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F I S C A L I M P A C T R E P O R T

SPONSOR Sanchez, B

ORIGINAL DATE

LAST UPDATED

2/23/07

2/24/07 HB

SHORT TITLE Study Consumer Lending Practices and Regulation SM 41

ANALYST C. Sanchez

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to,

HB 92, SB 393

SOURCES OF INFORMATION

LFC Files

Responses Received From

Regulation and Licensing Department (RLD)

SUMMARY

Synopsis of Bill

The memorial calls for the director of the financial institutions division of the regulation and

licensing department to establish a consumer lending study committee to study the existing

regulatory framework for consumer lending, consumer lending practices and consumer lending

needs. The memorial attends to the concern that current statutes and rules relating to consumer

have not been comprehensively updated to reflect recent trends in consumer financing.

FISCAL IMPLICATIONS

It is unknown what implications to the resources (personnel, costs of surveys, etc.) will be

necessary in order for the Financial Institutions Division to complete the study.

Senate Memorial 41 – Page

2

SIGNIFICANT ISSUES

The memorial requires the Director of the Financial Institutions Division of the Regulation and

Licensing Department to include as part of the study Pawnbrokers. The Financial Institutions

Division does not regulate Pawnbrokers. However, the Financial Institution does regulate various

types of loans as indicated by the study.

ADMINISTRATIVE IMPLICATIONS

The amount of time that a Financial Institutions Division employee or employees will need to

allocate to this study is unknown. It could divert time from the individual's regular duties.

RELATIONSHIP

HB 92, SB 393

ALTERNATIVES

The committee membership could be chosen by an agency other than the Financial Institution

Division. Perhaps the Office of the Attorney General could establish a membership made up of

representatives of all segments of the consumer loan industry and consumers within the state.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

The consumer lending regulatory environment will remain as it is today with or without the

study unless the legislature acts upon any recommendations made as a result of the study.

CS/mt