PRINTER'S NO. 1796
No. 1478 Session of 2005
INTRODUCED BY ROSS, BIANCUCCI, CAPPELLI, CASORIO, CRAHALLA,
CURRY, DeLUCA, DENLINGER, FAIRCHILD, HARHAI, HARRIS, HERSHEY,
HESS, JAMES, KILLION, KOTIK, McILHATTAN, R. MILLER, PICKETT,
REICHLEY, SATHER, SAYLOR, SCHRODER, SEMMEL, SHANER, B. SMITH,
STAIRS, STERN, TANGRETTI, E. Z. TAYLOR, TIGUE, WHEATLEY, WILT
AND PISTELLA, MAY 2, 2005
REFERRED TO COMMITTEE ON COMMERCE, MAY 2, 2005
AN ACT
1 Amending Titles 7 (Banks and Banking) and 18 (Crimes and
2 Offenses) of the Pennsylvania Consolidated Statutes,
3 regulating payday loans in terms of practice, licensure and
4 penalties; further providing for deceptive or fraudulent
5 business practices; and providing for unlicensed payday
6 lending.
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 Section 1. Title 7 of the Pennsylvania Consolidated Statutes
10 is amended by adding parts to read:
11 Part
12 I. Preliminary Provisions (Reserved)
13 II. Licensing
14 PART I
15 PRELIMINARY PROVISIONS
16 (Reserved)
17 PART II
18 LICENSING
1 Chapter
2 51. Payday Loan Protection
3 CHAPTER 51
4 PAYDAY LOAN PROTECTION
5 Subchapter
6 A. Preliminary Provisions
7 B. Nature and Effect of Payday Loans
8 C. Administrative and Licensure Provisions
9 D. Miscellaneous Provisions
10 SUBCHAPTER A
11 PRELIMINARY PROVISIONS
12 Sec.
13 5101. Scope.
14 5102. Definitions.
15 § 5101. Scope.
16 This chapter relates to consumer payday loan protection.
17 § 5102. Definitions.
18 The following words and phrases when used in this chapter
19 shall have the meanings given to them in this section unless the
20 context clearly indicates otherwise:
21 "Applicant." A person that applies for a license under this
22 chapter.
23 "Check." A check as that term is defined in 13 Pa.C.S. §
24 3104(f) (relating to negotiable instrument) which is drawn on a
25 depository institution.
26 "Consumer." An individual who is the recipient of a payday
27 loan or a renewal loan.
28 "Deferment period." The term of a loan or the number of days
29 a lender agrees to defer depositing or presenting a repayment
30 mechanism, as the context may require. The period shall not be
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1 in excess of 30 days or less than seven days. The deferment
2 period shall be calculated from the date of the loan agreement.
3 "Department." The Department of Banking of the Commonwealth.
4 "Depository institution." A person authorized to accept
5 deposits in accordance with Federal or State law.
6 "Gross monthly income." Wages or commissions received by a
7 consumer in the 30-day period immediately preceding the date of
8 the consumer's application for a loan, or as otherwise
9 determined by the Department of Banking.
10 "Licensee." A person licensed by the Department of Banking
11 under this chapter.
12 "Loan." A payday loan or a renewal loan, as the context may
13 require.
14 "Loan agreement." A signed written agreement between a
15 payday lender and a consumer that complies with the requirements
16 of section 5112 (relating to loan agreement requirements)
17 evidencing a loan.
18 "Payday lender." A person who, as principal or agent,
19 markets, negotiates, arranges, places, makes, holds or
20 originates payday loans for consumers for a fee, finance charge
21 or other consideration. The term shall include a payday lender
22 who acquires a payday loan or renewal loan from another payday
23 lender by purchase or assignment.
24 "Payday loan." A loan or advance of money or credit to a
25 consumer by a payday lender that, for a fee, finance charge or
26 other consideration, does all of the following:
27 (1) Accepts a check from the consumer.
28 (2) Agrees to hold the check for a deferment period.
29 (3) Pays to the consumer a cash advance, a locally
30 cashable check, debit card or money order or credits to the
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1 consumer's account the amount of the check less finance
2 charges permitted under section 5113 (relating to authorized
3 finance charges). The term includes any arrangement in which
4 a person pays a cash advance to a consumer in return for a
5 repayment mechanism and a fee, finance charge or other
6 consideration.
7 "Payday loan business." A person is deemed to be engaged in
8 the payday loan business in this Commonwealth if that person, in
9 the ordinary course of its business, advertises, causes to be
10 advertised, solicits, negotiates or arranges, offers to make,
11 makes or holds a payday loan or renewal loan in this
12 Commonwealth, whether directly or through any other person
13 acting for his benefit.
14 "Person." An individual, association, joint venture or joint
15 stock company, partnership, limited liability company, limited
16 partnership, limited partnership association, business
17 corporation or any other group of individuals, however
18 organized.
19 "Renewal loan." A payday loan that a consumer obtains from a
20 payday lender, the proceeds of which are applied to the balance
21 due on an existing payday loan previously obtained by the
22 consumer from the same payday lender.
23 "Repayment mechanism." Any method agreed to by a consumer
24 which a payday lender may use to effect repayment of a loan,
25 including a present-dated or post-dated check, electronic debit
26 or assignment of a future deposit.
27 "Tangible net worth." Net worth less all of the following:
28 (1) That portion of assets pledged to secure obligations
29 of any person other than that of the applicant.
30 (2) Any asset due from officers or stockholders of the
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1 applicant or related companies in which the applicant's
2 officers or stockholders have an interest.
3 (3) That portion of the value of any marketable
4 security, listed or unlisted, not shown at lower of either
5 cost or market.
6 (4) Any investment shown on the applicant's balance
7 sheet in the applicant's joint ventures, subsidiaries,
8 affiliates or related companies which is greater than the
9 value of the assets at equity.
10 (5) Goodwill.
11 (6) The value placed on insurance renewals, property
12 management contract renewals or other similar intangibles of
13 the applicant.
14 (7) Organization costs of the applicant.
15 (8) Any real estate held for investment where
16 development will not start within two years from the date of
17 its initial acquisition.
18 (9) Any leasehold improvements not being amortized over
19 the lesser of the expected life of the asset or the remaining
20 term of the lease.
21 SUBCHAPTER B
22 NATURE AND EFFECT OF PAYDAY LOANS
23 Sec.
24 5111. License requirements.
25 5112. Loan agreement requirements.
26 5113. Authorized finance charges.
27 5114. Maximum amount of loans; terms of loans; right of
28 rescission.
