HF1/HJC/HB 92

Page 1

AN ACT

RELATING TO FINANCIAL TRANSACTIONS; PROVIDING FOR THE

LIMITATION OF FEES AND REGULATION OF PAYDAY LOANS; AMENDING,

REPEALING AND ENACTING SECTIONS OF THE NMSA 1978.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 14-7-1 NMSA 1978 (being Laws 1977,

Chapter 291, Section 1, as amended) is amended to read:

"14-7-1. REQUIRING NOTICE OF INTENT TO GAIN ACCESS TO

RECORDS OF FINANCIAL INSTITUTIONS.--

A. At least seven days prior to a state agency,

board or commission requesting or gaining access to or copies

of the records of a person, corporation, company or

organization maintained by a bank, savings and loan

association, small loan company or other similar financial

institution, the agency, board or commission shall notify by

certified or registered mail the person, corporation, company

or other organization of its intent to gain access or acquire

such records.

B. The requirement of notice set forth in

Subsection A of this section shall not apply to the audit of,

compliance monitoring of or preparation of reports concerning

any bank, savings and loan association, small loan company or

other similar financial institution by a state agency, when

conducted pursuant to the agency's statutory directive.

HF1/HJC/HB 92

Page 2

C. The provisions of Subsection A of this section

shall not apply to requests for records made pursuant to an

administrative subpoena. In such instances, at least twenty-

four hours' notice shall be given to the person, corporation,

company or organization."

Section 2. Section 58-15-2 NMSA 1978 (being Laws 1955,

Chapter 128, Section 2, as amended) is amended to read:

"58-15-2. DEFINITIONS.--The following words and terms

when used in the New Mexico Small Loan Act of 1955 have the

following meanings unless the context clearly requires a

different meaning. The meaning ascribed to the singular form

applies also to the plural:

A. "consumer" means a person who enters into a

loan agreement and receives the loan proceeds in New Mexico;

B. "debit authorization" means an authorization

signed by a consumer to electronically transfer or withdraw

funds from the consumer's account for the specific purpose of

repaying a loan;

C. "department" or "division" means the financial

institutions division of the regulation and licensing

department;

D. "director" means the director of the division;

E. "installment loan" means a loan that is to be

repaid in a minimum of four successive substantially equal

payment amounts to pay off a loan in its entirety with a

HF1/HJC/HB 92

Page 3

period of no less than one hundred twenty days to maturity.

"Installment loan" does not mean a loan in which a licensee

requires, as a condition of making the loan, the use of post-

dated checks or debit authorizations for repayment of that

loan;

F. "license" means a permit issued under the

authority of the New Mexico Small Loan Act of 1955 to make

loans and collect charges therefor strictly in accordance with

the provisions of that act at a single place of business. It

shall constitute and shall be construed as a grant of a

revocable privilege only to be held and enjoyed subject to all

the conditions, restrictions and limitations contained in the

New Mexico Small Loan Act of 1955 and lawful regulations

promulgated by the director and not otherwise;

G. "licensee" means a person to whom one or more

licenses have been issued pursuant to the New Mexico Small

Loan Act of 1955 upon the person's written application

electing to become a licensee and consenting to exercise the

privilege of a licensee solely in conformity with the New

Mexico Small Loan Act of 1955 and the lawful regulations

promulgated by the director under that act and whose name

appears on the face of the license;

H. "payday loan" means a loan in which the

licensee accepts a personal check or debit authorization

tendered by the consumer and agrees in writing to defer

HF1/HJC/HB 92

Page 4

presentment of that check or use of the debit authorization

until the consumer's next payday or another date agreed to by

the licensee and the consumer and:

(1) includes any advance of money or

arrangement or extension of credit whereby the licensee, for a

fee, finance charge or other consideration:

(a) accepts a dated personal check or

debit authorization from a consumer for the specific purpose

of repaying a payday loan;

(b) agrees to hold a dated personal

check or debit authorization from a consumer for a period of

time prior to negotiating or depositing the personal check or

debit authorization; or

(c) pays to the consumer, credits to

the consumer's account or pays another person on behalf of the

consumer the amount of an instrument actually paid or to be

paid pursuant to the New Mexico Small Loan Act of 1955; but

(2) does not include:

(a) an overdraft product or service

offered by a banking corporation, savings and loan association

or credit union; and

(b) installment loans;

I. "payday loan product" means a payday loan or a

payment plan pursuant to Section 58-15-35 NMSA 1978;

J. "person" includes an individual, copartner,

HF1/HJC/HB 92

Page 5

association, trust, corporation and any other legal entity;

K. "renewed payday loan" means a loan in which a

consumer pays in cash the administrative fee payable under a

payday loan agreement and refinances all or part of the unpaid

principal balance of an existing payday loan with a new payday

loan from the same licensee. A "renewed payday loan" includes

a transaction in which a consumer pays off all or part of an

existing payday loan with the proceeds of a payday loan from

the same licensee; and

L. "simple interest" means a method of calculating

interest in which the amount of interest is calculated based

on the annual interest rate disclosed in the loan agreement

and is computed only on the outstanding principal balance of

the loan."

Section 3. Section 58-15-3 NMSA 1978 (being Laws 1955,

Chapter 128, Section 3, as amended) is amended to read:

"58-15-3. APPLICABILITY OF ACT--EXEMPTIONS--EVASIONS--

PENALTY.--

A. A person shall not engage in the business of

lending in amounts of two thousand five hundred dollars

($2,500) or less for a loan without first having obtained a

license from the director. Nothing contained in this

subsection shall restrict or prohibit a licensee under the New

Mexico Small Loan Act of 1955 from making loans in any amount

under the New Mexico Bank Installment Loan Act of 1959 in

HF1/HJC/HB 92

Page 6

accordance with the provisions of Section 58-7-2 NMSA 1978.

B. Nothing in the New Mexico Small Loan Act of

1955 shall apply to a person making individual advances of two

thousand five hundred dollars ($2,500) or less under a written

agreement providing for a total loan or line of credit in

excess of two thousand five hundred dollars ($2,500).

