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Senate Bill 1013 — Commercial transactions

Senate Bill 1013 — Commercial transactions

Parrish Miller
January 21, 2021

Bill Description: Senate Bill 1013 adds regulations for certain lenders and makes it easier to revoke and suspend licenses. 

Rating: -2

Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?

Senate Bill 1013 amends Section 28-46-403, Idaho Code, to remove a requirement that applicants for a payday loan license "shall have liquid assets of at least thirty thousand dollars ($30,000) determined in accordance with generally accepted accounting principles, provided that applicants seeking to engage in the business of payday loans at more than one (1) location in the state shall have liquid assets of at least an additional five thousand dollars ($5,000) for each additional location in the state up to a maximum of seventy-five thousand dollars ($75,000) for all locations in the state."


Senate Bill 1013 amends Section 28-46-404, Idaho Code, to require that an application for a payday loan license be "filed through an electronic system of licensing" rather than "in a form." This change forces Idahoans seeking this license to use an electronic licensing system with no provision for use of a written form for those who prefer it.

Additionally, the change adds that applicants must provide any "such information as the administrator may reasonably require," in addition to a range of information already required by statute.


Does it increase barriers to entry into the market? Examples include occupational licensure, the minimum wage, and restrictions on home businesses. Conversely, does it remove barriers to entry into the market?

Senate Bill 1013 amends Section 28-46-303, Idaho Code, to change and add to the list of reasons why a person’s license to make regulated consumer loans may be revoked or suspended. Existing law requires that a licensee “repeatedly and willfully” violate the act, but the change requires only a single violation of "any provision" of the act "through a lack of due care." 


Senate Bill 1013 also adds another basis for suspending or revoking a license: The licensee has "committed any fraud, engaged in any dishonest activities, or made any misrepresentation." While fraud may have some existing statutory definitions, "dishonest activities" and "any misrepresentation" do not. These subjective terms could allow severe, career-destroying penalties to be levied for the most minor of white lies told in the course of a business discussion. 

It takes little imagination to see how such subjective language could be misused. If a client asks, "How are you today" and you say, "Great, how are you?" when you are actually having a really bad day, you have been dishonest and misrepresented the quality of your day. 


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