Understanding the process of securing a Loan From Money Lenders is crucial for borrowers. This guide provides a comprehensive overview of money lending regulations in South Dakota, including licensing requirements, application processes, and relevant resources.
Who are Money Lenders?
In South Dakota, any individual or entity engaged in the business of lending money, including creating, holding, purchasing, or acquiring retail installment contracts, is considered a money lender. This includes payday and title lenders. These lenders are required to be licensed under South Dakota Codified Law (SDCL) 54-4.
Licensing and Application Process for Money Lenders
The process of becoming a licensed money lender involves applying through the Nationwide Multistate Licensing System & Registry (NMLS). This platform provides comprehensive resources for prospective lenders, including application instructions, guidance on completing necessary forms, state-specific requirements, tutorials, and general information. You can find step-by-step instructions, state transition plans, and fee schedules on the NMLS website.
Key Regulations and Guidance for Loans from Money Lenders
South Dakota provides specific guidance on various aspects of money lending. This includes guidance on industrial hemp, issued by the Division of Banking in February 2021, and guidance on Initiated Measure 21 (IM 21), approved by voters in November 2016, which addresses payday lending practices. You can find a summary of IM 21 and related guidance on the Division of Banking’s website. Key areas covered include:
- Requirements for Licensure: Specific requirements that must be met to obtain a money lender license in South Dakota. More information can be found on the Division of Banking website.
- Exemptions: Certain entities may be exempt from money lending licensing requirements. Details about exemptions are available on the Division of Banking website.
- Renewal of License: Procedures for renewing an existing money lender license. Information on license renewal can be found on the Division of Banking website.
Forms and Reporting Requirements for Money Lenders
Money lenders in South Dakota must adhere to specific reporting requirements and utilize designated forms for various processes:
- Exempt Lender Annual Reporting Form: This form is required for lenders who are exempt from licensing requirements.
- Non-Profit Money Lender Registration Application Form & Renewal Application: Specific forms for non-profit organizations engaging in money lending activities.
- Quarterly Reporting of Money Lending Activity: All licensees are required to submit quarterly reports detailing their lending activity in South Dakota. This may include providing account-level data using the Uniform Loan Transaction Request (ULTR).
A detailed schedule outlining reporting deadlines for each quarter is available on the Division of Banking’s website. Amendments to application data, such as changes in address, contact person, or ownership, must be reported to the Division of Banking.
Laws and Rules Governing Loans From Money Lenders
Several laws and regulations govern money lending practices in South Dakota:
- SDCL 54-4: Outlines the legal framework for money lending licenses.
- ARSD Chapter 20:07:20: Administrative rules specifically addressing money lending licensees.
- U.S. Department of Defense Rule on Military Lending: Regulations protecting military personnel from predatory lending practices.
- Consumer Finance Protection Bureau (CFPB) Regulations: Federal regulations overseeing consumer financial products and services, including certain types of loans.
By understanding these regulations and requirements, borrowers can make informed decisions when seeking a loan from money lenders in South Dakota.
