AN ACT PROHIBITING THE MAKING OF PAYDAY LOANS.


General Assembly		*Raised Bill No. 1040*
*January Session, 2007*		LCO No. 3506
		03506_______BA_
Referred to Committee on Banks
Introduced by:
(BA )

AN ACT PROHIBITING THE MAKING OF PAYDAY LOANS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective October 1, 2007) No person shall engage in the business of making a payday loan. For the purposes of this section, a "payday loan" means an unsecured, short-term cash advance (1) made to a borrower until the next payday of such borrower, (2) with an interest rate exceeding thirty-six per cent per annum, and (3) made in accordance with a loan agreement that provides that the borrower writes a postdated check to the lender, authorizes the lender to debit the borrower's account or executes a wage assignment.


This act shall take effect as follows and shall amend the following sections:
Section 1	October 1, 2007	New section

Statement of Purpose:

To specifically prohibit the making of payday loans in order to protect consumers from the predatory terms and tactics employed in the making of such loans.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]