Department of Insurance Financial Institutions and Professional Registration John F. Rehagcn, Acting Director Governor Eric R. Greitens State of Missouri DIVISION OF FINANCE 301 West High Street, Room 630 Debra Hardman PO. Box 716 Acting Commissioner Jefferson City. MO 65102-0716 (573)751-3242 (573)751-9192 FAX February 14, 2017 The Honorable Eric R. Greitens, Governor State Capitol Building Room 216 Jefferson City, Missouri 65101 Re: Report to General Assembly pursuant to section 408.506, Dear Governor Greitens: The Division of Finance has, in accordance with section 408.506, conducted a survey by mail of payday lenders operating pursuant to section 408.500. The reporting _timef_rame was October 1, 2015 through September 30, 2016. The summary is based on a 90.1% return of surveys by the industry. The attached chart (Exhibit A) details the results of the survey and also provides historical data for comparison. Some highlights include: 825 payday loan licenses were issued during calendar year 2016. Lenders closed and opened locations throughout the year with 725 being the approximate average number active at any given time. The total number of payday loans made during the reporting period exceeded 51.62 million. (For purposes of this survey, a renewal was treated as a separate loan.) I The average loan was $314.93 and the average interest rate was 462.87%. This would result in an interest/fee of $55.91 for a 14-day loan. The Division of Finance accepts all types of consumer complaints, including phone calls, email, fax, mail, etc. While most of the contacts from citizens were resolved by explaining the law, the Division did document 8 complaint ?les during the reporting period. Complaints consisted of issues such as checks being deposited early, collection tactics, proper credit of payments, and customers being unable to make payments due to the location being closed. Most cases were resolved by telephone with the licensee. The Honorable Eric R. Greitens, Governor Report to General Assembly pursuant to section 408.506 February 14, 20.17 Page 2 The Division of Finance continues to perform examinations of all payday lenders and overall compliance with current statutes continues to be monitored. During 2016, 98.3% of the licensees examined received a satisfactory compliance evaluation. Refunds totaling over $204,100 were ordered. Cease and desist orders are issued in instances of serious non- compliance. During 2016, there were no such orders issued. As section 408.506 also requires the Division to summarize the payday loan laws from contiguous states, we conducted a survey of such states? laws. The results may be found in Exhibit attached. We believe the foregoing satis?es the requirements of section 408.506 Very truly yours, Mam Debra Hardman Acting Commissioner of Finance Enclosures (2) Payday Lender General Assembly Report Exhibit A January January January January January 2009 2011 2013 2015 2017 Number of Licenses Issued 1,315 1,066 984 904 825 Change from previous -15.00% -19.00% -7.69% -8.13% -8.74% Number of Active Licenses (approx) 1,275 1,040 934 898 725 Change from previous 1.03% -18.43% -10.19% -3.85% -1 9.3% Number of Loans Made* 2.83 million 2.43 million 2.34 million 1.87 million 1.62 million Chajge from previous -1.40% 44.13% -3.70% -20.08% -13.37% Average Loan Amount* $290.29 $307.56 $306.12 $309.64 314.93 Average Number of Renewals" 1.7 1.6 1.5 1.6 1.6 Defaulted Loans* 172,954 146,880 122,364 111,342 84,152 of Total Loans Made 6.12% 6.03% 5.23% 5.95% 5.18% Average Annual Percentage Rate 430.68 444.61 454.62 451.91 462.87 *Based on ?gures provided by industry surveys. Exhibit PAYDAY LOANS IN CONTIGUOUS STATES Licenses Maximum Rate Fees Term Renewals Complaints Loan Missouri 704 $500 A loan and all renewals 14 day minimum Limited to 6 During 2016, thereof may not earn ?ve regarding more than 75% Of the 3] day maximum licensed lenders, original principal in three regarding interest and fees. unlicensed Internet lenders Arkansas Industry is no longer regulated in Arkansas; therefore no information to report Kansas 60 $500 15% of the loan amount 7 day minimum Not 7 received in companies Allowed 2015 and 218 30 day maximum 7 received in locations 2016 Iowa 162 $445 $15% on the ?rst $100 of 31 day maximum Not 5 received in the face amount of the Allowed 2016 check; 10% on each $100 thereafter of the face amount of the check, or pro-rate for any portion thereof Tennessee 1038 Face 15% of the face of the No minimum Not For 2016, amount of check Maximum 31 days Allowed 18 total the check 4 Internet cannot exceed $500 Kentucky 651 $500 $15 per $100 14 60 days No Most are against intemet lenders, which are illegal in KY Nebraska 1 16 main $500 at $15 per $100 cash 34 day maximum Not Few; mostly re: of?ces plus one advanced Allowed intemet lenders 64 branch licensee and collection locations with no activities. more than 2 checks outstandin Illinois 500 $15.50 per $100 120 days max Not Rare Allowed Oklahoma 245 $500; No $15 per $100 for the ?rst Min. 12 days Not 46 complaints more than $300 and $10 per $100 Max. 45 days Allowed in 2016 2 loans out on the next $200.