29 5115. Prohibitions.
30 5116. Renewal loans.
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1 5117. Form of loan proceeds.
2 5118. Endorsement of check.
3 5119. Redemption of repayment mechanism.
4 5120. Authorized charge for dishonored repayment mechanisms.
5 5121. Posting of charges and notice of mandatory extended
6 payment plan.
7 5122. Notice of assignment or sale of loans.
8 5123. No criminal culpability.
9 5124. Unfair or deceptive practices.
10 5125. Extended payment plan.
11 5126. Prohibited practices regarding loans.
12 5127. Commonwealth Financial Literacy Account.
13 5128. Licensee duties with respect to military personnel.
14 § 5111. License requirements.
15 (a) General rule.--No person may market, service, arrange,
16 make, hold, originate, extend, contract or negotiate, whether
17 electronically or by other means, a payday loan or renewal loan
18 to an individual who resides in this Commonwealth or, if the
19 person has a place of business in this Commonwealth, to any
20 individual regardless of his residence, without first obtaining
21 a license from the department under this chapter and otherwise
22 complying with all of the provisions of this chapter.
23 (b) Exemptions.--This chapter shall not apply to depository
24 institutions. A payday lender that is an agent of a depository
25 institution for the purpose of brokering payday loans made by a
26 depository institution shall be subject to all provisions of
27 this chapter except those provisions related to finance charges.
28 This exemption from the provisions of this chapter relating to
29 finance charges is limited solely to the brokering of payday
30 loans that are made and held by a depository institution.
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1 § 5112. Loan agreement requirements.
2 (a) General rule.--Each loan shall be documented by a loan
3 agreement which shall contain all of the following:
4 (1) The name and address of the consumer.
5 (2) The transaction date and a prominently labeled
6 transaction number.
7 (3) The amount of the loan or advance.
8 (4) A statement of the total amount of finance charges
9 charged, expressed both as a dollar amount and an annual
10 percentage rate.
11 (5) A specific date for the end of the deferment period
12 or extended payment plan.
13 (6) The name, address, telephone number of the payday
14 lender and the name and title of the individual employee who
15 signs the loan agreement on behalf of the payday lender.
16 (7) An itemization of the fees and interest charges to
17 be paid by the consumer.
18 (8) Disclosures required by the Truth in Lending Act
19 (Public Law 90-321, 15 U.S.C. § 1601 et seq.), regardless of
20 whether the Truth in Lending Act applies to the particular
21 loan.
22 (9) A clear description of the consumer's payment
23 obligations under the loan and a clear description of the
24 repayment mechanism agreed to by the payday lender and the
25 consumer.
26 (10) A clear description of the consumer's right to an
27 extended payment plan under section 5125 (relating to
28 extended payment plan) if a consumer does not have the
29 ability to repay a loan when due.
30 (11) Disclosure in boldface print and in at least ten-
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1 point type that the consumer may not obtain renewal for the
2 payday loan more than one time for an additional deferment
3 period mutually agreed to by the consumer and the payday
4 lender.
5 (12) Disclosure in boldface print and in at least ten-
6 point type indicating the maximum loan amount and finance
7 charge.
8 (13) Disclosure in boldface print and in at least ten-
9 point type indicating the restrictions on multiple loans
10 provided for in this chapter.
11 (14) Disclosure in boldface print and in at least ten-
12 point type indicating the consumer's right of rescission
13 under this chapter. The disclosure of the consumer's right of
14 rescission shall be set forth immediately above the
15 consumer's signature line and shall state as follows:
16 This transaction is not meant to meet long-term financial
17 needs and should be used only to meet short-term cash
18 needs. Renewing a payday loan rather than repaying it in
19 full at the end of its term will result in further
20 finance charges. You have the right to rescind this
21 transaction at any time before the lender's close of
22 business on the next business day after the transaction
23 date shown above. In order to rescind, you must return
24 all of the loan proceeds you received to the lender. The
25 lender will refund to you all fees if you rescind this
26 transaction.
27 (15) Such other information as the department may
28 require.
29 (b) Limitations.--A loan agreement, or any other document or
30 instrument signed by the consumer in connection with the loan,
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1 shall not contain any of the following:
2 (1) A mandatory arbitration clause that does not comply
3 with the standards set forth in the statement of principles
4 of the National Consumer Dispute Advisory Committee of the
5 American Arbitration Association in effect on the effective
6 date of this chapter.
7 (2) A hold harmless clause for the benefit of the payday
8 lender.
9 (3) A confession of judgment clause.
10 (4) A waiver by the consumer of any contractual right or
11 any provision of this chapter.
12 § 5113. Authorized finance charges.
13 A payday lender may impose a finance charge for each loan
14 made by the payday lender to a consumer. Total finance charges
15 imposed by a payday lender in a single transaction shall not
16 exceed 17.5% of the amount advanced. The finance charge shall be
17 deemed fully earned as of the date of the transaction unless the
18 consumer rescinds the loan under section 5114(b) (relating to
19 maximum amount of loans; terms of loans; right of rescission). A
20 payday lender may impose only fees and charges authorized in
21 this chapter in connection with a loan.
22 § 5114. Maximum amount of loans; terms of loans; right of
23 rescission.
24 (a) General rule.--A payday lender shall not make a loan to
25 a consumer in an amount that would result in the consumer having
26 outstanding loans to the payday lender in excess of the lesser
27 of $500 or 25% of the consumer's gross monthly income at any
28 time. The payday lender shall maintain records evidencing the
29 consumer's gross monthly income as required by section
30 5136(a)(2) (relating to licensee requirements).
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1 (b) Right to rescind.--
2 (1) A consumer may rescind a loan before the payday
3 lender's close of business on the next business day
4 immediately following the day on which the loan was made.
5 (2) In order to rescind a loan, a consumer shall notify
6 the payday lender of the consumer's desire to rescind the
7 loan and return to the payday lender, at the time of giving
8 notice, the proceeds of the loan received by the consumer
9 from the payday lender as contemplated by section 5117
10 (relating to form of loan proceeds).
11 (3) No finance charge or other charge or fee may be
12 charged or collected by the payday lender when a loan is
13 rescinded.
14 (4) Upon rescission of a loan, the payday lender shall
15 return to the consumer any check given to the payday lender
16 in connection with the loan or shall agree in writing that
17 any other repayment mechanism shall not be utilized.
