An Act To Promote Consumer Fairness in Tax Refund Anticipation Loans
Maine Legislature, Session 124, LD 1343
Committee Amendment CA_A_H285 (House)
Amends: 9-A MRSA §10

COMMITTEE AMENDMENT "A" to H.P. 944, LD. 1343, Bill, "An Act To 
Promote Consumer Fairness in Tax Refund Anticipation Loans" 
Amend the bill by striking out everything after the enacting clause and before the 
summary and inserting the following: 
'Sec. 1. 9-A MRS A §8-106, sub-§6, as enacted by PL 1991, c, 330, §2, is 
amended to read: 
6. 
In the case of a tax refund loan, if it is the practice of the creditor to demand 
repayment upon delivery of the refund, the annual percentage rate is based on the 
creditor's reasonable estimate of the time the refund will be delivered. 
Sec. 2. 9-A MRSA §10-102, sub-§l, ~A, as amended by PL 2005, c. 274, §4, is 
further amended to read: 
A. 
"Loan broker" means any person who, with respect to the extension of consumer 
credit by others, provides or offers to provide, in return for the separate payment of 
money or other valuable consideration, any of the following services: 
(1) Improving a consumer's credit record, history or rating; 
(2) Arranging for or obtaining an extension of credit for a consumer; or 
(3) Providing advice or assistance to a consumer with respect to subparagraph 
(1) or (2). 
"Loan broker" also means any person who serves as a facilitator of a refund 
anticipation loan or refund anticipation check, whether or not in return for the 
separate payment of money or other valuable consideration. 
Sec. 3. 9-A MRSA §10-102, sub-§2-A is enacted to read: 
2-A. "Facilitator of a refund anticipation loan or refund anticipation check" means a 
persoll who individually or in conjunction or cooperation with another person: 
Page I - 124LR1767(02)-1 
COMMITTEE AMENDMENT 
i· ":)~ 
'X\- Ij. 
COMMITTEE AMENDMENT·4 "to H.P. 944, L.D. 1343 
A. Solicits the execution of, processes, receives or accepts application or agreement 
for a refund anticipation loan or refund anticipation check; 
B. Services or collects upon a refund anticipation loan or refund anticipation check; 
or 
C. Facilitates the making of a refund anticipation loan or refund anticipation check in 
any other manner. 
If there is no 3rd-party facilitator of a refund anticipation loan or refund anticipation 
check because a creditor directly solicits the execution of, receives or accepts application 
or agreement for a refund anticipation loan or refund anticipation check, that creditor is 
considered a facilitator of a refund anticipation loan or refund anticipation check for 
purposes of this subsection. For purposes of this subsection, "creditor" means any person 
who makes a refund anticipation loan or who takes assignment of a refund anticipation 
loan. 
Sec. 4. 9-A MRSA §lO-l02, sub-§4 is enacted to read: 
4. "Refund anticipation check" means a check, stored value card or other payment 
mechanism representing the proceeds of the consumer's tax refund that was issued by a 
depository institution or other person that received a direct deposit of the consumer's tax 
refund or tax credit and for which the consumer has paid a fee or other consideration. 
Sec. 5. 9-A MRSA §lO-l02, sub-§5 is enacted to read: 
5. "Refund anticipation loan" means a loan that is secured by or that the creditor 
arranges to be repaid directly or indirectly from the proceeds of the consumer's income 
tax refund or tax credits. A refund anticipation loan also includes any sale, assignment or 
purchase of a consumer's tax refund at a discount or for a fee, whether or not the 
consumer is required to repay the buyer or assignee if the federal Internal Revenue 
Service reduces the consumer's tax refund. 
Sec. 6. 9-A MRSA §lO-l02, sub-§6 is enacted to read: 
6. 
"Refund anticipation loan fee" means the charge, fee or other consideration 
charged or imposed directly or indirectly by the creditor for the making of or in 
connection with a refund anticipation loan. "Refund anticipation loan fee" includes any 
charge, fee or other consideration for a deposit account if the deposit account is used for 
the receipt of the consumer's tax refund to repay the amount owed on the loan. 
Sec. 7. 9-A MRSA §lO-l02, sub-§7 is enacted to read: 
7. "Refund anticipation loan interest rate" or "interest rate" means the interest rate 
that must be disclosed pursuant to section 8-106, subsection 6. 
