SENATE CORPORATIONS AND TRANSPORTATION COMMITTEE SUBSTITUTE FOR
SENATE BILL 340
49th legislature - STATE OF NEW MEXICO - first session, 2009
AN ACT
RELATING TO FINANCIAL INSTITUTIONS; ENACTING THE TAX REFUND ANTICIPATION LOAN ACT; REQUIRING THE LICENSURE OF TAX REFUND ANTICIPATION LOAN FACILITATORS; REQUIRING DISCLOSURES REGARDING TAX REFUND ANTICIPATION LOANS AND CHECKS; PROVIDING FOR PENALTIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. SHORT TITLE.--This act may be cited as the "Tax Refund Anticipation Loan Act".
Section 2. DEFINITIONS.--As used in the Tax Refund Anticipation Loan Act:
A. "customer" means a resident of New Mexico who files a federal or state personal income tax return and who applies for a tax refund anticipation loan;
B. "department" means the regulation and licensing department;
C. "director" means the director of the division;
D. "division" means the financial institutions division of the department;
E. "facilitate tax refund anticipation loans or tax refund anticipation checks" means to:
(1) make, process, receive or accept for delivery an application for a tax refund anticipation loan or tax refund anticipation check;
(2) issue a check in payment for the proceeds of a tax refund anticipation loan; or
(3) act in any other manner to further the making of a tax refund anticipation loan or the issuing of a tax refund anticipation check;
F. "facilitator" means a person acting individually, or in conjunction or cooperation with another person for money or other consideration, who facilitates a tax refund anticipation loan or tax refund anticipation check for a customer. A facilitator shall be primarily engaged in the business of preparing tax returns and shall be authorized by the federal internal revenue service to file federal income tax returns electronically;
G. "person" includes an individual, copartner, association, trust, corporation and any other legal entity;
H. "subsidiary" means:
(1) any company twenty-five percent or more of whose voting shares are directly or indirectly owned or controlled by a banking corporation, savings and loan association or credit union or are held by them with power to vote;
(2) any company the election of a majority of whose directors is controlled in any manner by a banking corporation, savings and loan association or credit union; or
(3) any company with respect to the management of policies of which a banking corporation, savings and loan association or credit union has the power, directly or indirectly, to exercise a controlling influence, as determined by the director;
I. "tax refund anticipation check" means a check or other payment mechanism:
(1) representing the proceeds of a customer's federal or state personal income tax refund;
(2) issued by a depository institution or other person that received a direct deposit of the consumer's federal or state personal income tax refund or credits; and
(3) for which the consumer has paid a fee or other consideration; and
J. "tax refund anticipation loan" means a loan that is secured by or that the lender arranges to be repaid from the proceeds of a customer's federal or state personal income tax refund.
Section 3. LICENSE REQUIRED--APPLICABILITY OF ACT.--
A. A person shall not facilitate tax refund anticipation loans or tax refund anticipation checks in New Mexico or facilitate tax refund anticipation loans or tax refund anticipation checks for customers in New Mexico without first having obtained a license pursuant to the Tax Refund Anticipation Loan Act.
B. A banking corporation, savings and loan association or credit union and its subsidiaries operating under the laws of the United States or of a state is exempt from the licensing requirements of the Tax Refund Anticipation Loan Act.
Section 4. LICENSE APPLICATION--FEES--LICENSE ISSUANCE--LICENSE RENEWAL.--
A. An application for a license to facilitate tax refund anticipation loans or tax refund anticipation checks in New Mexico or for a renewal of a license shall be made under oath, in writing in a form prescribed by the director, and shall include:
(1) the full name and business address of the applicant;
(2) evidence that the applicant is authorized by the federal internal revenue service to electronically file federal income tax returns;
(3) a list of the locations at which the applicant engages in or will engage in the business of facilitating tax refund anticipation loans or tax refund anticipation checks; and
(4) any other pertinent data that the director may require by regulation.
B. An application for a license and for the renewal of a license shall be accompanied by an application or renewal fee of one hundred dollars ($100). No license application or renewal fee shall be refunded.
