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Committee advances bill to create Consumer Alternative Installment Loan Act with capped rates for small‑dollar loans
Summary
House Bill 513 would create a state framework for alternative installment loans capped at specified rates, adjusting for the consumer price index; the Office of Financial Institutions and industry stakeholders discussed indexing and administrative costs during committee consideration.
The House Appropriations Committee advanced House Bill 513, which enacts the Louisiana Consumer Alternative Installment Loan Act to permit and regulate short‑term installment loans typically ranging from $700 to $5,000.
Sponsor Representative Reiser said the bill sets maximum interest rates, removes certain fees and ties future adjustments to the Consumer Price Index for All Urban Consumers (CPI‑U) using a specified July‑to‑July index month. Committee witnesses discussed the choice of CPI measure and the practical meaning of the federal “all urban consumers” category. Michelle Jonsaw of the state Office of Financial Institutions (OFI) said the CPI‑U was the federal index recommended for consistent adjustment and that the bill identified a single month to avoid agency discretion.
Committee members queried the fiscal note and whether OFI is funded from the state general fund. OFI representatives said the agency is primarily self‑funded through fees; staff cautioned that the bill’s fiscal note nonetheless anticipated potential state general fund expenditures to add positions. Members asked about new OFI positions and whether those - if filled - would be paid from state general fund or by fee revenue; OFI representatives said the agency’s operations are largely self‑funded but some staffing costs may be reflected in the fiscal note.
The committee adopted the bill as favorable after stakeholder testimony and technical discussion about indexing language and administrative implementation.
