There are two statutes that authorize lenders in Kentucky; a general licensing statute for mortgage loan brokers and mortgage loan companies (found in Ky. Rev. Stat. § 286.8-010 et seq.), and the consumer loan company statute (Ky. Rev. Stat. § 286.4-410 et seq.). The scope of the general licensing statute allows lenders to provide loans for any loan amount, whereas the consumer loan company statute can only be applied to loans of $15,000 or less [KRS 286.4-410(1)(b)]. If the loan is subject to the consumer loan company licensing statute, the late fee limitation is 2% [KRS 286.4-530(4)]; otherwise the late fee limitation is 5% under the general statute [KRS 286.8.030(1)(a)].
In order to provide lenders the option to use either license type for loan amounts under $15,000, we have created field 187639 “Kentucky License Type” that can be mapped to trigger the general licensing late fee limitation of 5%. Our default will continue to be the more conservative 2% for the consumer loan company late fee limitation. Clients who are using our Late Charge Defaults and wish to apply the 5% late charge limitation to loans of $15,000 or less can map field 187639 to ‘1’ (Mortgage Loan Company/Broker License).
These changes are available for testing on Stage & Stage 2 servers and will take effect on April 25, 2024. If you have any questions or concerns, please contact Client Support at 1.800.497.3584.
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