Regulatory Alerts2025-01-21
Early Settlement Directive for Pawnshops, Finance and Leasing Companies
NBFIRA directs pawnshops, finance companies, and leasing companies to waive early settlement fees when borrowers provide written notice at least 30 days before payoff. Entities may still charge a fee for late settlements, but the charge must not exceed 60 days' interest on the outstanding principal and must be clearly stipulated in loan agreements. The directive takes effect on January 1, 2025 and applies exclusively to loans originated after that date.
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