C. A banking corporation, savings and loan

association or credit union operating under the laws of the

United States or of a state shall be exempt from the licensing

requirements of the New Mexico Small Loan Act of 1955, nor

shall that act apply to business transacted by any person

under the authority of and as permitted by any such law nor to

any bona fide pawnbroking business transacted under a

pawnbroker's license nor to bona fide commercial loans made to

dealers upon personal property held for resale. Nothing

contained in the New Mexico Small Loan Act of 1955 shall be

construed as abridging the rights of any of those exempted

from the operations of that act from contracting for or

receiving interest or charges not in violation of an existing

applicable statute of this state.

D. The provisions of Subsection A of this section

apply to:

(1) a person who owns an interest, legal or

equitable, in the business or profits of a licensee and whose

name does not specifically appear on the face of the license,

HF1/HJC/HB 92

Page 7

except a stockholder in a corporate licensee; and

(2) a person who seeks to evade its

application by any device, subterfuge or pretense whatsoever,

including but not thereby limiting the generality of the

foregoing:

(a) the loan, forbearance, use or sale

of credit (as guarantor, surety, endorser, comaker or

otherwise), money, goods or things in action;

(b) the use of collateral or related

sales or purchases of goods or services or agreements to sell

or purchase, whether real or pretended;

(c) receiving or charging compensation

for goods or services, whether or not sold, delivered or

provided; and

(d) the real or pretended negotiation,

arrangement or procurement of a loan through any use or

activity of a third person, whether real or fictitious.

E. A person, copartnership, trust or a trustee or

beneficiary thereof or an association or corporation or a

member, officer, director, agent or employee thereof who

violates or participates in the violation of a provision of

Subsection A of this section is guilty of a petty misdemeanor

and upon conviction shall be sentenced pursuant to the

provisions of Subsection B of Section 31-19-1 NMSA 1978. A

contract or loan in the making or collection of which an act

HF1/HJC/HB 92

Page 8

is done that violates Subsection A or D of this section is

void and the lender has no right to collect, receive or retain

any principal, interest or charges whatsoever."

Section 4. Section 58-15-5 NMSA 1978 (being Laws 1978,

Chapter 6, Section 1, as amended) is amended to read:

"58-15-5. LICENSES--INVESTIGATION OF APPLICATION--

ISSUANCE--DENIAL--ISSUANCE OF RENEWAL LICENSE--DENIAL OF

RENEWAL LICENSE--FITNESS AND CHARACTER OF APPLICANT--LICENSE

FEES--LICENSEE BOUND BY ACT.--

A. Upon the filing of an application, whether it

is an original or a renewal, the director shall investigate

the facts concerning the application and the requirements

provided in this section.

B. An applicant for license, upon written notice

to do so by the director, shall, within twenty days after

service of the notice, furnish in writing, under oath, to the

director all additional information required by the director

that may be relevant or, in the opinion of the director,

helpful in conducting the investigation.

C. Failure to comply with the director's

requirement for supplemental information or the willful

furnishing of false information is sufficient grounds for

denial of license.

D. False or misleading information willfully and

intentionally furnished to the director prior to the issuance

HF1/HJC/HB 92

Page 9

of any license is grounds for suspension or revocation of any

license in accordance with the procedures for suspension or

revocation of license in the New Mexico Small Loan Act of

1955.

E. The director shall grant or deny each

application for an original license within sixty days from the

filing of the application with the required information and

fees, unless the period is extended by written agreement

between the applicant and the director.

F. In the event the director finds that:

(1) the financial responsibility, character

and general fitness of the applicant for an original license

and of the individual members and beneficiaries thereof, if

the applicant is a copartnership, association or trust, and of

the officers and directors thereof, if the applicant is a

corporation, are such as to command the confidence of the

public and to warrant belief that the business will be

operated lawfully, honestly, fairly and efficiently within the

declared purposes and spirit of the New Mexico Small Loan Act

of 1955;

(2) allowing the applicant to engage in

business will promote the convenience and advantage of the

community in which the business of the applicant is to be

conducted; and

(3) the applicant has available for

HF1/HJC/HB 92

Page 10

operation of the business at the specified location cash or

its equivalent, convertible securities or receivables of

thirty thousand dollars ($30,000) or any combination thereof;

the director shall enter an order granting the application,

file the director's findings and, upon payment of the license

fee of five hundred dollars ($500), issue and deliver a

license to the applicant.

G. If the director does not make the findings

enumerated in Subsection F of this section, the director shall

enter an order denying the application, notify the applicant

of the denial and retain the application fee. Within thirty

days after the entry of such an order, the director shall

prepare written findings and shall deliver a copy to the

applicant.

H. A written application for license renewal shall

be filed on or before March 31 of each year, and thereupon the

director shall investigate the facts and review the files of

examinations of the applicant made by the director's office

and of complaints filed by borrowers, if any. The director

shall deliver a renewal license to the applicant if the

director finds that:

(1) no valid complaints of violations or

abuses of the New Mexico Small Loan Act of 1955 or of the

regulations of the director promulgated under that act have

been filed by borrowers;

HF1/HJC/HB 92

Page 11

(2) examinations of the affairs of the

applicant indicate that the business has been conducted and

operated lawfully and efficiently within the declared purposes

and spirit of the New Mexico Small Loan Act of 1955; and

(3) the financial responsibility, experience

and general fitness and character of the applicant remain such

as to command the confidence of the public and to warrant the

belief that the business will continue to be operated lawfully

and efficiently within the purposes and spirit of the New

Mexico Small Loan Act of 1955.