18 (c) Completed transaction.--A loan transaction is completed
19 when the payday lender receives payment in full of the loan or
20 the consumer redeems the repayment mechanism being held by the
21 payday lender by paying the full amount represented by the
22 repayment mechanism to the payday lender. The consumer may repay
23 a loan at any office of the original payday lender or the
24 assignee of the payday lender at the consumer's election.
25 § 5115. Prohibitions.
26 (a) General rule.--A payday lender shall not knowingly make
27 a loan to a consumer who has an existing loan or loans with the
28 payday lender or any other licensee if the aggregate amount of
29 all loans outstanding to the consumer exceeds the maximum amount
30 permitted under section 5114(a) (relating to maximum amount of
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1 loans; terms of loans; right of rescission) or who has entered
2 into an extended payment plan under section 5125 (relating to
3 extended payment plan) which has not yet been paid in full. A
4 consumer may not have loans outstanding from more than two
5 payday lenders at any one time.
6 (b) General cooling-off period.--A payday lender shall not
7 knowingly make a loan to a consumer if the loan will result in
8 the consumer being or having been indebted to one or two payday
9 lenders for a period in excess of 60 consecutive days. If a
10 consumer has or has had loans outstanding for 60 consecutive
11 days, no payday lender may offer or make a loan to the consumer
12 for at least seven continuous days from the date of repayment of
13 the last loan. Notwithstanding this prohibition, a payday lender
14 may enter into an extended payment plan agreement with a
15 consumer in accordance with section 5125. For purposes of this
16 subsection, the term "consecutive days" means a series of
17 continuous days in which the consumer is party to one or more
18 loans with payday lenders, including up to six days between such
19 loans.
20 (c) Verification.--A consumer shall verify in writing at the
21 time of entering into a loan transaction:
22 (1) that the consumer does not have a loan or loans
23 outstanding from any payday lender, the aggregate outstanding
24 balance of which exceeds the maximum loan amount permitted
25 under section 5114(a);
26 (2) that the consumer has not entered into an extended
27 payment plan under section 5125 which has not yet been paid
28 in full; and
29 (3) the date of repayment of the consumer's last loan,
30 if applicable.
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1 (d) Confirmation.--A payday lender shall confirm the
2 accuracy of the verification required by subsection (c) by:
3 (1) A query of the payday lender's own records.
4 (2) A query of the database as described in subsection
5 (e).
6 (e) Procedure to determine outstanding loans and repayment
7 dates.--
8 (1) The department shall engage a third-party provider
9 capable of developing, implementing and maintaining a
10 database with real time access for reporting of loan
11 transactions and verifying the information required by
12 subsections (a), (b) and (c).
13 (2) Payday lenders shall report to the database
14 information determined by the department to be necessary to
15 verify the number and amount of loans a consumer has
16 outstanding with any payday lender and the date of repayment
17 of a consumer's last loan.
18 (3) The department may charge licensees a fee, to be
19 determined by the department, for each database transaction
20 in order to offset the department's costs in establishing and
21 maintaining the database.
22 § 5116. Renewal loans.
23 A payday loan may not be renewed more than once. A renewal
24 loan must satisfy the existing payday loan in full, shall be
25 documented by a loan agreement, including the inclusion of a new
26 deferment period and a new set of disclosures, and shall require
27 the agreement by the consumer and the payday lender of a new
28 repayment mechanism. At the end of the deferment period for the
29 renewal loan, the consumer must either pay the renewal loan in
30 cash or its equivalent or enter into an extended payment plan in
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1 accordance with section 5125 (relating to extended payment
2 plan). If the consumer fails to pay the renewal loan when due or
3 enter into an extended payment plan, the payday lender may
4 deposit the consumer's check or utilize any other repayment
5 mechanism provided for in the loan agreement. It shall be the
6 option of the payday lender to determine whether to offer a
7 renewal loan to a consumer.
8 § 5117. Form of loan proceeds.
9 (a) General rule.--A payday lender shall disburse the
10 proceeds of a loan to the consumer in the form of an immediately
11 and locally cashable check, money order, debit card or credit to
12 the consumer's account at a depository institution or cash.
13 (b) Prohibition.--A payday lender may not impose an
14 additional finance charge or fee for cashing the payday lender's
15 check or money order or for otherwise effecting the disbursement
16 of loan proceeds.
17 § 5118. Endorsement of check.
18 A payday lender may not negotiate or present a check for
19 payment of a loan unless the instrument is endorsed with the
20 actual business name of the payday lender.
21 § 5119. Redemption of repayment mechanism.
22 Prior to the payday lender's negotiating or presenting a
23 consumer's check, or utilizing any other repayment mechanism,
24 the consumer shall have the right to redeem the check or any
25 other repayment mechanism if the consumer pays the full amount
26 of the check or other repayment mechanism to the payday lender.
27 § 5120. Authorized charge for dishonored repayment mechanisms.
28 (a) General rule.--If a consumer's repayment mechanism is
29 dishonored due to insufficient funds in the consumer's account,
30 the payday lender:
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1 (1) Shall have the right to exercise all civil means
2 authorized by law to collect the face value of the repayment
3 mechanism.
4 (2) May contract for and collect from the consumer a
5 charge not to exceed $25.
6 (3) May not collect any other fees as a result of the
7 dishonor, including damages available under 42 Pa.C.S. § 8304
8 (relating to damages in actions on bad checks).
9 (b) When charge not allowed.--A charge authorized by this
10 section shall not be allowed:
11 (1) if the consumer does not receive the loan proceeds
12 from the payday lender for any reason; or
13 (2) if the consumer places a stop-payment order due to
14 forgery or theft.
15 § 5121. Posting of charges and notice of mandatory extended
16 payment plan.
17 (a) Posting of charges.--A payday lender shall post in large
18 type in plain view of the public at any place of business where
19 payday loans are made a notice of the finance charges and any
20 related charges, such as the charge for dishonored repayment
21 mechanisms, imposed for loans.
22 (b) Mandatory notice.--A payday lender shall provide to each
23 consumer at the time a loan agreement is signed, and
24 conspicuously display in the lending area of each business
25 location of the payday lender, the following notice:
26 Notice: If you are unable to repay your payday loan, you
27 may be entitled to an extended payment plan agreement.
28 The lender must provide you with an extended payment plan
29 agreement at any time you declare an inability to repay a
30 second loan from the lender made within six days of the
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1 first loan prior to the loan's due date or any
2 outstanding loans at the end of 60 consecutive days of
3 indebtedness. The lender may collect a finance charge for
4 each extended payment plan. If the lender refuses to
5 provide you with an extended payment plan, you should
6 contact the Pennsylvania Department of Banking. In
7 addition, you are required to enter into an extended
8 payment plan under certain circumstances that the lender
9 is required to describe to you.
