SB 3561 — BUY-NOW-PAY-LATER ACT

SB3561 EngrossedEnrolled LRB104 20058 SPS 33509 b AN ACT concerning business.

"Buy-now-pay-later loan" or "loan" also includes (i) a buy-now-pay-later loan payable SB3561 EngrossedEnrolled - 2 - LRB104 20058 SPS 33509 b in one or more installments without any interest or finance charge and (ii) a buy-now-pay-later loan with either interest or finance charges or both.

"Finance charge" means the cost of financing as a dollar SB3561 EngrossedEnrolled - 3 - LRB104 20058 SPS 33509 b amount.

This Act shall be administered by the Division SB3561 EngrossedEnrolled - 4 - LRB104 20058 SPS 33509 b on behalf of the Secretary.

This Act applies to loan transactions conducted by SB3561 EngrossedEnrolled - 5 - LRB104 20058 SPS 33509 b any medium, including, but not limited to, paper, facsimile, Internet, or telephone.

(d) Banks, savings banks, savings and loan associations, SB3561 EngrossedEnrolled - 6 - LRB104 20058 SPS 33509 b credit unions, and insurance companies organized, chartered, or holding a certificate of authority to do business under the laws of this State, any other state, or the United States are exempt from the provisions of this Act and rules adopted under this Act.

(A) The person indemnifies, insures, or protects an exempt person or entity for any costs or risks SB3561 EngrossedEnrolled - 7 - LRB104 20058 SPS 33509 b related to the loan.

(2) the filing with the Secretary or the multistate licensing system, as approved by the Secretary, of a listing of judgments entered against, and bankruptcy SB3561 EngrossedEnrolled - 8 - LRB104 20058 SPS 33509 b petitions by, the applicant for the preceding 10 years;

(d) The Secretary may impose conditions on a license if SB3561 EngrossedEnrolled - 9 - LRB104 20058 SPS 33509 b the Secretary determines that those conditions are necessary or appropriate.

SB3561 EngrossedEnrolled - 10 - LRB104 20058 SPS 33509 b (i) person, including an ultimate equitable owner, that directly or indirectly owns or controls 10% or more of any class of stock of the applicant;

SB3561 EngrossedEnrolled - 11 - LRB104 20058 SPS 33509 b Section 8.

(d) For the purposes of this Section, and to reduce the points of contact that the Secretary may have to maintain, the SB3561 EngrossedEnrolled - 12 - LRB104 20058 SPS 33509 b Secretary may use a multistate licensing system as a channeling agent for requesting and distributing information to and from any source.

SB3561 EngrossedEnrolled - 13 - LRB104 20058 SPS 33509 b (a) Absent a written extension from the Department and payment of any late fees required by the Department, a license shall expire on the last day of December of each calendar year if a licensee fails to timely submit a properly completed renewal application form and fees.

(a) The expenses of administering this Act, including licensing, investigations, and examinations provided for in this Act, shall be borne by and assessed against persons and entities regulated by this Act in the proportions and in the SB3561 EngrossedEnrolled - 14 - LRB104 20058 SPS 33509 b manner as the Secretary deems appropriate.

and (2) all reports and all books and records required to be made by any licensee, including annual audited SB3561 EngrossedEnrolled - 15 - LRB104 20058 SPS 33509 b financial statements if required by the Secretary and annual reports of activity;

(k) to examine the books and records of every licensee SB3561 EngrossedEnrolled - 16 - LRB104 20058 SPS 33509 b or any person requiring a license or who the Secretary reasonably believes may require a license at any time interval reasonably determined appropriate by the Secretary;

(s) to assign an examiner or examiners to monitor the affairs of a licensee with whatever frequency the Secretary determines appropriate and to charge the SB3561 EngrossedEnrolled - 17 - LRB104 20058 SPS 33509 b licensee for reasonable and necessary expenses of the Secretary if in the opinion of the Secretary an emergency exists or appears likely to occur;

The Secretary and the Secretary's appointees may examine the entire books, SB3561 EngrossedEnrolled - 18 - LRB104 20058 SPS 33509 b records, documents, and operations of each licensee and its subsidiary, affiliate, or agent, and may examine any of the licensee's or its subsidiaries', owners', affiliates', or agents' officers, directors, employees, and agents under oath.

Reports required of licensees by the Secretary under this Act and results of examinations performed by the Secretary under this Act shall be the property of only the Secretary, but may be SB3561 EngrossedEnrolled - 19 - LRB104 20058 SPS 33509 b shared with the licensee.

The requester shall promptly notify other parties to a case of the release of confidential supervisory information SB3561 EngrossedEnrolled - 20 - LRB104 20058 SPS 33509 b obtained and, upon entry of a protective order, shall provide copies of confidential supervisory information to the other parties.

The court may grant other relief, including, but not limited to, the restraint, by injunction or appointment of a receiver, of any transfer, pledge, assignment, or other disposition of the person's assets, concealment, destruction, or other disposition of books, accounts, records, or other documents and materials as the court deems appropriate, until the person SB3561 EngrossedEnrolled - 21 - LRB104 20058 SPS 33509 b has fully complied with the subpoena or subpoena duces tecum and the Secretary has completed an investigation or examination.

