Payday Loan in North Dakota
Legal Status: Legal
Citation:
N.D. Cent. Code § 13-08-01 et seq.
Loan Terms:
Maximum Loan Amount: $500
Loan Term: Max: 60 days
Maximum Finance Rate and Fees: 20% + databasing fee
Finance Charge for 14-day $100 loan: $20
APR for 14-day $100 loan: 520%
Debt Limits:
Maximum Number of Outstanding Loans at One Time: Not Specified ($600 aggregate loans outstanding to all licensees)
Rollovers Permitted: One (renewal fee not to exceed 20% of amount being renewed)
Cooling-off Period: 3 days
Repayment Plan:
Collection Limits:
Collection Fees: $20 NSF fee (if disclosed)
Criminal Action: Prohibited (Unless account was closed on date of original transaction)
Where to Complain, Get Information:
Regulator: North Dakota Department of Financial Institutions
Address: 2000 Schafer Street, Suite G Bismarck ND 58501
Phone: (701) 328-9933
Fax: (701) 328-9955
Applicability: Applies to deferred presentment service providers. Otherwise, consumer finance act applies. N.D. Cent. Code § 13-03.1-15.1 (2.5% per month on unpaid balance of principal up to $250; 2% per month on unpaid principal $250-$500; 1.75% on unpaid balance of $500-$750; and 1.5% on unpaid principal of $750-$1000).
Licensing Requirements: Persons engaging in deferred deposit presentment transactions must obtain a license. Licensees must obtain a surety bond in the amount $20k and have unencumbered assets of at least $25k per licensed location.
Required Disclosures: A licensee must conspicuously post the license in the place of business of the licensee and provide notice to its customers of its license number as well as a notice of the fees imposed for the deferred presentment service. Before disbursing funds under a deferred presentment service transaction, a licensee shall provide to the customer a clear and conspicuous printed notice indicating: that a deferred presentment service transaction is not intended to meet long-term financial needs; that a customer should use a deferred presentment service transaction only to meet short-term cash needs; that the customer will be required to pay additional fees if the deferred presentment service transaction is renewed rather than paid in full when due (if the transaction is renewed, any amount paid in excess of the fee applies to the payoff; any information required under federal law; no property, titles to any property, or mortgages may be received or held directly or indirectly by the licensee as a condition of a deferred presentment service transaction or as a method of collection on a defaulted deferred presentment service transaction without proper civil process. Each deferred presentment service transaction, including a renewal, must be documented by a written agreement signed by the customer which contains agreement the name of the licensee; the transaction date; the amount of the obligation; and a statement of the total amount of fees charged, expressed as a dollar amount and as an annual percentage rate.
Loan terms: The total period of deferral, including the initial deferral and one renewal, may not exceed 60 days. An individual renewal period may not be less than 15 days. After 60 days the renewed deferred presentment transaction must be paid off.
Permitted charges: A licensee may charge a fee of 20% of the amount paid to the customer. This fee may not be deemed interest for any purpose of law. No other fee or charge may be charged for the deferred presentment service, except that fee not to exceed the cost to the licensee, may be charged for registering a transaction on a database authorized by the commissioner.
Prohibited acts: No property, titles to any property, or mortgages may be received or held directly or indirectly by the licensee as a condition of a deferred presentment service transaction or as a method of collection on a defaulted deferred presentment service transaction without proper civil process. A licensee may not disburse more than $500 hundred dollars to the customer in a deferred presentment service transaction. A licensee may not engage in a deferred presentment service transaction with a customer who has an aggregate value of all outstanding obligations from any one customer exceeding $600 which is payable to the same or any other licensee. A licensee may not enter a new deferred presentment service transaction with a customer within 3 business days of that customer’s completion of a previous one. A customer who enters a deferred presentment service agreement is not subject to a criminal penalty (or threat of one) unless the customer’s account was closed on the original date of the transaction. At the time of entering a transaction, a licensee shall verify that the account on which the check is written is open. A licensee may not engage in unfair or deceptive acts, practices, or advertising in the conduct of a deferred presentment service business. A licensee may not renew a deferred presentment service transaction more than once.
Permitted charges: If a check or electronic debit is returned to the licensee from a payer financial institution due to insufficient funds, closed account, or a stop payment order, the licensee has the right to all civil remedies available to collect. The licensee may contract for and collect a returned check charge not to exceed $20. No other fee or charge may be collected as a result of a returned check or as a result of default. A licensee may not renew, repay, refinance, or consolidate a deferred presentment service transaction with the proceeds of another deferred presentment service transaction with that licensee by the same maker or customer. A licensee may not conduct another business, other than a bona fide pawn-broking business, within the same office, suite, room, or place of business at which the licensee engages in deferred presentment service transactions unless the commissioner provides written authorization after a determination the other business is not contrary to the best interests of consumers. Customers may not deferred presentment service transactions totaling more than $600 outstanding at any one time.
Penalties: Criminal and civil penalties available.
Enforcement: The commissioner may issue cease and desist orders and suspend/revoke license for violations.
