First Regular Session H.B. 2496
PROPOSED AMENDMENT
SENATE AMENDMENTS TO H.B. 2496
(Reference to House engrossed bill)
Strike everything after the enacting clause and insert:
"Section 1. Section 6-125, Arizona Revised Statutes, is amended to read:
6-125. Annual examination assessment of financial institutions and enterprises; costs of foreign examination; payment
A. Before August 31 of each year the superintendent shall make the following annual assessments:
1. Upon On banks, the annual assessment set by the superintendent.
2. Upon On savings and loan associations, a charge not to exceed the annual assessment set for state banks under paragraph 1 of this subsection.
3. Upon On credit unions, the annual assessment set by the superintendent.
B. The superintendent shall assess against the institution or enterprise examined a charge at the rate set by the superintendent but not to exceed sixty‑five dollars per hour for each examiner employed in the following examinations:
1. Any examination of a trust company.
2. Any examination of the trust operation of a bank or a savings and loan association.
3. Any examination of a financial institution ordered by the superintendent in addition to the regular examination required under section 6‑122.
4. Any examination of an enterprise ordered by the superintendent.
5. Any examination of a financial institution holding company or international banking facility.
6. Any examination of a consumer lender.
7. Any examination of a consumer access line of credit lender.
C. For a financial institution or enterprise maintaining an office outside this state, in addition to the annual assessment or examination assessment, the superintendent shall make an assessment equal to the travel and subsistence expense incurred in the examination of the office in the foreign state or country. Notwithstanding any other limitation prescribed by law, examiners engaged in examination of a foreign office shall be reimbursed for their necessary travel and subsistence expenses. Reimbursement for examiners' expenses shall be credited to the appropriation account of the department.
D. Assessments under this section are due and payable to the department within thirty days after notice of the assessment is mailed by the department. The superintendent shall assess a penalty of fifty dollars for each day after the thirty‑day period that the financial institution or enterprise fails to remit the assessment, unless, upon on good cause shown, a written request for an extension is approved by the superintendent prior to before the expiration of the specified time. In no event shall the total penalty exceed the examination assessment.
E. The superintendent shall set the amount of the annual assessment to be charged to banks and credit unions. In setting the annual assessment upon on banks, the superintendent shall consider the annual assessment set by the comptroller of currency for national banks. In setting the annual assessment upon on credit unions the superintendent shall consider the annual assessment set by the national credit union administration for federal credit unions.
Sec. 2. Section 6-126, Arizona Revised Statutes, is amended to read:
6-126. Application fees for financial institutions and enterprises
A. The following nonrefundable fees are payable to the department with the filing of the following applications:
1. To apply for a banking permit, five thousand dollars.
2. To apply for an amendment to a banking or savings and loan association permit, one thousand dollars.
3. To establish each banking branch office, seven hundred fifty dollars.
4. To move a banking office to other than an established office of a bank, one thousand dollars.
5. To apply for a savings and loan association permit, five thousand dollars.
6. To establish each savings and loan association branch office, one thousand five hundred dollars.
7. To move an office of a savings and loan association to other than an established office, one thousand dollars.
8. To organize and establish a credit union, one hundred dollars.
9. To establish each credit union branch or to move a credit union office to other than an established office of a credit union, two hundred fifty dollars.
10. To organize and establish any other financial institutions for which an application or investigation fee is not otherwise provided by law, two thousand five hundred dollars.
11. To acquire control of a financial institution, other than a consumer lender, five thousand dollars.
12. To apply for a trust company license, five thousand dollars.
13. To apply for a commercial mortgage banker, mortgage banker, escrow agent or consumer lender license, one thousand five hundred dollars.
14. To apply for a mortgage broker, commercial mortgage broker, sales finance company or debt management company license, eight hundred dollars.
15. To apply for a collection agency license, one thousand five hundred dollars.
16. To apply for a deferred presentment company license, one thousand dollars.
17. To apply for a branch office of an escrow agent, consumer lender, commercial mortgage banker, mortgage banker, trust company, money transmitter, collection agency, or deferred presentment company or consumer access line of credit lender, five hundred dollars.
18. To apply for a branch office of a mortgage broker, commercial mortgage broker, debt management company or sales finance company, two hundred fifty dollars.
19. To apply for approval of the articles of incorporation of a business development corporation, five hundred dollars.
20. To apply for approval for the merger or consolidation of two or more financial institutions, five thousand dollars per institution.
21. To apply for approval to convert from a national bank or federal savings and loan charter to a state chartered institution, five thousand dollars.
22. To apply for approval to convert from a federal credit union to a state chartered credit union, one thousand dollars.
