Bill Text: CT HB05297 | 2016 | General Assembly | Introduced
Bill Title: An Act Concerning Interest Transparency.
Spectrum: Committee Bill
Status: (Introduced - Dead) 2016-04-19 - Tabled for the Calendar, House [HB05297 Detail]
Download: Connecticut-2016-HB05297-Introduced.html
General Assembly |
Raised Bill No. 5297 | ||
February Session, 2016 |
LCO No. 1301 | ||
*01301_______BA_* | |||
Referred to Committee on BANKING |
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Introduced by: |
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(BA) |
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AN ACT CONCERNING INTEREST TRANSPARENCY.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Section 36a-770 of the 2016 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(a) The Uniform Commercial Code. A transaction subject to sections 36a-770 to 36a-788, inclusive, as amended by this act, 42-100b and 42-100c is also subject to the Uniform Commercial Code, title 42a, but in case of any conflict the provisions of sections 36a-770 to 36a-788, inclusive, as amended by this act, 42-100b and 42-100c shall control.
(b) Filing and recording. Section 42a-9-310 determines the need for filing or recording to perfect a security interest, section 42a-9-317 determines the persons who take subject to an unperfected security interest, and sections 42a-9-311 and 42a-9-501 to 42a-9-526, inclusive, determine the place for such filing or recording.
(c) Definitions. As used in sections 36a-770 to 36a-788, inclusive, as amended by this act, 42-100b and 42-100c, unless the context otherwise requires:
(1) "Boat" means any watercraft, as defined in section 22a-248, other than a seaplane, used or capable of being used as a means of transportation on water, by any power including muscular.
(2) "Cash price" means the total amount in dollars at which the seller and buyer agreed the seller would transfer unqualified title to the goods, if the transaction were a cash sale instead of a sale under a retail installment contract.
(3) "Commercial vehicle" means any domestic or foreign truck or truck tractor of ten thousand or more pounds gross vehicular weight or any trailer or semitrailer designed for use in connection with any truck or truck tractor of ten thousand or more pounds gross vehicular weight and which is not used primarily for personal, family or household use.
(4) "Filing fee" means the fee prescribed by law for filing, recording or otherwise perfecting and releasing or satisfying a security interest, as defined in subdivision (35) of subsection (b) of section 42a-1-201, retained or created by a retail installment contract or installment loan contract.
(5) "Finance charge" means the amount in excess of the cash price of the goods agreed upon by the retail seller and the retail buyer, to be paid by the retail buyer for the privilege of purchasing the goods under the retail installment contract or installment loan contract.
(6) "Finance charge markup" means the difference between the annual percentage rate of the retail seller's finance charge and the annual percentage rate offered by the sales finance company that acquires the retail installment contract.
[(6)] (7) "Goods" means (A) "consumer goods", as defined in subdivision (23) of subsection (a) of section 42a-9-102 and motor vehicles included under such definition, having an aggregate cash price of fifty thousand dollars or less, and (B) "equipment", as defined in subdivision (33) of subsection (a) of section 42a-9-102, having an aggregate cash price of sixteen thousand dollars or less, provided such consumer goods or such equipment is included in one retail installment contract or installment loan contract.
[(7)] (8) "Installment loan contract" means any agreement made in this state to repay in installments the amount loaned or advanced to a retail buyer for the purpose of paying the retail purchase price of goods and by virtue of which a security interest, as defined in subdivision (35) of subsection (b) of section 42a-1-201, is taken in the goods for the payment of the amount loaned or advanced. For purposes of this subdivision, "installment loan contract" does not include agreements to repay in installments loans made by the United States or any department, agency or instrumentality thereof.
[(8)] (9) "Lender" means a person who extends or offers to extend credit to a retail buyer under an installment loan contract.