I. If the director does not make the findings

enumerated in Subsection H of this section, the director may

grant a temporary extension of the license not exceeding sixty

days pending a hearing; shall enter an order fixing a date for

hearing upon the application; shall notify the licensee

thereof, specifying the particular complaints, violations or

abuses or other reasons for the director's contemplated

refusal to renew the license; and shall afford to the

applicant an opportunity to be heard. At the hearing, the

director shall produce evidence to establish the truth of the

charges of violation or other grounds specified in the notice,

and the applicant shall be accorded the right to produce

evidence or other matters of defense. If after the hearing

the director finds that the complaints of violations or other

grounds specified in the notice are not well-founded, the

HF1/HJC/HB 92

Page 12

director shall issue the renewal license. If the director

finds that the complaints of violations or other grounds are

well-founded, the director shall enter an order denying the

renewal application and notify the applicant of the denial,

returning the renewal license fee tendered with the

application. Within thirty days after the entry of such an

order, the director shall prepare written findings and shall

deliver a copy of the findings to the applicant. The order

shall be subject to review as provided in Section 58-15-25

NMSA 1978. The court in its discretion and upon proper

showing may order a temporary extension of the license pending

disposition of the review proceedings.

J. In connection with the determination of fitness

and character of an applicant pursuant to the provisions of

this section, the fact that the applicant or licensee is a

member of or interested financially in, connected or

affiliated with, controls or is controlled by or owns or is

owned by other corporations, partnerships, trusts,

associations or other legal entities engaged in the lending of

money whose policies and practices as to rates of interest,

charges and fees and general dealing with borrowers are

questionable or would constitute violation of the general

usury statutes of this state or of the declared purposes and

spirit of the New Mexico Small Loan Act of 1955 shall be given

such consideration and weight as the director determines.

HF1/HJC/HB 92

Page 13

K. At the time of issuance of original license and

each annual renewal thereof, the licensee for each licensed

office shall pay to the director as a license fee for the

period covered by the license the sum of five hundred dollars

($500) as a minimum, plus an additional seventy-five cents

($.75) for each one thousand dollars ($1,000) or fraction

thereof of loans outstanding as of December 31 next preceding,

as shown on the applicant's annual report. In the event that

the application for annual renewal of the 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 application for renewal.

L. A licensee by accepting a license that is

issued or renewed or by continuing to operate a licensed

office under the New Mexico Small Loan Act of 1955 shall by

such action be deemed to have consented to be bound by the

lawful provisions of that act and all lawful requirements,

regulations and orders of the director promulgated or issued

pursuant to any authorization granted in that act."

Section 5. Section 58-15-9 NMSA 1978 (being Laws 1955,

Chapter 128, Section 9, as amended) is amended to read:

"58-15-9. EXAMINATION OF LICENSEE'S BOOKS AND RECORDS--

WITNESSES.--

A. At least once each year, the director or the

director's authorized representative shall make an examination

HF1/HJC/HB 92

Page 14

of the place of business of each licensee and the loans,

transactions, books, papers and records of the licensee

insofar as they pertain to the business licensed under the New

Mexico Small Loan Act of 1955 as the director may deem

necessary. The licensee shall pay to the director for such

annual examination a fee of two hundred dollars ($200).

B. Within a reasonable time after the completion

of an examination of a licensed office, the director shall

mail to the licensee a copy of the report of the examination,

together with any comments, exceptions, objections or

criticisms of the director concerning the conduct of the

licensee and the operation of the licensed office.

C. For the purpose of discovering violations of

the New Mexico Small Loan Act of 1955 or of securing

information lawfully required under that act, the director or

the director's authorized representative may at any time

investigate the business and examine the books, accounts,

papers and records used therein, including income tax returns

or other reports filed in the office of the director of the

revenue processing division of the taxation and revenue

department of:

(1) any licensee;

(2) any other person engaged in the business

described in Subsection A of Section 58-15-3 NMSA 1978 or

participating in such business as principal, agent, broker or

HF1/HJC/HB 92

Page 15

otherwise; and

(3) any person whom the director has

reasonable cause to believe is violating any provision of the

New Mexico Small Loan Act of 1955, whether the person claims

to be within the authority or beyond the scope of that act.

D. For the purposes of this section, a person who

advertises, solicits or makes any representation as being

willing to make loan transactions in any amount, except

persons, financial institutions or lending agencies operating

under charters or licenses issued by a state or federal agency

or under any special statute, shall be subject to

investigation under the New Mexico Small Loan Act of 1955 and

shall be presumed to be engaged in the business described in

Subsection A of Section 58-15-3 NMSA 1978 as to any loans of

two thousand five hundred dollars ($2,500) or less.

E. To facilitate the examinations and

investigations by the director and fully disclose the

operations and methods of operation of each licensed office,

the licensee shall, in each licensed office, keep on file as

part of the records of the office all office manuals,

communications or directives containing statements of loan

policy to office managers and employees. If the licensee is

an individual, corporation, trust or association, the licensee

shall keep in at least one office for information of the

director a record of the several individuals, firms,

HF1/HJC/HB 92

Page 16

beneficiaries of any trust and corporations deriving or

receiving any part of the benefits, net income or profits from

the operation of the licensee within New Mexico.

F. For the purposes of this section, the director

or the director's authorized representative shall have and be

given free access to the offices and places of business,

files, safes and vaults of all licensees and shall have

authority to require the attendance of any person and to

examine the person under oath relative to such loans or

business or to the subject matter of any examination,

investigation or hearing as provided in the New Mexico Small

Loan Act of 1955. Notices to appear before the director for

examination under oath may be served by registered mail. If

the party notified to appear is the licensee, any person named

on the face of the license being investigated or any agent,

employee or manager participating in the licensee's business

and the party fails to appear for examination or refuses to

answer questions submitted, the director may, forthwith and

without further notice to the licensee, suspend the license

involved pending compliance with the notice. Upon failure of

any other person to appear or to answer questions, the

director may apply to and invoke the aid of any district court

of New Mexico in compelling the attendance and testimony of

any such person and the production of books, records, written

instruments and documents relating to the business of the

HF1/HJC/HB 92

Page 17

licensee. The district court whose aid is so invoked by the

director may, in case of contumacy or refusal to obey any

order of the district court issued to compel the attendance of

the person or the production of books, records, written

instruments and documents, punish the person as for contempt

of court.