C. Upon the filing of a complete application, whether it is an initial or a renewal application, the director shall investigate the facts concerning the application and the requirements provided in this section. An applicant for an initial license or for a license renewal shall, within twenty days of receipt of a written request by the director, furnish the director in writing and under oath all additional information required by the director that may be relevant or, in the opinion of the director, helpful in conducting the investigation. Failure to comply with the director's requirement for supplemental information or the willful furnishing of false information is sufficient grounds for denial of a license or license renewal. The willful and intentional furnishing of false or misleading information to the director shall constitute grounds for the denial of any license or license renewal application and for the suspension or revocation of any license in accordance with the procedures for license suspension or revocation as set forth in the Tax Refund Anticipation Loan Act.
D. A written application for the renewal of a license shall be filed on or before November 30 of the year following its date of issue. In the event that an application for the renewal of a license is delinquent, the licensee shall also pay a delinquency fee of ten dollars ($10.00) per day for each day the licensee is delinquent in filing the renewal application.
E. The director shall grant or deny an application for an initial or renewal license within sixty days from the filing of a complete application with the required information and fees, unless the period is extended by written agreement between the applicant and the director.
F. Not more than one place of business shall be maintained under the same license; but the director may issue additional licenses to the same licensee upon compliance with all the provisions of the Tax Refund Anticipation Loan Act governing issuance of a single license; provided that when more than one license is issued to any person, each licensed office of the person shall be operated under the same trade name.
G. No licensee shall facilitate tax refund anticipation loans under any name, or at any place of business within this state, other than that stated in the license.
H. Each license shall state the address at which the business is to be conducted and shall state fully the name of the licensee if an individual, and if a corporation the name, date and place of incorporation, and if a copartnership, trust or association or other legal entity, the names of all the copartners and all the members and beneficiaries thereof, and the trade name under which the licensee may desire to conduct such business. Each license shall be kept conspicuously posted in the licensed place of business and shall not be transferable or assignable.
I. By accepting a license that is issued or renewed or by acting as a facilitator licensed pursuant to the Tax Refund Anticipation Loan Act, a licensee shall by such actions be deemed to have consented to be bound by the provisions of that act and all lawful requirements, regulations and orders of the director promulgated or issued pursuant to that act.
Section 5. DUTIES OF LICENSEES--DISCLOSURES.--
A. A facilitator shall disclose the following information to the customer at the time that an application for a tax refund anticipation loan or a tax refund anticipation check is submitted:
(1) the tax refund anticipation loan or tax refund anticipation check fee schedule that is used by the facilitator; and
(2) a written statement or, if the transaction is conducted using electronic commerce, an electronic statement containing the following information:
(a) that the tax refund anticipation loan is a loan that creates a legally enforceable debt and that the loan is not the customer's actual tax refund;
(b) that the customer may file a personal income tax return electronically without applying for the tax refund anticipation loan;
(c) that neither the federal internal revenue service nor the taxation and revenue department guarantees that a person will be paid the full amount of an anticipated tax refund nor do they guarantee that an anticipated tax refund will be deposited into a person's account or mailed to a person on a specific date;
(d) that the customer is responsible for repayment of the tax refund anticipation loan or tax refund anticipation check and payment of related fees and charges if the anticipated tax refund is not paid in the full anticipated amount;
(e) the estimated time frame within which the proceeds of the tax refund anticipation loan or tax refund anticipation check will be paid to the customer if the loan is approved;
(f) the fee or charge that will be imposed, if any, if the tax refund anticipation loan or tax refund anticipation check is not approved;
(g) the estimated total fees and charges to be incurred by the customer if the tax refund anticipation loan or tax refund anticipation check is approved; and
(h) the estimated annual percentage rate for the tax refund anticipation loan or tax refund anticipation check.
B. The full disclosures required pursuant to this section shall be made in a fourteen-point or larger bold type and shall be provided in English, Spanish or other language as determined by the director.
C. The full disclosures required pursuant to this section shall be prominently posted at any place of business at which a person facilitates a tax refund anticipation loan or tax refund anticipation check for customers. The posting shall be at least fourteen inches by twenty inches in size, shall be in at least sixty-point font and shall be posted in English, Spanish or other language as determined by the director.
Section 6. DUTIES OF DIRECTOR.--
A. The director may at any time examine all the books, records, papers, assets and liabilities of every kind of a licensee to determine the licensee's financial condition and business methods. The licensee shall pay a fee of one hundred fifty dollars ($150) for each day or any portion of a day thereof for the conduct of the examination.
