Pennsylvania Statutes Title 7 P.S. Banks and Banking § 6213. Powers conferred on licensees

In addition to the general powers conferred upon a corporation by the Business Corporation Law of this Commonwealth,  1 a corporation licensed under this act shall have power and authority:

A. To lend money, credit, goods or things in action and charge, contract for, receive or collect charges herein provided.

B. To lend money on the security of real or personal property or without security.

C. To lend money on promissory or judgment notes with or without comakers, endorsers, guarantors or sureties.

D. To purchase contracts evidencing an agreement to pay a sum certain in money or credit at a fixed or determinable time.

E. To charge, contract for, receive or collect interest or discount at a rate not to exceed nine dollars and fifty cents ($9.50) per one hundred dollars ($100) per year when the contract is repayable within forty-eight (48) months from the date of making.  When the contract is repayable more than forty-eight (48) months from the date of making, the rate of interest or discount which may be charged, contracted for, received or collected, shall not exceed nine dollars and fifty cents ($9.50) per one hundred dollars ($100) per year for the first forty-eight (48) months of the term of the contract plus six dollars ($6) per one hundred dollars ($100) per year for any remainder of the term of the contract.  Such interest or discount shall be computed at the time the loan is made on the face amount of the contract for the full term of the contract from the date of the contract to the date of the scheduled maturity notwithstanding any requirement for installment payments.  On contracts for periods which are less or greater than one year, or which are not a multiple of one year, the interest or discount shall be computed proportionately on even calendar months:  Provided, however, That for a period of less than one month the computation may be based on a full calendar month.  The face amount of any note or contract made pursuant to this act may, notwithstanding any other provision, exceed twenty-five thousand dollars ($25,000) by the amount of interest or discount and service or other charge authorized by this act collected or deducted in advance or added to the principal at the time of making the loan.  As an alternative to the rates provided for in this clause, a licensee may charge, contract for, and collect interest at the rate and in the manner provided for in section 17.1 A:  2  Provided, however, That on loans secured by a security interest, mortgage or other lien on real property, and in which the principal amount exceeds five thousand dollars ($5,000), a licensee may not charge, contract for, receive, or collect interest in excess of the rate specified in section 9 of the act of December 12, 1980 (P.L. 1179, No. 219),  3 known as the “Secondary Mortgage Loan Act.”

F. To charge, contract for, receive or collect on any contract a service charge of one dollar and fifty cents ($1.50) for each fifty dollars ($50), or fraction thereof, provided that the total service charge shall not exceed one hundred fifty dollars ($150) on any contract.

G. To charge, contract for, or collect for interest or discount and service charge a minimum charge of three dollars ($3.00) on any contract of twenty-five dollars ($25) or less, which is payable in one year by a single payment, or is payable in one year, by installment payments and a minimum charge of six dollars ($6.00) on any contract in excess of twenty-five dollars ($25), which is payable in one year by a single payment, or is payable in one year by installment payments.  On contracts for periods which are less or greater than one year, a proportionate minimum charge may be collected which shall be computed on even calendar months:  Provided, however, That for a period less than one month the computation of the minimum charge may be based on a full calendar month.

H. To collect or deduct interest or discount and service charges in advance;  or to add interest or discount and service charges to the principal amount of the contract and divide the total into equal or substantially equal installment payments;  or to collect interest or discount and service charges wholly or partially at any time during the term of the contract;  or to collect interest or discount and service charges at the end of the term of the contract.

I. [Reserved].

J. To require payment of contracts in equal weekly, semi-monthly, monthly or any other periodic installments:  Provided, however, The first installment period may exceed one month by as much as fifteen (15) days without being deemed violative of this provision.

K. To collect an additional charge for extension, deferment or default in the payment of any contract or for extension, deferment or default in the payment of any installment on a contract at the rate of one and one-half per cent (1 1/2 %) per month on the amount extended, deferred or in arrears:  Provided, however, A minimum charge of one dollar ($1) may be collected for any extension, deferment or default of ten (10) or more days.

L. To renew or refinance contracts.  On a contract which is renewed or refinanced prior to the expiration of the term of the contract, a refund shall be made of unearned interest or discount which has been prepaid and shall be computed as on a prepaid contract.

