KRS 286.4-580: Prohibited conduct -- No contract or loan without scheduled repayment -

- Lien on real estate as security.

(1) No licensee shall take any confession of judgment or any power of attorney running

to the licensee or to any third person to confess judgment or to appear for the

borrower in a judicial proceeding; nor take any note or promise to pay that does not

disclose the date and amount of the loan obligation, a schedule or description of the

payments to be made thereon, and the rate or aggregate amount of the agreed

charges; nor take any instrument that is incomplete at the time the loan is made.

(2) No licensee shall enter into any contract of loan under this subtitle unless:

(a) The borrower agrees to make any scheduled repayment of principal within:

1. Sixty (60) months and fifteen (15) days from the date of making the

contract if the principal amount of the loan exclusive of interest and

charges is three thousand dollars ($3,000) or less; or

2. One hundred and twenty (120) months from the date of making the

contract if the principal amount of the loan exclusive of interest and

charges exceeds three thousand dollars ($3,000); and

(b) The contract provides for repayment of the amount lent in substantially equal

installments at approximately equal periodic intervals of time, except that

when appropriate for the purpose of facilitating payment in accordance with

the seasonable nature of obligor's main source of income, payments may be

deferred or omitted, if all other payments are increased in a man ner that the

other payments are substantially equal in amount and sufficient in the

aggregate to retire the loan in the period of months as provided in this

subsection.

(3) No licensee shall take any mortgage or other lien instrument upon real estate as

security for any loan under this subtitle in which the principal is three thousand

dollars ($3,000) or less, unless the lien is subject to a prior mortgage.