10 § 5122. Notice of assignment or sale of loans.
11 (a) General rule.--A payday lender shall inform a consumer
12 in writing immediately of the name, address and telephone number
13 of the person to whom a loan is assigned or sold. A payday
14 lender may only assign or sell a loan to another payday lender
15 or to a depository institution.
16 (b) Notice.--Prior to the assignment or sale of a loan, a
17 payday lender shall provide the following notice to the buyer or
18 assignee:
19 The repayment mechanism associated with this loan has
20 been given by a consumer to secure a payday loan
21 transaction under Pennsylvania State law and the assignee
22 or buyer is deemed to have knowledge of and shall be
23 bound by the terms and conditions of the loan agreement
24 between the consumer and the original lender.
25 § 5123. No criminal culpability.
26 A consumer shall not be subject to a criminal penalty:
27 (1) For entering into a loan agreement.
28 (2) In the event a consumer's repayment mechanism is
29 dishonored unless the consumer's account on which the
30 repayment mechanism is drawn is closed by the consumer before
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1 the end of the agreed-upon deferment period, in which event
2 the provisions of 18 Pa.C.S. § 4105 (relating to bad checks)
3 or 4106 (relating to access device fraud), as applicable,
4 shall apply.
5 § 5124. Unfair or deceptive practices.
6 A person may not engage in unfair or deceptive acts,
7 practices or advertising in connection with a loan. A violation
8 of this section shall be deemed a violation of the act of
9 December 17, 1968 (P.L.1224, No.387), known as the Unfair Trade
10 Practices and Consumer Protection Law.
11 § 5125. Extended payment plan.
12 (a) General rule.--
13 (1) A payday lender shall offer a consumer an extended
14 payment plan agreement if at any time the consumer declares
15 an inability to repay:
16 (i) a second loan from a payday lender when due,
17 provided that the second loan was from the same payday
18 lender and entered into within six days of the due date
19 of the prior payday loan; or
20 (ii) any outstanding loans at the end of 60
21 consecutive days of indebtedness as contemplated by
22 section 5115(b) (relating to prohibitions).
23 (2) The consumer shall accept an extended payment plan
24 agreement if the consumer declares an inability to repay:
25 (i) a single renewal loan when due; or
26 (ii) any outstanding loans at the end of 60
27 consecutive days of indebtedness as contemplated by
28 section 5115(b).
29 (b) Extended payment plan agreement.--An extended payment
30 plan agreement shall:
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1 (1) be considered an extension of the existing loan
2 obligation;
3 (2) be subject to the requirements and restrictions of a
4 loan agreement as specified in section 5112 (relating to loan
5 agreement requirements), excluding section 5112(a)(4), (8),
6 (10), (11) and (13) and the form notice in section
7 5112(a)(14); and
8 (3) be subject to the following terms:
9 (i) The principal balance due under the extended
10 payment plan shall be the outstanding principal balance
11 and finance charge due under the existing loan plus the
12 finance charge permitted under subparagraph (ii). The
13 payday lender may encourage, but shall not require, the
14 consumer to reduce the balance of the existing loan by
15 paying the payday lender cash on the date the consumer
16 enters into the extended payment plan agreement.
17 (ii) The payday lender may impose a finance charge
18 for entering into the extended payment plan that may not
19 exceed 10% of the principal balance due under the
20 existing loan. The finance charge shall be deemed fully
21 earned as of the date of the transaction unless the
22 consumer rescinds the extended payment plan under
23 subparagraph (v). The payday lender may impose only the
24 fees and charges authorized in this section and in
25 section 5120 (relating to authorized charge for
26 dishonored repayment mechanisms) in connection with an
27 extended payment plan.
28 (iii) The extended payment plan agreement shall
29 allow the consumer to pay the sums due under the extended
30 payment plan over at least eight 14-day terms. Each
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1 installment shall be in an amount arrived at by dividing
2 the total amount outstanding under subparagraph (i) to a
3 payday lender by the number of 14-day terms of the
4 extended payment plan. If the consumer has loans
5 outstanding to two lenders and is unable to pay both
6 loans, the consumer shall enter into an extended payment
7 plan with each payday lender. A consumer may, at any
8 time, partially or entirely pay off an extended payment
9 plan.
10 (iv) A payday lender shall report to the database
11 described in section 5115 that the consumer is enrolled
12 in an extended payment plan.
13 (v) Except when the consumer is required to enter
14 into an extended payment plan under the provisions of
15 this chapter, the consumer shall have the same right to
16 rescind an extended payment plan as is provided in
17 section 5114(b) (relating to maximum amount of loans;
18 terms of loans; right of rescission) for the rescission
19 of a loan.
20 (c) Eligibility requirements.--In order to enter into an
21 extended payment plan, a consumer must:
22 (1) Have obtained a loan from the same payday lender, or
23 its assignee, that will enter into the extended payment plan.
24 (2) Request an extended payment plan no later than the
25 due date of the loan.
26 (3) Reasonably inform the payday lender, either orally
27 or in writing, that the consumer requests an extended payment
28 plan.
29 (d) Prohibition.--During any period in which all or part of
30 an extended payment plan is outstanding and during the seven-day
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1 period following a consumer's payment in full of an extended
2 payment plan, no payday lender may make or offer to make a
3 payday loan to the consumer.
4 § 5126. Prohibited practices regarding loans.
5 The following are prohibited regarding loans:
6 (1) Taking or attempting to take any security other than
7 the consumer's check or other repayment mechanism.
8 (2) Taking or attempting to take more than a single
9 check or other repayment mechanism from the consumer in
10 connection with a single transaction.
11 (3) Selling, offering or soliciting any application for
12 credit insurance in connection with a transaction.
13 (4) Tying a transaction to any other transaction, offer
14 or obligation of the consumer.
15 (5) Assigning or selling a loan to another person other
16 than in accordance with the provisions of this chapter.
17 (6) Engaging in any device or subterfuge to evade the
18 requirements of this chapter, including making loans
19 disguised as personal property sales and leaseback
20 transactions or disguising loan proceeds as cash rebates for
21 the pretextual installment sale of goods and services.
22 (7) Failing to collect and provide information regarding
23 the number, total and average transaction amounts and other
24 information the department may request.
25 (8) Offering, arranging, negotiating, making, holding or
26 acting as an agent or broker for the making of a loan unless
27 the payday lender complies with all applicable provisions of
28 this chapter.
