It won't affect mortgage, car loans
Banks would no longer be restricted in the amount of upfront fees they charge on consumer loans under a bill that passed the House Commerce Committee on Tuesday.
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Supported by the Louisiana Bankers Association, House Bill 547 by Rep. Jeff Arnold, D-Algiers, applies to federally insured depository institutions and would not affect mortgage or auto loans.
Currently, banks can charge an origination fee up to $50 for consumer loans or revolving loan accounts, plus a documentation fee up to $20 and a notary fee of $15 on non-real estate consumer loan transactions.
Arnold's bill would let the banks charge "any amount agreed to in a written agreement signed by the consumer" and that the fees would be "nonrefundable and not subject to rebate."
Non-depository lenders that specialize in small consumer finance loans currently have the same fee limits as the banks but would not be relieved of the caps under the Arnold bill. Credit unions are not currently limited and would not be affected by the bill's current version.
Lawmakers discussed various ways the bill might be amended, such as extending the current cap to credit union loans. It will next be heard on the House floor.
Robert Taylor, chief executive officer of the Louisiana Bankers Association, said the government should not be fixing prices in the financial marketplace.
"I really don't think that this is going to be something that negatively impacts the consumer," Taylor said. "It could make credit more available."
The committee also approved House Bill 344 by Rep. Michael Jackson, I-Baton Rouge. It would prohibit retailers and other product and service sellers from imposing a surcharge on a cardholder who chooses to use a credit or debit card in lieu of payment by cash.
Arnold said surcharges are rarely applied because credit card companies already impose restrictions on vendors, but the bill could be useful in protecting consumers at places where the practice occurs.
Robert Travis Scott can be reached at rscott@timespicayune.com or 225.342.4197.
