Article 2.--FINANCE CHARGES AND RELATED PROVISIONS
16a-2-404.Payday loans; finance charges; rights and
duties.
(1) On consumer loan transactions in which cash is advanced:
(a) With a short term,
(b) a single payment repayment is anticipated, and
(c) such cash advance is equal to or less than $500, a
licensed or
supervised
lender may charge
an amount not to exceed 15% of the amount of the
cash
advance.
(2) The minimum term of any loan under this section shall be 7 days and
the maximum term of any loan made under this section shall be 30 days.
(3) A lender and related interest shall not have more than two loans made
under this section outstanding to the same borrower at any one time and
shall not make more than three loans to any one borrower within a 30 calendar
day period. Each lender shall maintain a journal of loan transactions for each
borrower which shall include at least the following information:
(a) Name, address and telephone number of each borrower; and
(b) date made and due date of each loan.
(4) Each loan agreement made under this section shall contain the following
notice in at least 10 point bold face type: NOTICE TO BORROWER: KANSAS LAW
PROHIBITS THIS LENDER AND THEIR RELATED INTEREST FROM HAVING MORE THAN TWO
LOANS OUTSTANDING TO YOU AT ANY ONE TIME. A LENDER CANNOT DIVIDE THE AMOUNT YOU
WANT TO BORROW INTO MULTIPLE LOANS IN ORDER TO INCREASE THE FEES YOU PAY.
Prior to consummation of the loan transaction, the lender must:
(a) Provide the notice set forth in this subsection in both English and
Spanish; and
(b) obtain the borrower's signature or initials next to the English version
of
the notice or, if the borrower advises the lender that the borrower is more
proficient in Spanish than in English, then next to the Spanish version of the
notice.
(5) The contract rate of any loan made under this section
shall not be more than 3% per month of the loan proceeds after the maturity
date. No insurance charges or any other charges of any nature whatsoever shall
be permitted, except as stated in subsection (7), including
any charges for cashing the loan proceeds if they are given in check form.
(6) Any loan made under this section shall not be repaid by
proceeds of another loan made under this section by the same lender or related
interest. The proceeds from any loan made under this section shall not be
applied to any other loan from the same lender or related interest.
(7) On a consumer loan transaction in which cash is
advanced in exchange for a personal check, one return check
charge may be charged
if the check is deemed insufficient as defined in paragraph (e) of subsection
(1) of K.S.A. 16a-2-501, and amendments thereto.
Upon receipt of the check from the consumer, 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. Holder takes subject to claims and
defenses of maker. No criminal prosecution."
(8) In determining whether a consumer loan transaction made
under the provisions of this section is unconscionable conduct under K.S.A.
16a-5-108, and amendments thereto, consideration shall be given, among other
factors, to:
(a) The ability of the borrower to repay within the terms of the loan made
under this section; or
(b) the original request of the borrower for amount and term of the loan are
within the limitations under this section.
(9) A consumer may rescind any consumer loan transaction made under the
provisions of this section without cost not later than the end of the business
day immediately following the day on which the loan transaction was made. To
rescind the loan transaction:
(a) A consumer shall inform the lender that the consumer wants to rescind
the loan transaction;
(b) the consumer shall return the cash amount of the principal of the loan
transaction to the lender; and
(c) the lender shall return any fees that have been collected in association
with the loan.
(10) A person shall not commit or cause to be committed any of the following
acts or practices in connection with a consumer loan transaction subject to the
provisions of this section:
(a) Use any device or agreement that would have the effect of charging or
collecting more fees, charges or interest, or which results in more fees,
charges, or interest being paid by the consumer, than allowed by the
provisions of
this section, including but not limited to:
(i) Entering into a different type of transaction with the consumer;
(ii) entering into a sales/leaseback or rebate arrangement;
(iii) catalog sales; or
(iv) entering into any other transaction with the consumer or any other
person that is designed
to evade the applicability of this section;
(b) use, or threaten to use the criminal process in any state to collect on
the loan;
(c) sell any other product of any kind in connection with the making or
collecting of the
loan;
(d) include any of the following provisions in a loan document:
(i) A hold harmless clause;
(ii) a confession of judgment clause;
(iii) a provision in which the consumer agrees not to assert a claim or
defense arising out of the contract.
(11) As used in this section, "related interest" shall have the same meaning
as "person related to" in K.S.A. 16a-1-301, and amendments thereto.
(12) Any person who facilitates, enables or acts as a conduit or agent for
any third party who enters into a consumer loan transaction with the
characteristics set out in paragraphs (a) and (b) of subsection (1) shall be
required to obtain a supervised loan license pursuant to K.S.A. 16a-2-301, and
amendments thereto, regardless of whether the third party may be exempt from
licensure provisions of the Kansas uniform consumer credit code.
(13) Notwithstanding that a person may be exempted by virtue of federal law
from the interest rate, finance charge and licensure provisions of the Kansas
uniform consumer credit code, all other provisions of the code shall apply to
both the person and the loan transaction.
(14) This section shall be supplemental to and a part of
the
uniform consumer credit code.
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.