23. To apply for approval to merge or consolidate two or more credit unions, five hundred dollars per credit union.
24. To move an established office of an enterprise to other than an established office, fifty dollars.
25. To issue a duplicate or replace a lost enterprise's license, one hundred dollars.
26. To change a responsible person on a mortgage broker's, commercial mortgage broker's, commercial mortgage banker's or a mortgage banker's license, two hundred fifty dollars.
27. To change an active manager on a collection agency license or a manager of a money transmitter branch office license, two hundred fifty dollars.
28. To change the licensee name on a financial institution or enterprise license, not more than two hundred fifty dollars.
29. To apply for a money transmitter license, one thousand five hundred dollars plus twenty‑five dollars for each branch office and authorized delegate to a maximum of four thousand five hundred dollars.
30. To acquire control of any money transmitter or controlling person pursuant to chapter 12 of this title, two thousand five hundred dollars.
31. To receive the following publications:
(a) Quarterly bank and savings and loan statement of condition, not more than ten dollars per copy.
(b) Monthly summary of actions report, not more than five dollars per copy.
(c) A list of licensees, a monthly pending actions report and all other in‑house prepared reports or listings made available to the public, not more than one dollar per page.
32. To apply for a loan originator license, an amount to be determined by the superintendent.
33. To apply for a loan originator license transfer, an amount to be determined by the superintendent.
34. To apply for a conversion from a mortgage banker license to a mortgage broker license, an amount to be determined by the superintendent.
35. To apply for a consumer access line of credit loan plan lender license, an amount to be determined by the superintendent.
B. On issuance of a license or permit for a financial institution or enterprise, the superintendent shall collect the first year's annual assessment or renewal fee for the financial institution or enterprise prorated according to the number of quarters remaining until the date of the next annual assessment or renewal.
C. The following annual renewal fees shall be paid each year:
1. For an escrow agent, or trust company, one thousand dollars plus two hundred fifty dollars for each branch office.
2. For a debt management company or sales finance company, five hundred dollars plus two hundred dollars for each branch office.
3. For a collection agency, six hundred dollars plus two hundred dollars for each branch office.
4. For an inactive mortgage broker or commercial mortgage broker, two hundred fifty dollars.
5. For a mortgage banker that negotiates or closes in the aggregate one hundred loans or less in the immediately preceding calendar year, seven hundred fifty dollars, and for a mortgage banker that negotiates or closes in the aggregate over one hundred loans in the immediately preceding calendar year, one thousand two hundred fifty dollars. In addition, a mortgage banker shall pay two hundred fifty dollars for each branch office.
6. For a commercial mortgage banker, one thousand two hundred fifty dollars. In addition, a commercial mortgage banker shall pay two hundred fifty dollars for each branch office.
7. For a mortgage broker or commercial mortgage broker that negotiates or closes in the aggregate fifty loans or less in the immediately preceding calendar year, two hundred fifty dollars and for a mortgage broker or commercial mortgage broker that negotiates or closes in the aggregate more than fifty loans in the immediately preceding calendar year, five hundred dollars. In addition, a mortgage broker or commercial mortgage broker shall pay two hundred dollars for each branch office.
8. For a consumer lender or a consumer access line of credit loan plan lender, one thousand dollars plus two hundred dollars for each branch office.
9. For a money transmitter, five hundred dollars plus twenty‑five dollars for each branch office and each authorized delegate to a maximum of two thousand five hundred dollars.
10. For a deferred presentment company, four hundred dollars. In addition, a deferred presentment company shall pay two hundred dollars for each branch office.
11. For a loan originator, an amount to be determined by the superintendent.
12. For an inactive status loan originator, an amount to be determined by the superintendent.
D. The license, renewal or branch office permit fee for a premium finance company for each calendar year or part thereof shall not be less than one hundred dollars or more than three hundred dollars as set by the superintendent. If the license is issued or the branch office is opened after June 30 in any year, the fees shall not be less than fifty dollars or more than one hundred fifty dollars for that year.
Sec. 3. Title 6, Arizona Revised Statutes, is amended by adding chapter 18, to read:
CHAPTER 18
CONSUMER ACCESS LINE OF CREDIT
ARTICLE 1. GENERAL PROVISIONS
6-1801. Definitions
In this chapter, unless the context otherwise requires:
1. "CALC loan" or "consumer access line of credit loan" means a loan made pursuant to a CALC loan plan.
2. "CALC loan plan" means a written or electronic agreement in a record between a licensee and a consumer establishing an open‑end credit plan subject to this chapter under which the licensee contemplates repeated noncommercial loans for personal, family or household purposes that are all of the following:
(a) Unsecured by personal property or real estate.
(b) Without fixed maturities or limitation as to the length of term.
