Bill Text: OR SB722 | 2011 | Regular Session | Introduced
Bill Title: Relating to retail installment contracts for motor vehicles.
Spectrum: Committee Bill
Status: (Failed) 2011-06-30 - In committee upon adjournment. [SB722 Detail]
Download: Oregon-2011-SB722-Introduced.html
76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3780
Senate Bill 722
Sponsored by COMMITTEE ON GENERAL GOVERNMENT, CONSUMER AND SMALL
BUSINESS PROTECTION
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Imposes disclosure and notice requirements relating to amounts
owed for sale or lease of motor vehicles that are not commercial
vehicles or commercial motor vehicles. Imposes specified
restrictions related to payments owed under retail installment
contract.
Creates unlawful trade practice for violation of Act.
Becomes operative on July 1, 2012.
Applies to sales and leases that occur on or after operative
date.
A BILL FOR AN ACT
Relating to retail installment contracts for motor vehicles;
creating new provisions; and amending ORS 646.608.
Be It Enacted by the People of the State of Oregon:
{ +
DEFINITIONS + }
SECTION 1. { + As used in sections 1 to 8 of this 2011 Act:
(1) 'Ancillary item' includes extended or additional
warranties, theft deterrent devices, security systems, vehicle
service contracts, automobile club memberships, roadside
assistance programs, road hazard protection programs and
undercoating, rustproofing or other surface protection products.
(2) 'Buyer' means a person that buys or leases a motor vehicle
under a retail installment contract.
(3) 'Cash price' means the amount for which a seller would sell
and transfer to a buyer unqualified title to a motor vehicle if
the motor vehicle were sold for cash at the seller's place of
business on the date that the contract is executed.
(4) 'Down payment' means:
(a) A payment that a buyer pays or agrees to pay to a seller
upon or prior to the seller delivering a motor vehicle to the
buyer; or
(b) If a buyer defers the payment, a payment that is not
subject to a finance charge.
(5) 'Finance charge' means any amount that a creditor directly
or indirectly charges a buyer as incident to, or as a condition
of, the extension of credit.
(6) 'Motor vehicle' has the meaning given that term in ORS
801.360. 'Motor vehicle' does not include commercial vehicles, as
defined in ORS 801.210, or commercial motor vehicles, as defined
in ORS 801.208.
(7) 'Purchase order' means a written or electronic instrument
used to sell a motor vehicle pending execution of a retail
installment contract.
(8) 'Retail installment contract' means:
(a) A contract, entered into in this state, for the sale of a
motor vehicle between a buyer and a seller under which the buyer
has a possessory right to the motor vehicle and either:
(A) Title to the motor vehicle vests in the buyer upon the
payment of all or a part of the price of the motor vehicle or the
performance of some other condition; or
(B) A lien on the motor vehicle vests in the seller as a
security for the payment of all or a part of the price of the
motor vehicle or the performance of some other condition.
(b) A contract for the bailment or lease of a motor vehicle
between a buyer and a seller under which the buyer:
(A) Has the right to use the motor vehicle;
(B) Must pay a sum substantially equivalent to or in excess of
the aggregate value of the motor vehicle; and
(C) Will become for no additional consideration, or has the
option to become for nominal consideration, the owner of the
motor vehicle upon full compliance with the terms of the
contract.
(9) 'Seller' means a person:
(a) That is engaged in the business of selling or leasing motor
vehicles under retail installment contracts; and
(b) That sells or leases a motor vehicle under a retail
installment contract. + }
{ +
DISCLOSURE AND NOTICE REQUIREMENTS + }
SECTION 2. { + A retail installment contract and purchase
order must disclose the following amounts:
(1) Under the heading 'Itemization of Charges':
(a) The cash price of the motor vehicle less fees and charges
incidental to the selling or leasing of the motor vehicle, taxes
imposed on the sale or lease of the motor vehicle and any
remaining credit or lease balance on property being offered in
exchange for payment toward the motor vehicle.
