Consumer Installment Lenders
The governing authority for Consumer Installment Lenders is found in 408.510 and 20 CSR 1140-13.010. In 2001, the "traditional" small loan companies and the "payday" lenders separated themselves at $500 with the payday lenders authorized for very short-term loans of up to $500 and traditional lenders able to make any loan from a minimum amount of $500 on up. The consumer installment lender provisions were needed to cover a gap: the borrower of a very small amount who needed more time than the 14-31 day limit on payday lenders. Therefore, the third type of direct lender category came into being and is sometimes referred to as a 408.510 licensee although it is, in effect, a variation of the 367.100 license. These loans are very much like Consumer Loans, but with some notable exceptions. For instance, the loans may be in any amount, secured or unsecured, but must be repayable in not less than four (4) equal installments over a period of not less than 120 days. The loans may be precomputed or simple interest.
The consumer protection provisions of sections 408.551-408.562 do apply. Since Consumer Installment Lenders are actually a special category of Consumer Credit Lenders, the regulations found in 20 CSR 1140-5.010 and 20 CSR 1140-5.020 are generally applicable. The provisions of sections 409.100, 408.140 and 408.170 are incorporated by reference.