G. The director shall prescribe rules of procedure

for all hearings, examinations or investigations provided for

in the New Mexico Small Loan Act of 1955. The director is not

bound by the usual common law or statutory rules of evidence

or by any technical or formal rules of procedure or pleading

and specification of charges other than as specifically

provided in the New Mexico Small Loan Act of 1955 but may

conduct hearings, examinations and investigations in the

manner best calculated to ascertain the substantial rights of

the parties interested.

H. The director has the power to administer oaths,

certify official acts and records of the director's office,

issue subpoenas for witnesses in the name of and under the

seal of the director's office and compel the production of

papers, books, accounts and documents. The director shall

issue subpoenas at the instance of any party to a hearing

before the division upon payment of a fee of two dollars fifty

cents ($2.50) for each subpoena so issued.

I. Depositions may be taken with or without a

HF1/HJC/HB 92

Page 18

commission, and written interrogatories may be submitted in

the same manner and on the same grounds provided by law for

the taking of depositions or submission of written

interrogatories in civil actions pending in the district

courts of this state.

J. Each witness who appears before the director by

the director's order shall receive the fees and mileage

provided for witnesses in civil actions in the district court.

Fees and mileage shall be paid by the state, but no witness

subpoenaed at the instance of parties other than the director

is entitled to compensation from the state for attendance or

mileage unless the director certifies that the witness'

testimony is material.

K. Whenever the director has reasonable cause to

believe that a person is violating a provision of the New

Mexico Small Loan Act of 1955, the director may, in addition

to all actions provided for in that act and without prejudice

thereto, enter an order requiring the person to desist or to

refrain from the violation. An action may be brought on the

relation of the attorney general and the director to enjoin

the person from engaging in or continuing the violation or

from doing any act in furtherance of the violation. In any

such action, an order or judgment may be entered awarding a

preliminary or final injunction as may be deemed proper. In

addition to all other means provided by law for the

HF1/HJC/HB 92

Page 19

enforcement of a temporary restraining order, temporary

injunction or final injunction, the court in which such action

is brought shall have power and jurisdiction to impound and to

appoint a receiver for the property and business of the

defendants, including books, papers, documents and records

pertaining thereto or so much thereof as the court may deem

reasonably necessary to prevent further violations of the New

Mexico Small Loan Act of 1955 through or by means of the use

of the property and business. The receiver, when appointed

and qualified, shall have powers and duties as to custody,

collection, administration, winding up and liquidation of the

property and business as are from time to time conferred upon

the receiver by the court."

Section 6. Section 58-15-10 NMSA 1978 (being Laws 1955,

Chapter 128, Section 10, as amended) is amended to read:

"58-15-10. BOOKS AND RECORDS--ANNUAL REPORTS--

ADDITIONAL INFORMATION.--

A. Each licensee shall keep and use in the

business such books, accounts and records in accordance with

sound accounting practices that will enable the director to

determine whether the licensee is complying with the

provisions of the New Mexico Small Loan Act of 1955 and with

the orders and regulations lawfully made by the director

pursuant to the provisions of that act. Each licensee shall

preserve the books, accounts and records for at least two

HF1/HJC/HB 92

Page 20

years after making the final entry on a loan recorded therein.

B. Each licensee shall, annually on or before

March 31, file a report with the director giving such relevant

information as the director may reasonably require concerning

the business and operations during the preceding calendar year

for each licensed place of business conducted by the licensee

within the state pursuant to the provisions of the New Mexico

Small Loan Act of 1955. The report shall be made under oath

and shall be in the form prescribed by the director. A

summary of the reports shall be included in the published

annual report of the director.

C. At the time of filing each annual report, at

the time of the annual examination or at any other time when a

license is in effect, the director may, upon written notice,

require a licensee to furnish within twenty days in writing,

and under oath if so specified by any written notice issued

and served by the director upon the licensee, additional

information as to ownership of any office; operation of any

office; books, records, files and papers; and affiliation or

relationship with any other person, firm, trust, association

or corporation as, in the opinion of the director, may be

helpful in the discharge of the director's official duties.

D. False or misleading information willfully

furnished to the director by a licensee in an annual report or

pursuant to a notice or requirement of the director is

HF1/HJC/HB 92

Page 21

sufficient grounds for suspension and revocation of license in

accordance with the procedures for suspension or revocation of

license set forth in the New Mexico Small Loan Act of 1955."

Section 7. Section 58-15-11 NMSA 1978 (being Laws 1955,

Chapter 128, Section 11, as amended) is amended to read:

"58-15-11. REGULATIONS AND ORDERS--CERTIFIED COPIES.--

A. The director has authority to make reasonable

regulations and orders for the administration and enforcement

of the New Mexico Small Loan Act of 1955 and is expressly

authorized to make regulations and orders governing the

conduct of all licensees' operations, including the method and

manner of selling, handling and writing, in connection with

any loan, any form of insurance by the licensee or any agent

or employee in the office of the licensee or of any other

firm, person or corporation associated or affiliated with the

licensee or operating in the same building in which the

business of the licensee is conducted. Every regulation shall

be promulgated by an order, and any ruling, demand,

requirement or similar administrative act may be promulgated

by an order. Every order shall be in writing, referenced to

the section under which it is issued, shall state its

effective date and the date of its promulgation and shall be

entered in an indexed permanent book that shall be a public

record. A copy of every order promulgating a regulation and

of every other order containing a requirement of general

HF1/HJC/HB 92

Page 22

application shall be mailed to each licensee at least fifteen

days before the effective date of the order.

B. The director is expressly authorized to make

regulations and orders, in accordance with the provisions of

Subsection A of this section, governing the conduct of

licensees in making loans to consumers. Such regulations may

address, consistent with the provisions of Sections 58-15-32

through 58-15-38 NMSA 1978, all aspects of loans to consumers

and shall specifically address:

(1) the cost of loans, including fees and

interest rates;

(2) the terms of loans, including amount,

length, renewals, rescission, payments and security;

(3) required disclosures to consumers;

(4) methods of collection on loans in

default; and

(5) methods of verifying consumer

eligibility for loans and licensee compliance with the New

Mexico Small Loan Act of 1955 and regulations promulgated

pursuant to that act.

