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HOUSE BILL No. 2497
AN ACT concerning financial institutions; relating to loans; prohibiting the assessment of a
prepayment penalty against any party more than six months after the execution of a
note evidencing a home loan made primarily for personal, family or household
purposes secured by a real estate mortgage; amending K.S.A. 2025 Supp. 16-207 and
repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 2025 Supp. 16-207 is hereby amended to read as
follows: 16-207. (a) Subject to the following provision, the parties to
any bond, bill, promissory note or other instrument of writing for the
payment or forbearance of money may stipulate therein for interest
receivable upon the amount of such bond, bill, note or other instrument
of writing, at a rate not to exceed 15% per annum unless otherwise
specifically authorized by law.
(b) No prepayment penalty shall be assessed against any party for
prepayment of any home loan evidenced by a note secured by a real
estate mortgage where such prepayment is made more than six months
after execution of such note more than six months after the execution of
a note evidencing a home loan made primarily for personal, family or
household purposes secured by a real estate mortgage.
(c) The lender may collect from the borrower:
(1) The actual fees paid a public official or agency of the state or
federal government, for filing, recording or releasing any instrument
relating to a loan subject to the provisions of this section; and
(2) reasonable expenses incurred by the lender in connection with
the making, closing, disbursing, extending, readjusting or renewing of
loans subject to the provisions of this section.
(d) Any person so contracting for a greater rate of interest than
that authorized by this section shall forfeit all interest so contracted for
in excess of the amount authorized under this section; and in addition
thereto shall forfeit a sum of money, to be deducted from the amount
due for principal and lawful interest, equal to the amount of interest
contracted for in excess of the amount authorized by this section and
such amounts may be set up as a defense or counterclaim in any action
to enforce the collection of such obligation and the borrower shall also
recover a reasonable attorney fee.
(e) Subsection (a) shall not apply to:
(1) A covered transaction subject to the usury provisions of the
Kansas mortgage business act, K.S.A. 9-2201 et seq., and amendments
thereto;
(2) a consumer credit transaction subject to the usury provisions of
the uniform consumer credit code, K.S.A. 16a-1-101 et seq., and
amendments thereto;
(3) loans made by a qualified plan, as defined by the internal
revenue code, to an individual participant in such plan or to a member
of the family of such individual participant;
(4) a note secured by a real estate mortgage or a contract for deed
to real estate when the note or contract for deed permits adjustment of
the interest rate, the term of the loan or the amortization schedule; or
(5) a business or agricultural transaction. For the purpose of this
section, a "business or agricultural transaction" means a loan, including
a note secured by a contract for deed to real estate or a credit sale,
which is made primarily for purposes other than personal, family or
household purposes.
(f) Subsections (b), (c) and (d) shall not apply to:
(1) A covered transaction under the Kansas mortgage business act,
K.S.A. 9-2201 et seq., and amendments thereto; or
(2) a consumer credit transaction under the uniform consumer
credit code, K.S.A. 16a-1-101 et seq., and amendments thereto.
HOUSE BILL No. 2497—page 2
Sec. 2. K.S.A. 2025 Supp. 16-207 is hereby repealed.
Sec. 3. This act shall take effect and be in force from and after its
publication in the statute book.
I hereby certify that the above BILL originated in the HOUSE, and was
adopted by that body
HOUSE adopted
Conference Committee Report
Speaker of the House.
Chief Clerk of the House.
Passed the SENATE
as amended
SENATE adopted
Conference Committee Report
President of the Senate.
Secretary of the Senate.
APPROVED
Governor.