3 AAC 12.370 - Loans

(a) On the date the loan is made, loan proceeds must be delivered to the borrower or to a third party on behalf of the borrower. Loan proceeds delivered by mail must be sent by registered mail, by certified mail, or in another manner that allows the licensee to obtain written confirmation of the date the loan proceeds are received. The licensee shall obtain written confirmation of the date of receipt for loan proceeds hand-delivered or electronically deposited. Interest may be charged only from the date the loan proceeds are received even if the note bears a prior date. If loan proceeds are delivered to a third party, the promissory note and disclosure must state the name of the third party and the amount delivered.

(b) When a death claim is filed with an insurance company, the exact date of death must be recorded on the account record.

(c) No licensee may accept applications for loans or close loans at any place other than that named in the license. However, if the loan is made by mail, the signature of one or more of the borrowers may be obtained outside the loan office if the signatures are obtained by an actual and bona fide employee of the licensee or by the spouse of the borrower.

(d) When making loans by mail the licensee shall mail all necessary forms and documents to the borrower, and upon completion of those forms by the borrower, the proceeds of the loan must be delivered from the licensee's office.

(e) No licensee may permit any person other than a bona fide employee to complete its notes, security instruments or any other forms used in small loan transactions, nor may any person other than a bona fide employee be permitted to accept payments on those loans except delinquent loans referred to other parties for collection purposes.

(f) The licensee shall explain to the borrower the contents of the note, the statement of loan, the security agreement and any other forms or documents used in connection with the completion of a loan. No instrument may have blanks left to be completed after being signed.

(g) Security for any loan must be released by the licensee when the loan is paid in full, unless the loan is paid by renewal and the security is used as collateral for the new loan. Copies of any releasing documents, such as termination statements, properly documented, must be retained in the borrower's file.

Notes

3 AAC 12.370

Eff. 6/30/77, Register 62; am 10/16/2003, Register 168

Authority:AS 06.20.220

AS 06.20.250

AS 06.20.270

AS 06.20.340