22351.
(a) The licensee shall disclose to the prospective borrower, at the time of the application, in a written notice in a typeface no smaller than 12-point type, all of the following information:(1) The amount borrowed; the total dollar cost of the loan to the consumer if the loan is paid back on time, including the sum of the administrative fee, principal amount borrowed, and interest payments; the corresponding annual percentage rate, calculated in accordance with Federal Reserve Board Regulation Z (12 C.F.R. 226.1 et seq.); the periodic payment amount; the delinquency fee schedule; and the following statement: “Repaying your loan early will lower your borrowing costs by reducing the amount of interest you will pay. This loan has no
prepayment penalty.”
(2) A statement that the consumer has the right to rescind the loan by notifying the licensee of the consumer’s intent to rescind the loan and returning the principal advanced by the end of the business day following the date the loan is consummated.
(b) A licensee may provide the borrower with the disclosures required by subdivision (a) in a mobile or other electronic application, on which the size of the typeface of the disclosure can be manually modified by a prospective borrower, if the prospective borrower is given the option to print the disclosure in a typeface of at least 12-point size or is provided by the licensee with a hardcopy of the disclosure in a typeface of at least 12-point size before the loan is consummated.
(c) The loan shall have a minimum principal amount upon origination
of one thousand dollars ($1,000) and a term of not less than the following:
(1) One hundred twenty days for loans whose principal balance upon origination is at least one thousand dollars ($1,000), but is less than one thousand five hundred dollars ($1,500).
(2) One hundred eighty days for loans whose principal balance upon origination is at least one thousand five hundred dollars ($1,500), but is less than two thousand five hundred dollars ($2,500).
(3) One year nor more than five years for loans whose principal balance is more than two thousand five hundred dollars ($2,500).
(d) All of the following apply to a loan made by a licensee pursuant to this section:
(1) The licensee shall
report each borrower’s payment performance to at least one consumer reporting agency that compiles and maintains files on consumers on a nationwide basis, upon acceptance as a data furnisher by that consumer reporting agency. For purposes of this section, a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis is one that meets the definition in Section 603(p) of the federal Fair Credit Reporting Act (15 U.S.C. Sec. 1681a(p)). Any licensee that is accepted as a data furnisher after admittance into the program shall report all borrower payment performance since its inception of lending.
(2) (A) The licensee shall underwrite each loan to determine a borrower’s ability and willingness to repay the loan pursuant to the loan terms, and shall not make a loan if it determines, through its underwriting, that the borrower’s total monthly debt service payments, at the time of origination,
including the loan for which the borrower is being considered, and across all outstanding forms of credit that can be independently confirmed by the licensee, exceed 50 percent of the borrower’s gross monthly income for a loan of no more than two thousand five hundred dollars ($2,500) or exceed 36 percent of the borrower’s gross monthly income for a loan in excess of two thousand five hundred dollars ($2,500).
(B) (i) The licensee shall seek information and documentation pertaining to all of a borrower’s outstanding debt obligations during the loan application and underwriting process, including loans that are self-reported by the borrower but not available through independent verification. The licensee shall confirm that information using a credit report from at least one consumer reporting agency that compiles and maintains files on consumers on a nationwide basis or through other available electronic debt verification
services that provide reliable evidence of a borrower’s outstanding debt obligations.
(ii) Notwithstanding the confirmation requirement in subparagraph (A), the licensee shall request from the borrower and include all information obtained from the borrower regarding outstanding deferred deposit transactions in the calculation of the borrower’s outstanding debt obligations.
(iii) The licensee shall not be required to consider, for purposes of debt-to-income ratio evaluation, loans from friends or family.
(C) The licensee shall also confirm the borrower’s income that the licensee relies on to determine the borrower’s debt-to-income ratio using information from either of the following:
(i) Electronic means or services that provide reliable evidence of the
borrower’s actual income.
(ii) Internal Revenue Service Form W-2, tax returns, payroll receipts, bank statements, or other third-party documents that provide reasonably reliable evidence of the borrower’s actual income.