PRIOR PRINTER'S NO. 2495 PRINTER'S NO. 2586
No. 2036 Session of 1981
INTRODUCED BY BITTLE, RYAN, LASHINGER, BURD, GEIST, CESSAR,
GLADECK, MORRIS, COLE, RAPPAPORT, LETTERMAN AND McCALL,
OCTOBER 28, 1981
AS REPORTED FROM COMMITTEE ON BUSINESS AND COMMERCE, HOUSE OF
REPRESENTATIVES, AS AMENDED, NOVEMBER 24, 1981
AN ACT
1 Amending the act of December 12, 1980 (P.L.1179, No.219),
2 entitled "An act to define and regulate secondary mortgage
3 loans and providing penalties," permitting licensees to <--
4 charge any interest rate allowed for any regulated lender
5 under the laws of this Commonwealth. CHANGING THE MAXIMUM <--
6 RATE OF INTEREST PERMITTED TO BE CHARGED BY LICENSEES.
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 Section 1. The act of December 12, 1980 (P.L.1179, No.219), <--
10 known as the "Secondary Mortgage Loan Act," is amended by adding
11 a section to read:
12 Section 9.1. Rate parity.
13 Notwithstanding the provisions of paragraph (1) of section 9,
14 a loan authorized by this act may be made at an interest or
15 finance charge rate permitted any regulated lender under the
16 laws of this Commonwealth without regard to the maximum amount
17 of credit that may be extended at that rate or the maximum
18 duration for loans made by such lender. The maximum rate of
19 interest authorized by this section shall not exceed the maximum
1 usury rate contained in 18 Pa.C.S. § 911(h)(1)(iv).
2 SECTION 1. PARAGRAPH (1) OF SECTION 9, ACT OF DECEMBER 12, <--
3 1980 (P.L.1179, NO.219), KNOWN AS THE "SECONDARY MORTGAGE LOAN
4 ACT," IS AMENDED TO READ:
5 SECTION 9. POWERS CONFERRED ON LICENSEES.
6 ALL SECONDARY MORTGAGE LOAN LICENSEES SHALL HAVE POWER AND
7 AUTHORITY:
8 (1) TO MAKE A SECONDARY MORTGAGE LOAN REPAYABLE IN
9 INSTALLMENTS, AND CHARGE, CONTRACT FOR AND RECEIVE THEREON
10 INTEREST AT A PERCENTAGE RATE NOT EXCEEDING [1.45%] 1.85% PER
11 MONTH. NO INTEREST SHALL BE PAID, DEDUCTED OR RECEIVED IN
12 ADVANCE, EXCEPT THAT INTEREST FROM THE DATE OF DISBURSEMENT
13 OF FUNDS TO THE BORROWER TO THE FIRST DAY OF THE FOLLOWING
14 MONTH SHALL BE PERMITTED IN THE EVENT THE FIRST INSTALLMENT
15 PAYMENT IS MORE THAN 30 DAYS AFTER THE DATE OF DISBURSEMENT.
16 INTEREST SHALL NOT BE COMPOUNDED AND SHALL BE COMPUTED ONLY
17 ON UNPAID PRINCIPAL BALANCES. HOWEVER, THE INCLUSION OF
18 EARNED INTEREST IN A NEW NOTE SHALL NOT BE CONSIDERED
19 COMPOUNDING. FOR THE PURPOSE OF COMPUTING INTEREST, A MONTH
20 SHALL BE ANY PERIOD OF 30 CONSECUTIVE DAYS.
21 * * *
22 Section 2. This act shall take effect immediately.
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