(c) Subject to prepayment in whole or in part at any time without charge or penalty.
3. "Control" means direct or indirect possession of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities by contract or otherwise, except that an individual does not control a person solely because the individual is a director, officer or employee of the person.
4. "Controlling person" means any person in control of a licensee.
5. "Default" means:
(a) The failure of a consumer to make a required payment pursuant to a periodic billing statement within a certain number of days after the due date as agreed on by the licensee and the consumer in the CALC loan plan, provided that such a period may not exceed one hundred twenty days after the due date on the billing statement.
(b) The consumer's failure to perform the consumer's obligations under the CALC loan plan.
6. "Licensee" means a person licensed to offer CALC loans pursuant to this chapter.
7. "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and that is retrievable in perceivable form.
6-1802. License required
A. A person may not engage in the business of entering into calc loan plans and making CALC loans unless the person is licensed pursuant to this chapter. A person is engaged in the business of entering into CALC loan plans and making CALC loans in this state if the person induces a consumer, while located in this state, to enter into a CALC loan plan or make a CALC loan in this state through the use of the Internet, a fax, a telephone or another means.
b. A nonresident person may be licensed to enter into CALC loan plans and make CALC loans pursuant to this chapter. Any nonresident person seeking a license under this chapter shall furnish the superintendent with the name and address of a resident of this state on whom notices or orders issued by the superintendent or process affecting a licensee under this chapter may be served. The nonresident licensee shall promptly notify the superintendent in a written or electronic record of every change in the nonresident licensee's designated agent for service of process. The changes do not become effective until approved by the superintendent.
C. Notwithstanding any other law, the business of entering into CALC loan plans and making CALC loans pursuant to this chapter is not subject to or controlled by any other law governing the imposition of interest, fees or loan charges. This chapter does not prevent a licensee from conducting the business of entering into CALC loan plans and making CALC loans over the internet.
6-1803. Qualifications for licensure
An applicant for a license issued under this chapter shall:
1. Have a tangible net worth that comprises tangible assets minus liabilities of at least fifty thousand dollars.
2. have financial responsibility, a financial condition, business experience, character and general fitness to reasonably warrant the belief that the applicant's business will be conducted lawfully and fairly. In determining whether this qualification has been met and for the purpose of ensuring compliance with this chapter, the superintendent may review and approve all of the following:
(a) The relevant business records and the capital adequacy of the applicant.
(b) The competence, experience, integrity and financial ability of any person who is a director, officer or ten percent or more shareholder of the applicant or who owns or controls the applicant.
(c) Any record on the part of the applicant or on the part of any licensee or controlling person of any of the following:
(i) Any criminal activity, fraud or other act of personal dishonesty.
(ii) any act, omission or practice that constitutes a breach of a fiduciary duty.
(iii) Any suspension, removal or administrative action by any agency or department of the United States or any state that is related to participation in the conduct of any business.
6-1804. Application
Each application for a license shall be in written or electronic record and in a form prescribed by the superintendent. The application shall include the following:
1. The legal name, residence and business address of the applicant and, if the applicant is a partnership, association or corporation, of every member, officer, managing employee and director.
2. The location in this state where the registered agent of the applicant is located. The registered agent includes a person designated by the applicant for accepting notices or orders by the superintendent.
3. Other data and information that the superintendent may require relating to the applicant and its directors, trustees, officers, members, managing employees or agents.
6-1805. Application; fee; disclosures; sureties
A. Each application for a license shall be accompanied by all of the following:
1. A fee as prescribed by section 6-126. In the case of a nonresident applicant, the fee is applicable to the nonresident applicant's principal place of business.
2. An audited financial statement, including a balance sheet, statement of income or loss and statement of changes in financial position for the immediately preceding fiscal year end, that is prepared in accordance with generally accepted accounting principles by a certified public accountant or public accounting firm, neither of which is affiliated with the applicant. For a newly created entity, the superintendent may accept a balance sheet prepared by a certified public accountant or public accounting firm, neither of which is affiliated with the applicant, accompanied by a projected income statement demonstrating that the applicant will have adequate capital after the payment of start‑up costs. If the applicant does not have an audited financial statement meeting the above requirements, the applicant may submit a financial statement of its parent entity if the financial statement is audited in accordance with generally accepted accounting principles by a certified public accountant or public accounting firm, neither of which is affiliated with the applicant.
