
    Small Loans Act.
    
      Small Loans Act — Usury—Act of June 17, 1915.
    
    Under the Small Loans Act of June 17, 1915, F. L. 1012, a loan of more than $300 by any person, partnership, association or corporation to a single individual is unauthorized.
    Attorney-General’s Department. Opinion to Hon. John S. Fisher, Commissioner of Banking.
    Sept. 1, 1921.
   Alter, Att’y-Gen.,

I have your inquiry as to the interpretation of the Act of June 17, 1915, P. L. 1012, entitled “An act regulating the business of loaning money in sums of $300 or less, either with or without security, to individuals pressed by lack of funds to meet immediate necessities, fixing the rates of interest and charges therefor, requiring the licensing of lenders, and prescribing penalties for the violation of this act.”

Your question is whether the authority conferred by the act is limited to a single loan, not exceeding $300 to any individual, or whether one individual may be given an unlimited number of loans, provided each loan does not exceed $300.

The language to be considered is found in section 1 of the act as follows: “It shall be lawful for any person, persons, partnership, association or corporation within this Commonwealth, who shall comply with the requirements of this act, to loan money in sums of three hundred ($300) dollars or less, either with or without security, to individuals pressed for lack of funds to meet immediate necessities and charge and collect for the loan thereof interest and fees as hereinafter provided.”

The interest and fees provided are such as would otherwise be usurious.

This act deals with an exception to the general law as well as to the principles of the common law. It should be construed accordingly. If the limit of $300 were to be applied only to each single loan and an individual could borrow any amount desired by dividing it into notes of $300 each, the limitation would be of little practical use. While the expression “sums of $300 or less” occurs in the language above quoted, the plural “sums” and the words “to individuals,” which follow, are consistent with an interpretation restricting the loan of the prescribed sum to each individual borrower. This, I think, is the correct interpretation.

You are advised that the loan of more than $300 by any person, partnership, association or corporation to one individual is not authorized by this act.

From Guy H. Davies, Harrisburg, Fa.  