2002 Legislation
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SENATE BILL NO. 1410 – Consumer credit, delinquency charge

SENATE BILL NO. 1410

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Daily Data Tracking History



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

Bill Text


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  Second Regular Session - 2002
                                                                        
                                                                        
                                       IN 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, or five twelve
 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,  or  five
 24    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    within fifteen ten (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, or ten fifteen 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 / Fiscal Impact



                       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