3. Evidence of a surety bond that is in an amount of at least twenty‑five thousand dollars for each location or, in the case of a nonresident applicant, for the nonresident applicant's principal place of business, and that is issued by a company that is authorized to do business in this state, that is approved by the superintendent and that is not affiliated with the applicant. The aggregate amount of the surety bond required for a single licensee may not exceed two hundred fifty thousand dollars. In lieu of the surety bond, the applicant may file an irrevocable letter of credit that is in the amount of the surety bond and that is issued by any federally insured bank, savings bank or credit union, none of which is affiliated with the applicant. The bond or irrevocable letter of credit shall be in favor of this state to discharge unsatisfied indebtedness or liability of the licensee to this state, any political subdivision of this state or any person that may have a cause of action against the lender by reason of the lender's conduct under this chapter. The surety on the bond or irrevocable letter of credit may cancel the bond or letter by giving sixty days' notice in written or electronic record to the superintendent and shall be relieved of liability after the effective date of cancellation. The superintendent shall require a new bond or irrevocable letter of credit when the superintendent has knowledge that a licensee's bond or irrevocable letter of credit has expired, is about to expire or, in the opinion of the superintendent, is insecure for any reason. The license of any lender that is authorized to enter into CALC loan plans and make CALC loans under this chapter and that fails to post a replacement bond or irrevocable letter of credit within ten days after receipt of a notice from the superintendent shall be canceled immediately. Claimants against the licensee may bring suit directly on the bond or irrevocable letter of credit and the attorney general also may bring suit on behalf of claimants in one or multiple actions. The surety bond or irrevocable letter of credit shall be maintained by the licensee for not less than three years after the expiration, revocation or surrender of the licensee's license.
B. The superintendent may require an applicant for a license to submit a full set of fingerprints to the superintendent for the purpose of obtaining a state and federal criminal records check pursuant to section 41‑1750 and public law 92‑544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation. The superintendent may require consent and fingerprints from any individual who is a director, officer or ten percent or more shareholder of the applicant or who owns or controls the applicant. Refusal of any person to consent to a criminal records check or to provide fingerprints pursuant to this subsection constitutes grounds for the superintendent to deny the applicant a license. fingerprints are not required to be submitted by any shareholder if the applicant or its parent company is a publicly traded corporation. For the purposes of this subsection, "publicly traded" means that the company's stock is currently traded on a national securities exchange registered with the federal securities and exchange commission and that the company is subject to the federal security and exchange commission's disclosure and reporting requirements.
C. An applicant shall pay all costs incurred in conducting a criminal records check.
6-1806. Suitability review; posting; initial licensure
A. When the superintendent receives the application, fee and documents required by this chapter, the superintendent shall issue a license if the superintendent finds that the application requirements of this chapter are satisfied.
B. The license shall be conspicuously posted in the place of business of the licensee, except that a nonresident licensee shall post the license in its principal place of business.
C. A license issued pursuant to this chapter is valid through the remainder of the calendar year ending December 31 after its date of issuance unless earlier surrendered, suspended or revoked pursuant to this chapter.
6-1807. Denial of license; hearing; burden of proof
A. If the superintendent determines that an applicant is not qualified to receive a license, the superintendent shall notify the applicant in written or electronic record that the application has been denied stating the basis for the denial.
B. If the superintendent denies an application or if the superintendent fails to act on an application within ninety days after the filing of a properly completed application, the applicant may make a demand in a written or electronic record to the superintendent for a hearing before the superintendent on the question of whether the license should be granted.
C. In the hearing, the burden of proving that the applicant is entitled to a license is on the applicant.
6-1808. Renewal; annual report
A. Licenses that are issued pursuant to this chapter expire on December 31. On an application in a form prescribed by the superintendent, a licensee may renew a license for one year. The application shall be accompanied by a license renewal fee as prescribed by section 6-126.
B. A licensee that makes a timely and complete application for renewal of its license may continue to operate under its existing license until its application is approved or denied.
C. The superintendent may establish a biennial license for the filing of the application for license renewal except that the license fee may not be payable for more than one year at a time.
D. A licensee shall submit to the superintendent an annual report with the renewal application. The report shall contain the following information:
1. The names and addresses of persons owning a controlling interest in the licensee.
2. The location of all places of business operated by the licensee and the nature of the business conducted at each location.
3. The names and addresses of all affiliated entities that are regulated under this title and that are doing business in this state.
4. An audited financial statement, including a balance sheet, statement of income or loss and statement of changes in financial position for the immediately preceding fiscal year end, that is prepared in accordance with generally accepted accounting principles by a certified public accountant or public accounting firm, neither of which is affiliated with the licensee.
5. If the licensee is a corporation, the names and addresses of the corporation's officers and directors.
6. If the licensee is a partnership, the names and addresses of the partners.
7. If the licensee is a limited liability company, the names and addresses of the members or managers of the limited liability company.
E. If the licensee holds two or more licenses or is affiliated with other licensees, a single composite report may be filed.
F. The report shall be filed in a form prescribed by the superintendent and shall be sworn to by a responsible officer of the licensee.