C. On application of any person and payment of the

cost thereof, the director shall furnish, under the director's

seal and signed by the director or the director's deputy, a

certified copy of any license, regulation or order. In any

court or proceeding, the copy shall be prima facie evidence of

HF1/HJC/HB 92

Page 23

the fact of the issuance of a license, regulation or order."

Section 8. Section 58-15-12 NMSA 1978 (being Laws 1955,

Chapter 128, Section 12, as amended) is amended to read:

"58-15-12. ADVERTISING.--A licensee or other person

subject to the New Mexico Small Loan Act of 1955 shall not

advertise, display, distribute or broadcast or cause or permit

to be advertised, displayed, distributed or broadcast in any

manner whatsoever a false, misleading or deceptive statement

or representation with regard to the charges, terms or

conditions for loans in the amount or of the value of two

thousand five hundred dollars ($2,500) or less. The director

may require that charges or rates of charge, if stated by a

licensee, be stated fully and clearly in such manner as the

director deems necessary to prevent misunderstanding by

prospective borrowers. The director may permit or require

licensees to refer in their advertising to the fact that their

business is under state supervision, subject to conditions

imposed by the director to prevent erroneous impressions as to

the scope or degree of protection provided by the New Mexico

Small Loan Act of 1955."

Section 9. Section 58-15-14.1 NMSA 1978 (being Laws

1983, Chapter 95, Section 2) is amended to read:

"58-15-14.1. CHARGES--METHOD OF COMPUTATION.--The

simple interest method shall be used for loans made under the

New Mexico Small Loan Act of 1955. Interest charges shall not

HF1/HJC/HB 92

Page 24

be paid, deducted or received in advance. Interest charges

shall not be compounded. However, if part or all of the

consideration for a loan contract is the unpaid principal

balance of a prior loan, then the principal amount payable

under the loan contract may include any unpaid charges that

have accrued within sixty days on the prior loan. Such

charges shall be computed on the basis of the number of days

actually elapsed."

Section 10. Section 58-15-17 NMSA 1978 (being Laws

1955, Chapter 128, Section 15, as amended) is amended to read:

"58-15-17. REQUIREMENTS FOR MAKING AND PAYING OF

LOANS--INCOMPLETE INSTRUMENTS--LIMITATIONS ON CHARGES AFTER

JUDGMENT AND INTEREST.--

A. Every licensee shall:

(1) at the time a loan is made within the

provisions of the New Mexico Small Loan Act of 1955, deliver

to the borrower or, if there are two or more borrowers on the

same obligation, to one of them, a statement in English or

Spanish as requested by the borrower, on which shall be

printed a copy of Section 58-15-14.1 NMSA 1978 and that

discloses in clear and distinct terms:

(a) the amount of the loan;

(b) the date the loan was made;

(c) a schedule or a description of the

payments;

HF1/HJC/HB 92

Page 25

(d) the type of the security, if any,

for the loan;

(e) the name and address of the

licensed office;

(f) the name of the person primarily

obligated for the loan;

(g) the amount of principal;

(h) the agreed rate of charge stated on

a percent per year basis and the amount in dollars and cents;

(i) all other disclosures required

pursuant to state and federal law; and

(j) other items allowable pursuant to

that act, so stated as to clearly show the allocation of each

item included;

(2) for each payment made on account of any

such loan, give to the person making it a plain and complete

receipt specifying the date and amount of the payment, the

amount applied to interest and principal and the balance

unpaid. When payment is made in any other manner than by the

borrower in person, by an agent of the borrower or by check or

money order, the licensee shall mail the receipt to the

borrower's last known address or hold the receipt for delivery

upon request of the borrower. A copy of all receipts shall be

kept on file in the office of the licensee as a part of the

licensee's records; and

HF1/HJC/HB 92

Page 26

(3) upon payment of the loan in full, mark

plainly every note and promise to pay signed by any obligor

with the word "paid" or "canceled" and promptly file or record

a release of any mortgage if the mortgage has been recorded,

restore any pledge and cancel and return any note and any

assignment given to the licensee. A licensee may mark and

return a copy of the note, promise to pay or any assignment if

the copy accurately reproduces the complete original.

B. A licensee shall not take a note or promise to

pay that does not disclose the amount of the loan, a schedule

of payments, or a description thereof, and the agreed charge

or rate of charge or any instrument in which blanks are left

to be filled in after execution.

C. If judgment is obtained against a party on a

loan made pursuant to the provisions of the New Mexico Small

Loan Act of 1955, neither the judgment nor the loan shall

carry, from the date of the judgment, charges against a party

to the loan other than costs, attorney fees and post-judgment

interest as provided by law.

D. Any loan made under the provisions of the New

Mexico Small Loan Act of 1955 that is filed and approved as a

claim in any bankruptcy proceeding shall, from a date ninety

days subsequent to the date of adjudication, bear interest at

the rate of ten percent a year only. This limitation shall

not apply when the bankrupt is not discharged in bankruptcy or

HF1/HJC/HB 92

Page 27

to any obligation not dischargeable under the provisions of

the Bankruptcy Act presently in force or as hereafter amended.

E. No loan made under the provisions of the New

Mexico Small Loan Act of 1955 shall bear interest after ninety

days from the date of the death of the borrower in excess of a

rate of ten percent a year on the unpaid principal balance of

the loan.

F. No loan made under the provisions of the New

Mexico Small Loan Act of 1955 shall bear interest after twelve

months from the date of maturity of the loan in excess of ten

percent a year upon the unpaid principal balance of the loan."

Section 11. Section 58-15-20 NMSA 1978 (being Laws

1955, Chapter 128, Section 18) is amended to read:

"58-15-20. FEES AND COSTS.--

A. Notwithstanding any provision of the New Mexico

Small Loan Act of 1955, lawful fees, if any, actually and

necessarily paid out by the licensee to a public officer for

the filing, recording or releasing in a public office of an

instrument securing the loan may be charged to the borrower.

