Legal Status: Legal
Citation:
Alaska Statute 06.50.100 et seq.
Loan Terms:
Maximum Loan Amount: $500
Loan Term: Min: 14 days
Maximum Finance Rate and Fees: $5 + the lesser of $15 per $100 or 15%
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
Rollovers Permitted: Two (renewals)
Cooling-off Period:
Repayment Plan: Yes
Collection Limits:
Collection Fees: $30 NSF fee; Court costs of up to $700 over the amount of the payment (if disclosed in loan agreement)
Criminal Action: Prohibited (Unless check returned due to closed account)
Where to Complain, Get Information:
Regulator: Alaska Division of Banking and Securities
Address: P.O. Box 110807 Juneau AK 99811
Phone: (888) 925-2521
Fax: (907) 465-2549
Applicability: The statute applies to prohibit persons, including persons doing business from outside this state, from engaging in the business of making or offering to make deferred deposit advances without having a license under this chapter. Otherwise small loan act applies. Alaska Stat. ยง 06.20.230 et seq. (3% per month for amounts up to $759; 2% per month for amounts of $850- $9,999).
Licensing Requirements: Applicants for a license must have cash assets of at least $25,000 (for each location); demonstrate the financial responsibility, financial condition, business experience, character, and general fitness that reasonably warrant the department’s belief that the applicant’s business will be conducted lawfully and fairly; if the person has a physical business location in the state, have a physical business location that is accessible by and convenient to the public. An applicant for a license shall file a bond in the sum of $25,000 for a business with one location and $50,000 for a business with more than one location.
Disclosures: An advance must be documented in a written agreement signed by the advance recipient and on a form approved by the department. The agreement must clearly and conspicuously disclose the name of the licensee; the date of the advance; the principal amount of the advance; a statement of the total amount of fees that may be charged as a condition of making the advance, expressed both as a dollar amount and as an annual percentage rate; the repayment terms; the due date; an itemization of all disbursements, including disbursements to third parties; the name and title of the employee who signs the agreement on behalf of the licensee; and any other item required to be disclosed under state or federal law. A licensee shall post a conspicuous (legible and at least one inch in height) notice in each business location that discloses the fees that the licensee charges for advances. The fees in the notice must be expressed as a dollar amount, as an annual percentage rate for 14 days for each $100, and as an annual percentage rate for 30 days for each $100. Before disbursing funds, a licensee shall provide a clearly written statement separate from the written advance agreement required to be reviewed and signed by the advance recipient. The licensee shall keep the signed original and give a copy to the recipient. The disclosure statement must indicate the advance is intended to address short-term, not long-term, financial needs; include an explanation of all fees for advances and renewals of advances; state that the licensee may charge an advance recipient a bad check fee for costs if a payment is returned unpaid; state that, in the event of the advance recipient’s default, the licensee may sue the recipient and recover up to $700 over the amount of the payment and, give the department’s address and telephone number for receiving calls regarding customer complaints and concerns; state that the licensee may not accept collateral or services for an advance; state that the check given as security for the advance may be negotiated as part of the advance; state that the advance recipient may rescind the advance without cause at any time before the close of business on the business day following the day on which the licensee makes the advance by paying the principal amount of the advance to the licensee in cash or other immediately available funds; if the advance recipient rescinds under this paragraph, the origination fee is not refundable, but the licensee may not charge the recipient another fee, except for a bad check fee for costs if the payment is returned unpaid; state that a criminal action may not be brought against the advance recipient for failure to pay the advance; and include other information reasonably required by the department to inform and protect advance recipients.
Permitted charges: The licensee may collect a bad check fee. The licensee may initiate a court action against a defaulting recipient to recover damages and costs but the total of all damages and costs, including damages recovered, may not exceed the amount of the payment by $700. If a payment received from an advance recipient is returned unpaid to a licensee, the licensee may not collect the fees allowed by this chapter unless the fees are disclosed in the agreement for the advance.
Loan Terms: A licensee may not: make advances that exceed $500 outstanding in advances to the recipient at one time (minimum duration: 14 days); renew an advance more than 2 consecutive times. A licensee may only charge a nonrefundable origination fee in an amount not to exceed $5; and a fee that does not exceed $15 for each $100 of an advance, or 15 percent of the total amount of the advance, whichever is less. These fees are considered earned at the time of the transaction and may not be prorated. If an advance recipient defaults, before assigning the payment obligation to a third party for collection and before initiating a court action against the recipient, a licensee shall attempt in good faith to contact the advance recipient at reasonable times by telephone or mail to discuss the delinquency and to offer the recipient a payment plan under which the recipient may repay the delinquent advance over an extended period of time, which may not exceed six months. In addition to the contact required, the licensee shall send a certified letter to the recipient’s last known address at least 15 days before the action that makes the payment plan offer described and that informs the recipient of the licensee’s intent to proceed with a court action.
Prohibited Acts: A licensee may not: charge fees other than those allowed by this section; charge the advance recipient an additional fee to access the proceeds of an advance; require a recipient to agree to mandatory arbitration; threaten an advance recipient with criminal action as a result of the recipient’s default.
Enforcement: License suspension or revocation.