G. The information submitted by licensees pursuant to this section shall be afforded the same degree of confidentiality by the department and the superintendent as is applicable to reports filed by other lenders regulated by this title.
6-1809. Control change; notice of change
A. A license issued pursuant to this chapter is not transferable or assignable.
B. The superintendent's prior approval in a written or electronic record is required for the continued operation of a CALC loan plan business whenever a change in control of a licensee is proposed. The superintendent may require the submittal of information that the superintendent deems necessary to determine whether a new application is required. Reasonable and actual costs incurred by the superintendent in investigating a change of control request shall be paid by the person requesting approval.
C. a person who, directly or indirectly, owns, controls, holds the power to vote or holds proxies representing twenty‑five percent or more of the then‑outstanding voting securities issued by another person is presumed to control the other person. The superintendent may determine whether a person controls another person.
D. Whenever control is acquired or exercised in violation of this section, the license shall be deemed revoked as of the date of the unlawful acquisition of control. The licensee or its controlling person shall surrender the license to the superintendent on demand.
E. A licensee shall notify the department five days before any change in the licensee's principal place of business, branch office or name.
6-1810. Fees; payment; default; returned checks; compliance
A. Notwithstanding any other law, a licensee authorized to enter into CALC loan plans and make CALC loans under this chapter may only charge and collect a daily transaction fee to defray the ordinary costs of opening, administering and terminating a CALC loan plan, including costs associated with all of the following:
1. Underwriting and documenting the account.
2. Securing and maintaining account information.
3. Validating consumer information other than licensee‑paid usage fees prescribed by section 6‑1813.
4. Offering electronic and phone access to accounts.
5. Processing account transactions.
6. Responding to consumer inquiries.
7. Providing periodic billing statements.
8. All other services or activities conducted by the licensee under the CALC loan plan.
B. The daily transaction fee is not interest and may not exceed a daily rate of 0.45 percent of the outstanding principal balance of the CALC loan account.
C. A licensee may not enter into a CALC loan plan or make a CALC loan having an annual percentage rate greater than that set forth in federal law in 10 United States code section 987 (b) to a person who is either:
1. A member of the United States armed forces who is on active duty under a call or order that does not specify a period of thirty days or less.
2. On active national guard and reserve duty.
3. A dependent, as defined in the John Warner national defense authorization act for fiscal year 2007 (P.L. 109-364; 120 stat. 2083; 10 United States code section 987) or any regulation adopted pursuant to that act, including 32 code of federal regulations part 232, of a person listed in paragraphs 1 and 2 of this subsection.
D. A CALC loan plan under this chapter may not have an outstanding principal balance in excess of two thousand five hundred dollars at any time.
E. Any CALC loan plan under this chapter shall require a minimum payment on or before the due date of each billing cycle in an amount sufficient to reduce any outstanding principal balance by at least eight percent per month or an amount calculated to pay off the entire principal within one calendar year, whichever is greater.
F. If a consumer defaults under the terms of a CALC loan plan and the licensee refers the consumer's account to an attorney, including a regular salaried employee of the licensee, for collection, the licensee may:
1. If allowed under the CALC loan plan, charge and collect from the consumer reasonable attorney fees.
2. Refer the consumer to an approved consumer credit counseling agency and offer concessions with regard to daily transaction fee, repayment schedule and other terms as agreed.
3. Charge and collect interest following the default of the consumer or a judgment in favor of the licensee at a periodic interest rate not to exceed the United States prime rate plus fifteen percent a year.
G. A licensee may not assess any fee or charge in association with a CALC loan plan unless the fee or charge is authorized under this section.
H. If a payer financial institution returns a check to a licensee due to insufficient funds, a licensee may not assess a handling charge against the maker or drawer of the returned check.
I. If a licensee fails to comply with this section, the consumer may void the CALC loan or calc loan plan. If the CALC loan or calc loan plan is void under this subsection, the CALC loan or calc loan plan is unenforceable under the laws of this state.
6-1811. Consumer disclosures
A. Before entering into a CALC loan plan, a licensee shall provide each prospective consumer a written or electronic explanation, in clear, understandable language, of the interest, fees and charges to be charged by the licensee. The style, content and method of executing the required written or electronic explanation shall comply with the truth in lending act as defined in section 6‑601 and shall contain a statement that the consumer may prepay the unpaid balance in whole or in part at any time without penalty. The superintendent may adopt rules establishing additional requirements in order to ensure complete and accurate disclosure of the interest, fees and charges to be charged by a licensee under a CALC loan plan.
