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Consumer Credit Regulation: 3.10.1 Introduction

The preceding sections discuss whether federal law displaces state consumer credit law,865 or whether federal law determines which state law applies to interest rate regulation.866 If there is no federal preemption or federal choice of the applicable state whose law applies, then, this section describes how state law determines which state’s law applies to a credit transaction.

Consumer Credit Regulation: 3.10.2 Contractual Choice of Law Clauses

Consumer credit contracts typically include a clause stating that the contract will be governed by a particular state’s laws. A choice of law provision will not be given effect if a statute in the forum state prohibits such a clause for the types of loan contracts at issue,876 or state law requires that the law of that state be chosen for certain types of contracts.877

Consumer Credit Regulation: 3.10.3 State Statutes Explicitly Governing Choice of Law

A state’s courts will almost always follow the forum’s statutory provision requiring that the law of that state apply. For example, a Washington statute provides:

Whenever a loan or forbearance is made outside Washington state to a person then residing in this state the usury laws found in chapter 19.52 RCW, as now or hereafter amended, shall be applicable in all courts of this state to the same extent such usury laws would be applicable if the loan or forbearance was made in this state.891

Consumer Credit Regulation: 3.10.4 Rule for Special Usury Statutes

As long as a transaction bears a substantial relationship to the forum state, courts of that state will typically apply that state’s special usury statutes, such as the small loan laws, installment sales acts, and second mortgage statutes.902 This is consistent with the typical state choice of law rule for contract cases (other than for general usury statutes) that the law of the state with the most significant relationship to the parties and the transaction should apply.903

Consumer Credit Regulation: 3.10.6 Military Small Loan Companies and the Military Lending Act

Lenders may target personnel at military bases who are not legal residents of the state where the base is located. Since many state credit laws apply only to state residents, these lenders argue that the laws of the state where the military base is located do not apply, allowing the lender to use interest rates and credit regulation of the state where the lender is headquartered or licensed.

Consumer Banking and Payments Law: 19(d) Agreements for All Open Accounts

1. Requirement applies to all open accounts. The requirement to provide access to prepaid account agreements under § 1005.19(d) applies to all open prepaid accounts. For example, an issuer that is not required to post agreements on its Web site because it qualifies for the de minimis exception under § 1005.19(b)(4) would still be required to provide consumers with access to their specific agreements under § 1005.19(d).

Consumer Banking and Payments Law: 30(c) Designated Recipient

1. Person. A designated recipient can be either a natural person or an organization, such as a corporation. See § 1005.2(j) (definition of person). The designated recipient is identified by the name of the person provided by the sender to the remittance transfer provider and disclosed by the provider to the sender pursuant to § 1005.31(b)(1)(iii).

2. Location in a foreign country.

Consumer Banking and Payments Law: 30(g) Sender

1. Determining whether a consumer is located in a State. Under § 1005.30(g), the definition of “sender” means a consumer in a State who, primarily for personal, family, or household purposes, requests a remittance transfer provider to send a remittance transfer to a designated recipient. A sender located on a U.S. military installation that is physically located in a foreign country is located in a State.

Consumer Banking and Payments Law: 32(b)(5) Permanent Exception for Estimation of Covered Third–Party Fees by an Insured Institution

1. Insured institution cannot determine the exact covered third-party fees. For purposes of § 1005.32(b)(5)(i)(B), an insured institution cannot determine, at the time it must provide the applicable disclosures, the exact covered third-party fees required to be disclosed under § 1005.31(b)(1)(vi) for a remittance transfer to a designated recipient's institution when all of the following conditions are met:

Consumer Banking and Payments Law: Appendix A Model Disclosure Clauses and Forms

1. Review of forms. The Bureau will not review or approve disclosure forms or statements for financial institutions. However, the Bureau has issued model clauses for institutions to use in designing their disclosures. If an institution uses these clauses accurately to reflect its service, the institution is protected from liability for failure to make disclosures in proper form.

