An Act to Establish Consumer Protections Regarding Small Dollar
Maine Legislature, Session 132, LD 0314
Sponsors: MASTRACCIO
Amends: 9-A MRSA §2

Legislative Document
No. 314
H.P. 214
House of Representatives, February 3, 2025
An Act to Establish Consumer Protections Regarding Small Dollar 
Loans
Received by the Clerk of the House on January 30, 2025.  Referred to the Committee on 
Health Coverage, Insurance and Financial Services pursuant to Joint Rule 308.2 and ordered 
printed pursuant to Joint Rule 401.
ROBERT B. HUNT
Clerk
Presented by Representative MASTRACCIO of Sanford.
Cosponsored by Representatives: CROCKETT of Portland, FLYNN of Albion, FOLEY of 
Wells, MORRIS of Turner, OLSEN of Raymond, Senator: HAGGAN of Penobscot.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  9-A MRSA §2-701, as enacted by PL 2021, c. 297, §1, is amended to read:
§2-701.  Engaging in pretense to evade requirements of this Article prohibited
An Except as expressly provided in section 2-703, an entity covered by this Article 
may not engage in any device, subterfuge or pretense to evade the requirements of this 
Article, including, but not limited to, making a loan disguised as a personal property sale 
and leaseback transaction, disguising loan proceeds as a cash rebate for the pretextual 
installment sale of goods or services or making, offering, assisting or arranging a debtor to 
obtain a loan with a greater rate of interest, consideration or charge than is permitted by 
this Article through any method.  A loan made in violation of this Part is void and 
uncollectible as to any principal, fee, interest or charge.
Sec. 2.  9-A MRSA §2-702, as enacted by PL 2021, c. 297, §1, is repealed.
Sec. 3.  9-A MRSA §2-703 is enacted to read:
§2-703.  Exemptions
The provisions of this Article do not apply to a person doing business pursuant to any 
law of this State or of the United States relating to banks, national banking associations, 
savings banks, trust companies, savings and loan associations, credit unions or mortgage 
companies, including without limitation any affiliate, subsidiary or service provider of such 
a person, irrespective of whether or not such an affiliate, subsidiary or service provider is 
a bank.
Sec. 4.  9-A MRSA Art. 2, Pt. 8 is enacted to read:
PART 8
MAINE SMALL DOLLAR CONSUMER PROTECTION ACT
§2-801.  Short title
This Part may be known and cited as "the Maine Small Dollar Consumer Protection 
Act."
§2-802. Definitions
As used in this Part, unless the context otherwise indicates, the following terms have 
the following meanings.
1. Renew. "Renew" means to renew, repay, refinance or consolidate an existing small 
dollar loan with the proceeds of another small dollar loan.
2. Small dollar loan. "Small dollar loan" means a loan made by a supervised lender 
that:
A. Is made to one or more individuals for personal, family or household use;
B. Has a principal amount that does not exceed $2,500;
C. Is unsecured and payable in substantially equal installments;  
D. Has a repayment schedule consisting of installment payments of substantially equal 
amounts of principal and service fees amortizing over the term of the loan such that the 
loan is repaid in full by the maturity date; and
E. Has a maturity date that is not less than 90 days or more than 365 days after the date 
of the loan agreement.
§2-803. Small dollar loans authorized; rules
A supervised lender may make a small dollar loan to a consumer pursuant to this Part. 
The administrator shall adopt rules to carry out the purposes of this Part. The rules must 
include, at a minimum, the following:
1.  Copy.  A requirement for a supervised lender to immediately provide a consumer 
with a signed copy of the small dollar loan agreement;
2.  Payment.  Provisions allowing for payment of a small dollar loan to a consumer by 
check, money order, cash or other mutually agreed upon means, but that prohibit the 
supervised lender from charging the consumer additional fees based on the method of 
payment;
3.  Right to cancel.  The right of a consumer to cancel a small dollar loan agreement 
by notifying the supervised lender and returning the total original small dollar loan amount 
within 3 business days after the date the consumer entered into the small dollar loan 
agreement;
4.  Right to file complaint.  The right of a consumer to file a complaint against a 
supervised lender for a violation of any provision of this Part; and
5.  Modification.  An allowance for a supervised lender and a consumer to mutually 
agree to modify the repayment schedule to allow for different payment amounts over the 
term of the small dollar loan, as long as the modified repayment schedule does not include 
a payment due at the date of maturity that is substantially larger than any previously 
scheduled installment payment.
Rules adopted pursuant to this section are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A.
§2-804. Limitations on multiple small dollar loans
A supervised lender may not enter into a small dollar loan agreement with a consumer 
if the consumer has an open small dollar loan agreement with the supervised lender or 
another supervised lender in the State.  A supervised lender may rely on a consumer's 
representation of open small dollar loan agreements with any other supervised lender.
§2-805. Renewal of small dollar loans
A supervised lender may not renew a small dollar loan agreement unless:
1.  Payments as scheduled.  A consumer has made payments as scheduled; and
2.  Percentage of payments.  A consumer has made at least 30% of all scheduled 
payments or has retired at least 50% of the principal amount of the small dollar loan.
