Bill Text: MI HB5361 | 2023-2024 | 102nd Legislature | Introduced
Bill Title: Consumer protection: retail installment sales; citations to the motor vehicle sales finance act in the retail installment sales act; revise. Amends secs. 1a, 3, 5, 6 & 11 of 1966 PA 224 (MCL 445.851a et seq.). TIE BAR WITH: HB 5354'23
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced) 2024-05-23 - Referred To Second Reading [HB5361 Detail]
Download: Michigan-2023-HB5361-Introduced.html
HOUSE BILL NO. 5361
A bill to amend 1966 PA 224, entitled
"Retail installment sales act,"
by amending sections 1a, 3, 5, 6, and 11 (MCL 445.851a, 445.853, 445.855, 445.856, and 445.861), section 1a as amended by 1993 PA 112, section 3 as amended by 2009 PA 232, and section 11 as amended by 1995 PA 167.
the people of the state of michigan enact:
Sec. 1a. Compliance with the requirements of the truth in lending act, title I of Public Law 90-321, 15 U.S.C. 15 USC 1601 to 1608, 1610 to 1613, 1615, 1631 to 1635, 1637 to 1638, 1640 to 1647, and 1661 to 1667e, 1667f, is compliance with the disclosure provisions of sections 3(d) 3(5) and 12(b).
Sec. 3. (1) Each A retail installment contract shall must be in writing, dated, signed by the retail buyer or the authorized representative of the retail buyer and completed as to all essential provisions, except as otherwise provided in sections 5 and 6. A seller, agent of the seller, or employee of the seller, acting in the course of his or her the individual's employment shall not act as the authorized representative of a retail buyer under this act.
(2) (a) The printed or typed portion of the contract, other than instructions for completion, shall must be in a size equal to at least 8-point type. The contract shall must be designated "retail installment contract" and shall must contain substantially the following notice printed or typed in a size equal to at least 10-point bold type:
"Notice to the buyer: Do not sign this contract before you read it or if it contains blank spaces. You are entitled to a copy of the contract you sign. You are entitled to a partial return of the finance charge if you prepay the balance."
(3) (b) The retail seller shall deliver to the retail buyer, or mail to him or her the retail buyer at his or her the retail buyer's address shown on the retail installment contract, a copy of the contract as accepted by the seller. Until the seller delivers or mails a copy of the contract, the buyer, to any extent that he or she the buyer has not received delivery of the goods or been furnished or rendered the services, has the right to rescind his or her the contract and to receive a refund of all payments made and return of all goods traded in to the seller on account of or in contemplation of the contract, or if those goods cannot be returned, the value of the goods. Any reliance by a holder other than the seller on written acknowledgment by the buyer of delivery of a copy of the contract shall must be based upon on a statement in a size equal to at least 10-point bold type and, if contained in the contract, shall must appear directly above the buyer's signature or the signature of the authorized representative of the buyer and shall must require a separate signature of the buyer or the authorized representative of the buyer.
(4) (c) The retail installment contract shall must contain the names of the seller and the buyer, the place of business of the seller, the residence or other address of the buyer as specified by the buyer, and a description or identification of the goods sold or to be sold, or services furnished or rendered or to be furnished or rendered.
(5) (d) The retail installment contract shall must contain all of the following items:
(a) (1) The cash sale price of the goods or services.
(b) (2) The amount of the buyer's down payment, identifying the amounts paid in money and allowed for goods traded in.
(c) (3) The difference between subparagraphs (1) subdivisions (a) and (2).(b).
(d) (4) The itemized amounts of official fees.
(e) (5) The aggregate amount, if any, included for insurance, if a separate identified charge is made therefor, for insurance, specifying the type or types of insurance and the term or terms of coverage.
(f) (6) If the retail installment transaction involves goods that are a vehicle, the cost of any guaranteed asset protection waiver that the seller agrees to extend credit to the buyer to obtain. For purposes of this subparagraph, subdivision, all of the following apply:
(i) "Guaranteed asset protection waiver" means that term as defined in section 3 of the guaranteed asset protection waiver act, 2009 PA 229, MCL 492.23.
(ii) "Vehicle" means goods that are a motor vehicle, as that term is defined in section 3 of the guaranteed asset protection waiver act, 2009 PA 229, MCL 492.23, that is not subject to the motor vehicle sales finance act, 1950 (Ex Sess) PA 27, MCL 492.101 to 492.141.492.137a.
(iii) A guaranteed asset protection waiver may be included as part of, or as an addendum to, a retail installment contract.
