Colorado

ARTICLE 3.1 - DEFERRED DEPOSIT LOAN ACT
5-3.1-101. Short title. This article shall be known and may be cited as the "Deferred
Deposit Loan Act".
5-3.1-102. Definitions. As used in this article, unless the context otherwise requires:
(1) "Administrator" means the administrator of the "Uniform Consumer Credit Code".
(2) "Consumer" means a person other than an organization who is the buyer, lessee, or
debtor to whom credit is granted in a consumer credit transaction.
(3) "Deferred deposit loan" means a consumer loan whereby the lender, for a fee, finance
charge, or other consideration, does the following:
(a) Accepts a dated instrument from the consumer;
(b) Agrees to hold the instrument for a period of time prior to negotiation or
deposit of the instrument; and
(c) Pays to the consumer, credits to the consumer's account, or pays to another
person on the consumer's behalf the amount of the instrument, less finance charges
permitted by section 5-3.1-105.
(4) "Instrument" means a personal check or authorization to transfer or withdraw funds
from an account signed by the consumer and made payable to a person subject to this
article.
(5) (a) "Lender" means any person who offers or makes a deferred deposit loan, who
arranges a deferred deposit loan for a third party, or who acts as an agent for a third party,
regardless of whether the third party is exempt from licensing under this article or
whether approval, acceptance, or ratification by the third party is necessary to create a
legal obligation for the third party.
(b) Lender includes, but is not limited to, a supervised financial organization as
defined in section 5-1-301 (45).
(c) Notwithstanding that a bank, saving and loan association, credit union, or
supervised lender may be exempted by federal law from this code's interest rate, finance
charges, and licensure provisions, all other applicable provisions of this code apply to
both a deferred deposit loan and a deferred deposit lender.
(6) "Loan amount" means the amount financed as defined in Regulation Z of the federal
"Truth in Lending Act", 12 C.F.R. 226.18 (b), as amended, or as supplemented by this
code, articles 1 to 9 of this title.
5-3.1-103. Written agreement requirements. Each deferred deposit loan transaction
and renewal shall be documented by a written agreement signed by both the lender and
consumer. The written agreement shall contain the name of the consumer; the transaction
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date; the amount of the instrument; the annual percentage rate charged; a statement of the
total amount of finance charges charged, expressed both as a dollar amount and an annual
percentage rate; and the name, address, and telephone number of any agent or arranger
involved in the transaction. In addition, the written agreement shall include all
disclosures required by section 5-3-101 (2). The written agreement shall set a date, not
more than forty days after the loan transaction date, upon which the instrument may be
deposited or negotiated.
5-3.1-104. Notice to consumers. A lender shall provide the following notice in a
prominent place on each loan agreement in at least ten-point type:
"A DEFERRED DEPOSIT LOAN IS NOT INTENDED TO MEET LONG-TERM
FINANCIAL NEEDS.
A DEFERRED DEPOSIT LOAN SHOULD BE USED ONLY TO MEET SHORTTERM
CASH NEEDS.
RENEWING THE DEFERRED DEPOSIT LOAN RATHER THAN PAYING THE
DEBT IN FULL WILL REQUIRE ADDITIONAL FINANCE CHARGES."
5-3.1-105. Authorized finance charge. A lender may charge a finance charge for each
deferred deposit loan that may not exceed twenty percent of the first three hundred
dollars loaned plus seven and one-half percent of any amount loaned in excess of three
hundred dollars. Such charge shall be deemed fully earned as of the date of the
transaction. The lender shall charge only those charges authorized in this article in
connection with a deferred deposit loan.
5-3.1-106. Maximum loan amount - right to rescind. (1) A lender shall not lend an
amount greater than five hundred dollars nor shall the amount financed exceed five
hundred dollars at any time to a consumer. No instrument held as a result of a deferred
deposit loan shall exceed five hundred seventy-five dollars.
(2) A consumer shall have the right to rescind the deferred deposit loan on or before 5
p.m. the next business day following the loan transaction.
5-3.1-107. Multiple outstanding transactions notice. A lender shall provide the
following notice in a prominent place on each deferred deposit loan agreement in at least
ten-point type:
"STATE LAW PROHIBITS DEFERRED DEPOSIT LOANS EXCEEDING FIVE
HUNDRED DOLLARS ($500) TOTAL DEBT PLUS APPLICABLE FINANCE
CHARGES PERMITTED BY LAW FROM A DEFERRED DEPOSIT LENDER.
EXCEEDING THIS AMOUNT MAY CREATE FINANCIAL HARDSHIPS FOR YOU
AND YOUR FAMILY. YOU HAVE THE RIGHT TO RESCIND THIS
TRANSACTION BY 5 P.M. THE NEXT BUSINESS DAY FOLLOWING THIS
TRANSACTION.