(b) Any fees, listed separately, charged by the seller,
including:
(A) Any fee charged by the seller for document preparation;
(B) Any fee charged by the seller for registering or
transferring ownership of the motor vehicle; and
(C) Any fees charged by the seller and required by the state
for the sale, certification or operation of a motor vehicle.
(c) Any taxes, listed separately, imposed on the sale or lease.
(d) Any amount, listed separately, charged for an ancillary
item.
(e) The sum of the amounts required to be disclosed under this
subsection.
(2) Any fees, listed separately, not charged by the seller and
required by this state for the sale, certification or operation
of a motor vehicle.
(3) Under the heading 'Insurance Premiums,' the aggregate
amount of insurance premiums to be paid under the retail
installment contract.
(4) The sum of the fees, taxes and amounts in subsections (1)
and (3) of this section.
(5) Under the heading 'Itemization of Down Payment':
(a) The value of any property being offered in exchange for
payment toward the motor vehicle.
(b) The remaining credit or lease balance on any property being
offered in exchange for payment toward the motor vehicle.
(c) The net value of any property being offered in exchange for
payment toward the motor vehicle.
(d) Any portion of a down payment that a buyer defers until not
later than the due date of the second scheduled installment
payment.
(e) The amount, if any, of a manufacturer's rebate applied or
to be applied to the purchase of the motor vehicle.
(f) The remaining amount of the down payment paid or to be paid
by the buyer.
(g) The sum of the amounts required to be disclosed under this
subsection. If the sum is zero or greater than zero, the amount
shall be listed under the heading 'Down Payment.' If the sum is
less than zero, the amount shall be listed as a positive number
under the heading 'Amount Owed on Exchanged Property. '
(6) Under the heading 'Finance Charge Assessed on Date of
Contract,' the amount of any finance charge that is assessed on
the date on which the buyer and the seller enter into the retail
installment contract.
(7) Under the heading 'Unpaid Balance,' the difference between
the sum in subsection (4) of this section and the sum of the
values and amounts in subsections (5) and (6) of this section or,
if the sum of the values and amounts in subsections (5) and (6)
of this section is less than zero, the aggregate of the sum in
subsection (4) of this section and the sum of the values and
amounts in subsections (5) and (6) of this section.
(8) Any other amount required to be disclosed under Regulation
Z, 12 C.F.R. part 226. + }
SECTION 3. { + In addition to the disclosure requirements of
section 2 of this 2011 Act:
(1) A retail installment contract must contain a brief and
easily understandable explanation of any finance charge assessed
as of the date on which the buyer and the seller enter into the
retail installment contract.
(2) If payment of all or a portion of a down payment is
deferred, the seller shall include the deferred payment in the
payment schedule required to be disclosed under Regulation Z, 12
C.F.R. part 226.
(3) If a down payment includes property being offered in
exchange for payment toward a motor vehicle, the retail
installment contract or purchase order shall contain a brief
description of the property.
(4) If the terms of a retail installment contract include the
sale of an ancillary item, the retail installment contract must:
(a) Identify the difference between the amount of a payment
under the retail installment contract and the amount that the
payment would be if the terms of the retail installment contract
did not include the ancillary item; and
(b) Clearly state that the buyer is not required to purchase
the ancillary item.
(5) If the terms of a retail installment contract include the
provision of insurance coverage for the buyer, the retail
installment contract must include an itemized explanation of
terms that relate to the provision of insurance coverage. The
explanation must identify the type of insurance coverage, the
premium charged for the insurance coverage and, if the insurance
coverage expires before the date of the last scheduled payment
under the retail installment contract, the date on which the
insurance coverage expires. + }
SECTION 4. { + (1) A retail installment contract must contain
notice in substantially the following form in at least 12-point
type that is boldfaced: + }
________________________________________________________________
{ +
NOTICE TO BUYER + }
{ + Do not sign this agreement before you read it or if it
contains any blank spaces to be filled in. There should be no
blank spaces.
