Bill Text: CT HB05293 | 2016 | General Assembly | Introduced

Connecticut House Bill 5293 (Prior Session Legislation)

Introduced

Bill Title: An Act Concerning Retail Installment Sales Financing.

Spectrum: Committee Bill

Status: (Introduced - Dead) 2016-02-19 - Public Hearing 02/25 [HB05293 Detail]

Download: Connecticut-2016-HB05293-Introduced.html


General Assembly		*Raised Bill No. 5293*
*February Session, 2016*		LCO No. 1010
		01010_______BA_
Referred to Committee on BANKING
Introduced by:
(BA)

AN ACT CONCERNING RETAIL INSTALLMENT SALES FINANCING.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 36a-773 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):

Every retail seller or sales finance company, if insurance is included in a retail installment contract, shall, within fifteen days after execution of the retail installment contract, send or cause to be sent to the retail buyer a policy or policies or certificate of insurance clearly setting forth the amount of the premium, the kind or kinds of insurance and the scope of the coverage and all of the terms, exceptions, limitations, restrictions and conditions of the insurance contract or contracts. [of the insurance.] In the event of repossession of goods under section 36a-785, as amended by this act, the holder of the retail installment contract shall refund all unearned insurance premiums and apply the refund toward the balance of the retail buyer's obligations under the retail installment contract. For purposes of this section, "unearned insurance premiums" means the premiums that are collected by an insurer in advance, but subject to return if the coverage under the insurance contract or contracts ends before the term covered by the premiums is complete.

Sec. 2. Section 36a-774 of the 2016 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):

Every installment loan contract shall be in writing executed by the retail buyer and a copy thereof shall be delivered to such retail buyer at the time of the execution thereof. Within fifteen days after the execution of such installment loan contract, the holder thereof shall send or cause to be sent to the retail buyer a policy or policies or certificates of insurance clearly setting forth the amount of the premium, the kind or kinds of insurance and the scope of the coverage and all of the terms, exceptions, limitations, restrictions and conditions of the insurance contract or contracts. [of the insurance.] Every installment loan contract for the purchase of consumer goods subject to section 36a-771 and this section shall set forth the information required to be disclosed under sections 36a-675 to 36a-686, inclusive, and the regulations thereunder, using the form, content and terminology provided therein.

Sec. 3. Section 36a-778 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):

The holder of any retail installment contract or any installment loan contract shall not receive or collect any charges or expenses for delinquency and collection, including, but not limited to, any service fees for accepting payments over the telephone or Internet, except as follows: The holder of a retail installment contract or installment loan contract, [other than] except a contract for the purchase of a commercial vehicle or an installment loan contract regulated by sections 36a-555 to 36a-573, inclusive, may collect a delinquency and collection charge for default in the payment of any such contract or installment [thereof] of such contract, when such default has continued for a period of ten days, such charge not to exceed five per cent of the amount of the installments in default or the sum of ten dollars, whichever is the lesser. [; provided this provision shall have no application to installment loan contracts regulated by sections 36a-555 to 36a-573, inclusive.] The holder of any retail installment contract or any installment loan contract for the purchase of a commercial vehicle, as defined in section 36a-770, except an installment loan contract regulated by sections 36a-555 to 36a-573, inclusive, may collect a delinquency and collection charge for default in the payment of any such contract or installment [thereof] of such contract, when such default has continued for a period of ten days, such charge not to exceed five per cent of the amount of the installments in default. [, provided this provision shall have no application to installment loan contracts regulated by sections 36a-555 to 36a-573, inclusive.] In addition to any such delinquency and collection charge, the retail installment contract or the installment loan contract may provide for the payment of attorney's fees not exceeding fifteen per cent of the amount due and payable under such contract when such contract is referred to an attorney, who is not a salaried employee of the holder of the contract, for collection, plus the court costs. The restriction on charges [herein provided] under this section shall not apply to any expenses permitted under section 36a-785, as amended by this act.

