KentuckySB 2192026 Regular SessionSenateWALLET

AN ACT relating to debts.

How does this bill affect your finances?

Personalize government policy and PRIA will tell you what this bill means for your household, plus every other piece of legislation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.

Free to download

Bill Overview

Analyzed Economic Effects

7 provisions identified: 2 benefits, 2 costs, 3 mixed.

Stronger collections on bounced payday payments

If your payment bounces, the lender can still collect even after the database shows the loan as closed. This applies whether the return happens within or after bank or UCC time limits. Collection does not count as a renewal or roll-over, and it does not trigger new database reporting.

Payday loan limits, fees, and rights

The law sets clear rules for payday-style deferred deposit loans. Fees are capped at $15 per $100, and each fee must cover at least 14 days. You can have no more than two open loans at once, and your total open loan proceeds are capped at $600, adjusted each year by CPI but never above $850. Each loan can be held no more than 60 days, and lenders cannot charge for rollovers, require collateral, or force a guarantor. Lenders must give you a dated, signed agreement and a copy, and disclose fees in writing before you borrow. You cannot be prosecuted under KRS 514.040 for using these transactions, and shops must post that notice. These sections apply to loans entered on or after the law’s effective date.

Statewide payday loan database and checks

The state runs a real-time database for payday loans. Before making a loan, lenders must check it to see if you already have open loans; until it is fully ready, they must check their own records. If the database is down, the lender must get your written statement about your open loans and total proceeds before moving ahead. The database must mark loans closed right away and auto-close five days after maturity unless a valid reason is reported; if a lender exits the market, open loans are closed after 60 days unless an approved plan continues updates. The operator must protect data and handle requests during tech problems, and lenders who entered data correctly may rely on database answers. The commissioner may access records only for investigations, exams, or enforcement and cannot delegate that duty.

Clear, privacy-safe wage garnishment forms

Wage-garnishment orders to employers must fit on one clear page with key facts: debtor’s name and address, debt amount, judgment ID, and where to send payments. A sealed addendum can give the employer the worker’s birth date and Social Security number (or say it is unknown) and other needed identifiers. The addendum is not open to the public.

Agencies must align rules with law

Any agency rule that conflicts with Sections 1 or 2 of this law is void. The Department of Financial Institutions and other agencies must fix any conflicts within 90 days of the law’s effective date.

Tighter rules for check-cashing stores

Check-cashing stores must verify ID and cannot advertise cashing without ID. They must endorse deposited checks with their business name and cannot change dates on payment instruments. They cannot cash checks payable to an organization unless they first get written proof the person is authorized. If a bank flags a check as altered, forged, stolen, or fraudulent, the store must report it to the regulator and prosecutor within two business days and must hold the returned item. Stores may not use unfair or deceptive practices or schemes to charge more than the law allows.

Payday data privacy and $3 fee

A $3 fee applies to each payday-loan record sent to the database, and lenders may charge it to you per loan. Your transaction history in the database is confidential and not a public record. The commissioner can require archiving within 365 days after a loan closes, delete identifying info at archiving, and delete full records after three years or after any case ends. The provider may use data only for allowed purposes; people harmed by a provider’s violation can recover actual damages and attorney’s fees. By March 1 each year, the provider may be required to report totals, fees, average loan sizes, time engaged, and average fees paid per customer.

Sponsors & Cosponsors

Sponsor

Jason Howell
Republican • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 157 • No: 11

Senate vote • 3/31/2026

passed

Yes: 32 • No: 6

House vote • 3/26/2026

3rd reading, passed

Yes: 87 • No: 5

Senate vote • 3/10/2026