Colorado § 5-3.1-108 - Renewal - new loan - consecutive loans - payment plan - definitions.

§ 5-3.1-108. Renewal - new loan - consecutive loans - payment plan - definitions.

(1) A deferred deposit loan shall not be renewed more than once. After such renewal, the consumer shall pay the debt in cash or its equivalent. If the consumer does not pay the debt, then the lender may deposit the consumer's instrument.

(2) Upon renewal of a deferred deposit loan or payday loan, the lender may assess a finance charge that must not exceed an annual percentage rate of thirty-six percent. If the deferred deposit loan or payday loan is renewed prior to the maturity date, the lender shall refund to the consumer a prorated portion of the finance charge based upon the ratio of time left before maturity to the loan term.

(3) A transaction is completed when the lender presents the instrument for payment or the consumer redeems the instrument by paying the full amount of the instrument to the holder. Once the consumer has completed the deferred deposit transaction, the consumer may enter into a new deferred deposit agreement with the lender. If the consumer's instrument is dishonored by the payor financial institution after the transaction is complete and, before the lender receives a notice of dishonor, the lender makes a new loan that does not exceed the maximum allowable loan, the lender shall not be in violation of the maximum loan amount provisions in section 5-3.1-106.

(4) Nothing in this section prohibits a lender from refinancing a deferred deposit loan as a supervised loan subject to the provision of this code, articles 1 to 9 of this title; except that the lender may not contract for or receive the minimum finance charge contained in section 5-2-201 (7).

(5) (Deleted by amendment, L. 2010, (HB 10-1351), ch. 267, p. 1223, § 6, effective August 11, 2010.)

Source: L. 2000: Entire article added, p. 441, § 1, effective July 1. L. 2001: (4) amended, p. 29, § 9, effective March 9. L. 2004: (3) amended, p. 318, § 4, effective July 1. L. 2007: (5) added, p. 384, § 1, effective July 1. L. 2010: (2) and (5) amended, (HB 10-1351), ch. 267, p. 1223, § 6, effective August 11. Initiated 2018: (2) amended, Proposition 111, L. 2019, p. 4539, § 3, effective February 1, 2019, proclamation of the Governor issued December 19, 2018.

Cross references: For the legislative declaration in the 2010 act amending subsections (2) and (5), see section 1 of chapter 267, Session Laws of Colorado 2010.