29 (9) Altering or deleting the date on any loan agreement
30 or repayment mechanism held by the payday lender.
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1 (10) Rolling over, refinancing, extending or
2 consolidating payday loans except as provided in sections
3 5116 (relating to renewal loans) and 5125 (relating to
4 extended payment plan).
5 (11) Failing to immediately and accurately report a loan
6 or an extended payment plan to the database provider as
7 required by this chapter or by the department.
8 (12) Threatening to use or using the criminal process in
9 any state to collect the balance due on a loan.
10 (13) Depositing a check or otherwise implementing any
11 repayment mechanism prior to the expiration of the agreed-
12 upon deferment period.
13 § 5127. Commonwealth Financial Literacy Account.
14 (a) Establishment of account.--There is hereby established
15 within the Banking Department Fund a restricted account to be
16 known as the Commonwealth Financial Literacy Account. Funds
17 collected under subsections (b) and (c) shall be deposited in
18 the account.
19 (b) Required deposits.--On December 1 of each year beginning
20 with the December immediately following the effective date of
21 this section, payday lenders shall deposit into the account 25¢
22 for each payday loan transaction entered into by them during the
23 preceding 12-month period.
24 (c) Penalties and interest.--In addition to any other remedy
25 provided by law, the department may enforce collection of the
26 amount of the deposit required by subsection (b) by imposing the
27 following remedies:
28 (1) When a payday lender fails to make the deposit on
29 the date required, the department shall add interest at the
30 rate provided in section 806 of the act of April 9, 1929
20050H1478B1796 - 20 -
1 (P.L.343, No.176), known as The Fiscal Code, to the unpaid
2 amount until the date it is paid.
3 (2) When a payday lender fails to make the deposit in a
4 timely manner or provide records or information to the
5 department for calculation of the amount owed, the department
6 shall impose a penalty against the payday lender in the
7 amount of $10,000, plus an additional amount of $200 per day
8 for each additional day that the payday lender fails to
9 provide the required information or records.
10 (3) The department may waive all or part of the penalty
11 assessed against a payday lender pursuant to paragraph (2)
12 for good cause shown by the payday lender.
13 (d) Liens.--Any amount owed by and interest and penalties
14 assessed against a payday lender under this section shall be a
15 lien on the real and personal property of the payday lender in
16 the manner provided by section 1401 of The Fiscal Code. The lien
17 may be entered by the department in the manner provided by
18 section 1404 of The Fiscal Code and shall continue and retain
19 priority in the manner provided in section 1404.1 of The Fiscal
20 Code.
21 § 5128. Licensee duties with respect to military personnel.
22 (a) Collection activity.--A licensee shall defer collection
23 activity against:
24 (1) a consumer who is a member of the military that has
25 been deployed to combat or a combat support posting, for the
26 duration of the posting; or
27 (2) a reserve or National Guard member called to active
28 duty.
29 (b) Military personnel.--A licensee shall not contact the
30 military chain of command of a consumer who is a member of the
20050H1478B1796 - 21 -
1 military in an effort to collect a loan.
2 (c) Repayment agreement.--A licensee shall honor the terms
3 of any repayment agreement that it has entered into with a
4 consumer who is a member of the military, including any
5 repayment agreement negotiated through military counselors or
6 third-party credit counselors.
7 SUBCHAPTER C
8 ADMINISTRATIVE AND LICENSURE PROVISIONS
9 Sec.
10 5131. Application for license.
11 5132. Annual license fee.
12 5133. Public notification.
13 5134. Issuance of license.
14 5135. License duration.
15 5136. Licensee requirements.
16 5137. Licensee limitations.
17 5138. Surrender of license.
18 5139. Authority of department.
19 5140. Suspension, revocation or refusal.
20 5141. Penalties.
21 § 5131. Application for license.
22 (a) Contents.--An application for a license under this
23 chapter shall be on a form prescribed and provided by the
24 department. The application shall include the name of the
25 applicant, the address of the principal place of business of the
26 applicant and the address or addresses where the applicant's
27 payday loan business is to be conducted, the full name, official
28 title and business address of each director and principal
29 officer of the payday loan business and any other information
30 that may be required by the department. An applicant shall
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1 demonstrate to the department that policies and procedures have
2 been developed to receive and process consumer inquiries and
3 grievances promptly and fairly.
4 (b) Duty to update.--All applicants and licensees shall be
5 required to provide the department with written notice of the
6 change in any information contained in an application for a
7 license or for any renewal of a license promptly upon an
8 applicant or licensee becoming aware of such change.
9 (c) Financial structure.--
10 (1) The applicant must establish that:
11 (i) At the time of application, the applicant has a
12 minimum tangible net worth of $250,000.
13 (ii) The applicant will, at all times thereafter,
14 maintain the minimum tangible net worth required by
15 subparagraph (i).
16 (2) Prior to and as a condition of the issuance of a
17 license, an applicant for a license shall maintain a bond in
18 the amount of $100,000 in a form acceptable to the department
19 from a surety company authorized to do business in this
20 Commonwealth. The bond shall be a penal bond conditioned on
21 compliance by the licensee with this chapter and subject to
22 forfeiture and shall run to the Commonwealth for its use and
23 shall be held by the department for the term of the license.
24 The bond shall also be for the use of any consumer against
25 the licensee for failure to carry out the terms of any loan
26 or extended payment plan. If a consumer is aggrieved, he may,
27 with the written consent of the department, recover the
28 amount by which the consumer is aggrieved from the bond by
29 filing a claim with the surety company or maintaining an
30 action on the bond. In the alternative, an aggrieved consumer
20050H1478B1796 - 23 -
1 may recover the amount by which the consumer is aggrieved by
2 filing a formal complaint against the licensee with the
3 department which shall adjudicate the matter. Such an
4 adjudication shall be binding upon the surety company and
5 enforceable by the department in Commonwealth Court and by an
6 aggrieved consumer in any court. Any aggrieved consumer
7 seeking to recover any amount from a bond that has already
8 been forfeited by the licensee or which the department is in
9 the process of having forfeited may recover payment on such
10 bond if, after filing a petition with the department, the
11 department consents to the requested payment or portion
12 thereof. The department may pay the aggrieved consumer from
13 the bond proceeds recovered by the department in such case.