(iv) A retail seller that offers, sells, or provides guaranteed asset protection waivers to retail buyers in this state must comply with the guaranteed asset protection waiver act, 2009 PA 229, MCL 492.21 to 492.33.
(v) Any cost to a retail buyer for a guaranteed asset protection waiver entered into in compliance with the truth in lending act, 15 USC 1601 to 1667f, and the regulations promulgated under that act, 12 CFR part 226, must be separately stated and is not considered a finance charge or interest.
(g) (7) The principal balance , which that is the total of the amounts described in subparagraphs (3), (4), (5), and (6).subdivisions (c), (d), (e), and (f).
(h) (8) The amount of the time price differential for the full term of the contract.
(i) (9) The amount of the time balance owed by the buyer to the seller , which that is the total of the amounts described in subparagraphs (7) and (8).subdivisions (g) and (h).
(j) (10) Except as otherwise provided in this subparagraph, subdivision, the maximum number of installment payments required and the amount of each installment and the due date of each payment necessary to pay the time balance set forth in subparagraph (9). subdivision (i). If installment payments other than the final payment are stated as a series of equal schedule amounts and if the amount of the final installment payment does not substantially exceed the scheduled amount of each preceding installment payment, the maximum number of payments and the amount and due date of each payment need not be separately stated and the amount of the scheduled final installment payment may be stated as the remaining unpaid balance. The due date of the first installment payment may be fixed by a day or date or may be fixed by reference to the date of the contract or to the time of delivery or installation.
(k) (11) The time sale price.
(l) (12) If any installment, except the down payment, is more than double the average of all other installments, except the down payment, the following legend printed in at least 10-point bold type or typewritten: "This contract is not payable in installments of equal amounts", followed, if there is but 1 larger installment, by: "An installment of $............ will be due on ............" or, if there is more than 1 larger installment, by: "larger installments will be due as follows: ............" , in the latter case inserting the amount of every larger installment and of its due date. The above items do not need not to be stated in the sequence or order set forth; and additional items may be included to explain the computations made in determining the amount to be paid by the buyer.
(m) (13) A notice to the buyer that on his or her the buyer's request the seller must provide or make available for examination by the buyer a statement or table showing how the partial refund of the time price charge is to be computed if any balance of the contract is prepaid.
(n) (14) A statement that the seller retains a security interest in the subject matter of the retail installment contract or retail charge agreement if he or she the seller does so and a statement setting forth the nature and terms of the security interest retained, and the following legend printed in at least 10-point bold type or typewritten: "The seller retains a security interest in the subject matter of this agreement".
Sec. 5. (1) A retail installment transaction negotiated and entered into by mail or telephone without personal solicitations by a salesperson or other representative of the seller and based upon on a catalog of the seller, or other printed solicitation which that clearly sets forth the cash sale prices and other terms of sales to be made through the medium may be made as provided in this section. The provisions of this act with respect to a retail installment transaction shall be are applicable to the sale, except that:as follows:
(a) The designation and notice provisions of sections 3(a) 3(2) and 12(a) shall are not be applicable to the retail installment contract or retail charge agreement.
(b) The retail installment contract or retail charge agreement, when completed by the buyer, does not need not to contain the items required by section 3(d) 3(5) or 12(a). When the retail installment contract or retail charge agreement is received from the retail buyer, the seller shall either prepare a written memorandum containing all of the information required by section 3(d) 3(5) to be included in a retail installment transaction or shall deliver a copy of the retail charge agreement to the retail buyer as provided in section 12(a) prior to before the due date of the first installment or payment payable under the contract or agreement.
(2) When the retail installment contract or retail charge agreement is received from the retail buyer, the seller shall prepare a written memorandum containing all of the information required by sections 3(d) 3(5) and 12(a) to be included in a retail installment transaction. Instead of delivering a copy of the contract or agreement to the retail buyer as provided in sections 3(b) 3(3) and 12(a), the seller shall deliver to the buyer a copy of the memorandum prior to before the due date of the first installment or payment payable under the contract or agreement.
Sec. 6. A retail installment contract shall must not be signed by any party thereto of the contract when it contains blank spaces of items which are essential provisions of the transaction, but if delivery of the goods is not made at the time of the execution of the contract, the identifying numbers or marks of the goods or similar information and the due date of the first installment may be inserted by the seller in the seller's counterpart of the contract after it has been signed by the buyer. The buyer's acknowledgment, conforming to the requirement of subsection (b) of section 3, 3(3), of delivery of a copy of the contract shall must be presumptive proof, or, in the case of a holder of the contract without knowledge to the contrary when he the holder purchases it, conclusive proof of such the delivery and of compliance with this subsection and any other requirement relating to completion of the contract prior to before execution thereof of the contract by the buyer, in any action or proceeding.
