Louisiana Amends Consumer Loan Licensing Requirements

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Louisiana Governor Bobby Jindal recently signed HB 766 into law, which amends numerous provisions regulating creditors engaging in any consumer credit or deferred presentment transaction. Under the law, a creditor may not take assignments, undertake direct collection of payments, or enforce rights against consumers arising from consumer loans without first obtaining a license. However, a creditor may collect and enforce consumer loan obligations of which he has taken assignment for three months without a license if:

  • He notifies the Commissioner in writing of his intention to take assignments at least 10 days before the assignment is made
  • The Commissioner does not object
  • The creditor promptly applies for a license afterward that is not denied

Notably, in a change from current law, the amendment eliminates the exemption for creditors that do not have in-state offices. Under the new law, such creditors will be required to obtain a license regardless of whether they maintain an in-state office.

The bill makes a number of other changes to the laws governing licensees, among them, changes to record-keeping requirements; requirements regarding registration with the Louisiana Secretary of State; finance charge and fee restrictions; requirements pertaining to payment plans for consumers who are unable to repay their consumer loans; and public notice requirements mandating that licensees post certain information at their lending locations and websites.

The changes take effect January 15, 2015.

 

Topics:  Creditors, Licensing Rules, Loans

Published In: General Business Updates, Consumer Protection Updates, Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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