Bill > S2194

This bill, titled "Relative to unsolicited loans," aims to protect consumers by establishing new regulations for financial instruments like checks or drafts that offer loans or lines of credit without being requested by the recipient. It defines an "unsolicited loan instrument" as a negotiable item for a loan or credit line that the consumer did not ask for, and "unauthorized use" as someone other than the intended recipient cashing it without permission and without the recipient benefiting. The bill prohibits issuing such instruments, with exceptions for existing customer relationships as defined by the Gramm-Leach-Bliley Act of 1999 or valid loan agreements. If an unsolicited loan instrument is misused, the recipient is not liable for the debt; instead, the issuing institution must provide a written release of liability, fix any damage to the recipient's credit rating, and inform them of these actions. Furthermore, financial institutions cannot seize funds from an addressee's account due to a default on a debt arising from unauthorized use. Knowingly sending an unsolicited loan instrument can result in a fine of up to $5,000 per violation, and converting such an instrument to cash with intent to defraud could lead to imprisonment or a fine of up to $25,000. The Commissioner of Banks is tasked with creating rules to enforce this chapter, and violations will be considered unfair or deceptive practices under Chapter 93A. Additionally, recipients have a 10-day window to rescind a loan contract if an unsolicited instrument is cashed, by notifying the lender and returning the full loan amount.