Sec. 11. (1) (a) If, in a retail installment transaction, a retail buyer purchases goods or services from a retail seller from whom he or she the retail buyer has previously purchased goods or services under 1 or more retail installment contracts, and the amounts under the previous contracts have not been fully paid, the subsequent purchases may be included in and consolidated with 1 or more of the previous contracts at the seller's option. Each subsequent purchase shall be is a separate retail installment contract under this act, notwithstanding that the purchase may be included in and consolidated with 1 or more previous contracts. All Except as otherwise provided in this section, the provisions of this act with respect to retail installment contracts apply to subsequent purchases. except as otherwise provided in this section.
(2) (b) In the event of consolidation, if the buyer does not execute a retail installment contract respecting each subsequent purchase as provided in this act, the seller may prepare a written memorandum of each subsequent purchase and the provisions of section 3 do not apply. Unless previously furnished in writing to the buyer by the seller, by sales slip, memorandum, or otherwise, the memorandum shall must contain the items (1) to (8) of in section 3(d) 3(5)(a) to (h) and the outstanding balance of the previous contract or contracts, the consolidated time balance, and the revised installments applicable to the consolidated time balance, if any. The seller shall deliver to the buyer a copy of the memorandum prior to before the due date of the first installment of the consolidated contract.
(3) (c) When subsequent purchases are made, if the seller has retained title or taken a lien or other security interest in any of the goods purchased under any 1 of the contracts included in the consolidation, the entire amount of all payments made prior to before the subsequent purchases are considered to have been applied to the unpaid time balances of the previous purchases. Each payment after the subsequent purchase made on the consolidated contract shall be is considered to have been allocated to all of the various purchases in the same ratio as the original cash sale prices of the various purchases bear to the total of all. Where If the amount of each installment payment is increased in connection with subsequent purchases, at the seller's option, the subsequent payments may be considered to be allocated as an amount equal to the original periodic payment to the previous purchase, the balance to the subsequent purchase. The amount of a down payment on the subsequent purchase shall must be allocated in its entirety to the subsequent purchase. This subsection does not apply if the previous and subsequent purchases involve equipment, parts or other goods attached or affixed to goods previously purchased and not fully paid, or to services rendered by the seller at the buyer's request.
(4) (d) (1) The holder of a retail installment contract, upon agreement in writing with the buyer, may extend the scheduled due date or defer the scheduled payment of all or of any part of any installment or installments payable under the contract. A minimum charge of $1.00 for the period of extension or deferral may be made in any case where the extension or deferral charge, when computed at the rate permitted a regulated lender by may use under the credit reform act, 1995 PA 162, MCL 445.1851 to 445.1864, amounts to less than $1.00. The agreement may also provide for the buyer's payment of the additional cost to the holder of the contract of premiums for continuing in force until the end of the period of extension or deferral any insurance coverage provided for in the contract. The extension or deferral shall must be confirmed in writing by the holder.
(5) (2) The holder of a retail installment contract, upon agreement in writing with the buyer, may refinance the payment of the unpaid time balance of the contract by providing for a new schedule of installment payments. The holder may charge and contract for the payment of a refinance charge by the buyer and collect and receive the refinance charge, but the refinance charge shall must be based upon on the amount refinanced, plus any additional cost of insurance and of official fees incident to the refinancing, after the deduction of a refund or credit in an amount equal to that to which the buyer would have been entitled under section 8, if he or she the buyer had prepaid in full his or her the buyer's obligations under the contract or contracts, computed without allowance for any minimum earned finance charge. The refinance charge shall must not exceed the rate of interest or its equivalent permitted a regulated lender by the credit reform act, 1995 PA 162, MCL 445.1851 to 445.1864. The refinancing agreement shall must set forth the amount of the unpaid time balance to be refinanced, the amount of any refund credit, the amount to be refinanced after the deduction of the refund credit, any additional premiums paid for insurance and of official fees to the buyer, the amount of the finance charge under the refinancing agreement, the new unpaid time balance, and the new schedule of installment payments.
Enacting section 1. This amendatory act does not take effect unless Senate Bill No.____ or House Bill No. 5354 (request no. 03158'23) of the 102nd Legislature is enacted into law.
