COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. No.:         3460-01

Bill No.:          HB 1301

Subject:           Banks and Financial Institutions; Business and Commerce; Consumer Protection

Type:              Original

Date:               January 23, 2008

Bill Summary:            Changes the laws regarding unsecured loans of $500 or less, sometimes referred to as "payday loans", and allows the Attorney General to maintain an action to enforce compliance.

FISCAL SUMMARY

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 4 pages.

☐ Estimated Total Net Effect on All funds expected to exceed $100,000 savings or (cost).

☐ Estimated Net Effect on General Revenue Fund expected to exceed $100,000 (cost).

FISCAL ANALYSIS

ASSUMPTION

Officials from the Office of State Courts Administrator and Department of Insurance, Financial Institutions and Professional Registration assume the proposal will have no fiscal impact on their organizations.

Officials from the Office of Attorney General assume any potential costs arising from this proposal can be absorbed with existing resources.

Oversight notes the provisions of the proposal, section 408.500.11(2), allow the court to impose civil penalties of up to $1,000 per day if the lender fails to comply with the provisions of the legislation. Oversight assumes any penalties collected will be collected and distributed according to section 7, Article IX of the Constitution. Oversight further assumes minimal penalties will be collected and, therefore, is not presenting penalties in the fiscal note.

FISCAL IMPACT - Small Business

The proposal may impact small business loan companies if they can no longer renew "payday" loans and the fees and interest rates charged are limited by the legislation.

FISCAL DESCRIPTION

The proposed legislation appears to have no fiscal impact.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

SOURCES OF INFORMATION

Office of Attorney General

Office of State Courts Administrator

Department of Insurance, Financial Institutions and Professional Registration

                                                                                                Mickey Wilson, CPA

                                                                                                Director

                                                                                                January 23, 2008