Sec. 8. 9-A MRSA §lO-202, as amended by PL 2005, c. 274, §6, is further 
amended to read: 
§10-202. Bond 
Each application must be accompanied by evidence of a surety bond, in a form 
approved by the administrator in the aggregate amount of $25,000, to run to the State for 
use by the State and any person or persons who may have a cause of action against a loan 
COMMITTEE AMENDMENT 
.) 
'\ 
... ,,t'\ 
) 
,) 
i. 
'f 
~ 
ll.S-
~. (i 
('"") 
COMMITTEE AMENDMENT ·A" to I-I.P. 944, L.D. 1343 
broker. 
Notwithstanding this section, the aggregate amount of a surety bond 
accompanying the application of a loan broker conducting business solely as a facilitator 
of a refund anticipation loan or refund anticipation check must be $10,000. The terms of 
the bond must run concurrent with the period of time during which the license is in effect. 
Sec. 9. 9-A MRSA §10-310 is enacted to read: 
§10-310. Requirements related to refund anticipation loan and refund anticipation 
check 
1. A facilitator of a refund anticipation loan or refund anticipation check shall make 
the following disclosures in accordance with this section. 
A. 
A facilitator of a refund anticipation loan or refund anticipation check shaIl 
prominently display a schedule showing the current fees for a refund anticipation 
loan or refund anticipation check at its place of business. Each fee schedule must 
include at least 5 examples of refund anticipation loans in different amounts ranging 
from $300 to $5,000. 
B. A facilitator of a refund anticipation loan or refund anticipation check shalI post 
the following notice to consumers: "When you take out a refund anticipation loan, 
you are borrowing money against your tax refund, If your tax refund is less than 
expected, you will still owe the entire amount of the loan. If your refund is delayed, 
you may have to pay additional costs. You can get your refund in 8 to 15 days 
without paying any extra fees and taking out a refund anticipation loan. You can have 
your tax return filed electronically and your refund deposited directly into your own 
bank account without obtaining a refund anticipation loan or paying fees for an extra 
product" 
C. At the time a person applies for a refund anticipation loan or refund anticipation 
check, the facilitator of a refund anticipation loan or refund anticipation check shalI 
disclose, on a form separate from the application, the refund anticipation loan fee or 
refund anticipation check fee; the fee for tax preparation or any other fee; the time 
within which the proceeds of the refund anticipation loan or refund anticipation check 
will be paid if the loan or check is approved; and the interest rate, calculated pursuant 
to section 8-106, subsection 6, if the person is applying for a refund anticipation loan. 
D. Prior to the consummation of the refund anticipation loan or refund anticipation 
check transaction, the facilitator of a refund anticipation loan or refund anticipation 
check shalI also provide a copy of the completed loan or check application and 
agreement and, for a refund anticipation loan, the disclosures required by Article 8. 
E. 
If a person applies for a refund anticipation loan, the facilitator of a refund 
anticipation loan or refund anticipation check shall oralIy inform the applicant that 
the product is a loan that lasts only one to 2 weeks, that the applicant is liable for the 
full amount of the loan if the anticipated tax refund is less than expected, the amount 
of any loan fees and the interest rate for the loan. If a person applies for a refund 
anticipation check, the facilitator of a refund anticipation loan or refund anticipation 
check shalI oralIy inform the applicant of any check fee and that the applicant can 
receive a refund without a loan or extra fees if the refund is filed electronicalIy and 
the applicant chooses direct deposit to the applicant's own bank account 
COMMITTEE AMENDMENT 
~~~ 
COMMITTEE AMENDMENT·A" to H.P. 944, L.D. 1343 
2. 
A facilitator of a refund anticipation loan or refund anticipation check is 
prohibited from engaging in any of the following activities. 
A. A facilitator of a refund anticipation loan or refund anticipation check may not 
assess or impose any fee, charge or other consideration in the making of a refund 
anticipation loan or refund anticipation check unless that fee, charge or other 
consideration is included in the disclosed refund anticipation loan fee and the refund 
anticipation loan interest rate charged by the creditor or bank that provides the loan or 
check. 
In addition, any such fee, charge or other consideration, from whatever 
source, must be disclosed on the written agreement required by section 10-302. A 
facilitator of a refund anticipation loan or refund anticipation check may charge a fee 
for tax preparation if the same fee in the same amount is charged to customers who 
do not receive a refund anticipation loan, refund anticipation check or any other tax-
related financial product. 
B. A facilitator of a refund anticipation loan or refund anticipation check may not 
engage in unfair or deceptive acts or practices in the facilitating of a refund 
anticipation loan or refund anticipation check, including making any oral statements 
contradicting any of the information required to be disclosed under this Article. 
