Nevada Enacts Payday Lender Best Practices Act

Payday Lending

On May 27, Nevada Governor Brian Sandoval signed into law S.B. 242, enacting the Payday Lender Best Practices Act. The legislation requires payday and similar lenders to use various specified best practices – advocated by the Community Financial Services Association of America – to strengthen consumer protections and promote responsible lending. The Act applies to any lender licensed within the state who operates a deferred deposit loan service, high-interest loan service, or title loan service. In addition to requiring lenders to fully comply with federal TILA disclosure requirements, the Act mandates lenders must also, among other things, (i) disclose to and provide borrowers with the option to enter into a repayment plan if the borrower is unable to pay; (ii) include a notice on marketing materials and advertisements advising borrowers that the loan should be used for short-term financial needs, and that borrowers with credit impairments should seek credit counseling; and (iii) report violations of Nevada’s short-term loan law to the state’s Financial Institutions Division.