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Consumer Credit Regulation: South Dakota

S.D. Codified Laws §§ 54-3A-1 to 54-3A-25 (Consumer Installment Sales Contracts).

Scope: Installment sales of goods or services for personal, family, or household use. § 54-3A-1.

Licensure requirements: None.

Credit terms: Rate agreed upon by the creditor and the consumer by written agreement. The finance charge is expressed and compounded in the same manner as an interest rate. § 54-3A-3.

Restrictions on points or prepaid interest: None.

Consumer Credit Regulation: Tennessee

Tenn. Code Ann. §§ 47-11-101 to 47-11-111 (Retail Installment Sales Act).

Scope: Installment sales of goods and services, whether or not purchased for commercial or industrial use, not principally for the purpose of resale. Revolving credit. § 47-11-102.

Licensure requirements: None.

Credit terms: The seller or other holder under a retail installment contract may charge a time price differential that shall not exceed $11.75 per $100 per year on the principal balance. § 47-11-103(d).

Consumer Credit Regulation: Texas

Tex. Fin. Code Ann. §§ 345.001 to 345.357 (West) (Retail Installment Sales).

Scope: Installment sales of goods (but not motor vehicles) and services purchased for personal, family, or household use. Revolving credit. §§ 345.001, 345.002 and 345.003.

Licensure requirements: Each holder must pay $10 annual fee per location at which a retail installment transaction is originated, serviced, or collected. § 345.351.

Consumer Credit Regulation: Utah

Utah Code Ann. §§ 70C-1-101 to 70C-8-203 (West) (Utah Consumer Credit Code).

Scope: All credit offered or extended by a creditor to an individual person primarily for personal, family, or household purposes. Does not include any extension of credit primarily for business, commercial or agricultural purposes and does not apply to any extension of credit in which amount financed exceeds $25,000. §§ 70C-1-201, 70C-1-202.

Licensure requirements: None.

Consumer Credit Regulation: Vermont

Vt. Stat. Ann. tit. 9, §§ 2401 to 2410 (Retail Installment Sales).

Scope: Installment sales of goods (but not motor vehicles or mobile homes) and services purchased primarily for personal, family, or household use. § 2401.

Licensure requirements: Sales finance companies must be licensed. Vt. Stat. Ann. tit. 8 § 2201(a).

Credit terms: For a retail installment contract, the finance charge shall not exceed 18% per year of the first $500 of the balance and 15% on the balance in excess of $500. §§ 2405(k) and 41a(b)(2).

Consumer Credit Regulation: Virginia

Va. Code Ann. § 6.2-311 (Closed-End Installment Loans by Sellers of Goods or Services)

Scope: Applies to seller of goods or services who extends credit under a closed-end installment credit plan or arrangement.

Licensure requirements: None.

Credit terms: The rate or rates agreed upon. Statute defines the components of the amount financed on which the finance charge may be computed.

Restrictions on points or prepaid interest: None.

Consumer Credit Regulation: Washington

Wash. Rev. Code §§ 63.14.010 to 63.14.926 (Retail Installment Sales of Goods and Services).

Scope: Installment sales of goods and services purchased for personal, family, or household use. Revolving credit. § 63.14.010.

Licensure requirements: None.

Credit terms: The dollar amount or rate agreed to by contract. § 63.14.130.

Restrictions on points or prepaid interest: None.

Restrictions on length of term: None.

Consumer Credit Regulation: West Virginia

W. Va. Code §§ 46A-1-101 to 46A-8-102 (Consumer Credit and Protection Act).

Scope: Sales of goods, services or interest in land purchased primarily for personal, family, household, or agricultural purpose. With respect to a sale of goods or services, the amount financed may not exceed $45,000. However, the sale of a factory-built home is not subject to this dollar limit. § 46A-1-102(13).

Licensure requirements: A license is required to make regulated consumer loans. § 46A-4-102

Consumer Credit Regulation: 12.2.2 States with Explicit Auto Title Loan Regulation That Permit High Interest Rates

Five states have auto title lending statutes that permit loans over 200%23 and another seven set no cap at all.24 While Wisconsin caps the interest rate at 33% a year that can be charged on loans not paid by their maturity date, until the maturity date the loan has no interest cap, thus making Wisconsin the ninth state without a cap.25 In all of these fourteen states, there is a significant presence of auto title lending

Consumer Credit Regulation: 12.2.3.1 Overview

Twenty-nine states plus the District of Columbia and Puerto Rico have not adopted special auto title lending statutes and do not include special provisions in their pawn statute for auto title lending.39 In those states, either courts will have to interpret the state’s pawn statute as applying to auto title loans (see § 12.2.3.2

Consumer Credit Regulation: 12.2.3.2 Applicability of State Pawn Legislation

To try to take advantage of the high usury cap under pawn statutes, lenders argue that the loan is a pawn because the contractual language that they themselves draft gives the “pawnbroker” a security interest in the property. Only the title is pawned, however, not the vehicle itself—there is a security interest in the vehicle, but the vehicle itself is not given to the lender to hold during the loan term.40

Consumer Credit Regulation: 12.2.3.3 Applicability of Small Loan Acts

If the pawn statute does not apply, then the question will be whether the state’s remaining general credit legislation has a usury cap.48 While in most states, the usury cap for small loans will prevent high-rate auto title lending, this will depend on the specifics of the state’s small loan legislation.

Consumer Credit Regulation: 12.2.4.3 Arizona

Arizona has an auto title lending statute that provides maximum monthly rates for auto title lending of different dollar amounts—17% if under $500, 15% if otherwise under $2,500, and 13% if over $2,500 but under $5,000, and 10% if over $5,000.63

Consumer Credit Regulation: 12.2.4.8 Delaware

In Delaware, auto title lending is authorized by statute.65 Interest rates are capped at 5% over the Federal Reserve discount rate66 The law prohibits the rollover of auto title loans beyond 180 days from the date of the original loan disbursement.67 Lenders are required to offer the borrower a workout agreement prior to repossession of the vehicle.68 Borrowers are permitted t