Section 58-15-32 - Requirements for payday loans.
58-15-32. Requirements for payday loans.
A. No licensee shall make a payday loan to a consumer if the total principal amount of the loan and fees, when combined with the principal amount and fees of all of the consumer's other outstanding payday loan products, exceeds twenty-five percent of the consumer's gross monthly income.
B. Without affecting the rights of a consumer to prepay a payday loan product at any time without additional cost or penalty:
(1) no payday loan shall have a stated maturity greater than thirty-five days;
(2) no payday loan shall have a stated minimum term less than fourteen days unless agreed to in writing by the consumer; and
(3) there shall be a scheduled pay date for the consumer within the term of the payday loan.
C. A payday loan agreement shall include a provision granting the consumer the right to rescind the transaction by returning in cash, or through certified funds, one hundred percent of the amount advanced by a licensee for a payday loan no later than 5:00 p.m. on the first day of business conducted by the licensee following the execution of the payday loan agreement. If a consumer exercises the right of rescission pursuant to this subsection, no fee for the rescinded transaction shall be charged to the consumer and the licensee shall not charge or impose on the consumer a fee for exercising the right of rescission pursuant to this subsection. If this subsection is applicable, any fee collected by a licensee shall be returned in full to the consumer.
D. A consumer shall be permitted to make payments in any amount on a payday loan product at any time before maturity without additional fees. A payment received by a licensee shall first be applied to administrative fees owed with any remaining amount to be applied to principal.
E. After each payment is made, in full or in part, on a payday loan product, the licensee shall give to the person making the payment a signed, dated receipt showing the amount paid; the amount credited toward administrative fees and principal; and the balance due on the loan.
F. A check written by a consumer for a payday loan product shall be payable to the order of the licensee.
G. Prior to the consummation of a payday loan, the licensee shall provide the consumer, or each consumer if there is more than one, with copies of the payday loan product agreement in English, Spanish or other language as determined by the director. Consumers shall have the option to decide which language version of the agreement they wish to receive.
H. Licensees making payday loans shall provide the consumer with an information brochure in English, Spanish or other language as determined by the director. Consumers shall have the option to decide which language version of the brochure they wish to receive.
I. The disclosure of the credit terms of a payday loan product shall be according to and governed by the requirements of 12 CFR 226, known as "Regulation Z". The definitions and requirements of that regulation and commentary shall apply to payday loan products as if those provisions are fully set out in this section.
J. A licensee shall collect on payday loan products in default in a professional, fair and lawful manner. A licensee that complies with the requirements and prohibitions set forth in 15 U.S.C. 1692c-1692f of the federal Fair Debt Collection Practices Act shall be deemed to have operated in a professional, fair and lawful manner.