Sec. 4. Section 36a-785 of the 2016 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):

(a) When the retail buyer is in default in the payment of any sum due under the retail installment contract or installment loan contract, or in the performance of any other condition that such contract requires [him] the retail buyer to perform, or in the performance of any promise, the breach of which is by such contract expressly made a ground for the retaking of the goods, the holder of the contract may retake possession [thereof] of such goods, provided the filing of a petition in bankruptcy under 11 USC Chapter 7 by a retail buyer of a motor vehicle, or such retail buyer's status as a debtor in bankruptcy, shall not be considered a default of a retail installment contract or ground for repossession of such motor vehicle. Unless the goods can be retaken without breach of the peace, [it] the goods shall be retaken by legal process, [but nothing herein contained] provided nothing contained in this section shall be construed to authorize a violation of the criminal law. In the case of repossession of any motor vehicle without the knowledge of the retail buyer, the local police department shall be notified of such repossession [within] not later than two hours after repossession. In the absence of a local police department or if the local police department cannot be reached for notification, the state police shall be promptly notified of such repossession.

(b) Not less than ten days prior to the retaking, the holder of such contract [, if he so desires,] may serve upon the retail buyer, personally or by registered or certified mail, a notice of intention to retake the goods on account of the buyer's default. The notice shall state [the] that the retail buyer is in default and [the period at the end of which] designate (1) the date upon which such goods will be retaken, [and] (2) the dollar amount needed to cure the default, and (3) the date by which such payment shall be made. The notice shall briefly and clearly state [what] the retail buyer's rights under this subsection [will be] in [case] the event such goods are retaken. If the notice is so served and the buyer does not perform the conditions and provisions [as to which he is in] required under the contract to cure the default before the day set for retaking, the holder of the contract may retake said goods and hold such goods subject to the provisions of subsections (d), (e), (f), (g) and (h) of this section regarding resale, but without any right of redemption.

(c) If the holder of such contract does not give the notice of intention to retake, described in subsection (b) of this section, [he] the holder shall retain such goods for fifteen days after the retaking within the state in which [they] such goods were located when retaken. During such period the retail buyer, upon payment or tender of the unaccelerated amount due under such contract at the time of retaking and interest, or upon performance or tender of performance of such other condition as may be named in such contract as precedent to the retail buyer's continued possession of such goods, or upon performance or tender of performance of any other promise for the breach of which such goods were retaken, and upon payment of the actual and reasonable expenses of any retaking and storing, may redeem such goods and become entitled to take possession of [the same] such goods and to continue in the performance of such contract as if no default had occurred. The holder of such contract shall, [within three days of] not later than three days after the retaking, furnish or mail, by registered or certified mail, to the last known address of the buyer, a written statement of the unaccelerated sum due under such contract and the actual and reasonable expense of any retaking and storing. [For failure] Failure to furnish or mail such statement as required by this section [, the holder of the contract shall forfeit the] shall result in forfeiture of the holder's right to claim payment for the actual and reasonable expenses of retaking and storage, and [also] the holder shall be liable for the actual damages suffered because of such failure. If such goods are perishable so that retention for fifteen days [as herein prescribed] under subsection (d) of this section would result in their destruction or substantial injury, the provisions of this subsection shall not apply and the holder of the contract may resell the goods immediately upon such retaking.

(d) If the retail buyer does not redeem such goods within fifteen days after the holder of the contract has retaken possession, the holder of the contract shall sell such goods at public or private sale [which sale may be held] not less than fifteen days and [shall be held] not more than one hundred eighty days after the retaking. When the holder of the contract retakes possession by legal process, and an answer is interposed, the holder of the contract may, at his election, hold such retaken goods for a period not to exceed thirty days after the entry of final judgment by a court of competent jurisdiction entitling the holder of the contract to possession of such goods before holding such resale. The holder of the contract shall give the retail buyer not less than ten days' written notice of the time and place of any public sale, or the time after which any private sale or other intended disposition is to be made, either personally or by registered mail or by certified mail, [receipted for on mailing] return receipt requested, directed to the retail buyer at [his] such retail buyer's last-known place of business or residence. The holder of the contract may bid for such goods at any public sale. The proceeds of the resale shall be considered to be either the amount paid for such goods at such sale or the fair cash retail market value of such goods at the time of repossession, whichever is the greater, except as otherwise provided in subsection (g) of this section.