B. The account-opening statement for any CALC loan plan shall include a notice that informs the consumer that:
1. The consumer has the right of rescission on the next business day for any requested draw under the CALC loan plan.
2. Complaints may be made to the department. The notice shall include the department's telephone number and address.
c. The account-opening statement for any CALC loan plan may not require or provide the licensee the authority to require the consumer to draw the full amount of credit available under a CALC loan plan at any time.
D. A licensee shall provide consumers with a periodic billing statement in compliance with the truth in lending act as defined in section 6‑601.
6-1812. Ability to repay
A. Before entering into a new CALC loan plan, or increasing the credit limit of an existing CALC loan plan, a licensee shall underwrite each CALC loan to determine a consumer's ability and willingness to repay the CALC loan pursuant to the CALC loan plan.
B. A licensee shall obtain information from the consumer relating to the consumer's income and expenses and shall validate a consumer's supplied information using at least one consumer credit report from a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis consistent with Section 603 of the Fair Credit Reporting Act (15 United States Code section 1681a) and may validate a consumer's supplied information using other reasonably reliable sources such as:
1. debt verification services.
2. The consumer's bank statements, tax returns, payroll information, benefits or child support statements.
3. other information that is either provided by the consumer or is commercially available online.
C. A licensee may not be required to consider, for the purposes of debt‑to‑income evaluation, loans from friends or family.
D. A licensee shall report a consumer's payment history to at least one consumer reporting agency that compiles and maintains files on consumers on a nationwide basis as defined in Section 603 of the Fair Credit Reporting Act (15 United States Code section 1681a(p)).
E. In determining a consumer's ability to repay under this section, a licensee shall comply with all laws relating to data privacy and security.
6-1813. One outstanding CALC loan plan allowed; database; compliance
A. A consumer may not have more than one outstanding CALC loan plan at any one time.
B. The superintendent may require licensees to confirm through the use of a state-approved database that a consumer does not have more than one outstanding CALC loan plan at any one time or that a CALC loan does not cause the CALC loan plan to exceed an outstanding principal balance in excess of two thousand five hundred dollars. The database shall comply with all of the following:
1. Be capable of real-time queries.
2. Be selected by the superintendent through an open bidding and review process.
3. Have licensee‑paid usage fees for the database and not have consumer‑paid usage fees.
C. The superintendent shall require the database vendor to be audited annually to determine privacy of the database and compliance with this chapter. The superintendent shall provide the audit results to each licensee.
D. The department shall report on the operations of the database and on the continued need for such a system to the legislature annually.
E. Until a department-approved database system is operational, a licensee may rely on the attestation of a consumer relating to the consumer's eligibility for a CALC loan plan.
F. If a licensee fails to comply with this section, the consumer may void the CALC loan or CALC loan plan. If the CALC loan or CALC loan plan is void under this subsection, the CALC loan or CALC loan plan is unenforceable under the laws of this state.
6-1814. Records
A. Each licensee shall keep and use in its business any books, accounts and records that the superintendent may require to enforce this chapter. Every licensee shall preserve the books, accounts and records for at least two years. after receiving the superintendent's prior written or electronic approval, a licensee may maintain records at a location within or outside this state. Any records required to be retained under this chapter may be converted to or stored in an electronic format.
B. A person that is subject to the licensing requirements of this chapter and that is examined or investigated shall pay to the superintendent the reasonable and actual expenses of the investigation or examination. The expenses shall be payable in addition to all other fees, taxes and costs required by law.
6-1815. License revocation and suspension
A. The superintendent, after notice and a hearing, may suspend or revoke any license if the superintendent finds that the licensee has knowingly or through lack of due care:
1. Failed to pay any fees, expenses or costs imposed by the superintendent under this chapter.
2. Committed any fraud, engaged in any dishonest activities or made any misrepresentations.
3. Violated this chapter in the course of the licensee's dealings as a licensee.
4. Made a false statement in the application for the license or failed to give a true reply to a question in the application.
5. Demonstrated incompetency or untrustworthiness to act as a licensee.
B. A hearing shall be held on a licensee's written or electronic notice given to the superintendent at least twenty days before the date of the hearing and shall be conducted pursuant to title 41, chapter 6, article 10.
6-1816. Violations; civil penalty
If, after notice and the opportunity for a hearing, the superintendent finds that a person has violated this chapter, the superintendent may take the following actions:
1. Order the person to cease and desist violating the chapter.
2. Require the refund of any fees collected by the person in violation of this chapter.
3. Order the person to pay to the superintendent a civil penalty of not more than one thousand dollars for each transaction in violation of this chapter.
6-1817. Censures, suspensions and bars
A. The superintendent, after notice and the opportunity for a hearing, may censure, suspend for a period not to exceed twelve months or bar a person from any position of employment, management or control of a licensee, if the superintendent finds that the:
1. Censure, suspension or bar is in the public interest and that the person has committed or caused a violation of this chapter or any order of the superintendent.
