CHAPTER 50 HOUSE BILL No. 2193 An Act relating to payday loans; limiting number of loans to same borrower; amending
K.S.A. 2000 Supp. 16a-2-404 and repealing the existing section. Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 2000 Supp. 16a-2-404 is hereby amended to read
as follows: 16a-2-404. (1) On consumer loan transactions in which cash is
advanced:

      (a) With a short term,

      (b) a single payment repayment is anticipated, and

      (c) such cash advance is equal to or less than $860, a licensed or
supervised lender may charge in lieu of the loan finance charges specified
in K.S.A. 16a-2-401, and amendments thereto, the following amounts:

      (i) On any amount up to and including $50, a charge of $5.50 may
be added;

      (ii) on amounts in excess of $50, but not more than $100, a charge
may be added equal to 10% of the loan proceeds plus a $5 administrative
fee;

      (iii) on amounts in excess of $100, but not more than $250 a charge
may be added equal to 7% of the loan proceeds with a minimum of $10
plus a $5 administrative fee;

      (iv) for amounts in excess of $250 and not greater than the maximum
defined in this section, a charge may be added equal to 6% of the loan
proceeds with a minimum of $17.50 plus a $5 administrative fee.

      (2) The maximum term of any loan made under this section shall be
30 days.

      (3) A lender and related interest shall not have more than two loans
made under this section outstanding to the same borrower at any one
time.

      (4) Each loan agreement made under this section shall contain the
following notice in at least 10 point bold face type: NOTICE TO BOR-
ROWER: KANSAS LAW PROHIBITS THIS LENDER AND THEIR
RELATED INTEREST FROM HAVING MORE THAN TWO LOANS
OUTSTANDING TO YOU AT ANY ONE TIME. A LENDER CANNOT
DIVIDE THE AMOUNT YOU WANT TO BORROW INTO MULTIPLE
LOANS IN ORDER TO INCREASE THE FEES YOU PAY.

      (3) (5) The contract rate of any loan made under this section shall
not be more than 3% per month of the loan proceeds after the maturity
date. No insurance charges or any other charges of any nature whatsoever
shall be permitted, except as stated in subsection (5) (7), including any
charges for cashing the loan proceeds if they are given in check form.

      (4) (6) Any loan made under this section shall not be repaid by pro-
ceeds of another loan made under this section by the same lender or
related interest. The proceeds from any loan made under this section
shall not be applied to any other loan from the same lender or related
interest.

      (5) (7) On a consumer loan transaction in which cash is advanced in
exchange for a personal check, a return check charge may be charged if
the check is deemed insufficient as defined in paragraph (e) of subsection
(1) of K.S.A. 16a-2-501, and amendments thereto.

      (6) (8) In determining whether a consumer loan transaction made
under the provisions of this section is unconscionable conduct under
K.S.A. 16a-5-108, and amendments thereto, consideration shall be given,
among other factors, to:

      (a) The ability of the borrower to repay within the terms of the loan
made under this section; or

      (b) the original request of the borrower for amount and term of the
loan are within the limitations under this section.

      (7) (9) This section shall be supplemental to and a part of the uniform
consumer credit code.

 Sec.  2. K.S.A. 2000 Supp. 16a-2-404 is hereby repealed.
 Sec.  3. This act shall take effect and be in force from and after its
publication in the Kansas register.

Approved March 27, 2001.
 Published in the Kansas Register April 5, 2001.
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