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An Act To Stop Unlicensed Loan Transactions
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  9-A MRSA §5-118  is enacted to read:
§ 5-118. Unlicensed loan transactions
 
1.  Definitions.     As used in this section, unless the context otherwise indicates, the following terms have the following meanings.
 
A.  "Financial account" means a checking, savings, share, stored value, prepaid, payroll card or other depository account.
 
B.  "Lender" means a person engaged in the business of making loans of money, credit, goods or things in action and charging, contracting for or receiving on any such loan interest, a finance charge, a discount or consideration. For purposes of this section, "lender" does not include a supervised financial organization.
 
C.  "Process" or "processing" includes printing a check, draft or other form of negotiable instrument drawn on or debited against a consumer's financial account, formatting or transferring data for use in connection with the debiting of a consumer's financial account by means of such an instrument or an electronic funds transfer or arranging for such services to be provided to a lender.
 
D.  "Processor" means a person who engages in processing.
 
2.  Certain loans prohibited.     It is an unfair or deceptive act or practice in commerce, a violation of the Maine Unfair Trade Practices Act and a violation of this Title for a lender directly or through an agent to solicit or make a loan to a consumer by any means unless the lender is in compliance with Article 2, Part 3 or is otherwise exempt from the requirements of Article 2, Part 3.
 
3.  Certain processing prohibited.     It is an unfair or deceptive act or practice in commerce, a violation of the Maine Unfair Trade Practices Act and a violation of this Title for a processor, other than a federally insured depository institution, to process a check, draft, other form of negotiable instrument or an electronic funds transfer from a consumer's financial account in connection with a loan solicited from or made by any means to a consumer unless the lender is in compliance with Article 2, Part 3 or is otherwise exempt from the requirements of Article 2, Part 3.
 
4.  Certain assistance to lenders or processors prohibited.     It is an unfair or deceptive act or practice in commerce, a violation of the Maine Unfair Trade Practices Act and a violation of this Title for a person or lender to provide assistance to a lender or processor when the person or lender or the person's or lender's authorized agent receives notice from a regulatory, law enforcement or similar governmental authority, knows from its normal monitoring and compliance systems or consciously avoids knowing that the lender or processor is in violation of subsection 2 or 3 or is engaging in an unfair or deceptive act or practice in commerce. This subsection does not apply to a supervised financial organization.
 
SUMMARY
This bill makes an unlicensed loan transaction, including an unlicensed loan transaction by a payday lender, or assisting in such a transaction, an unfair or deceptive act or practice in commerce, a violation of the Maine Unfair Trade Practices Act and a violation of the Maine Consumer Credit Code. This bill does not affect supervised financial organizations.