2. Person has been either:
(a) Convicted or pled guilty to, or pled nolo contendere to, any crime.
(b) Held liable in any civil action by final judgment or any administrative judgment by any public agency if the civil or administrative judgment involved any offense reasonably related to the qualifications, functions or duties of a person engaged in the business of entering into CALC loan plans or making CALC loans pursuant to this chapter.
B. Persons that are censured, suspended or barred under this section are prohibited from participating in any business activity of a licensee and from engaging in any business activity on the premises where a licensee is conducting its business within this state. This subsection does not prohibit censured, suspended or barred persons from having personal transactions processed by a licensee.
6-1818. Consent agreements; emergency enforcement action
A. The superintendent may enter into a consent order at any time with any person to resolve any matter arising under this chapter. A consent order shall be signed or authenticated in a record by the person to whom it is issued or a duly authorized representative and shall indicate agreement to the terms contained in the order. A consent order is not required to constitute:
1. An admission by any person that a provision of this chapter or an order issued under this chapter has been violated.
2. A finding by the superintendent that the person has violated this chapter or an order issued under this chapter.
B. Notwithstanding the issuance of a consent order, the superintendent may seek civil or criminal penalties concerning matters encompassed by the consent order.
C. In cases involving extraordinary circumstances that require immediate action, the superintendent may take any enforcement action authorized by this chapter without providing the opportunity for a prior hearing but shall promptly afford a subsequent hearing on an application to rescind the action taken that is filed with the superintendent within twenty days after receipt of the notice of the superintendent's emergency action.
6-1819. Complaints
A. Any person aggrieved by the conduct of a licensee under this chapter in connection with the licensee's regulated activities may file a written or electronic complaint with the superintendent, and the superintendent may investigate the complaint.
B. The license of any licensee under this chapter that fails to comply with a subpoena of the superintendent may be suspended pending compliance with the subpoena.
C. The superintendent shall have exclusive administrative power to investigate and enforce a complaint relating to the business of entering into CALC loan plans or making CALC loans filed by any person if the complaint is not criminal in nature.
6-1820. Report
Within thirty days after the occurrence of any one of the following, a licensee shall file a report in a record with the superintendent describing the event and its expected impact on the activities of the licensee in this state:
1. The filing for bankruptcy or reorganization by the licensee.
2. The institution of revocation or suspension proceedings against the licensee by any state or governmental authority.
3. The denial of the opportunity to engage in the business of making loans by any state or governmental authority.
4. Any felony indictment of the licensee or any of its directors, officers or principals.
5. Any felony conviction of the licensee or any of its directors, officers or principals.
6. Other events as determined by the superintendent.
6-1821. Multistate automated licensing system
A. The superintendent may require persons subject to this chapter to be licensed through a multistate automated licensing system. The superintendent may:
1. Adopt rules that are reasonably necessary for participation in, transition to or operation of a multistate automated licensing system.
2. Establish relationships or enter into agreements that are necessary for the participation in, transition to or operation of a multistate automated licensing system. The agreements may include operating agreements, information sharing agreements, interstate cooperative agreements and technology licensing agreements.
3. Require that applications for licensing under this chapter and renewals of licenses be filed with a multistate automated licensing system.
4. Require that any fees required to be paid under this chapter be paid through a multistate automated licensing system.
5. Establish deadlines for transitioning licensees to a multistate automated licensing system. The superintendent may deny any applications or renewal applications that are not filed with a multistate automated licensing system after the deadlines have passed if the superintendent provides reasonable notice of any transition deadlines to the licensees.
6. Take further actions as are reasonably necessary to give effect to this section.
b. This section does not authorize the superintendent to require a person that is not subject to this chapter to submit information to, or to participate in, a multistate automated licensing system that is operated or participated in pursuant to this chapter.
c. Nothing in this section shall be deemed to be a reduction or derogation of the superintendent's authority and discretion to administer and enforce this chapter.
D. Licensees and applicants for licenses issued under this chapter shall pay all costs associated with submitting an application or transitioning a license to a multistate automated licensing system and all costs required by a multistate automated licensing system for maintaining and renewing any license issued by the superintendent on a multistate automated licensing system.
6-1822. Multistate automated licensing system usage
The superintendent may use a multistate automated licensing system to request or distribute information that the superintendent is authorized to request or distribute under this chapter.
