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F I S C A L I M P A C T R E P O R T
SPONSOR
Maestas
ORIGINAL DATE
LAST UPDATED
2/19/07
HB
1224
SHORT TITLE
Small Loan-Provision of Info on Financial
Literacy
SB
ANALYST
C. Sanchez
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY07
FY08
NFI
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
Regulation and Licensing Department (RLD)
Attorney General’s Office (AGO)
Financial Institutions Division (FID)
SUMMARY
Synopsis of Bill
House Bill 1224 amends the Small Loan Act (Act) to require all lenders subject to the Act to
provide information on financial literacy courses to a consumer at the time a consumer enters a
short-term loan agreement with the lender.
SIGNIFICANT ISSUES
The statute does not provide details, such as: (1) who will provide the names of entities
providing financial literacy courses to the small loan businesses who then in turn will be required
to provide that information to consumers under this provision, (2) what the required content
would be for these courses; (3) who may provide these financial literacy courses, and what the
criteria would be to select those providers, and (4) who will oversee the conduct of these
providers.
pg_0002
House Bill 1224 – Page
2
OTHER SUBSTANTIVE ISSUES
In a study conducted by the Ariel Mutual Funds/ Charles Schwab & Co. 43% of minority
workers described their personal knowledge of investing or saving as “knowing nothing,"
compared with 12% of all workers.
WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL
Lenders will not be required to provide information on financial literacy courses to a consumer at
the time a consumer enters a short-term loan agreement with the lender.
CS/nt