[(9)] (10) A retail installment contract or installment loan contract is "made in this state" if: (A) An offer or agreement is made in Connecticut by a retail seller or a lender to sell or extend credit to a resident retail buyer, including, but not limited to, any verbal or written solicitation or communication to sell or extend credit originating outside the state of Connecticut but forwarded to and received in Connecticut by a resident retail buyer; or (B) an offer to buy or an application for extension of credit, or an acceptance of an offer to buy or to extend credit, is made in Connecticut by a resident retail buyer, regardless of the situs of the contract which may be specified therein, including, but not limited to, any verbal or written solicitation or communication to buy or to have credit extended, originating within the state of Connecticut but forwarded to and received by a retail seller or a lender outside the state of Connecticut. For purposes of this subdivision, a "resident retail buyer" means a retail buyer who is a resident of the state of Connecticut.
[(10)] (11) "Motor vehicle" means any device in, upon or by which any person or property is or may be transported or drawn upon a highway by any power other than muscular. For purposes of this subdivision, "motor vehicle" does not include self-propelled wheelchairs and invalid tricycles, tractors, power shovels, road machinery, implements of husbandry and other agricultural machinery, or other machinery not designed primarily for highway transportation but which may incidentally transport persons or property on a highway, or devices which move upon or are guided by a track or travel through the air.
[(11)] (12) "Retail buyer" means a person who buys or agrees to buy one or more articles of goods from a retail seller not for the purpose of resale or lease to others in the course of business and who executes a retail installment contract or an installment loan contract in connection therewith.
[(12)] (13) "Retail installment contract" means any security agreement, as defined in subdivision (74) of subsection (a) of section 42a-9-102, made in this state, including one in the form of a mortgage, conditional sale contract or other instrument evidencing an agreement to pay the retail purchase price of goods, or any part thereof, in installments over a period of time and pursuant to which a security interest, as defined in subdivision (35) of subsection (b) of section 42a-1-201, is retained or taken by the retail seller for the payment of the amount of such retail installment contract. For purposes of this subdivision, "retail installment contract" does not include a rent-to-own agreement, as defined in section 42-240.
[(13)] (14) "Retail installment sale" means any sale evidenced by a retail installment contract or installment loan contract wherein a retail buyer buys goods from a retail seller at a time sale price payable in two or more installments. The cash price of the goods, the amount, if any, included for other itemized charges which are included in the amount of the credit extended but which are not part of the finance charge under sections 36a-675 to 36a-686, inclusive, and the finance charge shall together constitute the time sale price. For purposes of this subdivision, "retail installment sale" does not include a rent-to-own agreement, as defined in section 42-240.
[(14)] (15) "Retail seller" means a person who sells or agrees to sell one or more articles of goods under a retail installment contract to a retail buyer.
[(15)] (16) "Sales finance company" means any person engaging in this state in the business, in whole or in part, of acquiring retail installment contracts from retail sellers or installment loan contracts from holders thereof, by purchase, discount or pledge, or by loan or advance to the holder of either on the security thereof, or otherwise.
Sec. 2. Subsection (a) of section 36a-772 of the 2016 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):
(a) A retail seller of motor vehicles may charge, contract for, receive or collect a finance charge expressed as an annual percentage rate on any retail installment contract covering the retail sale of a motor vehicle in this state, which charge shall not exceed the rates indicated for the respective classifications of motor vehicles as follows: (1) On sales made prior to October 1, 1985, of (A) new motor vehicles, eighteen per cent; (B) used motor vehicles of a model designated by the manufacturer by a year not more than three years prior to the year in which the sale is made, nineteen and one-quarter per cent; and (C) used motor vehicles of a model designated by the manufacturer by a year more than three years prior to the year in which the sale is made, twenty-one and one-half per cent; (2) on sales made on or after October 1, 1985, and prior to October 1, 1987, (A) new motor vehicles, sixteen per cent; (B) used motor vehicles of a model designated by the manufacturer by a year not more than two years prior to the year in which the sale is made, eighteen per cent; (C) used motor vehicles of a model designated by the manufacturer by a year more than two years prior to the year in which the sale is made, twenty per cent; and (3) on sales made on or after October 1, 1987, (A) new motor vehicles, fifteen per cent; (B) used motor vehicles of a model designated by the manufacturer by a year not more than two years prior to the year in which the sale is made, seventeen per cent; (C) used motor vehicles of a model designated by the manufacturer by a year more than two years prior to the year in which the sale is made, nineteen per cent. A retail seller who charges, contracts for, receives or collects a finance charge under this subsection shall disclose, in writing, to the retail buyer purchasing the motor vehicle: (i) The annual percentage rate of the retail seller's finance charge; (ii) the identity of the sales finance company, as defined in section 36a-535, bank, credit union or other lender of the retail installment contract that offers the lowest annual percentage rate and the amount of that rate; and (iii) any finance charge markup, as defined in section 36a-770, as amended by this act, imposed by the retail seller.
