Idaho Payday Loan Laws & Legislation

PAYDAY REQUIREMENTS UNDER FEDERAL AND STATE LAW:
http://finance.idaho.gov/Education/Documents/Payday-Loans-in-Idaho.pdf

PAYDAY LOAN REFORM: Effective July 1, 2014 payday loan borrowers will have the option of dividing the loan into four payments instead of paying it back all at once. The law —sponsored by state Sen. Lee Heider, R-Twin Falls— also bars lenders from tacking on additional interest fees once the extended payment plan started.

Payday lenders doing business in Idaho are regulated by the federal Truth in Lending Act (Regulation Z) and the Idaho Credit Code. Truth-in-Lending laws require disclosures to be made to borrowers in plain language and in a conspicuous manner.

In addition, Truth-in-Lending requirements mirror many of Idaho’s requirements as outlined below. Idaho law requires the following from payday loan companies doing business in Idaho:

Payday lenders doing business in Idaho must be licensed before offering payday loans (A payday loan made in Idaho in violation of licensing requirements is void, uncollectable and unenforceable)
Payday loans are limited to no more than $1,000
Each licensee must post a notice of fee costs, expressed in a dollar amount as a cost per $100

Before doing business with a borrower, licensees must disclose to the borrower that:
a. payday loans are short-term loans
b. the borrower will be required to pay additional fees if the loan is renewed
c. the borrower may rescind/cancel the loan, at no cost, no later than the end of the next business day following the day the payday loan was made
d. the costs for the payday loan must be disclosed as an annual percentage rate (APR) on a Truth-in-Lending form Payday lenders may charge any interest rate on the short term loan, so long as it is agreed upon by the borrower, and it is expressed in dollar amount and annual percentage rate in the contract.

PAYDAY LOAN VIOLATIONS OF THE ACT:
Payday loan companies doing business in Idaho are prohibited from:
Accepting payment for a payday loan through the proceeds of another payday loan made by the same payday lender

Idaho Payday loan laws. Idaho Payday loan legislation. Idaho has specific payday advance laws.

The maximum term of a payday loan is 30 days. Maximum amount of a cash advance is $1000.

For a thorough discussion of the payday loan industry and access to our payday loan training materials, we recommend you proceed to Payday Loan Industry.com

Idaho Payday Loan Laws & Legislation State Information

Legal Status: Legal

Citation:
Idaho Code Ann. § 28-46-401 et seq.

Loan Terms:
Maximum Loan Amount: $1000
Loan Term: Not Specified
Maximum Finance Rate and Fees: Not Specified
Finance Charge for 14-day $100 loan:
APR for 14-day $100 loan: No Limit

Debt Limits:
Maximum Number of Outstanding Loans at One Time: Not Specified ($1000 aggregate loans outstanding to all licensees)
Rollovers Permitted: Three (renewals)
Cooling-off Period:
Repayment Plan:

Collection Limits:
Collection Fees: $20 NSF fee + 12% interest per annum on unpaid amount (if disclosed )
Criminal Action: Prohibited
Regulator: Idaho Department of Finance
Address: Consumer Credit Section, 700 West State Street, 2nd Floor Boise ID 83702
Phone: (208) 332-8000
Fax: (208) 332-8099
Regulatory Contact: Mike Larsen,, Consumer Finance Bureau Chief
Regulator Website

Licensee Database

Online Resources:
Consumer Finance FAQ

Consumer Credit and Consumer Loan Section
The Idaho Credit Code regulates consumer credit - credit for personal, family, or household purposes. This includes extensions of credit through subordinate lien mortgage loans on residential real property. Credit extended for business, commercial, and agricultural purposes is usually exempt from the ICC, as are first mortgages loans. Payday and title lenders are required to comply with the ICC.

Creditors engaged in the business of making regulated consumer loans, or taking assignment of and undertaking direct collection of payments from debtors arising from regulated consumer loans, must obtain a regulated lenders license. Regulated lender licensees must file an annual license renewal and an annual report on or before May 31 of each year. The following provides basic licensing information as detailed in the ICC:

Licensees are not required to maintain a physical location in Idaho
There is no "one time" exemption for individuals regularly engaged in lending activities.
Exempt entities include, but may not be limited to, certain supervised financial organizations.
Regulated lenders (wholesale mortgage lenders, finance companies, title lenders and assignees) who desire to conduct payday lending activity must obtain a separate and additional payday lender license.
Payday lenders who hold a valid payday lender license and only engage in payday lending activity do not need to obtain a separate regulated lenders license.

A brief summary of licensee qualifications include the following:
$350 license application fee, per location and per license type (regulated lender/payday lender)

Completed application

$30,000 evidenced in liquid assets (regulated lenders) to be increased by additional sums of $5,000 (payday lenders) for each branch office located Idaho , to a maximum of $75,000

Registration with the Idaho Secretary of State's Office, for the legal entity name and structure, as well as any d/b/a to be used in Idaho
To obtain licensing and notification information for Consumer Credit, please call 208-332-8002.

