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(1) Every applicant for license under the Montana Consumer Loan Act shall file with the commissioner in duplicate, at the time of filing application for such license, a full and accurate schedule of all charges, fees and costs to be exacted in connection with any and all loans to be made by such applicant and the method of computing the same.


(2) Licensees shall thereafter maintain on file with the commissioner in duplicate a current schedule of all charges, fees and costs to be exacted in connection with all loans to be made by such licensee and shall not exact charges, fees or costs in excess of those contained in the schedule.

(3) Licensees shall display such schedule, which shall include examples of principal, add-on charges, monthly payments, and the contract period covered, prominently in each licensed place of business where loans are made or negotiated so as to be easily readable by borrowers and prospective borrowers.

(4) Licensees shall not make loans without such schedule being displayed.

(5) Licensees operating more than one licensed location in Montana shall advise the commissioner at which location or locations each such schedule is to be used, if there be more than one schedule.

(6) Licensees shall observe the following definitions and procedures in computing charges:

(a) a calendar month is that period of time from one date in the month to the corresponding date in the next month. If there is no corresponding date, then the last date of the next month will be used.

(b) the term "month" as used in the Act and in this regulation shall mean calendar month;

(c) charges shall be computed at the applicable rate on the amount of the loan from the date of the loan to the due date of the final installment irrespective of the fact that the loan is payable in installments;

(d) licensees shall compute monthly charges for a period of less than one year at 1/12th of the annual rate for each month;

(e) licensees shall compute daily charges for a period of less than one month at 1/30th of 1/12th of the annual rate for each day;

(7) Licensees shall not fix the due date of the first installment on any loan contract providing for monthly installments, for a term exceeding 45 actual days from the date of loan.

(a) When the first payment on any such contract may be due on a date beyond a calendar month as defined above, licensees will be permitted to make an additional charge for the number of days in excess of 30 or of one calendar month from the date of loan, whichever is less.

(b) The number of days in excess will be at the daily rate for actual number of days.

(8) Licensees shall compute prepayment refunds under the rule of 78ths:

(a) Licensees may disregard any earned charge made for an extended first payment. (e.g. if a 10-day first payment extension charge was made, the charge becomes earned with the elapse of the 10 days.)

(b) When any loan contract is prepaid after the first scheduled installment date by cash, a new loan, renewal, or otherwise, on other than scheduled dates, licensees shall elect to use either the 15-day rule or a daily basis to compute the refund due.

(i) The daily basis, if elected, shall be at the rate of 1/30th of the total earned charges determined under the rule of 78ths for that month in which prepayment occurs times the number of days which follow the prepayment date to the next scheduled payment date;

(ii) Licensees electing the 15-day rule are entitled to earned charges under the rule of 78ths for the month in which prepayment occurs provided the prepayment date is 16 days or more after the preceding regularly scheduled payment date;

(iii) Licensees are prohibited from using both methods.

(c) Licensees who elect to use the 15-day rule in determining the refund due a borrower under the provisions of (8)(b)(ii) above may use the following formula in determining the service charge due from borrowers who repay any loan contract within 15 days or less from the date the loan is made:

(i) lenders are authorized to divide the original add-on charge by the number of months in the contract period of the original term of loan. If a first payment extension was made, that charge is to be entirely refunded if it has not been earned by elapse of time; if earned, the 15 days or less is determined from the date which is one month prior to the first scheduled payment;

(ii) whenever the resulting quotient is less than $2, the lender may collect $2 as a minimum service charge.

(d) a borrower who prepays one whole installment or more in advance shall be entitled to a refund credit of unearned charges for such prepayment, if the loan contract is repaid within the time allowed in its original terms. Such refund shall be computed by subtracting from the original add-on charge as great a proportion of such charge as the sum of all monthly balances as originally contracted for. Monthly balances are those on the date of origination and on the consecutive scheduled monthly payment dates of the original loan contract;

(9) Licensees shall interpret 32-5-301(2), MCA, of the Act "only once" to mean on the same default; i.e., a borrower who defaults in one or more payments may be subject to a penalty of 5% of each payment in default;

(10) Licensees shall not add to the amount of any balance, which remains after the terminal date of a loan contract, including extensions or charges for payments in default, interest or charges which in the aggregate exceed the legal rate authorized by 31-1-106, MCA.

History: 32-5-401, MCA; IMP, 31-1-106, 32-5-301, MCA; Eff. 12/31/72; TRANS, from Commerce, 2001 MAR p. 1178; AMD, 2010 MAR p. 213, Eff. 1/29/10.

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