An Act To Stop Unlicensed Loan Transactions
Maine Legislature, Session 126, LD 1691
Committee: Labor, Commerce, Research and Economic Development
Sponsors: POWERS, GRATWICK, FREY, GILBERT, KORNFIELD, KUSIAK, MASTRACCIO, NADEAU, PLANTE, SHORT
Amends: 9-A MRSA §5

Legislative Document 
No. 1691 
H.P. 1214 
House of Representatives, December 30, 2013 
An Act To Stop Unlicensed Loan Transactions 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203. 
Reference to the Committee on Labor, Commerce, Research and Economic Development 
suggested and ordered printed. 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative POWERS of Naples. 
Cosponsored by Senator GRATWICK of Penobscot and 
Representatives: FREY of Bangor, GILBERT of Jay, KORNFIELD of Bangor, KUSIAK of 
Fairfield, MASTRACCIO of Sanford, NADEAU of Winslow, PLANTE of Berwick, SHORT 
of Pittsfield. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  9-A MRSA §5-118 is enacted to read: 
§5-118.  Unlicensed loan transactions 
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A.  "Financial account" means a checking, savings, share, stored value, prepaid, 
payroll card or other depository account. 
B.  "Lender" means a person engaged in the business of making loans of money, 
credit, goods or things in action and charging, contracting for or receiving on any 
such loan interest, a finance charge, a discount or consideration.  For purposes of this 
section, "lender" does not include a supervised financial organization. 
C.  "Process" or "processing" includes printing a check, draft or other form of 
negotiable instrument drawn on or debited against a consumer's financial account, 
formatting or transferring data for use in connection with the debiting of a consumer's 
financial account by means of such an instrument or an electronic funds transfer or 
arranging for such services to be provided to a lender. 
D.  "Processor" means a person who engages in processing. 
2.  Certain loans prohibited.  It is an unfair or deceptive act or practice in 
commerce, a violation of the Maine Unfair Trade Practices Act and a violation of this 
Title for a lender directly or through an agent to solicit or make a loan to a consumer by 
any means unless the lender is in compliance with Article 2, Part 3 or is otherwise exempt 
from the requirements of Article 2, Part 3. 
3.  Certain processing prohibited.  It is an unfair or deceptive act or practice in 
commerce, a violation of the Maine Unfair Trade Practices Act and a violation of this 
Title for a processor, other than a federally insured depository institution, to process a 
check, draft, other form of negotiable instrument or an electronic funds transfer from a 
consumer's financial account in connection with a loan solicited from or made by any 
means to a consumer unless the lender is in compliance with Article 2, Part 3 or is 
otherwise exempt from the requirements of Article 2, Part 3. 
4.  Certain assistance to lenders or processors prohibited.  It is an unfair or 
deceptive act or practice in commerce, a violation of the Maine Unfair Trade Practices 
Act and a violation of this Title for a person or lender to provide assistance to a lender or 
processor when the person or lender or the person's or lender's authorized agent receives 
notice from a regulatory, law enforcement or similar governmental authority, knows from 
its normal monitoring and compliance systems or consciously avoids knowing that the 
lender or processor is in violation of subsection 2 or 3 or is engaging in an unfair or 
deceptive act or practice in commerce.  This subsection does not apply to a supervised 
financial organization. 
SUMMARY 
This bill makes an unlicensed loan transaction, including an unlicensed loan 
transaction by a payday lender, or assisting in such a transaction, an unfair or deceptive 
act or practice in commerce, a violation of the Maine Unfair Trade Practices Act and a 
violation of the Maine Consumer Credit Code.  This bill does not affect supervised 
financial organizations.