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S1410.......................................by COMMERCE AND HUMAN RESOURCES CONSUMER CREDIT - Amends existing law to increase the maximum amount of certain charges allowed in regulated consumer credit transactions; and to provide that parties may contract for delinquency charges on installments or scheduled payments not paid in full within ten days after the scheduled due date. 02/08 Senate intro - 1st rdg - to printing 02/11 Rpt prt - to Com/HuRes 02/22 Rpt out - rec d/p - to 2nd rdg 02/25 2nd rdg - to 3rd rdg 02/27 3rd rdg - PASSED - 27-8-0 AYES -- Andreason, Boatright, Brandt, Bunderson, Burtenshaw, Davis, Deide, Dunklin, Geddes, Goedde, Hill, Ingram, Keough, King-Barrutia, Little, Lodge, Marley, Noh, Risch, Sandy, Schroeder, Sims, Stegner, Stennett, Thorne, Wheeler, Williams NAYS -- Branch(Bartlett), Cameron, Darrington, Frasure, Hawkins, Ipsen, Richardson, Sorensen Absent and excused -- None Floor Sponsor - Schroeder Title apvd - to House 02/28 House intro - 1st rdg - to Bus 03/08 Rpt out - rec d/p - to 2nd rdg 03/11 2nd rdg - to 3rd rdg Rls susp - PASSED - 50-10-10 AYES -- Aikele, Barraclough, Bedke, Bell, Block, Bolz, Bradford, Bruneel, Callister, Campbell, Clark, Collins, Crow, Cuddy, Deal, Denney, Ellis, Ellsworth, Eskridge, Field(13), Field(20), Gagner, Gould, Hadley, Hammond, Henbest, Higgins, Hornbeck, Jaquet, Jones, Kellogg, Kendell, Kunz, Lake, Meyer, Montgomery, Mortensen, Pearce, Pischner, Pomeroy, Raybould, Roberts, Shepherd, Smith(33), Smylie, Stevenson, Stone, Tilman, Wheeler, Mr. Speaker NAYS -- Barrett, Loertscher, Martinez, McKague, Ridinger, Robison, Sali, Schaefer, Trail, Young Absent and excused -- Bieter, Black, Boe, Harwood, Langford, Mader, Moyle, Sellman, Smith(23), Wood Floor Sponsor - Deal Title apvd - to Senate 03/12 To enrol 03/13 Rpt enrol - Pres signed Sp signed 03/14 To Governor 03/26 Governor signed Session Law Chapter 302 Effective: 07/01/02
|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-sixth Legislature Second Regular Session - 2002IN THE SENATE SENATE BILL NO. 1410 BY COMMERCE AND HUMAN RESOURCES COMMITTEE 1 AN ACT 2 RELATING TO FINANCE CHARGES; AMENDING SECTION 28-42-301, IDAHO CODE, TO 3 INCREASE THE MAXIMUM AMOUNT OF CERTAIN CHARGES ALLOWED IN PRECOMPUTED CON- 4 SUMER CREDIT TRANSACTIONS, CONSUMER LOANS SECURED BY SECURITY INTERESTS IN 5 REAL PROPERTY AND ALL OTHER REGULATED CONSUMER CREDIT TRANSACTIONS AND TO 6 PROVIDE THAT PARTIES MAY CONTRACT FOR DELINQUENCY CHARGES ON INSTALLMENTS 7 OR SCHEDULED PAYMENTS NOT PAID IN FULL WITHIN TEN DAYS AFTER THE SCHEDULED 8 DUE DATE. 9 Be It Enacted by the Legislature of the State of Idaho: 10 SECTION 1. That Section 28-42-301, Idaho Code, be, and the same is hereby 11 amended to read as follows: 12 28-42-301. DELINQUENCY CHARGES. (1) With respect to a precomputed regu- 13 lated consumer credit transaction, the parties may contract for a delinquency 14 charge on any installment not paid in full within ten (10) days after its due 15 date, as originally scheduled or as deferred, in an amount which is not more 16 than five percent (5%) of the unpaid amount of the installment, orfivetwelve 17 dollars and fifty cents ($5.012.50), whichever is greater. 18 (2) With respect to a regulated consumer loan secured by a security 19 interest in real property which is used or expected to be used as the resi- 20 dence of the debtor which is not a precomputed regulated consumer loan, the 21 parties may contract for a delinquency charge on any installment not paid in 22 full within fifteen (15) days after its scheduled due date in an amount not 23 exceeding five percent (5%) of the unpaid amount of the installment, orfive24 fifteen dollars ($15.00), whichever is greater. 25 (3) With respect to all other regulated consumer credit transactions, 26 whether secured or unsecured, and whether such credit transactions are classi- 27 fied as open-end credit or closed-end credit, the parties may contract for a 28 delinquency charge on any installment or scheduled payment not paid in full 29 withinfifteenten (150) days after its scheduled due date in an amount not 30 exceeding five percent (5%) of the unpaid amount of the installment or sched- 31 uled payment, ortenfifteen dollars ($105.00), whichever is greater. 32 (4) A delinquency charge under subsection (1), subsection (2) or subsec- 33 tion (3) of this section may be collected only once on an installment or 34 scheduled payment, however long it remains in default. No delinquency charge 35 may be collected if the installment or scheduled payment has been deferred and 36 a deferral charge, section 28-42-302, Idaho Code, has been paid or incurred. A 37 delinquency charge may be collected at the time it accrues or at any time 38 thereafter. 39 (5) No delinquency charge may be collected on an installment or payment 40 which is paid in full within ten (10) days after its scheduled due date even 41 though an earlier maturing installment or scheduled payment or a delinquency 42 charge on an earlier installment or scheduled payment may not have been paid 43 in full. For purposes of this subsection, payments are applied first to cur- 2 1 rent installments or scheduled payments and then to delinquent installments 2 or scheduled payments. 3 (6) If two (2) installments or parts thereof of a precomputed regulated 4 consumer credit transaction are in default for ten (10) days or more, the 5 creditor may elect to convert the credit transaction from a precomputed regu- 6 lated consumer credit transaction to one in which the finance charge is based 7 on unpaid balances. In this event, he shall make a rebate pursuant to the pro- 8 visions on rebate upon prepayment, section 28-42-307, Idaho Code, as of the 9 maturity date of the first delinquent installment, and thereafter may make a 10 finance charge as authorized by the provisions on finance charge for regulated 11 consumer credit transactions. The amount of the rebate shall not be reduced by 12 the amount of any permitted minimum charge, section 28-42-307, Idaho Code.
STATEMENT OF PURPOSE RS 11911C1 Relating to consumer credit, this legislation increases the minimum delinquency charge that may be assessed by a creditor when a payment in a consumer credit transaction is not paid in full within ten or fifteen days after its due date. The existing statutory minimum delinquency charges have not been increased since 1996 and are lower than the charges allowed in most of our surrounding states. Moreover, many out-of-state creditors rely on federal preemptive statutes to charge a higher delinquency charge than that allowed to local creditors under state law. As a consequence, Idaho businesses are placed in a disadvantaged position because customers tend to pay out-of-state creditors before they pay local creditors. This legislation does not increase the minimum delinquency charges in consumer transactions to the level allowed in most of the states surrounding Idaho, but it does place Idaho businesses in a better position to encourage their customers to make timely payments. FISCAL IMPACT This legislation applies only to private transactions and will have no fiscal impact on state or local government. Contact Name: Mike Brassey, Hopkins, Roden Crockett, Hansen & Hoopes PLLC Phone: 336-7930 STATEMENT OF PURPOSE/FISCAL NOTE S 1410