28-46-412 PAYDAY LOAN PROCEDURES. - Idaho Statutes

TITLE 28

COMMERCIAL TRANSACTIONS

CHAPTER 46

ADMINISTRATION

PART 4.

PAYDAY LOANS

28-46-412. Payday loan procedures. (1) Each payday loan must be documented in a written agreement signed by the borrower. The loan agreement must include the name of the licensee, the loan date, the principal amount of the loan, and a statement of the total amount of fees charged as a condition of making the loan, expressed both as a dollar amount and as an annual percentage rate (APR).

(2) The maximum principal amount of any payday loan is one thousand dollars ($1000).

(3) A licensee may charge a fee for each payday loan. Such fee shall be deemed fully earned as of the date of the transaction and shall not be deemed interest for any purpose of law. No other fee or charges may be charged or collected for the payday loan except as specifically set forth in this act.

(4) Each licensee shall conspicuously post in each licensed location a notice of the fees, expressed as a dollar amount per one hundred dollars ($100), charged for payday loans.

(5) Before disbursing funds pursuant to a payday loan, a licensee shall provide written notice to the borrower indicating the following:

(a) A payday loan is intended to address short-term, not long-term, financial needs.

(b) The borrower will be required to pay additional fees if the payday loan is renewed rather than paid in full when due.

(c) The borrower has the right to rescind the payday loan, at no cost, no later than the end of the next business day following the day on which the payday loan is made.

(6) (a) A payday loan may be made pursuant to a transaction whereby the licensee:

(i) Accepts a check from a borrower who is the maker of the check; and

(ii) Agrees not to negotiate, deposit or present the check for an agreed upon period of time and pays to the maker the amount of the check, less the fees permitted by this act.

(b) In such a transaction, the licensee may accept only one (1) postdated check for each loan as security for the loan. Before the licensee may negotiate or present a check for payment, the check shall be endorsed with the actual name under which the licensee is doing business. The borrower shall have the right to redeem the check from the licensee at any time prior to the presentment or deposit of the check by making payment to the licensee of the full amount of the check in cash or immediately available funds.

(7) The amount advanced to the borrower by the licensee in a payday loan may be paid to the borrower in the form of cash, the licensee’s business check, a money order, an electronic funds transfer to the borrower’s account, or other reasonable electronic payment mechanism, provided however, that no additional fee may be charged to the borrower by a licensee to access the proceeds of the payday loan.

(8) A payday loan may be repaid by the borrower in cash, by negotiation of the borrower’s check in a transaction pursuant to subsection (6) of this section or, with the agreement of the licensee, a debit card, a cashier’s check, an electronic funds transfer from the borrower’s bank account, or any other reasonable electronic payment mechanism to which the parties may agree.