Sec. 3. (NEW) (Effective October 1, 2016) (a) For purposes of this section, "ancillary product or service" includes, but is not limited to: (1) Guaranteed auto protection or guaranteed asset protection insurance, (2) an extended warranty or vehicle service contract, and (3) finishing items or equipment that may be purchased with a motor vehicle, including, but not limited to, paint protection, vehicle identification number etching and stolen vehicle recovery systems.
(b) A retail installment contract from a retail seller of motor vehicles shall disclose to the retail buyer purchasing a motor vehicle from the retail seller pursuant to such contract, at the time of the execution of such contract, that (1) any ancillary product or service offered to such individual seller is optional, (2) the total cost or retail price of each ancillary product or service and the percentage of such cost or retail price being retained by the retail seller, and (3) the amount by which such monthly payment on the installment loan originating from such contract will increase as a result of purchasing such ancillary product or service.
Sec. 4. Section 36a-786 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):
A wilful violation of any provision of sections 36a-770 to 36a-788, inclusive, as amended by this act, 42-100b, [and] 42-100c or section 3 of this act, except a violation with respect to disclosure which is subject to the provisions of section 36a-683, by any person, firm, association or corporation shall bar recovery of any finance, delinquency or collection charge by the owner or holder of the retail installment contract or any interest, delinquency or collection charge by the owner or holder of an installment loan contract involved, provided such owner or holder approved of or had knowledge of such violation and after such approval or knowledge retained the benefits, proceeds, profits or advantages accruing from such violation or otherwise ratified such violation.
Sec. 5. Section 36a-787 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):
Any person and any responsible officer, partner or employee of such person who wilfully and deliberately fails to comply with or violates any of the provisions of sections 36a-770 to 36a-788, inclusive, as amended by this act, 42-100b, [and] 42-100c or section 3 of this act, except a violation with respect to disclosure which is subject to the provisions of section 36a-681, shall, in addition to the penalty prescribed in section 36a-786, as amended by this act, be fined not less than twenty-five dollars nor more than five hundred dollars for each offense, except that in the case of a violation by a licensed motor vehicle dealer the penalty provided in section 14-64 shall apply.
Sec. 6. Section 36a-788 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):
Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any provision of sections 36a-770 to 36a-788, inclusive, as amended by this act, 42-100b, [and] 42-100c or section 3 of this act, the commissioner may take action against such person in accordance with sections 36a-50 and 36a-52.
This act shall take effect as follows and shall amend the following sections: | ||
Section 1 |
from passage |
36a-770 |
Sec. 2 |
October 1, 2016 |
36a-772(a) |
Sec. 3 |
October 1, 2016 |
New section |
Sec. 4 |
October 1, 2016 |
36a-786 |
Sec. 5 |
October 1, 2016 |
36a-787 |
Sec. 6 |
October 1, 2016 |
36a-788 |
Statement of Purpose:
To inform individuals of finance charges imposed by retail sellers of motor vehicles.
[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.]