Arizona Amends Consumer Lender Act
A Consumer Lender License is required in Arizona for any person that advertises to make or procure, solicits, or holds themselves out as willing to make or procure or makes or procures a loan of $10,000 or less or a revolving loan of not more than $10,000. Licensing and regulation is primarily overseen by the Arizona Department of Financial Institutions (AzDFI).
Arizona’s legislature recently made changes to A.R.S. § 6-611, its consumer lender legislation regarding prohibited acts and insurance add-on practices. One change is the removal of the provision prohibiting a licensee from paying “a fee, commission or bonus or give anything of value to any merchant, dealer, consumer or other person for referring consumer lender loan business, other than the fees permitted pursuant to the real estate settlement procedures act.” The legislature also removed the prohibition against a licensee giving a consumer “any prize, good, ware, merchandise or tangible property of an aggregate value of more than twenty‑five dollars.” Moreover, licensees can now sell certain add-on insurance products, including “accidental death and dismemberment insurance providing a benefit if death occurs as a result of an accident or if dismemberment occurs” and “disability income protection insurance providing a benefit if a total disability occurs during the terms of insurance.” These changes are set to be effective August 26, 2016 (or 90 days following adjournment of the legislative session).