H685 - Electronic Transaction Fees/Official Fees. (SL 2021-159)

Overview: S.L. 2021-159 does the following:

• Allows a consumer finance lender to recover from a borrower the actual cost of a fee imposed on the lender from an unaffiliated third-party for processing electronic payments and disbursing loan proceeds. Many consumer finance lenders will accept a debit card payment on a loan amount, and many will load loan proceeds onto a borrower's debit card. In these instances, the card company charges a fee for this service. Section 1 of the act allows the lender to recover the actual transaction charge imposed by the card company. The third-party fees must also be publicly disclosed.

This disclosure requirement becomes effective January 1, 2022. The remainder of this section becomes effective October 1, 2021, and is applicable to transactions occurring on or after that date.

• Provides that fees or charges paid by the seller for determining the existence of or to record a security interest in a consumer credit sale may be included in the amount financed but must be excluded from the finance charge.

This section becomes effective October 1, 2021, and applies to contracts entered into, or renewed or modified, on or after that date.