31-1-723. Prohibited acts. A licensee making deferred deposit loans may not commit, or have committed on behalf of the licensee, any of the following prohibited acts:
     (1) engaging in the business of deferred deposit lending unless the department has first issued a valid license;
     (2) threatening to use or using a criminal process in this or any other state to collect on the loan made to a consumer in this state or any civil process to collect the payment of deferred deposit loans not generally available to creditors to collect on loans in default;
     (3) altering the date or any other information on a check received from a consumer;
     (4) using any device or agreement that would have the effect of charging or collecting more fees, charges, or interest than those allowed by this part, including but not limited to entering into a different type of transaction or renewing or rolling over a loan with the consumer;
     (5) engaging in unfair, deceptive, or fraudulent practices in the making or collection of a deferred deposit loan;
     (6) entering into a deferred deposit loan with a consumer that is unconscionable. In determining whether a deferred deposit loan transaction is unconscionable, consideration must be given to, but is not limited to, whether the amount of the loan exceeds 25% of the consumer's monthly net income.
     (7) charging to cash a check representing the proceeds of the deferred deposit loan;
     (8) using or attempting to use the check provided by the consumer in a deferred deposit loan as security for purposes of any state or federal law;
     (9) accepting payment of the deferred deposit loan through the proceeds of another deferred deposit loan provided by the same licensee or any affiliate;
     (10) making a deferred deposit loan that, when combined with another outstanding deferred deposit loan owed to the licensee, exclusive of the fee allowed in 31-1-722(2), exceeds a total of $300 when combining the face amount of the checks written in connection with each loan. Regardless of the total of the loans, a licensee may not make a loan to a consumer who has two or more deferred deposit loans outstanding with the licensee.
     (11) renewing, repaying, refinancing, or consolidating a deferred deposit loan with the proceeds of another deferred deposit loan made to the same consumer. However, a licensee may without charge extend the term of the loan beyond the due date.
     (12) accepting any collateral for a deferred deposit loan;
     (13) charging any interest, fees, or charges other than those specifically authorized by this part, including but not limited to charges for insurance;
     (14) threatening to take any action against a consumer that is prohibited by this part or making any misleading or deceptive statements regarding the deferred deposit loan;
     (15) making a misrepresentation of a material fact by an applicant in obtaining or attempting to obtain a license;
     (16) including any of the following provisions in the loan agreement required by 31-1-721:
     (a) a hold harmless clause;
     (b) a confession of judgment clause;
     (c) a waiver of the right to a jury trial, if applicable, in any action brought by or against a consumer;
     (d) a mandatory arbitration clause;
     (e) any assignment of or order for payment of wages or other compensation for services;
     (f) a provision in which the consumer agrees not to assert any claim or defense arising out of the contract; or
     (g) a waiver of any provision of this part.

     History: En. Sec. 13, Ch. 404, L. 1999.