Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 6-1259, Arizona Revised
Statutes, is amended to read:
START_STATUTE6-1259. Prohibited acts
A. A person shall not
engage in the business of providing deferred presentment services without first
obtaining a license pursuant to this chapter. A separate license is required
for each location from which the business is conducted. The licensee shall
post its license to engage in the business of deferred presentment services at
each location that is licensed pursuant to this chapter.
B. A licensee shall not:
1. Advance monies on the
security of a check without first obtaining reasonable evidence that indicates
that the account on which the presented check is drawn is an open and active
account.
2. Assess any fee that
is more than the amount prescribed in this chapter.
3. At the licensed
location engage in the business of:
(a) Making loans of
money or extensions of credit other than those allowed under this chapter or
title 44, chapter 11, article 3.
(b) Discounting notes,
bills of exchange, items or other evidences of debt.
(c) Accepting deposits
or bailments of money or items, except as expressly provided in section 6‑1260.
4. Use or cause to be
published or disseminated any advertisement that contains false, misleading or
deceptive statements or representations.
5. Engage in the
business of deferred presentment services at locations other than licensed
locations.
6. Engage in unfair,
deceptive or fraudulent practices.
7. Alter or delete the
date on a check accepted by the licensee.
8. Take possession of an
undated check or a check dated on a date other than the date on which the
licensee takes possession of the check or the date of presentment.
9. Require a customer to
provide security for the transaction, other than the presented check, or
require the customer to provide a guaranty from another person.
10. Fail to take reasonable measures to ensure that
no customer has more than one deferred presentment loan outstanding at any time
with any licensee in this state.
11. Engage in the sale of the following goods or
services at any licensed location:
(a) Gaming activities, including the sale of lottery
tickets.
(b) Alcoholic beverages.
12. Tie or otherwise condition the offering of
deferred presentment services to the sale of any good or service.
13. Permit others to
engage in any activity prohibited in this section at a location licensed
pursuant to this chapter.
14. Offer deferred
presentment services for less than five days.
15. Be required to
request or accept any written representation by a customer as to whether the
customer has any outstanding checks for deferred presentment held by other
licensees.
16. Charge interest at an annual percentage rate
exceeding thirty-six per cent, including fees. END_STATUTE
Sec. 2. Section 6-1260, Arizona Revised
Statutes, is amended to read:
START_STATUTE6-1260. Deferred presentment; amount; fees;
loans to members of military service
A. The licensee may
accept for deferred presentment or deposit a check with a face amount of at
least fifty dollars but not more than five hundred dollars, excluding the fees
permitted in subsection F of this section.
B. For each check the
licensee accepts for deferred presentment or deposit, the licensee and the
customer shall sign a written agreement that contains the name or trade name of
the licensee, the transaction date, the amount of the check, the amount to be
paid by the maker, a statement of the total amount of the fees charged,
expressed both as a dollar amount and as an effective annual percentage rate, a
disclosure statement that complies with state and federal truth in lending laws
and a notice to the customer as prescribed in subsection C of this section.
The written agreement shall expressly require the licensee to defer presentment
or deposit of the check until a specified date.
C. A licensee shall
provide a notice in a prominent place on each written agreement that specifies
that no customer may have outstanding more than one deferred presentment
service agreement at one time and the face amount, exclusive of any fees,
cannot be more than five hundred dollars. A licensee shall ask every customer
who seeks deferred presentment services whether that customer has any
outstanding checks payable to other licensees.
D. A licensee may rely
on the customer's representation of whether the customer has any outstanding
checks for deferred presentment held by other licensees.
E. The maker of a check
has the right to redeem the check from the licensee before the agreed on date
of presentment or deposit if the maker pays the licensee the amount of the
check.
F. A licensee shall not
directly or indirectly charge any fee or other consideration for accepting a
check for deferred presentment or deposit that is more than fifteen per cent of
the face amount of the check for any initial transaction or any extension.
G. A licensee may impose
the fee prescribed in subsection F of this section only once for each written
agreement. The fee is earned on execution of the written agreement and is not
subject to any reimbursement even if the maker redeems the check pursuant to
subsection E of this section.
H. The fee charged by
the licensee is not
interest for purposes of any other law or rule of this state.
I. Except as otherwise
provided in this subsection, a person may extend the presentment or deposit of a check not more than
three consecutive times. For each extension the customer and the licensee
shall terminate the previous agreement and sign a separate agreement. During
an incomplete transaction the customer may not receive any additional monies
from the licensee. The licensee may charge a fee as prescribed in subsection F
of this section for each extension. A person who is a member of the military
service of the United States or the member's spouse may not extend the
presentment or deposit of a check. If a customer has completed a deferred
presentment transaction with the licensee, the customer may enter into a new
agreement for deferred presentment services with the licensee. A transaction
is completed when the customer's check is presented for payment, deposited or
redeemed by the customer for cash.
J. If a check is
returned to the licensee from a payer financial institution due to insufficient
funds, a closed account or a stop payment order, the licensee may use all
available civil remedies to collect on the check including the imposition of
the dishonored check service fee prescribed in section 44‑6852. An
individual who issues a personal check to a licensee under a deferred
presentment agreement is not subject to criminal prosecution pursuant to title
13, chapter 18.
K. Before engaging in a
deferred presentment transaction, a licensee shall provide to a customer who is
a member of the military service of the United States or the member's spouse a
written statement that clearly and conspicuously states the prohibited
practices and requirements prescribed in subsection L of this section.
L. If lending to a
member of the military service of the United States or the spouse of a member
of the military service of the United States, a licensee:
1. Shall not garnish any
military wages or salary.
2. Shall not conduct any
collection activity against a customer who is a member of the military service
of the United States or the spouse of the member during the member's deployment
to a combat or combat support posting or during active duty service by a member
of the national guard or any military reserve unit of any branch of the armed
forces of the United States.
3. Shall contact the
employer of a member of the military service of the United States about a
deferred presentment debt of the member or the member's spouse. The contact
allowed by this paragraph shall only be a notice for informational purposes and
shall not be an attempt to collect on a loan made to the member or the member's
spouse. A licensee shall not attempt to collect on a loan made to a member of
the military service of the United States or the member's spouse through the
member's chain of command.
4. Shall
not conduct a deferred presentment transaction with a member of the military
service of the United States or the member's spouse in any location that the
member's commanding officer prohibits the member or the member's spouse from
transacting deferred presentment business.
5. Is bound by the terms
of any repayment agreement that the licensee negotiates with respect to the
customer through military counselors or third party credit counselors. END_STATUTE
Sec. 3. Repeal
Section 6-1263, Arizona Revised Statutes, is repealed.