14 Nothing in this paragraph shall be construed as limiting the
15 ability of any court or magisterial district judge to award
16 to any aggrieved consumer other damages, court costs and
17 attorney fees permitted by applicable law, but those claims
18 that are not directly related to the loan or extended payment
19 plan may not be recovered from the proceeds of the bond. The
20 department, in its discretion, may consent to or order pro
21 rata or other recovery on the bond for any aggrieved consumer
22 if claims against the bond may or do exceed its full monetary
23 amount. No bond shall comply with the requirements of this
24 paragraph unless it contains a provision that it shall not be
25 canceled for any cause unless notice of intention to cancel
26 is given to the department at least 30 days before the day
27 upon which cancellation shall take effect. In such event, the
28 licensee shall be required to replace the bond with a bond
29 substantially in the same form as the original bond.
30 Cancellation of the bond shall not invalidate the bond
20050H1478B1796 - 24 -
1 regarding the period of time it was in effect.
2 (3) The applicant must also establish to the
3 satisfaction of the department that the applicant has an
4 otherwise adequate financial structure.
5 (d) License renewals.--Licenses shall be issued for terms of
6 12 months and may be renewed by the department upon application
7 by the licensee and the payment of any and all applicable
8 renewal fees. A licensee shall comply with the same requirements
9 for renewal of its license as it did for the issuance of the
10 original license.
11 § 5132. Annual license fee.
12 (a) General rule.--An applicant for a license shall pay to
13 the department at the time an application is filed and upon
14 filing of each application for renewal thereof a license fee for
15 the principal place of business of $1,000 and an additional
16 license fee for each branch office of $1,000.
17 (b) Recovery of costs.--No abatement of a licensee fee shall
18 be made if the license is issued for a period of less than one
19 year. The department shall be entitled to recover any cost of
20 investigation in excess of license or renewal fees from the
21 licensee or from a person who is not licensed under this chapter
22 but who is believed to be engaged in the payday loan business.
23 § 5133. Public notification.
24 (a) General rule.--Each applicant for a new license under
25 this chapter shall be required to post a notice for public
26 display at any location in this Commonwealth where licensing is
27 being requested. The purpose of the notice is to identify to the
28 public that an application to operate a payday loan office at
29 the location has been filed with the department. The applicant
30 shall:
20050H1478B1796 - 25 -
1 (1) Be required to post a notice commencing on the day
2 the application was filed with the department.
3 (2) Be required to maintain the notice until a decision
4 to approve or disapprove the license has been made by the
5 department.
6 (3) Be responsible for posting the notice in a
7 conspicuous location that is as close as possible to the main
8 entrance of the location requesting licensure.
9 (4) Be required to use a notice that is in a size and
10 form as determined by the department.
11 (b) Applicability.--This section shall not apply to any
12 location where a payday loan business was being conducted in
13 this Commonwealth on the effective date of this chapter.
14 § 5134. Issuance of license.
15 (a) Time limit.--Within 60 days after a completed
16 application is received, the department shall either issue a
17 license or, for any reason which the department may refuse to
18 issue a license under this section or for which the department
19 may suspend, revoke or refuse to renew a license under section
20 5140 (relating to suspension, revocation or refusal), refuse to
21 issue a license. Upon receipt of an application for a license,
22 the department may conduct such investigation as it deems
23 necessary to determine that the applicant and its officers,
24 directors and principals are of good character and ethical
25 reputation.
26 (b) Appeal of denial.--If the department refuses to issue a
27 license, it shall notify the applicant in writing of the denial,
28 the reason therefor and the applicant's right to appeal the
29 denial to the Secretary of Banking. An appeal from the
30 department's refusal to approve an application for a license
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1 must be filed by the applicant within 30 days of notice of
2 refusal.
3 (c) Contents of license.--Each license issued by the
4 department shall specify:
5 (1) The name and address of the licensee and the address
6 or addresses covered by the license.
7 (2) The licensee's reference number.
8 (3) Any other information the department shall require
9 to carry out the purposes of this chapter.
10 (d) Denial of license due to conviction.--
11 (1) The department may deny a license if it finds that
12 the applicant or a director, officer, partner or ultimate
13 equitable owner of 10% or more of the applicant has been
14 convicted of a crime of moral turpitude or felony in any
15 jurisdiction or of a crime which, if committed in this
16 Commonwealth, would constitute a crime of moral turpitude or
17 felony. For the purposes of this chapter, a person shall be
18 deemed to have been convicted of a crime if the person:
19 (i) pleads guilty or nolo contendere to a criminal
20 charge before a Federal magistrate or a court; or
21 (ii) is found guilty by the decision or judgment of
22 a Federal magistrate or a court or by the verdict of a
23 jury, irrespective of the pronouncement of sentence or
24 the suspension thereof, unless the plea of guilty or nolo
25 contendere or the decision, judgment or verdict is set
26 aside, vacated, reversed or otherwise abrogated by lawful
27 judicial process.
28 (2) A license under this chapter shall be deemed to be a
29 "covered license" within the meaning of section 405 of the
30 act of May 15, 1933 (P.L.565, No.111), known as the
20050H1478B1796 - 27 -
1 Department of Banking Code. The department shall notify a
2 licensee if a "covered individual" within the meaning of
3 section 405 of the Department of Banking Code that is or will
4 be employed or contracted by the licensee has a criminal
5 background that renders the employee unfit for employment in
6 the payday loan business.
7 (e) Denial of license for other reason.--The department may
8 deny a license or otherwise restrict a license if it finds that
9 the applicant or a director, officer, partner, employee, agent
10 or ultimate equitable owner of 10% or more of the applicant:
11 (1) has had a license application or license issued by
12 the department denied, suspended or revoked;
13 (2) is the subject of an order of the department;
14 (3) has violated or failed to comply with any provisions
15 of this chapter or any regulation or order of the department;
16 (4) is not of good character and ethical reputation in
17 the opinion of the department; or
18 (5) has an outstanding debt to the Commonwealth or any
19 Commonwealth agency.
20 § 5135. License duration.
21 A license issued by the department:
22 (1) Must be renewed on February 1 of each year upon
23 payment of the annual renewal fee and after the department
24 determines that the licensee is conducting business in
25 accordance with this chapter. No refund of any portion of the
26 license fee shall be made if the license is voluntarily
27 surrendered to the department or suspended or revoked by the
28 department prior to its expiration date.
29 (2) Shall be invalid if the licensee's authority to
30 conduct business is voided under any law of this Commonwealth
20050H1478B1796 - 28 -
1 or any other state unless the licensee demonstrates that the
2 applicable court or governmental entity was clearly erroneous
3 in voiding the licensee's authority to conduct business.
