HB 1411 - H AMDS 042 ADOPTED 3-7-97

By Representatives Keiser & L. Thomas

On page 1, after line 9, strike all material through and including line 13 on page 1, and insert:

A(2)(a)(i) Until June 30, 2002, in connection with the making of a loan that is secured primarily by real estate, charge the borrower a nonrefundable loan origination fee, which may be included in the principal balance of the loan;

(ii) After June 30, 2002, in connection with the making of a loan that is secured primarily by real estate, charge the borrower a nonrefundable loan origination fee not to exceed four percent of the first twenty thousand dollars and two percent thereafter of the principal amount of the loan advanced to or for the direct benefit of the borrower, which fee may be included in the principal balance of the loan;@

On page 2, after line 28, insert the following:

ANEW SECTION. Sec. 2. The department of financial institutions shall monitor the impact on consumers of removing the origination fee limit for real estate loans under this act, particularly the relationship between the interest rate charged and origination fees. The department shall report to the financial institutions committees of the legislature by October 1, 2001.@

Correct the title accordingly.

EFFECT: Makes the removal of the origination fee limit on real estate loans made by consumer loan companies effective until June 30, 2002; after that date, the limitation in current law of 4% of the first $20,000 and 2% thereafter is reinstated. The Department of Financial Institutions is to monitor the impact of deregulating the origination fees for real estate loans and report to the Legislature by October 1, 2001.