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Carleton Sales Team

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sales@carletoninc.com

 

Kansas Rate Adjustment for Consumer Loans & Retail Installment Sales

 

On March 29, 2024, Kansas Governor Laura Kelly signed House Bill 2247 into law changing provisions in the state’s Uniform Consumer Credit Code (“UCCC”) and the Kansas Mortgage Business Act (“KMBA”). There are nine amendments to the KMBA with many simply recodifying similar provisions from the UCCC. Among the various changes, the act modernizes language (such as adding the allowance for electronic signatures), removes references to precomputed transactions, amends licensing requirements, updates record keeping requirements, requires mandatory disclosures for credit card surcharges, allows for extended repayment plans for consumers who borrowed from a payday lender, and clarifies language around “late fees” and their assessment.

The KS UCCC covers loans and retail installment sales. HB 2247 changes the threshold amount covered by the UCCC from $25,000 to a “threshold amount” which is defined to align with the annual increase in the consumer price index (at least $69,500 as of July 1, 2024). In addition, the bill modifies the definition of “Annual percentage rate” and “Closed-End Credit” to tie these definitions explicitly to 15 USC § 1606 under the Truth in Lending Act.

 

Impact on Consumer Loans:

• Modifies the “threshold amount” based on the language above.
• Alters the maximum finance charge for a consumer loan under a supervised lender from a blended rate to a flat 36% rate.
• Increases the allowed prepaid finance charge to an amount not to exceed the lesser of 2% or $300 (previously $100).
• Changes the maximum term to 25 months for loans of $1,000 or less (removing the 37 month restriction for other loans).

 

Impact on Retail Installment Sales:

• Modifies the “threshold amount” based on the language above.
• Adds definition of “installment.”
• Increases the allowed prepaid finance charge to an amount not to exceed the lesser of 2% or $300 (previously $100).
• Modifies the minimum charge to a flat $10 (previously based on a $75 threshold).

 

Effective January 1, 2025.

 

About Carleton, Inc.:

Carleton is the country's leading provider of financial calculation software, loan origination compliance support, and document generation software. With over 50 years of experience, our ongoing expertise and industry knowledge reaffirms why we are a trusted partner.  Founded in conjunction with the Truth In Lending Act, Carleton provides expert compliance support with continuous accuracy in all our calculations and disclosures at a state and federal level. To learn more about Carleton's lending solutions, contact our sales team at sales@carletoninc.com or 574-243-6040 option #3.