C. A facilitator of a refund anticipation loan or refund anticipation check may not 
threaten to take any action prohibited by this Article in facilitating a refund 
anticipation loan or refund anticipation check. 
D. A facilitator of a refund anticipation loan or refund anticipation check may not 
directly or indirectly arrange for any 3rd party to charge any interest, fee or charge 
related to a refund anticipation loan or refund anticipation check, including but not 
limited to charges for insurance, check cashing or attorney's fees or other collection 
costs. 
E. A facilitator of a refund anticipation loan or refund anticipation check may not 
include any of the following provisions in a refund anticipation loan application or 
agreement: 
(1) A hold-harmless clause; 
(2) A confession-of-judgment clause; 
(3) A waiver of the right to a jury trial in any action; 
(4) Any assignment of or order for payment of wages or other compensation for 
services; 
(5) An agreement that the consumer will not assert any claim or defense arising 
out of the contract or seek any remedies pursuant to this Title; 
(6) A waiver of any requirement of this Al1icle; 
(7) A waiver of the right to injunctive, declaratory or other equitable relief or 
relief on a c1asswide basis; or 
(8) A requirement that any aspect of a resolution of a dispute between the paJ1ies 
to the agreement be kept confidential. 
COMMITTEE AMENDMENT 
\ 
,} 
.) 
"') 
") 
... 
l 
..lle.. 
~ 
~"",.,.,. 
("'\ 
, 
) 
COMMITTEE AMENDMENT "A" to I-U. 944, LD. 1343 
F. A facilitator of a refund anticipation loan or refund anticipation check may not 
take or an'ange for a creditor to take a security interest in any property of the 
consumer other than the proceeds of the consumer's tax refund to secure payment of a 
refund anticipation loan. 
G. A facilitator of a refund anticipation loan or refund anticipation check may not 
directly or indirectly engage in the collection of an outstanding or delinquent refund 
anticipation loan for any creditor or assignee. 
H. A facilitator of a refund anticipation loan or refund anticipation check may not 
refer, facilitate or solicit consumers on behalf of a 3rd party engaged in check cashing 
for a fee or permit 3rd-party check cashing for a fee in any place of business in which 
refund anticipation loans or refund anticipation checks are facilitated. 
I. A facilitator of a refund anticipation loan or refund anticipation check may not 
facilitate any refund anticipation loan that is secured by or that the creditor arranges 
to be repaid directly from the proceeds of the consumer's state tax refund. 
J. A facilitator of a refund anticipation loan or refund anticipation check may not 
make a misrepresentation of fact in obtaining or attempting to obtain a registration as 
a facilitator. 
1<.. A facilitator of a refund anticipation loan or refund anticipation check may not 
advertise or market a refund anticipation loan without including in the advertising or 
marketing materials a disclosure that the product is a loan and that tax refunds can be 
obtained without a loan or extra fees if tax returns are electronically filed with direct 
deposit. 
L. A facilitator of a refund anticipation loan or refund anticipation check may not 
advertise or market a refund anticipation check without including in the advertising 
or marketing materials a disclosure that there is a fee associated with the check and 
that tax refunds can be obtained without a loan or extra fees if tax returns are 
electronically filed with direct deposit.' 
-
SUMMARY 
This amendment replaces the bill. The amendment regulates businesses that facilitate 
refund anticipation loans or refund anticipation checks associated with tax refunds or tax 
credits. The amendment requires those acting as facilitators of refund anticipation loans 
or refund anticipation checks to register as loan brokers with the Department of 
Professional and Financial Regulation, Bureau of Consumer Credit Protection and post 
bonds for the protection of consumers. The bill requires disclosures to consumers who 
enter into these transactions and prohibits celiain practices by facilitators of refund 
anticipation loans or refund anticipation checks. 
FISCAL XOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 05/07 109 
~aC!. 
LD 1343 
LR 1767(02) 
An Act To Promote Consumer Fairness in Tax Refund Anticipation Loans 
Fiscal Detail and Notes 
Fiscal Note for Bill as Amended by Committee Amendment 'A" 
Committee: Insurance and Financial Services 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - Other Special Revenue Funds 
Minor revenue increase - Other Special Revenue Funds 
Additional costs and fee collections are expected to be minor and can be absorbed by the Bureau of Consumer Credit 
Protection in the Department of Professional and Financial Regulation within existing budgeted resources. 
LR1767(02) - Fiscal Note - Page 1 of 1 
j 
:) 
') 
,)