Amends TCA Title 45, Chapter 5.
This bill increases existing fees, and adds additional fees, that an industrial loan and thrift company, industrial investment company, or industrial bank may charge to service various loans. Under present law, any person registered as an industrial loan and thrift company, industrial investment company or industrial bank (referred to as a registrant) may charge a service charge in an amount equal to 4 percent of the total amount of the loan, which charge may be deducted in advance from the principal of the loan. This bill increases the authorized amount of the service charge from 4 percent to 5 percent. Present law authorizes registrants to also charge an installment maintenance fee of: $2.50 per month on loans where the total amount of the loan is less than $100; $3.50 per month where the total amount of the loan is $100 or more but not more than $750; $3.00 per month where the total amount of the loan is more than $750 but not more than $1,250; and $2.50 per month where the total amount of the loan is more than $1,250. This bill rewrites these provisions to instead provide that registrants may also charge an installment maintenance fee of $5.00 per month. This bill adds that in addition to any other charges permitted for the making of a loan, a registrant may collect a closing fee at the time of the making of the loan for the purpose of preparing and executing the documents for, and verifying compliance with, the federal Truth in Lending Act and state law. The closing fee may be for an amount up to 4 percent of the amount financed but must not be more than $50.00. The closing fee may be paid from the proceeds of the amount borrowed or added to the amount financed. If a loan, upon which a closing fee has been charged, is prepaid in full by any means within 90 days of the date of the loan, then the registrant must refund or credit the borrower with a pro rata portion of the closing fee. However, the registrant may retain up to $25.00 of the closing fee regardless of when the loan is prepaid.
This bill increases existing fees, and adds additional fees, that an industrial loan and thrift company, industrial investment company, or industrial bank may charge to service various loans. Under present law, any person registered as an industrial loan and thrift company, industrial investment company or industrial bank (referred to as a registrant) may charge a service charge in an amount equal to 4 percent of the total amount of the loan, which charge may be deducted in advance from the principal of the loan. This bill increases the authorized amount of the service charge from 4 percent to 5 percent. Present law authorizes registrants to also charge an installment maintenance fee of: $2.50 per month on loans where the total amount of the loan is less than $100; $3.50 per month where the total amount of the loan is $100 or more but not more than $750; $3.00 per month where the total amount of the loan is more than $750 but not more than $1,250; and $2.50 per month where the total amount of the loan is more than $1,250. This bill rewrites these provisions to instead provide that registrants may also charge an installment maintenance fee of $5.00 per month. This bill adds that in addition to any other charges permitted for the making of a loan, a registrant may collect a closing fee at the time of the making of the loan for the purpose of preparing and executing the documents for, and verifying compliance with, the federal Truth in Lending Act and state law. The closing fee may be for an amount up to 4 percent of the amount financed but must not be more than $50.00. The closing fee may be paid from the proceeds of the amount borrowed or added to the amount financed. If a loan, upon which a closing fee has been charged, is prepaid in full by any means within 90 days of the date of the loan, then the registrant must refund or credit the borrower with a pro rata portion of the closing fee. However, the registrant may retain up to $25.00 of the closing fee regardless of when the loan is prepaid.
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