Consumer Banking and Payments Law: Amendment History

[77 Fed. Reg. 6297 (Feb. 7, 2012); 77 Fed. Reg. 50,285 (Aug. 20, 2012); 78 Fed. Reg. 6025 (Jan. 29, 2013); 78 Fed. Reg. 18,224 (Mar. 26, 2013); 78 Fed. Reg. 30,662, 30,714 (May 22, 2013); 78 Fed. Reg. 49,366 (Aug. 14, 2013); 78 Fed. Reg. 69,753 (Nov. 21, 2013); 79 Fed. Reg. 55,993 (Sept. 18, 2014); 81 Fed. Reg. 70,320 (Oct. 12, 2016); 81 Fed. Reg. 84,345 (Nov. 22, 2016); 82 Fed. Reg. 18,975, 18,980 (Apr. 25, 2017); 83 Fed. Reg. 6364, 6420 (Feb. 13, 2018); 85 Fed. Reg. 34,905 (June 5, 2020)]

Consumer Banking and Payments Law: Amendment History

[77 Fed. Reg. 69,738 (Nov. 21, 2012); 77 Fed. Reg. 70,114 (Nov. 23, 2012); 78 Fed. Reg. 70,196 (Nov. 25, 2013); 78 Fed. Reg. 80,302 (Dec. 31, 2013); 79 Fed. Reg. 56,485 (Sept. 22, 2014); 80 Fed. Reg. 43,911, 43,920 (July 24, 2015); 80 Fed. Reg. 73,949 (Nov. 27, 2015); 81 Fed. Reg. 72,395 (Oct. 19, 2016); 81 Fed. Reg. 84,371 (Nov. 22, 2016); 81 Fed. Reg. 86,266 (Nov. 30, 2016); 82 Fed. Reg. 18,975 (April 25, 2017); 82 Fed. Reg. 37,773 (Aug. 11, 2017); 82 Fed. Reg. 51,979 (Nov. 9, 2017); 83 Fed. Reg. 6364, 6440 (Feb. 13, 2018); 83 Fed. Reg. 59,278 (Nov.

Consumer Banking and Payments Law: Introduction

The following analysis lists the citation and enactment date of state adoptions of the Uniform Electronic Transactions Act (UETA) and describes (1) any state variations from the uniform version of UETA, (2) whether a state has enacted E-Sign’s consumer protections, or (3) whether E-Sign’s consumer protections apply because of the timing of the enactment of state law. A state’s version of UETA supersedes certain E-Sign provisions.

Consumer Banking and Payments Law: ALABAMA

Ala. Code §§ 8-1A-2 to 8-1A-20

Date enacted: The Act was approved May 15, 2001, and effective January 1, 2002.

Non-Uniform Sections: § 8-1A-2(4): adds a definition of consumer; § 8-1A-8(e): restates language from 101(c); § 8-1A-13(b), admissibility in evidence: to determine authenticity and attribution, adds unique identifier language.

Consumer Banking and Payments Law: ALASKA

Alaska Stat. §§ 09.80.010 to 09.80.195

Date enacted: The Act was approved June 29, 2004, and effective July 1, 2004.

Non-Uniform Sections: § 09.80.130: adds a definition of “transferable record”; § 09.80.190: adds a definition of “Uniform Commercial Code.”

Consumer Banking and Payments Law: ARKANSAS

Ark. Code Ann. §§ 25-32-101 to 25-32-122

Date enacted: The Act was approved and effective March 19, 2001.

Non-Uniform Sections:§ 25-32-122: adds provision entitled “Signatures and records secured through blockchain technology—Definitions” (effective July 24, 2019, and 2021).

Consumer Banking and Payments Law: COLORADO

Colo. Rev. Stat. §§ 24-71.3-101 to 24-71.3-121

Date enacted: The Act was approved and effective May 30, 2002.

Non-Uniform Sections: § 24-71.3-102: adds qualification to definition of “transaction”; § 24-71.3-118: deletes certain subprovisions.