Chapter 26. To regulate the business of loaning money on security of any kind by persons, firms, and corporations other than national banks, licensed bankers, trust companies, savings banks, building and loan associations, and real-estate brokers in the District of Columbia
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CHAP. 26.— An Act To regulate the business of loaning money on security of any kind by persons, firms, and corporations other than national banks, licensed bankers, trust companies, savings banks, building and loan associations, and real-estate brokers in the District of Columbia.February 4, 1913.[[H. R. 8768](/us/bill/62/hr/8768).][[Public, No. 359](/us/pl/62/359).] *Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled*,District of Columbia.
Money-lending regulations.License tax required. That hereafter it shall be unlawful and illegal to engage in the District of Columbia in the business of loaning money upon which a rate of interest greater than six per centum per annum is charged on any security of any kind, direct or collateral, tangible or intangibly without procuring license; and all persons, firms, voluntary associations, joint-stock companies, incorporated societies, and corporations engaged in said business shall pay a license tax of five hundred dollars per annum to the District of Columbia.
No license shall be granted to any person, firm,Issue to resident persons, etc. or voluntary association unless such person and the members of any such firm or voluntary association shall be bona fide residents of the District of Columbia, and no license shall be granted for a periodCorporations. longer than one year, and no license shall be granted to any joint-stock company, incorporated society, or corporation unless and until such company, society, or corporation shall, in writing and in due form, to be first approved by and filed with the Commissioners of the District of Columbia, appoint an agent, resident in the District of Columbia, upon whom all judicial and other process or legal notice directed to such company, society, or Corporation may be served.
And in the case of the death, removal from the District, or any legal disability or disqualification of any such agent, service of such process or notice may be made upon the assessor of the District of Columbia. Sec. 2. That applications for license to conduct such business mustApplications for licenses.Contents. be made in writing to the Commissioners of the District of Columbia, and shall contain the full names and addresses of applicants, if natural persons, and in the case of firms and voluntary associations, the full names and addresses of all the members thereof, and in the case of joint-stock companies, incorporated societies, and corporations, the full names and addresses of the officers and directors thereof and under what law or laws organized or incorporated, and the place where such business is to be conducted, and such other information as the said commissioners may require.
Every license granted shallTerm, etc. date from the first of the month in which it is issued and expire on the thirty-first day of the following October, and such license shall be kept conspicuously displayed in the place of business of the licensee. Every application shall be filed not less than thirty daysHearings, etc. 658 prior to the granting of such license, and notice of the filing of such application shall be posted in the office of the assessor of the said District and be published twice a week for three successive weeks in a daily newspaper published in the District of Columbia.
Protest may be made by any person to the issuing of such license, and when such protests are filed with the said commissioners the latter shall give public notice of and hold a public hearing upon such protests before issuing such license. The said commissioners shall have the power to reject any application for license after a hearing upon such protest or for failure on the part of the applicant to observe this Act, or when such applicant shall have violated its provisions. Sec. 3.Bond required.
That each application shall be accompanied by a bond to the District of Columbia in the penal sum of five thousand dollars, with two or more sufficient sureties, and conditioned that the obligor will not violate any law relating to such business. The execution of any such bond by a fidelity or surety company authorized by the laws of the United States to transact business therein shall be equivalent to the execution thereof by two sureties, and such company, if excepted to, shall justify in the manner required by law of fidelity Actions on bond.and surety companies.
If any person shall be aggrieved by the misconduct of any such licensed person, firm, voluntary association, joint-stock company, incorporated society, or corporation, or by his, their, or its violation of any law relating to such business, and shall recover a judgment therefor, such person or his personal representative or heirs or distributers may, after a return unsatisfied either in whole or in part of any execution issued upon such judgment, maintain an action in his own name upon such bond herein required in any court having jurisdiction of the amount claimed.
The Commissioners of the District of Columbia shall furnish to anyone applying therefor a certified copy of any such bond filed with them, upon the payment of a fee of twenty-five cents, and such certified copy shall be prima facie evidence in any court that such bond was duly executed and delivered by the person, firm, voluntary association, joint -stock company, incorporated society, or corporation whose names Renewal, etc.appear thereon. Said bond shall be renewed and refiled annually in October of each year, or the licensed person, firm, voluntary association, joint-stock company, incorporated society, or corporation shall, within thirty days thereafter, cease doing business, and their license shall be revoked by the said commissioners, but said bond until renewed and refiled as aforesaid shall be and remain in full force and effect.
Sec. 4.Register of business to be kept. That every person, firm, voluntary association, joint-stock company, incorporated society, or corporation conducting such business shall keep a register, approved by said commissioners, showing, in English, the amount of money loaned, the date when loaned and when due, the person to whom loaned, the property or thing named as security for the loan, where the same is located and in whoso possession, the amount of interest, all fees, commissions, charges, and renewals charged, under whatever name.
