CONSUMER CREDIT/FINANCE CHARGE RATES.

View NCGA Bill Details2019-2020 Session
House Bill 787 (Public) Filed Tuesday, April 16, 2019
AN ACT TO INCREASE THE MAXIMUM FINANCE CHARGE RATES FOR CONSUMER CREDIT INSTALLMENT SALE CONTRACTS IN WHICH THE BUYER IS NOT A SERVICEMEMBER AND TO EXPAND THE DEFINITION OF OFFICIAL FEES AS APPLIED TO THOSE CONTRACTS.
Intro. by Jones, K. Hall, Humphrey.

Status: Ref to the Com on Banking, if favorable, Rules, Calendar, and Operations of the House (House action) (Apr 18 2019)
H 787

Bill Summaries:

  • Summary date: Apr 16 2019 - More information

    Enacts GS 25A-13.5 to define servicemember to mean a member of the uniformed services, as defined in specified federal law. 

    Amends GS 25A-10, which defines official fees for the Retail Installment Sales Act, by providing that it includes (1) for buyers who are servicemembers, fees and charges prescribed by law that actually are or will be paid to public officials for determining the existence of or for perfecting, releasing, or satisfying a security interest related to a consumer credit sale; (2) for buyers who are not servicemembers, fees and charges prescribed by law that actually are or will be paid by the sellers for determining the existence of or for perfecting, releasing, or satisfying a security interest related to a consumer credit sale; and (3) premiums payable for insurance in lieu of perfecting a security interest otherwise required by the seller in connection with a consumer credit sale if the premium does not exceed the fees or charges described above that would otherwise be payable. 

    Amends GS 25A-15 by adding special provisions that apply to consumer credit installment sale contracts in which the buyer is not a servicemember. Provides that the finance charge rates are those required to be disclosed by the Consumer Credit Protection Act provided that official fees must be included in the amount financed and excluded from the finance charge, and all balances due under a consumer credit installment contract from any person as a buyer or as an endorser, guarantor, or surety for any buyer or otherwise jointly or severally must be considered part of the amount financed with regard to the contract for purposes of computing interest or charges. Establishes caps on the finance charge rate for consumer credit installment sale contracts in which the buyer is not a servicemember at 24 percent per annum where the amount financed is less than $3,500; 22 percent for amounts between $3,500 and $5,000; 20 percent for amounts between $5,000 and $7,500; and 18 percent for an amount of $7,500 or greater. Establishes caps on the finance charge rate for consumer credit installment sale contracts in which the buyer is not a servicemember that are not repayable in less than six installments for a motor vehicle, setting the caps at 18 percent per annum for vehicles one model year old; 20 percent per annum for vehicles two model years old; 22 percent per annum for vehicles three model years old; and 29 percent per annum for vehicles four model years old and older. Specifies that a motor vehicle is one model year old on January 1 of the year following the designated year model of the vehicle.

    Makes clarifying changes to the existing caps on the finance charge rate for consumer credit installment sale contracts, limits their application to contracts in which the buyer is a servicemember, and permits a minimum finance charge of $5. Additionally, limits the existing caps for consumer credit installment sale contracts which are not repayable in less than six installments for a motor vehicle to contracts in which the buyer is a servicemember.

    Applies to contracts entered into, renewed, or modified on or after October 1, 2019.


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