Article 2.--FINANCE CHARGES AND RELATED PROVISIONS
16a-2-404.Payday loans; finance charges; rights and
duties.
(1) On consumer loan transactions in which cash is advanced:
(a) With a short term,
(b) a single payment repayment is anticipated, and
(c) such cash advance is equal to or less than $500, a
licensed or
supervised
lender may charge
an amount not to exceed 15% of the amount of the
cash
advance.
(2) The minimum term of any loan under this section shall be 7 days and
the maximum term of any loan made under this section shall be 30 days.
(3) A lender and related interest shall not have more than two loans made
under this section outstanding to the same borrower at any one time and
shall not make more than three loans to any one borrower within a 30 calendar
day period. Each lender shall maintain a journal of loan transactions for each
borrower which shall include at least the following information:
(a) Name, address and telephone number of each borrower; and
(b) date made and due date of each loan.
(4) Each loan agreement made under this section shall contain the following
notice in at least 10 point bold face type: NOTICE TO BORROWER: KANSAS LAW
PROHIBITS THIS LENDER AND THEIR RELATED INTEREST FROM HAVING MORE THAN TWO
LOANS OUTSTANDING TO YOU AT ANY ONE TIME. A LENDER CANNOT DIVIDE THE AMOUNT YOU
WANT TO BORROW INTO MULTIPLE LOANS IN ORDER TO INCREASE THE FEES YOU PAY.
Prior to consummation of the loan transaction, the lender must:
(a) Provide the notice set forth in this subsection in both English and
Spanish; and
(b) obtain the borrower's signature or initials next to the English version
of
the notice or, if the borrower advises the lender that the borrower is more
proficient in Spanish than in English, then next to the Spanish version of the
notice.
(5) The contract rate of any loan made under this section
shall not be more than 3% per month of the loan proceeds after the maturity
date. No insurance charges or any other charges of any nature whatsoever shall
be permitted, except as stated in subsection (7), including
any charges for cashing the loan proceeds if they are given in check form.
(6) Any loan made under this section shall not be repaid by
proceeds of another loan made under this section by the same lender or related
interest. The proceeds from any loan made under this section shall not be
applied to any other loan from the same lender or related interest.
(7) On a consumer loan transaction in which cash is
advanced in exchange for a personal check, one return check
charge may be charged
if the check is deemed insufficient as defined in paragraph (e) of subsection
(1) of K.S.A. 16a-2-501, and amendments thereto.
Upon receipt of the check from the consumer, 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. Holder takes subject to claims and
defenses of maker. No criminal prosecution."
(8) In determining whether a consumer loan transaction made
under the provisions of this section is unconscionable conduct under K.S.A.
16a-5-108, and amendments thereto, consideration shall be given, among other
factors, to:
(a) The ability of the borrower to repay within the terms of the loan made
under this section; or
(b) the original request of the borrower for amount and term of the loan are
within the limitations under this section.
(9) A consumer may rescind any consumer loan transaction made under the
provisions of this section without cost not later than the end of the business
day immediately following the day on which the loan transaction was made. To
rescind the loan transaction:
(a) A consumer shall inform the lender that the consumer wants to rescind
the loan transaction;
(b) the consumer shall return the cash amount of the principal of the loan
transaction to the lender; and
(c) the lender shall return any fees that have been collected in association
with the loan.
(10) A person shall not commit or cause to be committed any of the following
acts or practices in connection with a consumer loan transaction subject to the
provisions of this section:
(a) Use any device or agreement that would have the effect of charging or
collecting more fees, charges or interest, or which results in more fees,
charges, or interest being paid by the consumer, than allowed by the
provisions of
this section, including but not limited to:
(i) Entering into a different type of transaction with the consumer;
(ii) entering into a sales/leaseback or rebate arrangement;
(iii) catalog sales; or
(iv) entering into any other transaction with the consumer or any other
person that is designed
to evade the applicability of this section;
(b) use, or threaten to use the criminal process in any state to collect on
the loan;
(c) sell any other product of any kind in connection with the making or
collecting of the
loan;
(d) include any of the following provisions in a loan document:
(i) A hold harmless clause;
(ii) a confession of judgment clause;
(iii) a provision in which the consumer agrees not to assert a claim or
defense arising out of the contract.
(11) As used in this section, "related interest" shall have the same meaning
as "person related to" in K.S.A. 16a-1-301, and amendments thereto.
(12) Any person who facilitates, enables or acts as a conduit or agent for
any third party who enters into a consumer loan transaction with the
characteristics set out in paragraphs (a) and (b) of subsection (1) shall be
required to obtain a supervised loan license pursuant to K.S.A. 16a-2-301, and
amendments thereto, regardless of whether the third party may be exempt from
licensure provisions of the Kansas uniform consumer credit code.
(13) Notwithstanding that a person may be exempted by virtue of federal law
from the interest rate, finance charge and licensure provisions of the Kansas
uniform consumer credit code, all other provisions of the code shall apply to
both the person and the loan transaction.
(14) This section shall be supplemental to and a part of
the
uniform consumer credit code.
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.