Such register shall be open for inspection to the said commissioners, their officers and agents, on every day, except Sundays and legal holidays, between the hours of Yearly trial balance.nine o’clock in the forenoon and five o’clock in the afternoon. Every such person, firm, voluntary association, joint-stock company, incorporated society, or corporation conducting such business shall, on or before the twentieth day of January of each year, make to the said commissioners an annual statement in the form of a trial balance of its books on the thirty-first day of December in each year, specifying the different kinds of its liabilities and the different kinds of its assets, stating the amount of each, together with such other information as may be called for. 659 Sec. 5.
That no such person, firm, voluntary association, joint-stock Interest not to exceed one per cent per month.company, incorporated society, or corporation shall charge or receive a greater rate of interest upon any loan made by him or it than one per centum per month on the actual amount of the loan, and this charge shall cover all fees, expenses, demands, and services of every character, including notarial and recording fees and charges, except upon the foreclosure of the security.
The foregoing interest shall not be deducted from the principal of loan when same is made. Every Statement to borrower. such person, firm, voluntary association, joint-stock company, incorporated society, or corporation conducting such business shall furnish the borrower a written, typewritten, or printed statement at the time the loan is made, showing, in English, in clear and distinct terms, the amount of the loan, the date when loaned and when due, the person to whom the loan is made, the name of the lender, the amount of interest charged, and the lender shall give the borrower a plain and complete receipt for all payments made on account of the loan at the time such payments are made.
No such loan greater than twoLimitation. hundred dollars shall be made to any one person: *Provided*, That any*Provisos*.Forfeiture for exceeding rate. person contracting, directly or indirectly, for, or receiving a greater rate of interest than that fixed in this Act, shall forfeit nil interest so contracted for or received; and in addition thereto shall forfeit to the borrower a sum of money, to be deducted from the amount due for principal, equal to one-fourth of the principal sum: *And provided*Government employees. *further*, That any person in the employ of the Government who shall loan money in violation of the provisions of this Act shall forfeit his office or position, and be removed from the same. >Sec. 6.
That complaints against any licensee or applicant for aHearings of com plaints by Commissioner. license shall be made in writing to the said commissioners, and notice thereof of not less than three days shall be given to said licensee or applicant by serving upon him a concise statement of the facts constituting the complaint, and a hearing shall be had before the saidProceeding. commissioners within ten days from the date of the filing of the complaint, and no adjournment shall be taken for longer than one week.
A daily calendar shall be kept of all hearings by the said commissioners, which shall be posted in a conspicuous place in their public office for at least three days before the date of such hearings. The said commissioners shall render their decision within eight days from the time the matter is finally submitted to them. Said commissioners shall keep a record of all such complaints and hearings, and may refuse to issue and shall suspend or revoke any license for any good cause shown, within the meaning and purpose of this Act; and when it is shown to their satisfaction, whether as a result of a written complaint as aforesaid or otherwise, that any licensee or applicant under this Act, either before or after conviction, is guilty of any conduct hi violation of this or any law relating to such business it shall be the duty of the said commissioners to suspend or revoke the license of such licensee or reject the petition of the applicant, but notice of the written complaint or proposed action shall be presented to and reasonable opportunity shall be given said licensee or applicant to be heard in his defense.
Whenever for any cause such license is revoked, said commissioners shall not issue another license to said licensee until the expiration of at least one year from the date of revocation of such license, and not at all if such licensee shall have been convicted of a violation of this Act under the provisions of the following section thereof. Sec. 7. That any violation of this Act shall be punished by a. finePunishment for violations. of not less than twenty-five dollars and not greater than two hundred dollars, or by imprisonment in the jail or the work house of the District of Columbia for not less than five nor more than thirty days, or by both such fine and imprisonment, in the discretion of the court.
The 660 said commissioners shall cause the corporation counsel to institute criminal proceedings for the enforcement of this Act before any court of competent jurisdiction. Sec. 8.Foreclosure, etc., charges limited. That in any foreclosure on any loan made under this Act no charges for attorneys’ or agents’ fees shall be made or collected which will exceed ten per centum of the amount found due in such foreclosure proceedings. Sec. 9.Liquidated damages, etc., unlawful. That in any contract made in pursuance of the provisions of this Act it shall be unlawful to incorporate any provision for liquidated or other damages as a penalty for any default or forfeiture thereunder.
Sec. 10.Not applicable to banks, etc. That nothing contained in this Act shall be held to apply to the legitimate business of national banks, licensed bankers, trust companies, savings banks, building and loan associations, or Vol. 32, p. 621.real-estate brokers, as defined in the Act of Congress of July first, nineteen hundred and two. Sec.11.Enforcement byCommissioners. That the enforcement of this Act shall be entrusted to the Commissioners of the District of Columbia, and they are hereby authorized and empowered to make all rules and regulations necessary in their judgment for the conduct of such business and the enforcement of this Act in addition hereto and not inconsistent herewith.
Sec. 12.Inconsistent laws repealed. That all Acts and parts of Acts inconsistent herewith are hereby repealed. Sec. 13.In effect after 30 days. That this Act shall take effect at the expiration of thirty days from and after the date of its passage. Approved, February 4, 1913.