Area 404
16a-2-404. Pay day loans; finance fees; legal rights and duties. (1) On customer loan transactions by which money is advanced:
(a) By having a term that is short
(b) a solitary payment payment is expected, and
(c) such advance loan is add up to or lower than $500, an authorized or supervised lender may charge a quantity to not ever surpass 15% regarding the quantity of the money advance.
(2) The minimum term of every loan under this area will probably be 1 week while the maximum term of any loan made under this part will be thirty day period.
(3) a loan provider and associated interest shall not have a lot more than two loans made under this part outstanding into the exact same debtor at any one some time shall perhaps perhaps not make significantly more than three loans to virtually any one borrower inside a 30 calendar day duration. Each loan provider shall maintain a log of loan transactions for every borrower which shall add at the very least the following information:
(a) Name, address and phone number of each and every borrower; and
(b) date made and due date of each and every loan.
(4) Each loan contract made under this area shall retain the after notice in at least 10 point bold face kind: NOTICE TO BORROWER: KANSAS LAW PROHIBITS THIS LENDER AND THEIR RELATED INTEREST FROM HAVING A LOT MORE THAN TWO LOANS GREAT FOR YOUR REQUIREMENTS AT ANY ONE TIME. A LENDER CANNOT DIVIDE THE QUANTITY YOU WISH TO BORROW TOWARDS SEVERAL LOANS SO THAT YOU CAN RAISE THE FEES YOU PAY.
Ahead of consummation associated with loan deal, the lender must:
(a) supply the notice established in this subsection both in English and Spanish; and
(b) have the debtor’s signature or initials beside the English form of the notice or, in the event that borrower suggests the lending company that the borrower is more proficient in Spanish compared to English, then next to the Spanish type of the notice.
(5) The contract price of any loan made under this area shall maybe perhaps not be much more than 3% per thirty days associated with loan proceeds following the readiness date. No insurance coverage fees or some other costs of any nature whatsoever will probably be allowed, except as previously mentioned in subsection (7), including any prices for cashing the loan profits if they’re offered under control type.
(6) Any loan made under this part shall never be paid back by profits of some other loan made under this part by the exact exact same loan provider or interest that is related. The proceeds from any loan made under this part shall never be put on just about any loan through the exact same loan provider or associated interest.
(7) for a customer loan deal by which money is advanced in return for a check that is personal one return check fee might be charged in the event that check is viewed as inadequate as defined in paragraph ( ag e) of subsection (1) of K.S.A. 16a-2-501, and amendments thereto. The lender shall immediately stamp the back of the check with an endorsement that states: “Negotiated as part of a loan made under K.S.A. 16a-2-404 upon receipt of the check from the consumer. Holder takes susceptible to claims and defenses of manufacturer. No criminal prosecution.”
(8) In determining whether a customer loan deal made beneath the conditions with this part is unconscionable conduct under K.S.A. 16a-5-108, and amendments thereto, consideration shall be given, among other factors, to:
(a) the power for the borrower to repay in the terms of the loan made under this part; or
(b) the request that is original of debtor for amount and term associated with loan are inside the restrictions under this area.
(9) a consumer may rescind any customer loan deal made beneath the conditions with this area without expense perhaps perhaps not later on compared to the end associated with company immediately following the day on which the loan transaction was made day. To rescind the loan transaction:
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(a) a customer shall notify the financial institution that the buyer desires to rescind the mortgage deal;
(b) the buyer shall get back the bucks level of the main of this loan transaction towards the loan provider; and
(c) the financial institution shall get back any costs which have been collected in colaboration with the mortgage.
(10) an individual shall perhaps not commit or reason enough to be committed some of the after functions or practices associated with a customer loan transaction susceptible to the provisions of this area:
(a) Use any unit or contract that could have the consequence of recharging or collecting more costs, costs or interest, or which results much more charges, costs, or interest being compensated because of the consumer, than allowed because of the provisions of the section, including, yet not limited by:
(i) stepping into a various form of deal with all the customer;
(ii) getting into a sales/leaseback or rebate arrangement;
(iii) catalog product product sales; or
(iv) getting into every other deal because of the customer or other individual that was designed to evade the applicability for this part;
(b) usage, or threaten to utilize the process that is criminal any state to gather regarding the loan;
(c) sell virtually any item of all kinds relating to the generating or gathering associated with the loan;
(d) consist of some of the following conditions in a loan document:
(i) A hold clause that is harmless
(ii) a confession of judgment clause;
(iii) a supply when the customer agrees never to assert a claim or defense arising out from the agreement.
(11) As found in this section, “related interest” shall have the meaning that is same “person linked to” in K.S.A. 16a-1-301, and amendments thereto.
(12) Any individual who facilitates, allows or will act as a conduit or representative for just about any alternative party whom goes into right into a customer loan deal utilizing the characteristics put down in paragraphs (a) and (b) of subsection (1) will be expected to get yourself a supervised loan permit pursuant to K.S.A. 16a-2-301, and amendments thereto, whether or not the 3rd celebration might be exempt from licensure conditions regarding the Kansas uniform credit rating rule.
(13) Notwithstanding that any particular one can be exempted by virtue of federal legislation through the interest rate, finance fee and licensure conditions associated with the Kansas consistent credit rule, all the other provisions associated with the rule shall connect with both anyone plus the loan deal.
(14) This part will probably be supplemental to and part of the consistent credit rating rule.
History: L. 1993, ch. 75, § 1; L. 1999, ch. 107, § 20; L. 2001, ch. 50, § 1; L. 2004, ch. 29, § 1; L. 2005, ch. 144, § 12; July 1.