B. Notwithstanding any provision in a note or

other loan contract taken or received pursuant to the

provisions of the New Mexico Small Loan Act of 1955, attorney

fees shall not be charged or collected except when the note or

other contract has been submitted in good faith to an attorney

for collection and after diligent and good faith effort to

HF1/HJC/HB 92

Page 28

collect on the part of the licensee has failed.

C. Notary fees incident to the taking of a lien to

secure a small loan or releasing such a lien shall not be

charged or collected by a licensee, an officer, agent or

employee of a licensee or anyone within an office, room or

place of business in which a small loan office is conducted.

D. Delinquency fees shall not exceed five cents

($.05) for each one dollar ($1.00) of each installment more

than ten days in arrears; provided that the total of

delinquency charges on any such installment shall not exceed

ten dollars ($10.00) and that only one delinquency charge

shall be made on any one installment regardless of the period

during which the installment remains unpaid."

Section 12. Section 58-15-23 NMSA 1978 (being Laws

1955, Chapter 128, Section 21) is amended to read:

"58-15-23. VIOLATION OF GENERAL USURY LAWS.--The

violation by a licensee or by an officer, manager, director,

trustee, executive or employee directly engaged in operating a

small loan office under the provisions of the New Mexico Small

Loan Act of 1955 of any usury statute of this state within an

office, room or place of business in which the making of loans

as a licensee is solicited or engaged or in association or

conjunction therewith is grounds for suspension and revocation

of license in accordance with the applicable procedures set

forth in that act."

HF1/HJC/HB 92

Page 29

Section 13. Section 58-15-30 NMSA 1978 (being Laws

1955, Chapter 128, Section 28) is amended to read:

"58-15-30. PENALTIES--GENERAL.--Any person,

copartnership, trust, association or corporation and the

several members, beneficiaries, officers, directors, agents

and employees thereof who violate or participate in the

violation of any provision of the New Mexico Small Loan Act of

1955 are guilty of a misdemeanor and upon conviction shall be

punished by a fine of not less than five hundred dollars

($500) or more than one thousand dollars ($1,000) or by

imprisonment of not more than six months or both in the

discretion of the court."

Section 14. A new section of the New Mexico Small Loan

Act of 1955, Section 58-15-32 NMSA 1978, is enacted to read:

"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;

HF1/HJC/HB 92

Page 30

(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,

HF1/HJC/HB 92

Page 31

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.

HF1/HJC/HB 92

Page 32

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."

Section 15. A new section of the New Mexico Small Loan

Act of 1955, Section 58-15-33 NMSA 1978, is enacted to read:

"58-15-33. PAYDAY LOAN PRODUCTS--PERMITTED CHARGES.--

The following provisions apply only to payday loan products:

A. a licensee shall not charge or receive from a

consumer, directly or indirectly, fees or charges except as

provided in this section;

B. upon the execution of a new payday loan, the

licensee may impose an administrative fee of not more than

fifteen dollars fifty cents ($15.50) per one hundred dollars

($100) of principal, which fee is fully earned and

nonrefundable at the time a payday loan agreement is executed

and payable in full at the end of the term of the payday loan

or upon prepayment of the payday loan unless a payday loan is

rescinded pursuant to Subsection C of Section 58-15-32 NMSA

1978;

C. upon the execution of a new payday loan

agreement, the licensee may impose an additional

administrative fee of not more than fifty cents ($.50) per

executed new payday loan agreement as necessary to cover the

cost to the licensee of verification pursuant to Section

HF1/HJC/HB 92

Page 33

58-15-37 NMSA 1978, which fee is fully earned and

nonrefundable at the time a payday loan agreement is executed

and payable in full at the end of the term of the payday loan

or upon prepayment of the payday loan unless a payday loan is

rescinded pursuant to Subsection C of Section 58-15-32 NMSA

1978;

D. a licensee shall not charge a consumer interest

on the outstanding principal owed on a payday loan product;

and

E. if there are insufficient funds to pay a check

or other type of debit on the date of presentment by the

licensee, a licensee may charge a consumer a fee not to exceed

fifteen dollars ($15.00). Only one fee may be collected by a

licensee on a check or debit authorization. A check or debit

authorization request shall not be presented to a financial

institution by a licensee for payment more than one time

unless the consumer agrees in writing, after a check or other

type of debit has been dishonored, to one additional

presentment or deposit."

Section 16. A new section of the New Mexico Small Loan

Act of 1955, Section 58-15-34 NMSA 1978, is enacted to read:

"58-15-34. PAYDAY LOAN PRODUCTS--PROHIBITED ACTS.--A

licensee shall not:

A. enter into an agreement for a renewed payday

loan or otherwise refinance or extend the term of a payday

HF1/HJC/HB 92

Page 34

loan;

B. enter into an agreement for a payday loan with

a consumer who is participating in a payment plan pursuant to

Section 58-15-35 NMSA 1978;

C. threaten or intimidate a consumer or threaten

to use or request the use of criminal process in this or

another state to collect on a payday loan product;

D. use a device or agreement that would have the

effect of charging or collecting more fees, charges or

interest than that allowed by law by entering into a different

type of transaction with the consumer that has that effect;

E. require a consumer to enter into a new payday

loan to pay an existing payday loan in whole or in part when

the existing loan is eligible for a payment plan pursuant to

Section 58-15-35 NMSA 1978;

F. charge a fee to cash a check representing the

proceeds of a payday loan product;

G. charge a late fee or delinquency charge if a

consumer fails to repay a payday loan product on time;

H. assign or attempt to assign a consumer's

personal check to a third party unless for collection

purposes;

I. use or attempt to use the check written by the

consumer for a payday loan product as collateral for purposes

other than repaying that payday loan product;

HF1/HJC/HB 92

Page 35

J. require a consumer to provide multiple checks

or multiple debt authorizations;

K. accept collateral for a payday loan product

other than the consumer's check or debit authorization or

require a consumer to provide a guaranty from another person

for a payday loan product;

L. include any of the following provisions in a

payday loan product agreement:

(1) a hold harmless clause;

(2) a confession of judgment clause or power

of attorney;

(3) an assignment of or order for payment of

wages or other compensation for services;

