Legislative Update: Senate Bill 83 “Check Cashing and Deferred Deposit Lending Registration Act”
by Jill O. Jasperson
Senate Bill 83 modified what was known as the Check Cashing Registration Act to the more correct title of Check Cashing and Deferred Deposit Lending Registration Act (the Act). It was sponsored by legislator Karen Mayne and approved by the governor on March 14, 2008. The Act went into effect May 5, 2008. The bill makes technical and conformation amendments to the Utah Code, found mainly in Title 7. In part, the bill was a housekeeping effort to add the words “deferred deposit lender” or “deferred deposit lending” alongside the words “check casher” already used in other parts of the code. The bill was considered a compromise between legislators and consumer advocates in trying to establish further regulation of check cashers and deferred deposit lenders.
The most substantive part of the bill initiates an “Operation Statement” in concurrence with registration and renewals from all deferred deposit lenders in Utah. This new legislation will be found in Utah Code section 7-23-201. This Operation Statement includes the:
a. average deferred deposit loan amount that the deferred deposit lender extended;b. average number of days a deferred deposit loan is extended by the deferred deposit lender before the deferred deposit loan is paid in full;
c. minimum and maximum amount of interest or fees charged by the deferred deposit lender for a deferred deposit loan.
The last requirement also asks for interest or fees in relationship to a $100 loan, and a one-week extension. Further information to be reported by the deferred deposit lender is the total number of loans rescinded by request of the customer.
The Operation Statement is confidential between the state and deferred deposit lender: the records supplied are not subject to Government Records Access Management Act requests. However, as part of the Department of Financial Institutions’ (DFI) annual report to the governor and legislature as required by Utah Code section 7-1-211, the commissioner of DFI shall report findings from one or more of those Operation Statements. The report, however, cannot be so specific as to identify a particular deferred deposit lender. The next annual report of July 1, 2007 to June 30, 2008 may include some Operation Statement information from the effective date of the Act, May 5, 2008, to the end of the annual reporting period of June 30, 2008. This report and future reports will further help the legislature, consumer advocates, and the public at large determine the effects deferred deposit lenders have in Utah.
There was another change in the bill that made sponsor Mayne happy. A deferred deposit lender could not offer a new loan on the same day that a customer makes their last payment on an old loan. The customer has at least a day to think it over before making another loan with the lender.