Pennsylvania Statutes Title 7 P.S. Banks and Banking § 6214. Licensee requirements and limitations

A. A licensee shall not permit any person to become obligated to such licensee as a consumer on one or more loan contracts for an aggregate amount in excess of twenty-five thousand dollars ($25,000), exclusive of charges authorized by this act.  This limitation shall not apply to the purchase of contracts which arise from the bona fide sale of goods or services by a seller regularly engaged in the sale of such goods or services.  This limitation shall not impair the authority of a licensee to lend money, credit, goods or things in action, or to purchase contracts in amounts in excess of twenty-five thousand dollars ($25,000) and charge, contract for, receive or collect interest or discount at the legal rate established by the General Usury Statute of the Commonwealth.

B. A licensee shall not charge, contract for, collect or receive interest, discounts, fees, fines, commissions, charges or other considerations in excess of the interest or discount, service charges, extension charges, deferment charges, default charges, recording and satisfaction fees, premiums for insurance, attorney's fees, court costs, repossession expenses, storage charges, and selling expenses authorized by the provisions of this act.

C. A licensee shall not split or divide any contract so as to obtain charges in excess of those authorized by this act.

D. A licensee shall permit a consumer to pay partially or wholly any contract or any installment on a contract, prior to the due date.  On any contract which is wholly prepaid by cash, renewal or otherwise, at any time prior to maturity, the licensee shall refund to the consumer a portion of the interest or discount.  The portion to be refunded shall be that proportion of the interest or discount which the sum of the monthly balances originally scheduled to be outstanding during the full months following such prepayment in full bears to the sum of all monthly balances originally scheduled to be outstanding, both sums to be determined by the schedule of payments in the original contract, provided a licensee shall not be required to refund any portion of such interest or discount when the total amount of the refund computed as herein provided is less than one dollar ($1).  Such refund shall be computed and paid or credited at the time of prepayment on the contract.

E. A licensee shall not charge, contract for, receive or collect the service charge authorized by this act when only the unpaid balance of an existing contract is renewed or refinanced prior to the expiration of four (4) months from the date of such existing contract:  Provided, however, That when an existing contract is renewed or refinanced for an amount in excess of the unpaid balance of such existing contract prior to the expiration of four (4) months from the date of such existing contract, the service charge may be charged on the amount, whereby the amount of the renewed or refinanced contract exceeds the amount of the unpaid balance of such existing contract, after crediting such balance with any refund of interest or discount which may be due on such existing contract.

F. Except as otherwise permitted by this act all installment contracts shall provide for repayment in substantially equal periods and in substantially equal amounts:  Provided, That when appropriate for the purpose of facilitating payment in accordance with a consumer's intermittent income, an installment contract may provide for repayment on a schedule which reduces or omits payments over any period or periods in which the consumer's income is reduced or suspended.

G. A licensee shall not charge or collect a service charge for investigating an application or any other charges if a contract is not consummated.

H. A licensee shall not discount or deduct interest in advance on any contract, for any period in excess of seven years and fifteen days.

I. A licensee may sell contracts to and buy contracts from another licensee upon giving prior written notification to the Secretary of Banking.  The written notification shall state the name and address of the licensee to whom or from whom the contracts are being sold or purchased, the type of loan and number of contracts in the transaction and their aggregate principal balances.  A licensee may not sell contracts to a person or corporation not holding a license under this act without the prior written approval of the Secretary of Banking.

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