B. The director may at any time suspend or revoke a license on any ground on which the director might refuse to grant a license, for failure to pay an annual fee or for the violation of any provision of the Tax Refund Anticipation Loan Act.
C. No license shall be denied except on fifteen days' notice to the applicant. Upon receipt of notice, the applicant may, within five days of its receipt, make written demand for a hearing at the applicant's cost. The director shall thereafter with reasonable promptness hear and determine the matter, and the director's decision shall be subject to judicial review in accordance with Section 58-1-45 NMSA 1978.
D. The director may promulgate rules for the administration and enforcement of the Tax Refund Anticipation Loan Act.
Section 7. REVOCATION, SUSPENSION AND REINSTATEMENT OF LICENSE.--
A. The director shall not suspend or revoke a license issued pursuant to the Tax Refund Anticipation Loan Act unless the director first serves upon the licensee a written notice that states in general the grounds therefor, together with the time and place of hearing, which shall be held not less than fifteen days after the mailing of such notice to the licensee by registered mail as provided in this section. Following the hearing, the director shall suspend or revoke a license if the director finds that:
(1) the licensee, either knowingly or without the exercise of due care to prevent the same, has violated a provision of the Tax Refund Anticipation Loan Act or a regulation or order made pursuant to and within the authority of that act; or
(2) a fact or condition exists at the time of the proposed suspension or revocation that, if it had existed at the time of the initial application for the license or for a renewal thereof, clearly would have justified the director in refusing to issue or renew the license.
B. If the director finds that probable cause exists and that enforcement of the Tax Refund Anticipation Loan Act requires immediate suspension of a license pending investigation, the director may, upon three days' written notice by registered mail and a hearing, enter an order suspending a license for a period not exceeding thirty days.
C. Whenever the director revokes or suspends a license issued pursuant to the Tax Refund Anticipation Loan Act, the director shall enter an order to that effect and shall forthwith in writing notify the licensee of the revocation or suspension by registered mail, which notice shall state the grounds therefor.
D. A licensee may surrender a license by delivering it to the director with written notice of its surrender, but such surrender shall not affect any civil or criminal liability of the licensee for acts committed prior thereto.
E. No revocation, suspension or surrender of a license shall impair or affect the obligation of a preexisting lawful contract between the licensee and an obligor thereon.
F. The director may reinstate a suspended license or issue a new license to a person whose license or licenses have been revoked if no fact or condition then exists that clearly would have justified the director in initially refusing to issue the license pursuant to the Tax Refund Anticipation Loan Act.
G. Whenever the Tax Refund Anticipation Loan Act provides for service of notice by registered mail, such service shall be deemed complete upon deposit of such notice in the post office. For the purpose of this section, mailing of notice addressed to the person designated as the agent for service of process pursuant to the Tax Refund Anticipation Loan Act or to the manager or person in charge of the licensed office shall be sufficient.
Section 8. CIVIL PENALTIES--INJUNCTIVE RELIEF--CRIMINAL PENALTIES.--
A. Whoever violates a provision of the Tax Refund Anticipation Loan Act or a rule promulgated pursuant to that act shall be punished by a fine of not more than fifty dollars ($50.00) for each day during which a violation continues.
B. The director may bring an action in a court of competent jurisdiction to enjoin a person from violating the provisions of the Tax Refund Anticipation Loan Act.
C. If a person has a license suspended or revoked pursuant to Section 7 of the Tax Refund Anticipation Loan Act, is required to pay a fine pursuant to Subsection A of this section or is enjoined pursuant to Subsection B of this section, that person shall be liable for the reasonable expenses incurred by the department in investigating and enforcing the provisions of the Tax Refund Anticipation Loan Act against that person and for reasonable attorney fees and court costs incurred by the department in an action pursuant to Subsection B of this section.
D. A person who facilitates tax refund anticipation loans or tax refund anticipation checks in New Mexico or who facilitates tax refund anticipation loans for customers in New Mexico without a license required pursuant to Subsection A of Section 3 of the Tax Refund Anticipation Loan Act is guilty of a misdemeanor and upon conviction shall be sentenced pursuant to the provisions of Section 31-19-1 NMSA 1978.
Section 9. SEVERABILITY.--If any part or application of this act is held invalid, the remainder or its application to other situations or persons shall not be affected.
Section 10. EFFECTIVE DATE.--The effective date of the provisions of this act is January 1, 2010.
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