(a) A loan made pursuant to this section shall comply with the following requirements: (1) The loan shall be unsecured. (2) Interest on the loan shall accrue on a simple-interest basis, through the application of a daily periodic rate to the actual unpaid principal balance each day. (3) The licensee shall disclose the following to the consumer in writing, in a typeface no smaller than 12-point type, at the time of application: (A) The amount borrowed; the total dollar cost of the loan to the consumer if the loan is paid back on time, including the sum of the administrative fee, principal amount borrowed, and interest payments; the corresponding annual percentage rate, calculated in accordance with Federal Reserve Board Regulation Z (12 C.F.R. 226.1 et seq.); the periodic payment amount; the delinquency fee schedule; and the following statement: âRepaying your loan early will lower your borrowing costs by reducing the amount of interest you will pay. This loan has no prepayment penalty.â (B) A statement that the consumer has the right to rescind the loan by notifying the licensee of the consumerâs intent to rescind the loan and returning the principal advanced by the end of the business day following the date the loan is consummated. (4) A licensee may provide the borrower with the disclosures required by paragraph (3) in a mobile or other electronic application, on which the size of the typeface of the disclosure can be manually modified by a prospective borrower, if the prospective borrower is given the option to print the disclosure in a typeface of at least 12-point size or is provided by the licensee with a hardcopy of the disclosure in a typeface of at least 12-point size before the loan is consummated. (5) The loan shall have a minimum principal amount upon origination of three hundred dollars ($300) and a term of not less than the following: (A) Ninety days for loans whose principal balance upon origination is less than five hundred dollars ($500). (B) One hundred twenty days for loans whose principal balance upon origination is at least five hundred dollars ($500), but is less than one thousand five hundred dollars ($1,500). (C) One hundred eighty days for loans whose principal balance upon origination is at least one thousand five hundred dollars ($1,500), but is less than two thousand five hundred dollars ($2,500). (D) One year nor more than five years for loans whose principal balance is more than two thousand five hundred dollars ($2,500). (b) As an alternative to the charges authorized by Section 22303 or 22304, a licensee approved by the commissioner to participate in the program may contract for and receive charges for a loan made pursuant to this section at an annual simple interest rate not to exceed the following: (1) The lesser of 36 percent or the sum of 32.75 percent plus the United States prime lending rate, as of the date of loan origination, on that portion of the unpaid principal balance of the loan up to and including, but not in excess of, one thousand dollars ($1,000). The interest rate calculated as of the date of loan origination shall be fixed for the life of the loan. (2) The lesser of 35 percent or the sum of 28.75 percent plus the United States prime lending rate, as of the date of loan origination, on that portion of the unpaid principal balance of the loan in excess of one thousand dollars ($1,000), but less than seven thousand five hundred dollars ($7,500). The interest rate calculated as of the date of loan origination shall be fixed for the life of the loan. (c) Notwithstanding subdivision (b) and subject to subdivision (d), a licensee approved by the commissioner to participate in the program shall reduce the interest rates specified in subdivision (b) on each subsequent loan to the same borrower by a minimum of one percentage point, as follows: (1) The interest rates shall be reduced by one percentage point for loans with contractual terms of two years or less. (2) In addition to
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