If you do not pay the amounts that you owe under this
agreement, your motor vehicle may be repossessed and you may have
to pay an additional amount.
If you have a complaint concerning this agreement, you should
try to resolve it with the seller. If you cannot resolve your
complaint with the seller, you may contact the Oregon Department
of Justice.
After the agreement is signed, the seller may not change the
financing or payment terms unless you agree in writing to the
change. You do not have to agree to any change. It is an unlawful
practice under ORS 646.608 for the seller to make a change
without your approval. + }
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
____________
{ + (Signature of buyer) + }
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
________________________________________________________________
{ +
RESTRICTIONS RELATED TO PAYMENTS OWED + }
{ +
UNDER RETAIL INSTALLMENT CONTRACTS + }
SECTION 5. { + (1) A seller may not accept or solicit
compensation for procuring, providing for or arranging the
financing of a motor vehicle.
(2) A seller or other person that finances a motor vehicle may
not receive, and a person may not offer, consideration for the
sale, assignment or transfer of a retail installment contract.
(3) Notwithstanding subsections (1) and (2) of this section, a
seller may charge a buyer a fee of up to $250 for procuring,
providing for or arranging the financing of a motor vehicle and a
seller or other person that finances a motor vehicle may charge a
buyer a fee of up to $250 for the sale, assignment or
transference of a retail installment contract. + }
SECTION 6. { + (1) A seller may enter into an agreement with a
buyer that conditions the seller's execution of a manufacturer's
certificate of origin or a motor vehicle's certificate of title
on the buyer obtaining financing for the motor vehicle.
(2) A buyer may cancel an agreement entered into under this
section at any time before a financing agreement becomes final.
(3) In the event that a buyer cancels an agreement under this
section:
(a) The seller shall return any down payment and property that
was offered in exchange for the motor vehicle to the buyer; and
(b) The buyer shall return the motor vehicle to the seller in
the same condition as the seller delivered the motor vehicle to
the buyer, excepting normal wear and tear, within 24 hours of
canceling the agreement. + }
SECTION 7. { + If the terms of a retail installment contract
include the provision of insurance coverage for the buyer, the
retail installment contract may not provide for the imposition of
a finance charge on any insurance premium to be paid more than
one year in advance of the payment date. + }
SECTION 8. { + (1) In the event that a buyer is delinquent in
making a scheduled payment, a retail installment contract may
provide for the imposition of a charge.
(2) Notwithstanding subsection (1) of this section:
(a) A retail installment contract may not provide for the
imposition of a charge under this section that exceeds five
percent of the amount of the scheduled payment, except that a
retail installment contract may impose a reasonable collection
fee; and
(b) A seller or a person to which a seller assigns a retail
installment contract may not impose a charge on a delinquent
payment made pursuant to an agreement to extend or defer a
scheduled payment. + }
{ +
ENFORCEMENT + }
SECTION 9. ORS 646.608 is amended to read:
646.608. (1) A person engages in an unlawful practice when in
the course of the person's business, vocation or occupation the
person does any of the following:
(a) Passes off real estate, goods or services as those of
another.
(b) Causes likelihood of confusion or of misunderstanding as to
the source, sponsorship, approval, or certification of real
estate, goods or services.
(c) Causes likelihood of confusion or of misunderstanding as to
affiliation, connection, or association with, or certification
by, another.
(d) Uses deceptive representations or designations of
geographic origin in connection with real estate, goods or
services.
(e) Represents that real estate, goods or services have
sponsorship, approval, characteristics, ingredients, uses,
benefits, quantities or qualities that they do not have or that a
person has a sponsorship, approval, status, qualification,
affiliation, or connection that the person does not have.
(f) Represents that real estate or goods are original or new if
they are deteriorated, altered, reconditioned, reclaimed, used or
secondhand.
(g) Represents that real estate, goods or services are of a
particular standard, quality, or grade, or that real estate or
goods are of a particular style or model, if they are of another.