Every licensee shall produce to the Department written reports or answers to SB3561 EngrossedEnrolled - 22 - LRB104 20058 SPS 33509 b questions in the time and manner requested by the Secretary.

(2) that any fact or condition exists that, if it had existed at the time of the original application for the SB3561 EngrossedEnrolled - 23 - LRB104 20058 SPS 33509 b license, would have warranted the Secretary in refusing to issue the original license;

(10) that a licensee failed to submit to periodic SB3561 EngrossedEnrolled - 24 - LRB104 20058 SPS 33509 b examination by the Secretary as required by this Act or failed to maintain, preserve, and keep available for examination all books, accounts, or other documents required by the provisions of this Act and rules adopted under this Act for a period of at least 2 years after the loan is paid in full or any time period set forth by rule;

(13) that a person had a license, or the equivalent, to practice any profession, occupation, other industry or activity requiring licensure revoked, suspended, disciplined, or otherwise acted against, including the denial of licensure by a licensing authority of this State or another state, territory, or country for fraud, dishonest dealing, misrepresentations, incompetence, conversion, any act of moral turpitude or any other grounds that would constitute grounds for discipline under SB3561 EngrossedEnrolled - 25 - LRB104 20058 SPS 33509 b this Act;

The Secretary's approval of a licensee's application to surrender SB3561 EngrossedEnrolled - 26 - LRB104 20058 SPS 33509 b its license shall not affect the licensee's civil or criminal liability for acts committed prior to surrender.

(h) An order assessing a fine, an order imposing conditions upon a license, an order revoking or suspending a license, or an order denying renewal of a license shall take effect upon service of the order unless the licensee serves the Department with a written request for a hearing in the SB3561 EngrossedEnrolled - 27 - LRB104 20058 SPS 33509 b manner required by the notice within 20 days after the date of service of the order.

The Secretary may SB3561 EngrossedEnrolled - 28 - LRB104 20058 SPS 33509 b investigate any complaints and inquiries made concerning this Act and any licensees or persons the Secretary believes may require a license under this Act.

(2) personal history and experience information, including independent credit reports obtained from a consumer reporting agency described in Section 603(p) SB3561 EngrossedEnrolled - 29 - LRB104 20058 SPS 33509 b of the federal Fair Credit Reporting Act;

(d) Each person subject to this Act shall make or compile reports or prepare other information as directed SB3561 EngrossedEnrolled - 30 - LRB104 20058 SPS 33509 b by the Secretary to carry out the purposes of this Section, including, but not limited to:

SB3561 EngrossedEnrolled - 31 - LRB104 20058 SPS 33509 b (1) retain attorneys, accountants, or other professionals and specialists as examiners, auditors, or investigators to conduct or assist in the conduct of examinations or investigations;

(g) The authority of this Section shall remain in effect, whether a person subject to this Act acts or claims to act under any licensing or registration law of SB3561 EngrossedEnrolled - 32 - LRB104 20058 SPS 33509 b this State or claims to act without authority.

(b) The Secretary may enter into agreements or sharing arrangements with other governmental agencies, the Conference of State Bank Supervisors, and other SB3561 EngrossedEnrolled - 33 - LRB104 20058 SPS 33509 b associations representing governmental agencies.

The Secretary may also protect from disclosure confidential or privileged information that would be exempt from disclosure to the extent it is held directly by the multistate licensing system, another SB3561 EngrossedEnrolled - 34 - LRB104 20058 SPS 33509 b licensing body, federal and state regulatory officials, or law enforcement.

SB3561 EngrossedEnrolled - 35 - LRB104 20058 SPS 33509 b (1) appointment of a hearing officer;

Each licensee shall pay to the Division its pro rata share, based on number or volume of transactions or revenue or any other metric established by the Department by SB3561 EngrossedEnrolled - 36 - LRB104 20058 SPS 33509 b rule, of the cost for administration of the Act that exceeds other fees listed in this Section, as estimated by the Division, for the current year and any deficit actually incurred in the administration of the Act in prior years.

SB3561 EngrossedEnrolled - 37 - LRB104 20058 SPS 33509 b (d) If it is determined that the Secretary had the authority to issue the cease and desist order, the Secretary may issue orders as may be reasonably necessary to correct, eliminate, deter, or remedy the conduct described in the order and resulting harms.

A lender shall also, before providing or causing to be provided a loan to a consumer, take into consideration the financial SB3561 EngrossedEnrolled - 38 - LRB104 20058 SPS 33509 b ability of the borrower to repay the loan in the time and manner provided in the loan contract.

(2) the terms of buy-now-pay-later loans, including, without limitation, the cost, such as interest and fees, the repayment schedule, the means by which a person may SB3561 EngrossedEnrolled - 39 - LRB104 20058 SPS 33509 b dispute billing practices, whether the transaction will or will not be reported to a credit reporting agency, and other material conditions, in a clear and conspicuous manner and in a manner that complies with applicable federal regulations, including, but not limited to, Regulation Z of Title I of the Consumer Credit Protection Act;

(d) A lender shall provide refunds or credits for goods or services purchased in connection with a loan, if the consumer SB3561 EngrossedEnrolled - 40 - LRB104 20058 SPS 33509 b requests and is entitled to a refund, in a manner that is fair, transparent, and not unduly burdensome to consumers.