Kentucky Amends its Consumer Loan Company Licensing Requirements
On March 26, 2019, Kentucky Governor Matt Bevin signed into law a bill, House Bill 285 (HB 285), which amends the requirements for consumer loan companies in Kentucky.
Some of the key provisions of HB 285 include the following:
- Increases the fee for investigating an application for a consumer loan company license from $250 to $500 and increases the annual license fee for each location from $400 to $500;
- Establishes new bonding and net worth requirements for consumer loan company license applicants;
- Requires a consumer loan company to have at least one managing principal (i.e., a natural person with the requisite experience who is primarily responsible for the operations of a licensee) and it establishes the standards for such person;
- Provides the requirements for a change of control involving a consumer loan company;
- Authorizes the Commissioner of Financial Institutions (Commissioner) to take adverse action against a consumer loan company in certain specified circumstances (e.g., if the company has committed fraud or made a misrepresentation of material fact, or if the company has demonstrated incompetence or untrustworthiness to act as a licensee);
- Requires a consumer loan company to maintain an agent in Kentucky for service of process; and
- States that the Commissioner must conduct an examination of a consumer loan company licensee once every 2 years, instead of annually.
The changes made by HB 285 go into effect on June 26, 2019.