(h) Disparages the real estate, goods, services, property or
business of a customer or another by false or misleading
representations of fact.
(i) Advertises real estate, goods or services with intent not
to provide them as advertised, or with intent not to supply
reasonably expectable public demand, unless the advertisement
discloses a limitation of quantity.
(j) Makes false or misleading representations of fact
concerning the reasons for, existence of, or amounts of price
reductions.
(k) Makes false or misleading representations concerning credit
availability or the nature of the transaction or obligation
incurred.
(L) Makes false or misleading representations relating to
commissions or other compensation to be paid in exchange for
permitting real estate, goods or services to be used for model or
demonstration purposes or in exchange for submitting names of
potential customers.
(m) Performs service on or dismantles any goods or real estate
when not authorized by the owner or apparent owner thereof.
(n) Solicits potential customers by telephone or door to door
as a seller unless the person provides the information required
under ORS 646.611.
(o) In a sale, rental or other disposition of real estate,
goods or services, gives or offers to give a rebate or discount
or otherwise pays or offers to pay value to the customer in
consideration of the customer giving to the person the names of
prospective purchasers, lessees, or borrowers, or otherwise
aiding the person in making a sale, lease, or loan to another
person, if earning the rebate, discount or other value is
contingent upon occurrence of an event subsequent to the time the
customer enters into the transaction.
(p) Makes any false or misleading statement about a prize,
contest or promotion used to publicize a product, business or
service.
(q) Promises to deliver real estate, goods or services within a
certain period of time with intent not to deliver them as
promised.
(r) Organizes or induces or attempts to induce membership in a
pyramid club.
(s) Makes false or misleading representations of fact
concerning the offering price of, or the person's cost for real
estate, goods or services.
(t) Concurrent with tender or delivery of any real estate,
goods or services fails to disclose any known material defect or
material nonconformity.
(u) Engages in any other unfair or deceptive conduct in trade
or commerce.
(v) Violates any of the provisions relating to auction sales,
auctioneers or auction marts under ORS 698.640, whether in a
commercial or noncommercial situation.
(w) Manufactures mercury fever thermometers.
(x) Sells or supplies mercury fever thermometers unless the
thermometer is required by federal law, or is:
(A) Prescribed by a person licensed under ORS chapter 677; and
(B) Supplied with instructions on the careful handling of the
thermometer to avoid breakage and on the proper cleanup of
mercury should breakage occur.
(y) Sells a thermostat that contains mercury unless the
thermostat is labeled in a manner to inform the purchaser that
mercury is present in the thermostat and that the thermostat may
not be disposed of until the mercury is removed, reused, recycled
or otherwise managed to ensure that the mercury does not become
part of the solid waste stream or wastewater. For purposes of
this paragraph, 'thermostat' means a device commonly used to
sense and, through electrical communication with heating, cooling
or ventilation equipment, control room temperature.
(z) Sells or offers for sale a motor vehicle manufactured after
January 1, 2006, that contains mercury light switches.
(aa) Violates the provisions of ORS 803.375, 803.385 or 815.410
to 815.430.
(bb) Violates ORS 646A.070 (1).
(cc) Violates any requirement of ORS 646A.030 to 646A.040.
(dd) Violates the provisions of ORS 128.801 to 128.898.
(ee) Violates ORS 646.883 or 646.885.
(ff) Violates ORS 646.569.
(gg) Violates the provisions of ORS 646A.142.
(hh) Violates ORS 646A.360.
(ii) Violates ORS 646.553 or 646.557 or any rule adopted
pursuant thereto.
(jj) Violates ORS 646.563.
(kk) Violates ORS 759.690 or any rule adopted pursuant thereto.
(LL) Violates the provisions of ORS 759.705, 759.710 and
759.720 or any rule adopted pursuant thereto.
(mm) Violates ORS 646A.210 or 646A.214.
(nn) Violates any provision of ORS 646A.124 to 646A.134.
