Assembly Bill No. 421–Assemblymen Parnell,
Leslie, Gibbons, Lee and Smith

 

March 19, 2001

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Limits permissible rate of interest on installment loans. (BDR 56‑1282)

 

FISCAL NOTE:            Effect on Local Government: No.

                                    Effect on the State: No.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to the lending of money; imposing a limit upon the rate of interest chargeable upon loans regulated pursuant to chapter 675 of NRS; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1    Section 1. Chapter 675 of NRS is hereby amended by adding thereto a

1-2  new section to read as follows:

1-3    With respect to a loan under this chapter, regardless of the duration of

1-4  the loan, a licensee may not charge or contract for a rate of interest or

1-5  other charge exceeding the greater of:

1-6    1.  The total of:

1-7    (a) Thirty-six percent per year on that part of the unpaid balance of

1-8  the amount borrowed which does not exceed $300;

1-9    (b) Twenty-one percent per year on that part of the unpaid balance of

1-10  the amount borrowed which exceeds $300, but does not exceed $1,000;

1-11  and

1-12    (c) Fifteen percent per year on that part of the unpaid balance of the

1-13  amount borrowed which exceeds $1,000; or

1-14    2.  Eighteen percent per year on the entire unpaid balance of the

1-15  amount borrowed.

1-16    Sec. 2.  NRS 675.363 is hereby amended to read as follows:

1-17    675.363  1.  Under an agreement for a loan for an indefinite term, the

1-18  licensee may receive interest [in any amount or at any annual rate provided

1-19  in the agreement. This interest must be] calculated for each billing cycle in

1-20  either of the following ways:

1-21    (a) By multiplying the daily rate by the daily unpaid balance in the

1-22  account. The daily rate is determined by dividing the annual rate of interest

2-1  fixed by the agreement by 365. The daily unpaid balance is determined by

2-2  adding to any balance remaining unpaid as of the beginning of each day

2-3  any advances and any appropriate charges, including interest, and by

2-4  deducting therefrom any payments or other credits made or received on

2-5  that day.

2-6    (b) By multiplying the monthly rate by the average unpaid daily balance

2-7  in the account for that billing cycle. The monthly rate is determined by

2-8  dividing the annual rate of interest by 12. The average unpaid daily balance

2-9  is determined by dividing the sum of all of the daily unpaid balances

2-10  during the billing cycle by the number of days in the cycle.

2-11    2.  Unless otherwise provided in the agreement, the billing cycle must

2-12  be monthly. A billing cycle is monthly if the closing date of the cycle is the

2-13  same date each month or does not vary by more than 4 days from that date.

 

2-14  H