§ 6:548 — Interest rate parity; open-end credit

A. It is the purpose of this Section to provide for parity between Louisiana creditors and non-Louisiana financial institutions extending open-end credit in this state, as well as to promote the retention of existing financial services within the state by encouraging Louisiana creditors to continue their open-end credit operations in this state rather than relocating those operations to other states with interest rates, fees, and credit terms which may not be available under Louisiana law and exporting such interest rates, fees, and credit terms back to Louisiana under the "most favored lender" doctrine of federal law.
B. Louisiana creditors offering open-end credit may assess finance charges, and credit service charges, as well as fees and charges that are material to the determination of the interest rate, in connection with open-end credit accounts, at such rates and in such amounts which equal or are less than the amounts that financial institutions domiciled in any other state are permitted to impose and collect when extending credit to Louisiana customers as a result of the "most favored lender" doctrine of federal law.
C. A Louisiana creditor which seeks to utilize the provisions of Subsection B of this Section shall file with the office of financial institutions an affidavit setting forth the rates and fees to be charged, the state where such rates and fees are permissible, and the identity of one or more of the financial institutions domiciled in that state which offer open-end credit accounts to Louisiana customers. A Louisiana creditor may file an affidavit to assess rates and fees from other states in amounts which are otherwise permissible under Louisiana law.
D. "Open-end credit account" means an arrangement between a creditor and a customer in which:
(1) The creditor permits the customer to obtain credit advances on a pre-authorized basis.
(2) The creditor reasonably contemplates repeated transactions.
(3) The creditor may assess interest on the outstanding unpaid balance of the customer's account.
(4) The amount of credit that may be extended to the customer, up to any limit set by the creditor, is generally made available to the extent that any unpaid balance is repaid.
E. As used in this Section, "Louisiana creditor" means any state bank or national bank, savings and loan association, credit union, or other extender of retail credit.
F. For purposes of this Section, and Title 12, Sections 85, 1831d, and 1730g of the U.S. Code, all as applicable to the exportation of interest rates and any fees and charges which are material to their determination, any interest rates, finance charges, credit service charges, and other fees and charges imposed by Louisiana creditors pursuant to this Section shall be authorized interest rates, finance charges, credit service charges, and other fees and charges in amount as well as manner and method of computation under Louisiana law.
G. Any interest, finance charges, credit service charges, or other fees or charges which are adopted from another state by a Louisiana creditor, including those which are otherwise permissible in an amount under Louisiana law, may be assessed, accrued, earned, or charged in the same manner or according to the same method as permitted under the law of the state from which they have been adopted, regardless of whether such manner or method is material to the determination of the interest rate under the law of that state.
H. For purposes of this Section, Louisiana creditors may impose interest, finance charges, credit service charges, or other fees and charges from one or more open-end credit accounts offered by financial institutions in other states in connection with a single open-end credit account.
{{NOTE: Acts 1990, No. 709, §3, provides that its provisions supersede those of Acts 1990, No. 198, to the extent of conflict (Subsection F).}}

Legislative History

Acts 1987, No. 808, §1; Acts 1990, No. 198, §1; Acts 1990, No. 709, §1, eff. July 20, 1990; Acts 1997, No. 1207, §1.