Article 2.--FINANCE CHARGES AND RELATED PROVISIONS
16a-2-404.Payday loans; finance charges; rights and
duties.
(1) On consumer loan transactions in which cash is advanced:
(a) With a short term,
(b) a single payment repayment is anticipated, and
(c) such cash advance is equal to or less than $500, a
licensed or
supervised
lender may charge
an amount not to exceed 15% of the amount of the
cash
advance.
(2) The minimum term of any loan under this section shall be 7 days and
the maximum term of any loan made under this section shall be 30 days.
(3) A lender and related interest shall not have more than two loans made
under this section outstanding to the same borrower at any one time and
shall not make more than three loans to any one borrower within a 30 calendar
day period. Each lender shall maintain a journal of loan transactions for each
borrower which shall include at least the following information:
(a) Name, address and telephone number of each borrower; and
(b) date made and due date of each loan.
(4) Each loan agreement made under this section shall contain the following
notice in at least 10 point bold face type: NOTICE TO BORROWER: KANSAS LAW
PROHIBITS THIS LENDER AND THEIR RELATED INTEREST FROM HAVING MORE THAN TWO
LOANS OUTSTANDING TO YOU AT ANY ONE TIME. A LENDER CANNOT DIVIDE THE AMOUNT YOU
WANT TO BORROW INTO MULTIPLE LOANS IN ORDER TO INCREASE THE FEES YOU PAY.
Prior to consummation of the loan transaction, the lender must:
(a) Provide the notice set forth in this subsection in both English and
Spanish; and
(b) obtain the borrower's signature or initials next to the English version
of
the notice or, if the borrower advises the lender that the borrower is more
proficient in Spanish than in English, then next to the Spanish version of the
notice.
(5) The contract rate of any loan made under this section
shall not be more than 3% per month of the loan proceeds after the maturity
date. No insurance charges or any other charges of any nature whatsoever shall
be permitted, except as stated in subsection (7), including
any charges for cashing the loan proceeds if they are given in check form.
(6) Any loan made under this section shall not be repaid by
proceeds of another loan made under this section by the same lender or related
interest. The proceeds from any loan made under this section shall not be
applied to any other loan from the same lender or related interest.
(7) On a consumer loan transaction in which cash is
advanced in exchange for a personal check, one return check
charge may be charged
if the check is deemed insufficient as defined in paragraph (e) of subsection
(1) of K.S.A. 16a-2-501, and amendments thereto.
Upon receipt of the check from the consumer, 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. Holder takes subject to claims and
defenses of maker. No criminal prosecution."
(8) In determining whether a consumer loan transaction made
under the provisions of this section is unconscionable conduct under K.S.A.
16a-5-108, and amendments thereto, consideration shall be given, among other
factors, to:
(a) The ability of the borrower to repay within the terms of the loan made
under this section; or
(b) the original request of the borrower for amount and term of the loan are
within the limitations under this section.
(9) A consumer may rescind any consumer loan transaction made under the
provisions of this section without cost not later than the end of the business
day immediately following the day on which the loan transaction was made. To
rescind the loan transaction:
(a) A consumer shall inform the lender that the consumer wants to rescind
the loan transaction;
(b) the consumer shall return the cash amount of the principal of the loan
transaction to the lender; and
(c) the lender shall return any fees that have been collected in association
with the loan.
(10) A person shall not commit or cause to be committed any of the following
acts or practices in connection with a consumer loan transaction subject to the
provisions of this section:
(a) Use any device or agreement that would have the effect of charging or
collecting more fees, charges or interest, or which results in more fees,
charges, or interest being paid by the consumer, than allowed by the
provisions of
this section, including but not limited to:
(i) Entering into a different type of transaction with the consumer;
(ii) entering into a sales/leaseback or rebate arrangement;
(iii) catalog sales; or
(iv) entering into any other transaction with the consumer or any other
person that is designed
to evade the applicability of this section;
(b) use, or threaten to use the criminal process in any state to collect on
the loan;
(c) sell any other product of any kind in connection with the making or
collecting of the
loan;
(d) include any of the following provisions in a loan document:
(i) A hold harmless clause;
(ii) a confession of judgment clause;
(iii) a provision in which the consumer agrees not to assert a claim or
defense arising out of the contract.
(11) As used in this section, "related interest" shall have the same meaning
as "person related to" in K.S.A. 16a-1-301, and amendments thereto.
(12) Any person who facilitates, enables or acts as a conduit or agent for
any third party who enters into a consumer loan transaction with the
characteristics set out in paragraphs (a) and (b) of subsection (1) shall be
required to obtain a supervised loan license pursuant to K.S.A. 16a-2-301, and
amendments thereto, regardless of whether the third party may be exempt from
licensure provisions of the Kansas uniform consumer credit code.
(13) Notwithstanding that a person may be exempted by virtue of federal law
from the interest rate, finance charge and licensure provisions of the Kansas
uniform consumer credit code, all other provisions of the code shall apply to
both the person and the loan transaction.
(14) This section shall be supplemental to and a part of
the
uniform consumer credit code.
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.