SB 747

SENATE BILL NO. 747
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 do not need not to 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 the contract contains blank spaces of items which that 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 the
contract 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 be is presumptive proof, or, in the case of a holder of
the contract without knowledge to the contrary when he the holder purchases
it, the contract, conclusive
proof of such the delivery
and of compliance with this subsection section 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 on 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
if 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 on 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. 739 of the
103rd Legislature is enacted into law.