Idaho Bill Regulates Payday Loan Terms

Payday Lending Ability To Repay

On March 26, Idaho enacted SB 1314, which, among other things, prohibits payday lenders from making a loan that exceeds 25% of the borrower’s gross monthly income at the time the loan is made. The bill provides a safe harbor for lenders if the borrower presents evidence of gross monthly income or represents in writing that the payday loan does not exceed 25% of the borrower's gross monthly income. The bill also requires lenders to, upon request, allow borrowers to enter into extended repayment plans. Lenders cannot charge any additional fees related to such plans, but lenders are not required to enter into an extended plan with a borrower more than one time in any 12-month period. Finally, the bill requires specific written disclosures and prohibits payday lenders from presenting a borrower’s check to a depository institution more than two times. The changes take effect July 1, 2014.