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Bill Summary · SB 1367

Summary of SB 1367: Relating to Installment Loans

Bill Number: SB 1367
Status: Act 116, enacted on May 29, 2025
Introduced: January 21, 2025
Primary Sponsor: Senator Kouchi
Related Bill: HB 1048 (companion)

Purpose and Intent

SB 1367 aims to regulate installment loans by addressing issues related to convenience fees and maintenance fees charged by lenders. The bill seeks to enhance consumer protection within the installment lending industry, ensuring that borrowers are treated fairly and transparently.

Key Provisions

  1. Regulation of Convenience Fees:

    • The bill establishes guidelines for the imposition of convenience fees by installment lenders. These fees must be clearly disclosed to borrowers and cannot exceed a specified percentage of the loan amount.

  2. Maintenance Fees:

    • SB 1367 introduces regulations on maintenance fees associated with installment loans, ensuring that such fees are reasonable and justified. Lenders must provide clear information regarding any maintenance fees charged.

  3. Oversight by the Department of Commerce and Consumer Affairs:

    • The bill empowers the Division of Financial Institutions within the Department of Commerce and Consumer Affairs to oversee compliance with the new regulations, ensuring that lenders adhere to the established guidelines.

  4. Consumer Protections:

    • Enhanced consumer protections are a central focus of the bill, aimed at preventing predatory lending practices and ensuring that borrowers have access to transparent information regarding their loans.

Impact

  • Borrowers: The primary beneficiaries of SB 1367 are consumers who take out installment loans. The regulations are designed to protect them from excessive fees and ensure they are fully informed about the costs associated with their loans.

  • Lenders: Installment lenders will need to adjust their practices to comply with the new regulations. This may involve revising fee structures and improving transparency in their lending processes.

Procedural Timeline

  • January 21, 2025: Bill introduced and passed First Reading.
  • February 10, 2025: Public hearing scheduled by the Committee on Commerce and Consumer Protection (CPN).
  • March 4, 2025: Passed Third Reading in the Senate and transmitted to the House.
  • April 30, 2025: Passed Final Reading in the House with amendments.
  • May 2, 2025: Enrolled to the Governor.
  • May 29, 2025: Signed into law as Act 116.

Conclusion

SB 1367 represents a significant step towards improving consumer protections in the installment loan market. By regulating convenience and maintenance fees, the bill aims to foster a fairer lending environment for borrowers while holding lenders accountable for their practices. The oversight by the Department of Commerce and Consumer Affairs will play a crucial role in ensuring compliance and protecting consumer interests.

Compiled from official sources — confirm details with the bill’s official record.

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