4 (3) Shall not be assignable or transferable by operation
5 of law or otherwise.
6 § 5136. Licensee requirements.
7 (a) Requirements of a licensee.--A licensee shall:
8 (1) Conspicuously display its license at each licensed
9 place of business.
10 (2) Maintain at its principal place of business within
11 this Commonwealth, or at such place within or outside this
12 Commonwealth if agreed to by the department, the original or
13 a copy of any books, accounts, records and documents or
14 electronic or similar access thereto of the business
15 conducted under the license as prescribed by the department
16 to enable the department to determine whether the business of
17 the licensee is being conducted in accordance with the
18 provisions of this chapter and the orders, regulations and
19 statements of policy issued under this chapter. The
20 department shall have free access to and authorization to
21 examine records maintained outside this Commonwealth. The
22 costs of the examination, including travel costs, shall be
23 borne by the licensee. The department may deny or revoke the
24 authority to maintain records outside this Commonwealth for
25 good cause in the interest of protection for Commonwealth
26 consumers, including for the licensee's failure to provide
27 books, accounts, records or documents to the department upon
28 request.
29 (3) Annually, before December 1, file a report with the
30 department setting forth such information as the department
20050H1478B1796 - 29 -
1 shall require concerning the payday loan business conducted
2 by the licensee during the preceding calendar year. The
3 report shall be in writing and under oath on a form provided
4 by the department. Licensees failing to file the required
5 report by December 1 shall be subject to a penalty of $100
6 for each day after December 1 until the report is filed.
7 (4) Be subject to examination by the department at its
8 discretion, at which time the department shall have free
9 access, during regular business hours, to the licensee's
10 place or places of business in this Commonwealth and to all
11 instruments, documents, accounts, books and records which
12 pertain to a licensee's payday loan business, whether
13 maintained in or outside this Commonwealth. The department
14 may examine a licensee at any time if the department deems
15 the examination to be necessary or desirable. The cost of any
16 such examination shall be borne by the licensee.
17 (5) Include in all advertisements language indicating
18 that the licensee is licensed by the department.
19 (b) Accounting records.--The licensee's accounting records
20 must be constructed and maintained in compliance with generally
21 accepted accounting principles or as provided by the department
22 regulation. All instruments, documents, accounts, books and
23 records shall be kept separate and apart from the records of any
24 other business conducted by the licensee and shall be preserved
25 and kept available for investigation or examination by the
26 department for a period determined by the department.
27 (c) Copies.--If copies of instruments, documents, accounts,
28 books or records are maintained under subsection (a)(2), they
29 may be photostatic, microfilm or electronic copies or copies
30 provided in some other manner approved by the department.
20050H1478B1796 - 30 -
1 § 5137. Licensee limitations.
2 A licensee shall not:
3 (1) Transact any business under this chapter under any
4 other name or names except those designated in its license. A
5 licensee that changes its name or place or places of business
6 shall immediately notify the department, which shall issue a
7 certificate to the licensee, if appropriate, which shall
8 specify the licensee's new name or address.
9 (2) Conduct a business other than the payday loan
10 business licensed by the department under this chapter
11 without at least 30 days' prior written notification to and
12 approval by the department.
13 § 5138. Surrender of license.
14 Upon satisfying the department that all creditors of a
15 licensee have been paid or that other arrangements satisfactory
16 to the creditors and the department have been made, a licensee
17 may voluntarily surrender its license to the department by
18 delivering its license to the department with written notice
19 that the license is being voluntarily suspended, but such an
20 action by a licensee shall not affect the licensee's civil or
21 criminal liability for acts committed.
22 § 5139. Authority of department.
23 (a) General authority.--The department shall have the
24 authority to:
25 (1) Examine any instrument, document, account, book,
26 record or file of a licensee or any person having a
27 connection to the licensee or make such other investigation
28 as may be necessary to administer the provisions of this
29 chapter. The costs of the examination shall be borne by the
30 licensee or the entity subject to the examination.
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1 (2) Conduct administrative hearings on any matter
2 pertaining to this chapter, issue subpoenas to compel the
3 attendance of witnesses and the production of instruments,
4 documents, accounts, books and records at any such hearing.
5 The instruments, documents, accounts, books and records may
6 be retained by the department until the completion of all
7 proceedings in connection with which the materials were
8 produced. A department official may administer oaths and
9 affirmations to a person whose testimony is required. In the
10 event a person fails to comply with a subpoena issued by the
11 department or to testify on a matter concerning which he may
12 be lawfully interrogated, on application by the department,
13 the Commonwealth Court may issue an order requiring the
14 attendance of the person, the production of instruments,
15 documents, accounts, books and records and the giving of
16 testimony.
17 (3) Request and receive information or records of any
18 kind, including reports of criminal history record
19 information from any Federal, State, local or foreign
20 government entity regarding an applicant for a license,
21 licensee or person related in any way to the business of the
22 applicant or licensee, at a cost to be paid by the applicant
23 or licensee.
24 (4) Require a licensee or nonlicensee to pay the
25 department's costs incurred while conducting an investigation
26 of the licensee or nonlicensee for purposes of issuance or
27 renewal of a license or for any violation of this chapter.
28 (5) Promulgate regulations and statements of policy and
29 issue orders as may be necessary for the proper conduct of
30 the payday loan business by payday lenders, the issuance and
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1 renewal of licenses and the enforcement of this chapter.
2 (6) Prohibit or permanently remove an individual
3 responsible for a violation of this chapter from working in
4 his present capacity or in any other capacity related to
5 activities regulated by the department.
6 (7) Order a person to make restitution for actual
7 damages to consumers caused by any violation of this chapter.
8 (8) Impose such other conditions as the department deems
9 appropriate.
10 (b) Hearings.--A person aggrieved by a decision of the
11 department may appeal the decision of the department to the
12 Secretary of Banking. The appeal shall be conducted under 2
13 Pa.C.S. Ch. 5 Subch. A (relating to practice and procedure of
14 Commonwealth agencies).
15 (c) Injunctions.--The department may maintain an action for
16 an injunction or other process against a person to restrain and
17 prevent the person from engaging in an activity violating this
18 chapter.
19 (d) Final orders.--A decision of the Secretary of Banking
20 shall be a final order of the department and shall be
21 enforceable in a court of competent jurisdiction. The department
22 shall publish the final adjudication issued under this section,
23 subject to redaction or modification to preserve
24 confidentiality.