(4) a waiver of claims for punitive damages;

(5) a provision in which the consumer agrees

not to assert a claim or defense arising out of the contract;

(6) a waiver of a provision of the New

Mexico Small Loan Act of 1955;

(7) a waiver of the right to enter into a

payment plan pursuant to Section 58-15-35 NMSA 1978; or

(8) a waiver of any rights secured by New

Mexico law;

M. make a payday loan product contingent on the

purchase of insurance or other goods or services;

N. take a check, instrument or form in which

HF1/HJC/HB 92

Page 36

blanks are left to be filled in after execution of the check,

instrument or form;

O. offer, arrange, act as an agent for or assist a

third party in any way in the making of a payday loan product

unless the third party complies with all applicable federal

and state laws and regulations;

P. knowingly enter into a payday loan product with

a consumer who lacks the capacity to consent; or

Q. use an agency agreement or partnership

agreement as a scheme or contrivance to circumvent the

application of the provisions of the New Mexico Small Loan Act

of 1955 to a consumer's payday loan product. For the purposes

of this subsection:

(1) "agency agreement" means any agreement

between in-state entities and a banking corporation, savings

and loan association or credit union operating under the laws

of the United States or of any state whereby the in-state

agent holds a predominant economic interest in the revenues

generated by a payday loan made to New Mexico residents; and

(2) "partnership agreement" means any

agreement between in-state entities and a banking corporation,

savings and loan association or credit union operating under

the laws of the United States or of any state whereby the in-

state partner holds a predominant economic interest in the

revenues generated by a payday loan made to New Mexico

HF1/HJC/HB 92

Page 37

residents."

Section 17. A new section of the New Mexico Small Loan

Act of 1955, Section 58-15-35 NMSA 1978, is enacted to read:

"58-15-35. PAYDAY LOANS--PAYMENT PLANS.--

A. At the time a consumer enters into a payday

loan agreement, the licensee shall offer the consumer the

opportunity to enter into an unsecured payment plan for any

unpaid administrative fees and principal balance of the payday

loan. The consumer may elect, and a licensee shall permit,

entry into a payment plan for any unpaid administrative fees

and principal balance of the payday loan.

B. No fees, charges or interest may be charged for

a payment plan.

C. A payment plan shall provide for:

(1) a minimum of one hundred thirty days for

the repayment of the unpaid principal balance of a payday

loan; and

(2) relatively equal installment payments

based upon the consumer's schedule of pay periods.

D. A payment plan entered into pursuant to the

provisions of this section shall not be considered an

installment loan.

E. A licensee that fails to offer a consumer the

opportunity to enter into a payment plan for a payday loan

pursuant to Subsection A of this section shall not commence a

HF1/HJC/HB 92

Page 38

legal proceeding against a consumer to collect on that payday

loan if it has not been fully repaid."

Section 18. A new section of the New Mexico Small Loan

Act of 1955, Section 58-15-36 NMSA 1978, is enacted to read:

"58-15-36. PAYDAY LOANS--WAITING PERIOD.--

A licensee shall not make a payday loan to a consumer who has

entered into a payment plan pursuant to Section 58-15-35 NMSA

1978 until at least ten calendar days have passed since the

consumer completed all payment obligations pursuant to all of

the consumer's outstanding payday loan products, including

that payment plan."

Section 19. A new section of the New Mexico Small Loan

Act of 1955, Section 58-15-37 NMSA 1978, is enacted to read:

"58-15-37. PAYDAY LOANS--VERIFICATION.--

A. Before entering into a payday loan agreement

with a consumer, a licensee shall use a commercially

reasonable method of verification to verify that the proposed

loan agreement is permissible under the provisions of the New

Mexico Small Loan Act of 1955.

B. No later than November 1, 2007, the director

shall certify that one or more consumer reporting service

databases are commercially reasonable methods of verification.

The list of consumer reporting services that the director has

certified as providing commercially reasonable methods of

verification shall be posted on the division's web site and

HF1/HJC/HB 92

Page 39

shall be mailed to each licensee by first class mail at the

address of record as shown on the division's licensing files.

C. Each licensee who provides payday loan products

shall comply with Subsection A of this section no later than

November 30, 2007.

D. A consumer seeking a payday loan may make a

direct inquiry to the consumer reporting service to request a

more detailed explanation of the basis for a consumer

reporting service's determination that the consumer is

ineligible for a new payday loan, and the consumer reporting

service shall provide a reasonable response to the consumer.

E. In certifying a commercially reasonable method

of verification, the director shall ensure the certified

database:

(1) provides real-time access through an

internet connection or, if real-time access through an

internet connection becomes unavailable due to technical

problems incurred by the consumer reporting service, through

alternative verification mechanisms, including verification by

telephone;

(2) is accessible to the division and to

licensees in real time in order to ensure compliance with the

New Mexico Small Loan Act of 1955 regardless of where the

consumer requests a payday loan in New Mexico and in order to

provide any other information the director deems necessary;

HF1/HJC/HB 92

Page 40

(3) requires licensees to input whatever

information is required by the New Mexico Small Loan Act of

1955;

(4) contains a real-time regulator interface

that allows the division access to the consumer reporting

service database for the required monitoring and reporting

function, including the ability to determine consumer

eligibility and to generate reports for licensee examinations,

regulatory reporting and program monitoring;

(5) provides licensees with no more than a

statement that a consumer is eligible or ineligible for a new

payday loan and the reason for the determination;

(6) provides adequate safeguards to ensure

that consumer information contained in the database is kept

strictly confidential;

(7) provides sufficient information to

enable a licensee to determine whether a proposed payday loan

would meet the requirements for payday loans set forth in the

New Mexico Small Loan Act of 1955;

(8) ensures that information submitted to

the certified database is kept confidential and shall not be

released or otherwise made available to the public;

(9) demonstrates a working system to the

division prior to the certification of the database; and

(10) is generated by a registered consumer

HF1/HJC/HB 92

Page 41

reporting service that is subject to the applicable rules and

regulations applied by the federal trade commission under the

Fair Credit Reporting Act.

