COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 0624-01
Bill No.: SB 3
Subject: Banks & Financial Institutions; Consumer Protection
Type: Original
Date: December 18, 2000
FISCAL SUMMARY
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| None | |||
| Total Estimated
Net Effect on All State Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| None | |||
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 3 pages.
ASSUMPTION
Officials from the Department of Economic Development-Division of Finance and Division of Credit Unions assume the proposal would have no fiscal impact on their agencies.
| FISCAL IMPACT - State Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| $0 | $0 | $0 |
| FISCAL IMPACT - Local Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| $0 | $0 | $0 |
FISCAL IMPACT - Small Business
The proposal could have a negative effect on financial institutions classified as small businesses, if they are using the "sum of the digits" method to calculate prepaid interest refunds. The proposal reduces the amount of interest income financial institutions may recognize as earned when calculating refunds due to early loan payoffs.
DESCRIPTION
This act provides that upon the prepayment of any retail installment contract, premium finance contract, credit life, accident or sickness insurance policy, small loan, or retail credit sale, a refund of prepaid interest must be calculated by the actuarial method. The "sum of the digits" or "rule of 78" method of calculating prepaid interest refunds is prohibited.
This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Economic Development
Division of Finance
Division of Credit Unions
Jeanne Jarrett, CPA
Director
December 18, 2000