75-67-120 - Deferral of installment of loan made by small loan licensee; charge for deferral; rules and regulations.
§ 75-67-120. Deferral of installment of loan made by small loan licensee; charge for deferral; rules and regulations.
(1) With respect to any loan made or handled by a licensee hereunder, the licensee and the borrower may, at any time, agree to a deferral of all or part of one or more unpaid installments, and the licensee may make and collect a charge therefor, subject to the following provisions:
(a) A deferral postpones the scheduled due date of an installment or installments as originally scheduled, or as previously deferred, for the deferment period.
(b) The deferment period is that period of time for which the payment is or the payments are deferred.
(c) The deferral charge shall not exceed an amount equal to the result of applying the annual percentage rate, as defined by the federal Truth in Lending Act and Regulation Z, provided in the original agreement between the licensee and the borrower, to the amount deferred for the deferment period, calculated without regard to differences in the lengths of months, but proportionately for a part of a month, counting each day as one-thirtieth (1/30) of a month. A deferral charge is earned pro rata during the deferment period and is fully earned on the last day of the deferment period.
(d) If a loan is prepaid in full during a deferment period, then the licensee shall make or credit to the borrower a refund of the unearned deferral charge in addition to any other refund or credit made for prepayment in full.
(e) A deferral charge may be collected at the time it is assessed or at any time thereafter.
(f) Any payment received at the time of the deferment may be applied first to the deferral charge and the remainder, if any, to the unpaid balance of the loan, but if such payment is sufficient to pay, in addition to the appropriate delinquency charge, any installment which is in default, it shall be first so applied, and such installment shall not then be deferred or be subject to the deferral charge.
(g) No installment on which a delinquency charge has been collected shall be deferred or included in the computation of the deferral unless such delinquency charge is refunded to the borrower or credited to the deferral charge.
(h) In addition to the deferral charge, the licensee may make appropriate additional charges as provided in this chapter. The amount of such charges which are not paid in cash may be added to the amount deferred for the purpose of calculating the deferral.
(i) Any such deferral agreement shall be evidenced in writing, which shall include:
(i) The amount of the deferral charge;
(ii) The amount or amounts deferred;
(iii) The date to which, or the time period for which, payment is deferred; and
(iv) The nature and amount of any other charges made at the time.
(j) No deferral charge may be made for a period after the date that the licensee elects to accelerate the maturity of the loan.
(k) No more than two (2) deferrals on which the charge authorized in this section is made, may be made, or agreed to be made, in any twelve-month period.
(2) Whenever the Commissioner of Banking and Consumer Finance deems it necessary to do so, he shall have the authority to promulgate reasonable rules and regulations to prevent abuse of the provisions of this section.
Sources: Laws, 1989, ch. 362, § 1, eff from and after July 1, 1989.