§2-806. Consideration of ability to repay
1.  Considerations.  In determining the amount and duration of a small dollar loan as 
part of the underwriting, making or negotiating of the small dollar loan, a supervised lender 
shall take into consideration a consumer's financial ability to repay the small dollar loan in 
the time and manner provided in the prospective small dollar loan agreement. The 
supervised lender's consideration must include, but is not limited to, a consumer's: 
A. Credit and borrowing history;
B. Gross income;
C. Representation of major financial obligations; and
D. Estimated basic living expenses, including, but not limited to, expenses for food, 
utilities, regular medical costs and other costs associated with the consumer's health, 
welfare and ability to produce income and the health and welfare of members of the 
consumer's household who are financially dependent on the consumer. A supervised 
lender may rely on a consumer's representation of estimated basic living expenses when 
determining the consumer's ability to repay a small dollar loan.
2.  Ability to pay.  A supervised lender may enter into a small dollar loan agreement 
only with a consumer whom the supervised lender has determined pursuant to subsection 
to be able to repay the small dollar loan in the time and manner provided in the 
prospective small dollar loan agreement.  A supervised lender may not enter into a small 
dollar loan agreement with a consumer if the supervised lender determines that the 
prospective small dollar loan agreement would result in a monthly payment that would 
exceed 12% of the consumer's monthly gross income.
§2-807. No prepayment penalty
A consumer may prepay in full the unpaid balance of a small dollar loan at any time 
without additional interest, fees or penalties.
§2-808. Limitations on collections
A supervised lender may not use or threaten to use criminal proceedings in order to 
collect upon the terms of a small dollar loan agreement under this Part.
§2-809. Report to credit reporting agency required
A supervised lender shall report to a credit reporting agency or agencies the terms of a 
small dollar loan agreement and a consumer's performance pursuant to those terms.
§2-810. Required consumer disclosures
1.  Public notice.  A supervised lender shall post prominently at its place of business 
in a way designed to be seen by a consumer before the consumer enters into a small dollar 
loan agreement and on any website designed to be seen by a consumer before the consumer 
enters into a small dollar loan agreement a written notice that, at a minimum, informs the 
consumer that:
A.  State law prohibits a supervised lender from entering into a small dollar loan 
agreement with a consumer who already has a small dollar loan in effect with the 
supervised lender or with another supervised lender in the State;
B.  If a consumer enters into a small dollar loan agreement, a copy of the signed 
agreement must be immediately provided to the consumer;
C.  The proceeds of a small dollar loan are payable to a consumer by check, money 
order, cash or any other mutually acceptable means and that the consumer may not be 
subjected to additional fees based on the method of payment;  
D.  State law guarantees to a consumer the right to cancel a small dollar loan agreement 
and that, in order to cancel an agreement, the consumer must notify the supervised 
lender and return the original dollar value received within 3 business days after the date 
the consumer entered into the small dollar loan agreement;
E.  State law prohibits a supervised lender from using or threatening to use any criminal 
proceedings to collect on a small dollar loan agreement; and
F.  State law entitles a consumer to information regarding how to file a complaint 
against a supervised lender if the consumer has reason to believe that the supervised 
lender has violated the law and that a consumer who believes the supervised lender is 
acting unlawfully should contact the Bureau of Consumer Credit Protection within the 
Department of Professional and Financial Regulation.
Notices posted at the place of business must be in at least 36-point type.  Notices posted on 
a website must be located in a prominent place easily located by a consumer.
2.  Public notice of fees and charges.  A supervised lender shall post prominently at 
its place of business in a way designed to be seen by a consumer before the consumer enters 
into a small dollar loan agreement and on any website designed to be seen by a consumer 
before the consumer enters into a small dollar loan agreement a schedule of all fees and 
charges to be imposed for small dollar loans. Notices posted at the place of business must 
be in at least 36-point type. Notices posted on a website must be located in a prominent 
place easily located by a consumer.
SUMMARY
This bill establishes the Maine Small Dollar Consumer Protection Act. It establishes 
the required process for supervised lenders to offer small dollar loans, which are defined 
as loans not exceeding $2,500 that are unsecured and paid in substantially equal 
installments and that mature not less than 90 days or more than 365 days after the date of 
the agreement, and the rights that consumers have when entering into small dollar loan 
agreements.
It also repeals the provision that provides that a person is a lender subject to the 
requirements of the Maine Consumer Credit Code governing finance charges and related 
provisions notwithstanding the fact that the person purports to act as an agent or service 
provider or in another capacity for another entity that is exempt from the requirements of 
the Maine Consumer Credit Code governing finance charges and related provisions if 
certain conditions are met.
It provides that the requirements of the Maine Consumer Credit Code governing 
finance charges and related provisions do not apply to a person doing business pursuant to 
any law of this State or of the United States relating to banks, national banking associations, 
savings banks, trust companies, savings and loan associations, credit unions or mortgage 
companies, including without limitation any affiliate, subsidiary or service provider of such 
a person, irrespective of whether or not such an affiliate, subsidiary or service provider is 
a bank.