Grab a highlighter, call your attorney, and break out the aspirin, because we’re talking about new state laws!
Depending on the state or states in which you’re located or operate, it’s highly likely that lawmaking season is currently underway or has just ended: only 4 state legislatures (Texas, Nevada, Montana, and North Dakota) are not convening in 2018, while the other 46 are either in session or have adjourned. For lenders and other financial services companies, this is an energizing (read: rife with anxious energy) time, as states are increasingly turning their attention and resources toward vigorous consumer protection legislation and enforcement.
Last year, for instance, states passed a total of 139 lending laws, roughly around the median for similar legislation enacted every year since 2011. With nearly 600 lending-related bills introduced near the beginning of the year, 2018 is shaping up to be a continuation of the trend.
This data comes to us from the American Financial Services Association’s 2018 State Legislative Session Preview and 2017 Review. According to AFSA:
“Lending legislation, particularly concerning payday and title loans, has been considered frequently over the last several sessions. Lawmakers paid more attention to these kinds of loans because of the potential harms they pose to consumers, particularly low-income consumers, who, many believe, are at risk of becoming trapped in a cycle-of-debt if they use these loan products. These bills often concern capping interest rates, limiting how often such loans may be rolled over or renewed, or creating statewide loan databases to which lenders must report data and check regularly to ensure the loans they make comply with state laws. This type of legislation is at times written broadly enough to affect traditional installment loans as well.”
The big picture? This year’s not even half over and we’re seeing strong numbers of loan-related bills. As we’ve written before, it’s clear that states are stepping in where the Consumer Financial Protection Bureau is stepping out.
If you’re scrambling to keep up with the constantly evolving nature of fair lending compliance and the Excedrin isn’t cutting it anymore, it may be time to consider adopting an automated compliance management system. Learn how lenders use Compligo to stay on top of their annually mounting obligations under state and federal law.