25 (e) Appeals.--A person aggrieved by a decision of the
26 Secretary of Banking may appeal the decision under 2 Pa.C.S. Ch.
27 7 Subch. A (relating to judicial review of Commonwealth agency
28 action).
29 § 5140. Suspension, revocation or refusal.
30 (a) Departmental action.--The department may suspend, revoke
20050H1478B1796 - 33 -
1 or refuse to renew a license issued under this chapter if a
2 licensee or director, officer, partner or owner of a licensee
3 has:
4 (1) Made a material misstatement in an application or
5 any report or submission required by this chapter or any
6 department regulation, statement of policy or order.
7 (2) Failed to comply with or violated a provision of
8 this chapter or a regulation or order promulgated by the
9 department under this chapter.
10 (3) Engaged in dishonest, fraudulent or illegal
11 practices or conduct in a business or unfair or unethical
12 practices or conduct in connection with the payday loan
13 business.
14 (4) Been convicted of or pled guilty or nolo contendere
15 to a crime of moral turpitude or felony.
16 (5) Permanently or temporarily been enjoined by a court
17 of competent jurisdiction from engaging in or continuing
18 conduct or practice involving an aspect of the payday loan
19 business.
20 (6) Become the subject of an order of the department
21 denying, suspending or revoking a license applied for or
22 issued under this chapter.
23 (7) Become the subject of a United States Postal Service
24 fraud order.
25 (8) Failed to comply with the requirements of this
26 chapter to make and keep records prescribed by regulation or
27 order of the department, to produce records required by the
28 department or to file financial reports or other information
29 that the department by regulation or order may require.
30 (9) Become the subject of an order of the department
20050H1478B1796 - 34 -
1 denying, suspending or revoking a license under the
2 provisions of any other law administered by the department.
3 (10) Failed to comply with any order issued by the
4 department.
5 (11) Demonstrated negligence or incompetence in
6 performing an act for which the licensee is required to hold
7 a license under this chapter.
8 (b) Reinstatement.--The department may reinstate a license
9 which was previously revoked or denied renewal if all of the
10 following exist:
11 (1) The condition which warranted the original action
12 has been corrected to the department's satisfaction.
13 (2) The department has reason to believe that the
14 condition is not likely to occur again.
15 (3) The licensee satisfies all other requirements of
16 this chapter.
17 § 5141. Penalties.
18 (a) Nonlicensees.--A person subject to the provisions of
19 this chapter and not licensed by the department who violates any
20 provision of this chapter or who commits any action which would
21 subject a license to suspension, revocation or nonrenewal under
22 section 5140 (relating to suspension, revocation or refusal) may
23 be fined by the department up to $2,000 for each offense.
24 (b) Violation by licensee.--
25 (1) A person licensed under this chapter or director,
26 officer, owner, partner or agent of a licensee who violates a
27 provision of this chapter or who commits any action which
28 would subject the licensee to suspension, revocation or
29 nonrenewal under section 5140 may also be fined by the
30 department up to $2,000 for each offense.
20050H1478B1796 - 35 -
1 (2) It shall be an affirmative defense for a licensee
2 that, prior to an alleged violation of section 5115 (relating
3 to prohibitions), the licensee complied with all of the
4 following:
5 (i) Required a consumer to verify in writing that
6 the consumer does not have any outstanding loans with the
7 licensee or any other payday lender.
8 (ii) Accessed the database described in section
9 5115(e) to determine whether the consumer has any
10 outstanding loans.
11 SUBCHAPTER D
12 MISCELLANEOUS PROVISIONS
13 Sec.
14 5151. Applicability.
15 5152. Relationship to other laws.
16 5153. Report to General Assembly.
17 § 5151. Applicability.
18 The provisions of this chapter shall apply to a loan which:
19 (1) is made or executed within this Commonwealth; or
20 (2) is negotiated, offered or otherwise transacted
21 within this Commonwealth or with any resident of this
22 Commonwealth, in whole or in part, whether by the ultimate
23 lender or any other person.
24 § 5152. Relationship to other laws.
25 (a) General rule.--All political subdivisions of this
26 Commonwealth, including home rule municipalities, shall be
27 prohibited from enacting and enforcing ordinances, resolutions
28 and regulations pertaining to the financial or lending
29 activities of persons that are subject to this chapter. The
30 requirements of this chapter shall supersede and preempt all
20050H1478B1796 - 36 -
1 ordinances, resolutions and regulations imposing reporting
2 requirements or any other obligations upon persons regarding
3 financial or lending activities subject to this chapter. Except
4 as provided in subsection (b), political subdivisions of this
5 Commonwealth, including home rule municipalities, shall not
6 enact or enforce ordinances, resolutions and regulations
7 expressly pertaining to the facilities of persons whose
8 financial or lending activities are subject to this chapter.
9 (b) Exceptions.--Political subdivisions, including home rule
10 municipalities, shall retain the right pursuant to local zoning
11 ordinances to require a payday lender to locate within approved
12 residential, industrial, commercial or other zones and to
13 require a payday lender to obtain zoning permits, pay zoning
14 fees and undergo inspections related to zoning.
15 § 5153. Report to General Assembly.
16 Three years from the effective date of this chapter, the
17 department shall report to the General Assembly on the status of
18 the payday loan industry, including, but not limited to, the
19 number of payday lenders with active licenses issued by the
20 department, a summary of the number of loans issued, the average
21 loan amount and any other information as determined by the
22 department.
23 Section 2. Section 4107(a) of Title 18 is amended by adding
24 a paragraph to read:
25 § 4107. Deceptive or fraudulent business practices.
26 (a) Offense defined.--A person commits an offense if, in the
27 course of business, the person:
28 * * *
29 (9.1) violates 7 Pa.C.S. § 5124 (relating to unfair or
30 deceptive practices);
20050H1478B1796 - 37 -
1 * * *
2 Section 3. Title 18 is amended by adding a section to read:
3 § 7331. Unlicensed payday lending.
4 A person that operates without a license in violation of 7
5 Pa.C.S. § 5111 (relating to license requirements) commits a
6 felony of the third degree.
7 Section 4. This act shall take effect as follows:
8 (1) The following provisions of 7 Pa.C.S. shall take
9 effect upon the effective date of the regulations promulgated
10 by the Department of Banking under 7 Pa.C.S. § 5139(a)(5):
11 (i) Section 5115(d)(2) and (e)(2) and (3).
12 (ii) Section 5125(b)(3)(iv).
13 (iii) Section 5126(11).
14 (2) This section shall take effect immediately.
15 (3) The remainder of this act shall take effect in 60
16 days.
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