M. To collect from the consumer, in addition to the interest or discount and service charges permitted under this act, the actual fees charged by a public official or agency of the Commonwealth for recording and satisfying a judgment, mortgage, encumbrance or lien on any real or personal property which constitutes security on a contract.

N. To collect from the consumer, in addition to the interest or discount and service charges permitted under this act, the premium actually paid for insurance required or obtained as security for, or by reason of, a loan made or contract purchased, provided insurance is obtained from an insurance company authorized by the laws of Pennsylvania to conduct business in this Commonwealth.  Any benefit or return to the licensee from the sale or provision of such insurance shall not be deemed a violation of this act when the insurance is written pursuant to the laws of this Commonwealth governing insurance.

O. [Reserved].

P. To collect attorney's fees and court costs incurred in the collection of any contract in default and to collect actual and reasonable expenses of repossessing, storing and selling collateral, pledged as security on any contract in default.

Q. To conduct the business regulated by this act in any licensed place of business where another business is conducted by the licensee or another person unless the Secretary of Banking shall find, after a hearing, the conduct of the other business has concealed evasions of this act and shall order such person to desist from such conduct and to offer other services and products for voluntary purchase subject to the provisions of this clause.

(1) The licensee, or such other person, may offer the types of products or services described in subclause (2) provided, however, that if the products or services are to be offered to an applicant or applicants for a loan:

(i) the products or services shall not be offered to such applicant or applicants until the loan has been approved and the applicants, or the applicant being offered the service or product in the case of co-applicants, have been advised that the loan has been approved, either orally or in writing;

(ii) when the applicant has been advised that the loan is approved and products or services are then offered orally, by telephone or otherwise, the applicant shall also be advised that the purchase of the service or product is not required in order to qualify for the loan and that the purchase thereof is voluntary;

(iii) whether or not an oral disclosure has been made as provided in paragraph (ii), the applicant or applicants shall be provided a separate and distinct disclosure written in plain language to be signed by the applicant prior to the closing of the loan which clearly states that the purchase of the service or product is not required in order to obtain the loan and that the purchase thereof is voluntary;  and

(iv) if the cost of the service or product is to be included in the loan and paid from the loan proceeds, a separate loan proceeds check shall be drawn, made payable to the borrower or borrowers, for the cost or price of the service or product which may then be endorsed by the borrower or borrowers to the vendor of the service or product after closing at the option of the borrower or borrowers.

(2) A licensee may offer the types of services and products described in this subclause and may conduct or permit others to conduct the types of business described in this subclause within the same office, room or place of business where the licensee conducts its licensed business without prior approval by the Secretary of Banking.

(i) Automobile security plans which provide protection against automobile emergencies and which provide for full or partial reimbursement of certain costs incurred as the result of such emergencies, such as towing, lost key service, emergency transportation, stolen automobile expenses, bail bonds, emergency treatment expense, legal defense and similar or related items, which may include extended warranties, travel discounts and service items, among other things.

(ii) Home security plans which provide protection against home emergencies and provide full or partial reimbursement of certain costs incurred because of home emergencies, such as medical costs, health insurance deductibles, pharmacy service, extended warranties, lost or stolen key protection, credit card liability coverage, and which may include life-saving training, home security training and protection services and products, among other things.

(iii) First mortgage lending in accordance with all applicable Federal and State law and regulation.

(iv) Secondary mortgage lending in accordance with all applicable Federal and State law and regulation.

(v) Sales finance agreements pursuant to applicable law and regulation.

(vi) Income tax preparation services.

(vii) Commercial or business loans, including installment sales financing contracts for commercial purposes.

(viii) Credit card agreements, including additional services or goods which are or may be offered in connection with such credit cards or credit card agreements.

R. To collect a fee for a subsequent dishonored check or instrument taken in payment, not to exceed the service charge permitted to be imposed under 18 Pa.C.S. § 4105(e)(3) (relating to bad checks).

1 15 P.S. § 1001 et seq. (repealed;  see, now, 15 Pa.C.S.A. § 1101 et seq.).
2 7 P.S. § 6217.1.
3 7 P.S. § 6609.

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