission. The bill defines "small loan" as an unsecured loan or credit of $5,000 or less extended to a borrower for a personal, family, household, or other noncommercial purpose pursuant to a small loan agreement. The bill also prohibits any person from engaging in the business of arranging or brokering small loans for any consumer residing in the Commonwealth without registering with the Commission. Under the provisions of the bill, a licensee may charge and collect periodic interest at any rate up to 36 percent agreed to by the parties and may also charge and collect a customary daily fee. The bill provides exemptions for certain institutions and persons licensed by the Commission to provide consumer finance loans or motor vehicle loans.The bill provides for qualifications for licensure, posting of a bond, financial solvency requirements, reporting requirements, and recordkeeping and retention requirements. The bill authorizes the Commission to investigate and examine applicants and licensees, to revoke or suspend licenses, to issue cease and desist orders, and to impose a civil penalty of up to $10,000 for violations of the small loan provisions. The bill allows the Commission to refer violations to the Attorney General, and the Attorney General may seek injunctive relief and monetary damages.