PAYDAY LOAN LAWS and LEGISLATION IDAHO 2009
LEGISLATURE OF THE STATE OF IDAHO
Sixtieth Legislature First Regular Session 2009
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 172
BY BUSINESS COMMITTEE
1 AN ACT
2 RELATING TO PAYDAY LOANS; AMENDING SECTION 2846402, IDAHO CODE,
3 TO PROVIDE THAT A LENDER WHICH IS NOT A SUPERVISED FINANCIAL
4 ORGANIZATION MAY NOT DEPOSIT A CONSUMER’S CHECK, WITHDRAW
5 FUNDS ELECTRONICALLY FROM A CONSUMER’S ACCOUNT OR OTHERWISE
6 COLLECT THE PRINCIPAL OF, INTEREST ON, OR ANY FEES OR CHARGES FOR
7 A LOAN SUBJECT TO THIS PART, IF AT THE TIME THE LENDER MAKES THE
8 LOAN, THE LENDER DOES NOT HAVE A CURRENT AND VALID LICENSE TO
9 MAKE LOANS IN THIS STATE; AMENDING SECTION 2846412, IDAHO CODE,
10 TO REVISE PAYDAY LOAN PROCEDURES; AMENDING SECTION 2846413,
11 IDAHO CODE, TO PROVIDE CORRECT CODE REFERENCES AND TO PROVIDE
12 PROCEDURES UPON THE THIRD RENEWAL OF A PAYDAY LOAN; AND
13 DECLARING AN EMERGENCY.
14 Be It Enacted by the Legislature of the State of Idaho:
15 SECTION 1. That Section 2846402, Idaho Code, be, and the same is hereby amended
16 to read as follows:
17 2846402. LICENSE REQUIRED. (1) No person shall engage in the business of
18 payday loans, offer or make a payday loan, or arrange a payday loan for a third party lender in
19 a payday loan transaction without having first obtained a license under this chapter. A separate
20 license shall be required for each location from which such business is conducted.
21 (2) Any "supervised financial organization," as defined in section 2841301( 45), Idaho
22 Code, or any person organized, chartered, or holding an authorization certificate under the laws
23 of another state to engage in making loans and receiving deposits, including a savings, share,
24 certificate, or deposit account and who is subject to supervision by an official or agency of the
25 other state, shall be exempt from the licensing requirements of this section.
26 (3) A lender which is not a supervised financial organization as defined in subsection
27 (2) of this section may not deposit a consumer’s check, withdraw funds electronically from a
28 consumer’s account or otherwise collect the principal of, interest on, or any fees or charges for
29 a loan subject to this part, if at the time the lender makes the loan, the lender does not have a
30 current and valid license to make loans in this state.
31 SECTION 2. That Section 2846412,
Idaho Code, be, and the same is hereby amended
32 to read as follows:
33 2846412. PAYDAY LOAN PROCEDURES. (1) Each payday loan must be
34 documented in a written agreement signed by the borrower. The loan agreement must include
35 the name of the licensee, the loan date, the principal amount of the loan, and a statement of
36 the total amount of fees charged as a condition of making the loan, expressed both as a dollar
37 amount and as an annual percentage rate (APR).
2
1 (2) The maximum principal amount of any payday loan is one thousand dollars ($1000).
2 (3) A licensee may charge a fee for each payday loan. Such fee shall be deemed fully
3 earned as of the date of the transaction and shall not be deemed interest for any purpose of law.
4 No other fee or charges may be charged or collected for the payday loan except as specifically
5 set forth in this act.
6 (4) Each licensee shall conspicuously post in each licensed location a notice of the fees,
7 expressed as a dollar amount per one hundred dollars ($100), charged for payday loans.
8 (5) Before disbursing funds pursuant to a payday loan, a licensee shall provide written
9 notice to the borrower indicating the following:
10 (a) A payday loan is intended to address shortterm, not longterm, financial needs.
11 (b) The borrower will be required to pay additional fees if the payday loan is renewed
12 rather than paid in full when due.
13 (c) The borrower has the right to rescind the payday loan, at no cost, no later than the
14 end of the next business day following the day on which the payday loan is made.
15 (d) The borrower should consider consulting with a licensed credit or debt counselor if
16 the borrower is having difficulty meeting financial obligations.
17 (6) Before disbursing funds pursuant to a payday loan, a licensee shall give the
18 prospective borrower a written list setting forth the names, addresses and phone numbers
19 of all the credit and debt counselors permitted under chapter 22, title 26, Idaho Code, to
20 offer and deliver credit or debt counseling services in Idaho. The written list shall be
21 accessible on the website of the Idaho department of finance, and at the time of delivery to the
22 prospective borrower shall be current or dated no more than thirty (30) days prior to the date of
23 disbursement of funds pursuant to a payday loan.
24 (7)(a) A payday loan may be made pursuant to a transaction whereby the licensee:
25 (i) Accepts a check from a borrower who is the maker of the check; and
26 (ii) Agrees not to negotiate, deposit or present the check for an agreed upon
27 period of time and pays to the maker the amount of the check, less the fees
28 permitted by this act.
29 (b) In such a transaction, the licensee may accept only one (1) postdated check for each
30 loan as security for the loan. Before the licensee may negotiate or present a check for
31 payment, the check shall be endorsed with the actual name under which the licensee is
32 doing business. The borrower shall have the right to redeem the check from the licensee
33 at any time prior to the presentment or deposit of the check by making payment to the
