4 Colo. Code Regs. § 902-1-17
Current through Register Vol. 47, No. 16, August 25, 2024
Rule 4 CCR 902-1-17 - Deferred Deposit/Payday LoansFor deferred deposit/payday loans, the following rules apply. All references to payday loans also include deferred deposit loans.
(A) Origination/Acquisition Fee The finance charge permitted by section 5-3.1-105, C.R.S. of up to 20% of the first $300 loaned plus 7.5% of any amount loaned in excess of $300 may be referred to as an "origination" or "acquisition" fee.
(B) Installments 1. The lender and consumer may contract for payments to be made in a single installment or multiple installments of substantially equal amounts due at equal periodic intervals.2. All applications for payday loans and payday loan agreements shall clearly and conspicuously disclose that under Colorado law, loans may be structured to be repaid in a single installment or multiple installments. If a lender does not offer both installment options, it shall also clearly and conspicuously disclose in its applications and loan agreements the option it provides.(C) Interest Rate The interest rate of up to 45% per annum permitted by section 5-3.1-105, C.R.S. may be assessed only on the amount financed of $500 or less. It may not be assessed on the origination/acquisition fee or monthly maintenance fees.
(D) Monthly Maintenance Fees 1. A monthly maintenance fee may be charged for each month the loan is outstanding after the first 30 days of the loan. The number of monthly maintenance fees permitted is equal to the number of months in the loan term less one month. For example, on a six month loan, a monthly maintenance fee may be charged at the end of the second through sixth months if the loan is outstanding during that time.2. A monthly maintenance fee may be charged on each $100 increment of the amount financed. No fee may be collected on amounts of less than $100. For example, on a $350 loan, the permitted monthly maintenance fee is $22.50 (3 increments of $100 x $7.50 = $22.50).3. A monthly maintenance fee is not earned until the end of the month. If a payday loan is prepaid in full at any time during a month, no monthly maintenance fee may be collected for that month.4. The monthly maintenance fee may be based on the amount financed rather than the actual balance remaining each month.(E) Posting of Charges To comply with section 5-3.1-113, C.R.S., a lender shall post in its place of business examples of the total of all charges for a 6-month loan in the amounts of $100, $300 and $500 based on the assumption that the loan will be paid as scheduled. If the lender does not offer loans in those amounts, it shall post examples for its minimum and maximum loan amounts. If the lender offers both single and multiple installment loans, it shall provide the examples for both single and multiple installment loans. If a lender offers renewals, it shall also post the total of all charges for renewal of a 6-month loan using the same examples. If a lender does not offer renewals, it shall post a statement that although state law permits renewals, it does not offer renewals. Lenders that make loans over the internet shall post the charges required by this rule on their web sites. No other loan terms or payment information may be included in the required posting of charges.
(F) Payment Instruments If a payday loan is payable in multiple installments, the lender may hold a single payment instrument or a payment instrument for each installment. The amount of the payment instrument may include the loan principal and origination/acquisition fee. The payment instrument or authorization may not include interest or the monthly maintenance fee. The lender may collect the remaining amount due under each installment but may not hold a payment instrument or authorization for such additional amount.
(G) Application of Payments Subject to Rule 17(I), a lender may contract for and apply payments on a payday loan using a precomputed or non-precomputed method. A lender that contracts for a non-precomputed loan shall clearly and conspicuously disclose in the loan agreement "Late payments made after the due date will result in additional interest charges."
(H) Renewals 1. Upon renewal of a payday loan, the lender may not charge an origination fee, acquisition fee, or monthly maintenance fees.2. Upon renewal of a payday loan, the lender may refinance an amount up to $500. If the amount owed exceeds $500, the lender may refinance up to $500 and the consumer must pay any remaining amount.(I) Prepayments and Refunds 1. A consumer may at any time prepay a payday loan in full or in part without a penalty prior to the due date or date the last installment is due.2. The refund required by section 5-3.1-105, C.R.S. shall include the pro-rata portion of the origination/acquisition fee, the interest rate, and the monthly maintenance fee.3. Consumer refunds may be paid to the consumer by cash, check, or similar method, or by appropriate credit to the remaining balance of the loan but may not be applied as a credit to another open account or for a future loan with that lender or any other lender. If a lender makes a cash refund, it shall provide the consumer with a cash receipt and comply with Rule 10(a)(14).4. If a consumer exercises the right to rescind the loan by 5 p.m. of the next business day pursuant to section 5-3.1-106(2), C.R.S, the lender shall refund all charges imposed pursuant to section 5-3.1-105, C.R.S.(J) Default 1. If a payday loan is payable in 5 or more installments and the consumer is in default for failure to make a required payment, the lender may not accelerate the balance or enforce a security interest, including depositing any remaining payment instruments, unless it complies with the right to cure default provisions in UCCC sections 5-5-110 and 5-5-111.2. The lender may not charge or collect more than one returned instrument charge on a payday loan, regardless of the number of payment instruments returned unpaid or the number of times a payment instrument is presented and returned unpaid. The amount of the single returned instrument charge may not exceed $25 and must be contracted for in the loan agreement.3. The lender may not charge or collect monthly maintenance fees for any months the loan remains unpaid after the end of the scheduled final due date.Repealed effective November 1, 2000Rules 14 eff. 10/01/2008.Rule14 repealed eff. 07/30/2009.Rule 16 (1st un - numbered paragraph); eff.11/29/2010.