Predatory lending.

WORKING DRAFT
2009
STATE OF
WYOMING
09LSO-0519

HOUSE BILL
NO.
HB0139

Predatory lending.

Sponsored by:
Representative(s) Pedersen

A BILL

for

AN ACT relating to
consumer credit; providing additional limitations on lending of credit to servicemembers and their dependents; providing for disclosures; limiting interest rates; providing penalties;
and providing for an effective date.

Be It Enacted by the Legislature of the State of
Wyoming
:

Section 1.

W.S. 13
‑
10
‑
113 is created to read:

13
‑
10
‑
113.

Limitations on terms of consumer credit extended to servicemembers and dependents.

(
a
)

A creditor who extends consumer credit to a

covered member of the armed forces or a dependent of such a

member shall not require the member or dependent to pay interest

with respect to the exte
nsion of such credit, except as:

(
i
)

A
greed to under the terms of the credit agreement

or promissory note;

(
ii
)

A
uthorized by applicable
s
tate or
f
ederal law; and

(
iii
)

N
ot specifically prohibited by this section.

(
b
)

A creditor described in subsection

(
a
)
of this section
may not impose an annual percentage rate of interest

greater than
thirty-six
percent
(36%)
with respect to the consumer credit

extended to a covered member or a dependent of a covered member.

(c)

With respect to any extension
of consumer credit,
including any consumer credit originated

or extended through the internet to a covered member

or a dependent of a covered member, a creditor shall provide

to the member or dependent the following information orally

and in writing before the issuance of the credit:

(i)

A statement of the annual percentage rate of
interest applic
able to the extension of credit;

(
ii
)

Any disclosures required under the Truth in
Lending Act,
15 U.S.C. 1601
et seq.; and

(iii)

A clear description of the payment obligations

of the member or dependent, as applicable.

(d)

The
disclosures
required in subsection (c) of this section
shall be presented in accordance

with terms prescribed by the regulations issued by the
b
oard of
g
overnors of the
f
ederal
r
eserve
s
ystem to implement
the Truth in Lending Act, 15 U.S.C. 1601 et seq
.

(e)

It shall be unlawful for any creditor to

extend consumer credit to a covered member or a dependent of

such a membe
r with respect to which:

(
i
)

T
he creditor rolls over, renews, repays, refinances or

consolidates any consumer credit extended to the borrower

by the same creditor with the proceeds of other credit extended

to the same covered member or a dependent;

(ii
)

T
he borrower is required to waive the borrower’s right

to legal recourse under any otherwise applicable provision of
state or f
ederal law, including any provision of the
federal
S
ervicemembers
C
ivil
R
elief
A
ct;

(iii
)

T
he creditor requires the borrower to submit to arbitration

or imposes onerous legal notice provisions in the case

of a dispute;

(iv
)

T
he creditor demands unreasonable notice from the

borrower as a condition for legal action;

(v
)

T
he creditor uses a check or other method of access

to a deposit, savings
or other financial account maintained

by the borrower, or the title of a vehicle as security for the

obligation;

(vi
)

T
he creditor requires as a condition for the extension

of credit that the borrower establish an allotment to repay

an obligation; or

(vii
)

T
he borrower is prohibited from prepaying the loan

or is charged a penalty or fee for prepaying all or part of

the loan.

(f)

A creditor who knowingly violates this

section
is guilty of a misdemeanor punishable by imprisonment for not more than six (6) months, a fine of not more than seven hundred f
ifty dollars ($750.00), or both
.

(g)

Any credit agreement, promissory

note
or other contract prohibited under this section is void

from the inception of such contract.

(h)

As used in this section:

(i
)

"Annual
percentage

rate
"
has the same meaning as in section 107 of the Truth
and Lending Act, 15 U.S.C. 1606
, as implemented by regulations

of the Board of Governors of the Federal Reserve System.

For purposes of this section, such term includes all fees and

charges, including charges and fees for single premium credit

insurance and other ancillary products sold in connection with

the credit transaction, and such fees and charges shall be

included in the calculatio
n of the annual percentage rate;

(ii)

"Consumer credit"
has

the meaning provided for such term in regulations prescribed

under this section, except that such term does not include
a residential mortgage
or a loan procured in the course

of purchasing a car or other personal property, when that

loan is offered for the express purpose of financing the purchase

and is secured by the ca
r or personal property procured;

(
iii
)

"C
overed member
"
means

a me
mber of the armed forces who is:

(A)

O
n active duty under a call or order that does

not specify a period of
thirty (
30
)
days or less; or

(B)

O
n active
g
uard and
r
eserve
d
uty.

(iv)

"C
reditor
" means a person:

(A)

Who:

(
I
)

I
s engaged in the business of extending consumer

credit; and

(
II
)

M
eets such additional criteria as are specified

for such purpose in regulations prescribed under this

section; or

(B)

W
ho is an assignee of a person described in

subparagraph (A)
of this paragraph
with respect to any consumer credit

extended.

(v
)

"Dependent
,
"
with respect to
a covered member, means:

(A)

T
he member’s spouse;

(B)

T
he member’s child
as defined in 38 U.S.C. 101(4)
; or

(C)

A
n individual for whom the member provided more

than one-half
(1/2)
of the individual’s support for
one hundred eighty (
180
)
days immediately

preceding an extension of consumer credit covered

by this section.

(
vi
)

"I
nterest
"
includes all cost elements

associated with the extension of credit, including fees,

service charges, renewal charges, credit insurance premiums,

any ancillary product sold with any extension of credit to a

servicemember or the servicemember’s dependent, as

applicable, and any other charge or premium with respect
to the extension of consumer credit.

Section
2
.

This act is effective July 1, 200
9
.

(END)

1
HB0139