34 licensee of the full amount of the check in cash or immediately available funds.
35 (78) The amount advanced to the borrower by the licensee in a payday loan may be paid
36 to the borrower in the form of cash, the licensee’s business check, a money order, an electronic
37 funds transfer to the borrower’s account, or other reasonable electronic payment mechanism,
38 provided however, that no additional fee may be charged to the borrower by a licensee to
39 access the proceeds of the payday loan.
40 (89) A payday loan may be repaid by the borrower in cash, by negotiation of the
41 borrower’s check in a transaction pursuant to subsection (67) of this section or, with the
42 agreement of the licensee, a debit card, a cashier’s check, an electronic funds transfer from the
43 borrower’s bank account, or any other reasonable electronic payment mechanism to which the
44 parties may agree.
45 SECTION 3. That Section 2846413, Idaho Code, be, and the same is hereby amended
46 to read as follows:
3
1 2846413.
PAYDAY LOAN BUSINESS PRACTICES. (1) No licensee or person
2 related to a licensee by common control may have outstanding at any time to a single borrower
3 a loan or loans with an aggregate principal balance exceeding one thousand dollars ($1,000),
4 plus allowable fees.
5 (2) No payday loan shall be repaid by the proceeds of another payday loan made by the
6 same licensee or a person related to the licensee by common control.
7 (3) If the borrower’s check is returned unpaid to the licensee from a payor financial
8 institution, the licensee shall have the right to collect charges authorized by section 2822105,
9 Idaho Code, provided such charges are disclosed in the loan agreement. A licensee may not
10 charge treble damages. If the borrower’s obligation is assigned to any third party for collection,
11 the provisions of this section shall apply to such third party collector.
12 (4) A licensee shall not threaten a borrower with criminal action as a result of any
13 payment deficit.
14 (5) No licensee shall engage in unfair or deceptive acts, practices or advertising in the
15 conduct of a payday loan business.
16 (6) A licensee may renew a payday loan no more than three (3) consecutive times,
17 after which the payday loan shall be repaid in full by the borrower. A borrower may enter
18 into a new loan transaction with the licensee at any time after a prior loan to the borrower is
19 completed. A loan secured by a borrower’s check is completed when the check is presented
20 or deposited by the licensee or redeemed by the borrower pursuant to section 2846412(
67),
21 Idaho Code.
22 (7) A licensee and borrower may agree to a payment plan for a payday loan at any
23 time. After three (3) successive loans and prior to default upon the last loan, each borrower
24 may convert their payday loan to a payment plan. Each agreement for a loan payment plan
25 must be in writing and acknowledged by both the borrower and the licensee. The licensee may
26 charge the borrower, at the time both parties enter into the payment plan, a one (1) time fee for
27 the payment plan. The licensee may not assess any other fee, interest charge or other charge
28 on the borrower as a result of converting the loan into a payment plan. This payment plan
29 must provide for the payment of the total of payments due on the shorter payment period. The
30 borrower may pay the total payments at any time. The licensee may not charge any penalty,
31 fee or charge to the borrower for prepayment of the loan payment plan by the borrower. Each
32 licensee shall conspicuously disclose to each borrower in the payday loan agreement or loan
33 note that the borrower has access to such a payment plan after three (3) successive loans. A
34 licensee’s violation of such a payment plan constitutes a violation of this part.
35 (8) The licensee may take postdated checks at the initiation of the payment plan for the
36 payments agreed to under the plan. If any check accepted by the licensee as payment under the
37 payment plan is dishonored, the licensee may collect as provided in part 1, chapter 22, title 28,
38 Idaho Code.
39 (9) If the borrower defaults on the payment plan, the licensee may initiate action to
40 collect the total of payments. The licensee may charge the borrower a one (1) time payment
41 plan default fee of twentyfive dollars ($25.00).
42 (10) If the licensee enters into a payment plan with the borrower through an accredited
43 third party, with certified credit counselors, representing the borrower, the licensee’s failure to
44 comply with the terms of that payment plan constitutes a violation of this part.
4
(1 11) Other than a borrower’s check in a transaction pursuant to section 2846412(
67),
2 Idaho Code, a licensee shall not accept any property, title to property, or other evidence of
3 ownership as collateral for a payday loan.
4 (812) A licensee may conduct other business at a location where it engages in payday
5 lending unless it carries on such other business for the purpose of evading or violating the
6 provisions of this act.
7 (913) A borrower may rescind the payday loan at no cost at any time prior to the close
8 of business on the next business day following the day on which the payday loan was made by
9 paying the principal amount of the loan to the licensee in cash or other immediately available
10 funds.
11 SECTION 4. An emergency existing therefor, which emergency is hereby declared to
12 exist, this act shall be in full force and effect on and after its passage and approval