F. A licensee shall update the certified database

by inputting all information required under Paragraph (3) of

Subsection E of this section at the time that:

(1) a payday loan is made;

(2) a consumer elects to enter into a

payment plan;

(3) a consumer's payday loan is paid in

full; or

(4) a licensee determines a payday loan is

in default.

G. A licensee may rely on the information

contained in the certified database as accurate and is not

subject to any penalty or liability as a result of relying on

inaccurate information contained in the database.

H. In determining whether a consumer reporting

service should be certified as a commercially reasonable

method of verification, the director shall consider whether

such consumer reporting service is adequately capitalized,

demonstrates the resources and the ability to perform the

services required pursuant to this section and has appropriate

surety to ensure performance of its obligations pursuant to

this section and to reasonably protect claimants in the event

HF1/HJC/HB 92

Page 42

that actions or inactions on the part of the consumer

reporting service results in damages to licensees or

consumers.

I. The provisions of Section 14-7-1 NMSA 1978

shall not apply to access by the division to information for

purposes of compliance monitoring or preparation of reports

contained in a certified database established pursuant to this

section."

Section 20. A new section of the New Mexico Small Loan

Act of 1955, Section 58-15-38 NMSA 1978, is enacted to read:

"58-15-38. REQUIRED DISCLOSURES WHEN MAKING PAYDAY

LOANS--REQUIRED SIGNAGE.--

A. A licensee making payday loans shall provide a

notice immediately above the consumer's signature on each

payday loan agreement in at least twelve-point bold type using

the following language:

(1) A payday loan is not intended to meet

long-term financial needs.

(2) You should use a payday loan only to

meet short-term cash needs.

(3) A payday loan is a high-cost loan. You

should consider what other lower-cost loans are available to

you.

(4) If you cannot fully repay a payday loan

when due, you have a right to enter into a payment plan

HF1/HJC/HB 92

Page 43

requiring payment within a minimum of one hundred thirty days,

in relatively equal installments, based upon your scheduled

pay periods. If you enter into a payment plan, you will not

have to pay an additional administrative fee or interest on

the outstanding principal balance or any unpaid administrative

fees.

(5) If you have had payment obligations

under a payment plan pursuant to Section 58-15-35 NMSA 1978,

you may not enter into a new payday loan until at least ten

calendar days have passed since you have completed all payment

obligations pursuant to all of your outstanding payday loan

products, including that payment plan.

B. Each licensee shall display in each licensed

place of business in a place where it will be readily legible

by consumers, a sign containing the following notice in both

English and Spanish: "If you cannot fully repay a payday loan

when due, you have a right to enter into a payment plan

requiring payment within a minimum of one hundred thirty days,

in relatively equal installments, based upon your scheduled

pay periods. If you enter into a payment plan, you will not

have to pay an additional administrative fee or interest on

the outstanding principal balance or any unpaid administrative

fees."

Section 21. A new section of the New Mexico Small Loan

Act of 1955, Section 58-15-39 NMSA 1978, is enacted to read:

HF1/HJC/HB 92

Page 44

"58-15-39. DUTIES OF DIVISION.--

A. The division shall:

(1) maintain a list of licensees, which list

shall be available to interested persons and the public; and

(2) establish a complaint process whereby an

aggrieved consumer or other person may file a complaint

against a licensee.

B. The division shall annually provide a report to

the legislature detailing statistics, including data adequate

to obtain an accurate understanding of the practices,

demographics and legal compliance of all licensees licensed in

the state. The division shall compile an annual report by

October 1 of each year containing, at a minimum, data

regarding all payday loan products entered into in the

preceding calendar year on an aggregate basis. Annual reports

shall be made available to interested parties and the general

public. Consistent with state law, the report shall include,

at a minimum, nonidentifying consumer data from the preceding

year, including:

(1) the total number and dollar amount of

payday loan products entered into in the calendar year ending

December 31 of the previous year;

(2) the total number and dollar amount of

payday loan products outstanding as of December 31 of the

previous year;

HF1/HJC/HB 92

Page 45

(3) the effective annualized percentage rate

and the average number of days of a payday loan during the

calendar year ending December 31 of the previous year;

(4) the number of payday loan products

entered into in the amount of one hundred dollars ($100) or

less, the number of payday loan products entered into in the

amount of one hundred one dollars ($101) to five hundred

dollars ($500), the number of payday loan products entered

into in the amount of five hundred one dollars ($501) to one

thousand dollars ($1,000), the number of payday loan products

entered into in the amount of one thousand one dollars

($1,001) to one thousand five hundred dollars ($1,500), the

number of payday loan products in the amount of greater than

one thousand five hundred dollars ($1,500) and the percentage

of total payday loan products entered into in each of those

ranges;

(5) an estimate of the total dollar amount

of fees collected for payday loan products;

(6) the total number of payday loan products

entered into and the total dollar amount of the net charge-

offs or write-offs and of the net recoveries of licensees;

(7) the minimum, maximum and average dollar

amounts of payday loan products entered into in the calendar

year ending December 31 of the previous year;

(8) the average payday loan product amount,

average number of transactions and average aggregate payday

loan product amount entered into per consumer each year;

(9) the average number of days a consumer is

engaged in a payday loan product each year;

(10) an estimate of the average total fees

paid by a payday loan product consumer;

(11) the number of consumers who are

eligible for payment plans and the number of consumers who

enter into payment plans pursuant to Section 58-15-35 NMSA

1978; and

(12) the number of consumers who are subject

to the restrictions of the waiting period pursuant to Section

58-17-36 NMSA 1978."

Section 22. REPEAL.--Section 58-15-15 NMSA 1978 (being

Laws 1959, Chapter 201, Section 1, as amended) is repealed.

Section 23. 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 24. APPLICABILITY.--The provisions of Sections

14 through 21 of this act shall not apply to payday loans

entered into before November 1, 2007 or to loans other than

payday loans.

Section 25. EFFECTIVE DATE.--The effective date of the

provisions of this act is November 1, 2007.

HF1/HJC/HB 92

Page 46