(oo) Violates ORS 646A.095.
(pp) Violates ORS 822.046.
(qq) Violates ORS 128.001.
(rr) Violates ORS 646.649 (2) to (4).
(ss) Violates ORS 646A.090 (2) to (4).
(tt) Violates ORS 87.686.
(uu) Violates ORS 646.651.
(vv) Violates ORS 646A.362.
(ww) Violates ORS 646A.052 or any rule adopted under ORS
646A.052 or 646A.054.
(xx) Violates ORS 180.440 (1) or 180.486 (1).
(yy) Commits the offense of acting as a vehicle dealer without
a certificate under ORS 822.005.
(zz) Violates ORS 87.007 (2) or (3).
(aaa) Violates ORS 92.405 (1), (2) or (3).
(bbb) Engages in an unlawful practice under ORS 646.648.
(ccc) Violates ORS 646A.365.
(ddd) Violates ORS 98.854 or 98.858 or a rule adopted under ORS
98.864.
(eee) Sells a gift card in violation of ORS 646A.276.
(fff) Violates ORS 646A.102, 646A.106 or 646A.108.
(ggg) Violates ORS 646A.430 to 646A.450.
(hhh) Violates a provision of ORS 744.318 to 744.384, 744.991
and 744.992.
(iii) Violates a provision of ORS 646A.702 to 646A.720.
(jjj) Violates ORS 646A.530 30 or more days after a recall
notice, warning or declaration described in ORS 646A.530 is
issued for the children's product, as defined in ORS 646A.525,
that is the subject of the violation.
(kkk) Violates a provision of ORS 697.612, 697.642, 697.652,
697.662, 697.682, 697.692 or 697.707.
(LLL) Violates the consumer protection provisions of the
Servicemembers Civil Relief Act, 50 U.S.C. App. 501 et seq., as
in effect on January 1, 2010.
(mmm) Violates a provision of ORS 646A.480 to 646A.495.
(nnn) Violates ORS 646A.082.
(ooo) Violates ORS 646.647.
(ppp) Violates ORS 646A.115.
(qqq) Violates a provision of ORS 646A.405.
{ + (rrr) Violates a provision of sections 1 to 8 of this
2011 Act. + }
(2) A representation under subsection (1) of this section or
ORS 646.607 may be any manifestation of any assertion by words or
conduct, including, but not limited to, a failure to disclose a
fact.
(3) In order to prevail in an action or suit under ORS 646.605
to 646.652, a prosecuting attorney need not prove competition
between the parties or actual confusion or misunderstanding.
(4) An action or suit may not be brought under subsection
(1)(u) of this section unless the Attorney General has first
established a rule in accordance with the provisions of ORS
chapter 183 declaring the conduct to be unfair or deceptive in
trade or commerce.
(5) Notwithstanding any other provision of ORS 646.605 to
646.652, if an action or suit is brought under subsection (1)(xx)
of this section by a person other than a prosecuting attorney,
relief is limited to an injunction and the prevailing party may
be awarded reasonable attorney fees.
{ +
OPERATIVE DATE AND APPLICABILITY + }
SECTION 10. { + Sections 1 to 8 of this 2011 Act and the
amendments to ORS 646.608 by section 9 of this 2011 Act become
operative on July 1, 2012. + }
SECTION 11. { + (1) Sections 1 to 8 of this 2011 Act and the
amendments to ORS 646.608 by section 9 of this 2011 Act apply to
the sale or leasing of motor vehicles that occurs on or after the
operative date specified in section 10 of this 2011 Act.
(2) For purposes of this section, 'motor vehicle' has the
meaning given that term in section 1 of this 2011 Act. + }
{ +
UNIT CAPTIONS + }
SECTION 12. { + The unit captions used in this 2011 Act are
provided only for the convenience of the reader and do not become
part of the statutory law of this state or express any
legislative intent in the enactment of this 2011 Act. + }
----------
