Guidelines for the Sale and Financing of Club Memberships

STATE OF LOUISIANA
OFFICE OF FINANCIAL INSTITUTIONS
BATON ROUGE, LOUISIANA
November 7, 2001 POLICY NO. LL-02-01
(Amended--December 26, 2001)
Guidelines for the sale and financing of club memberships PURPOSE:
To prevent abusive practices through the sale and financing of club memberships in conjunction with consumer loans subject to the Louisiana Consumer Credit Law. TO WHOM THIS POLICY APPLIES:
All lenders who make consumer loans subject to the Louisiana Consumer Credit Law. SPECIFICS:
Section 3515 (A)(1)(a) of the Louisiana Consumer Credit Law authorizes the sale and financing
of thrift and buying club memberships, auto club memberships and similar consumer benefit club memberships. However, a lender shall not sell and finance any such club membership in connection with a consumer loan for a period of time the consumer has an unexpired membership in force. More than one membership to one consumer in force at any one time is considered abusive and is prohibited. Example:

• Loan #1 originates on January 2, 2002, matures on January 2, 2003, and includes a one￾year auto club membership.
• Loan #2 originates on May 1, 2002, matures on May 1, 2003, and also includes a one￾year club membership.
  In connection with Loan #2, the lender may sell and finance an auto club membership that begins January 3, 2003 and expires January 3, 2004. EFFECTIVE DATE:
  The effective date of this policy is January 1, 2002 John D. Travis, Commissioner of Financial Institutions