6-1823. Data sharing and confidentiality
A. The requirements under any federal or state law regarding the privacy or confidentiality of any information or material provided to a multistate automated licensing system, and any privilege arising under federal or state law, including the rules of any federal or state court with respect to such information or material, continue to apply to the information or material after the information or material has been disclosed to a multistate automated licensing system. The information or material may be shared with all state and federal regulatory officials that have consumer credit oversight authority without the loss of privilege or the loss of confidentiality protections provided by federal or state law, including the protections available under title 44, chapter 4.
B. The superintendent may enter into agreements, including sharing agreements, with other governmental agencies or other associations representing governmental agencies as established by the superintendent.
C. Information or material that is subject to a privilege or that is confidential under subsection A of this section is not subject to:
1. Disclosure under any federal or state law governing the disclosure to the public of information held by an officer or any agency of the federal government or the respective state.
2. Subpoena, discovery or admission into evidence in any private civil action or administrative process, unless with respect to any privilege held by a multistate automated licensing system applicable to the information or material, the person to whom the information or material pertains waives that privilege, in whole or in part, in the discretion of the person.
D. This section supersedes any inconsistent provisions of title 39 and does not apply to information or material relating to publicly adjudicated disciplinary and enforcement actions against persons subject to this chapter.
6-1824. Financial literacy
The superintendent may require licensees to provide consumers with access to financial literacy educational material or, in the event of default, to offer educational material in conjunction with approved consumer credit counseling providers.
6-1825. Fees; community development services fund
A. The superintendent shall collect a fee per transaction from each licensee in an amount to be determined by the superintendent, to be deposited into the community development services Fund established by subsection B of this section. The superintendent may not collect more than ten million dollars pursuant to this subsection. If a licensee does not pay the fee prescribed by this subsection, the superintendent may suspend or revoke the licensee's license.
B. The community development services Fund is established consisting of monies received pursuant to subsection A of this section and any donations. The superintendent shall administer the fund. Not more than ten percent of the monies deposited in the fund annually shall be used for the cost of administering the fund. Monies in the fund are continuously appropriated. Monies in the fund shall be used to provide grants to nonprofit organizations that provide any of the following to individuals in this state:
1. Consumer Credit Counseling Services.
2. Financial Literacy and Financial Education training and resources.
3. Direct, one-time emergency assistance funds.
C. The superintendent shall annually audit the programming policies and accounting records of any grant recipients and shall enter into an agreement with either a certified public accountant as defined in Section 32-701 or an attorney to conduct an annual broad‑based assessment of the grant recipients. The certified public accountant or attorney shall submit the assessment to the superintendent.
6-1826. Interest‑free repayment plan; past‑due balance repayment options
A. If a consumer access line of credit consumer has accumulated a past‑due balance but has not defaulted, once per year the consumer may request, and the licensee shall approve, that the past‑due balance be repaid on an interest-free balance in equal installments to be added to the minimum payment for the outstanding line. The daily transaction fee authorized under Section 6-1810 may not accrue with respect to this past‑due amount.
b. A consumer who has a past‑due balance and who has not defaulted and a licensee may agree to other repayment options by mutual agreement.
C. Notwithstanding section 6-1810, a consumer may request and a licensee may approve a lower pay‑down rate or minimum payment, except that a minimum payment that would fail to reduce outstanding principal by at least two percent per billing cycle may not be approved.
D. A licensee may refer a consumer to an approved credit counseling agency and include repayments under this section in a negotiated debt management plan.
E. The licensee may not enter into a repayment plan with a consumer for past‑due amounts owed at a daily transaction fee in excess of what is authorized under section 6‑1810.
6-1827. Superintendent; liability
If the superintendent acts in good faith when establishing and approving a database as described in section 6-1813, the superintendent is not subject to any civil or criminal liability for either of the following:
1. Providing verification that the consumer does not have more than one outstanding CALC loan plan totaling more than two thousand five hundred dollars.
2. Any breach of the database.
Sec. 4. Exemption from rulemaking
For the purposes of this act, the department of financial institutions is exempt from the rulemaking requirements of title 41, chapter 6, Arizona Revised Statutes, for one year after the effective date of this act.
Sec. 5. Committee of reference review; CALC loans
Ten years after the effective date of this act, an appropriate legislative committee of reference that is established pursuant to section 41-2954, Arizona Revised Statutes, shall review title 6, chapter 18, Arizona Revised Statutes, as added by this act. The committee shall deliver a report of its findings to the speaker of the house of representatives and the president of the senate on or before December 1, 2027.
Sec. 6. Delayed repeal
A. Section 6-1825, Arizona Revised Statutes, as added by this act, is repealed from and after December 31, 2027.
B. Except as provided in subsection A of this section, title 6, chapter 18, Arizona Revised Statutes, as added by this act, is repealed from and after December 31, 2037.
Sec. 7. Effective date
This act is effective from and after December 31, 2017."
Amend title to conform