(e) Proceeds of the resale shall be applied in the following order of priority: (1) First, to the payment of the actual and reasonable expenses [thereof] of such resale, (2) if, after application pursuant to subdivision (1) of this subsection, there are proceeds remaining, then to the payment of the actual and reasonable expenses of any retaking and storing of said goods, and (3) if, after application pursuant to subdivisions (1) and (2) of this subsection, there are proceeds remaining, then to the satisfaction of the balance due under the contract. [Within thirty days of] Not later than thirty days after the resale, the holder of the contract shall give the retail buyer a written statement itemizing the disposition of the proceeds. Any sum remaining after the satisfaction of such claims shall be paid to the retail buyer.

(f) [Notwithstanding that] Even if the proceeds of the resale are [not sufficient] insufficient to defray the actual and reasonable expenses [thereof] of such resale, and [also] such actual and reasonable expenses of any retaking and storing of such goods and the balance due under the contract, the holder of the contract may not recover the deficiency from the retail buyer or any surety or guarantor for [him] the retail buyer, or from any one who has succeeded to the obligations of such retail buyer, except as provided in subsection (g) of this section.

(g) If the goods retaken consist of a motor vehicle the aggregate cash price of which was more than two thousand dollars, the prima facie fair market value of such motor vehicle shall be calculated by adding together the [average] highest-stated trade-in value for [that] such motor vehicle and the [average] highest-stated retail value for [that] such motor vehicle and dividing [that] the sum of such values by two. Such [average] highest-stated trade-in value and [average] highest-stated retail value shall be determined by the values as stated in the National Automobile Dealers Association Used Car Guide, Eastern Edition, as of the date of repossession. If the goods retaken consist of a boat the aggregate cash price of which was more than two thousand dollars, the prima facie fair market value of such boat shall be calculated by adding together the [average] highest-stated trade-in value for [that] such boat and the [average] highest-stated retail value for [that] such boat and dividing [that] the sum of such values by two. Such [average] highest-stated trade-in value and [average] highest-stated retail value shall be determined by the values as stated in the National Automobile Dealers Association Appraisal Guide for Boats, Eastern Edition, as of the date of repossession. In the event that the value of such motor vehicle or boat is not stated in such publication, [then] the fair market value at retail minus the reasonable costs of resale shall be determined by the court. The prima facie evidence of fair market value of such motor vehicle or boat so determined may be rebutted only by direct in-court testimony. If such value of the motor vehicle or boat is less than the balance due under the contract, plus the actual and reasonable expenses of the retaking of possession, the holder of the contract may recover from the retail buyer, or from anyone who has succeeded to [his] such retail buyer's obligations, as a deficiency, the amount by which such liability exceeds such fair market value, as defined in this subsection. If the actual resale price received by the holder exceeds such fair market value, as defined in this subsection, the actual resale price shall govern.

(h) After the holder retakes possession as provided in subsection (a) of this section, or if the holder obtains a prejudgment remedy against the goods under chapter 903a, the retail buyer or anyone who has succeeded to [his] such retail buyer's obligations shall not be liable for any balance due, except to the extent permitted by subsection (g) of this section. The holder may seek a monetary judgment on the contract against the buyer unless the goods have been repossessed, with or without judicial process. Goods purchased under the contract shall not be executed upon to satisfy such judgment. When such judgment becomes final, the holder's security interest in the goods shall be extinguished. If the contract covers a retail sale of a motor vehicle required to be registered, the holder shall comply with section 14-188.

(i) If the holder of the contract fails to comply with the provisions of subsections (c), (d), (e), (f), (g) and (h) of this section, after retaking the goods, the retail buyer may recover from the holder of the contract [his] such retail buyer's actual damages, if any, and in no event less than one-fourth of the sum of all payments which have been made under the contract.

(j) No act or agreement of the retail buyer before or at the time of the making of a retail installment contract or installment loan contract nor any agreement or statement by the retail buyer in such contract shall constitute a valid waiver of the provisions of subsections (c), (d), (e), (f), (g), (h) and (i) of this section.

(k) After the delivery of the goods to the retail buyer and prior to any retaking [thereof] of such goods by the holder of the contract, the risk of injury and loss shall rest upon the retail buyer.


This act shall take effect as follows and shall amend the following sections:
Section 1	October 1, 2016	36a-773
Sec. 2	October 1, 2016	36a-774
Sec. 3	October 1, 2016	36a-778
Sec. 4	October 1, 2016	36a-785

Statement of Purpose:

To modernize the retail sales financing statutes in accordance with current industry practices.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]