PRINTER'S NO. 2210
No. 1775 Session of 1987
INTRODUCED BY VAN HORNE, BRANDT, PRESTON, CAPPABIANCA, BURD,
DORR, GEIST AND MARKOSEK, OCTOBER 5, 1987
REFERRED TO COMMITTEE ON BUSINESS AND COMMERCE, OCTOBER 5, 1987
AN ACT
1 Amending the act of October 28, 1966 (1st Sp.Sess., P.L.55,
2 No.7), entitled "An act defining, regulating and relating to
3 retail installment contracts for all goods and services
4 except certain motor vehicles and home improvements;
5 prescribing the requirements of such contracts and
6 limitations on the enforcement thereof; and providing
7 remedies and penalties," reenacting provisions relating to
8 service charges; further providing for fees; and making a
9 repeal.
10 The General Assembly of the Commonwealth of Pennsylvania
11 hereby enacts as follows:
12 Section 1. Sections 501(a) and (b) and 904(a) of the act of
13 October 28, 1966 (1st Sp.Sess., P.L.55, No.7), known as the
14 Goods and Services Installment Sales Act, amended March 25, 1982
15 (P.L.199, No.68) and reenacted March 1, 1985 (P.L.2, No.2), are
16 reenacted to read:
17 Section 501. (a) A seller may, in a retail installment
18 contract, contract for and, if so contracted for, the holder
19 thereof may charge, receive and collect a service charge
20 measured for a period between the date of such contract and the
21 due date of the last installment and calculated for that period
1 according to the actuarial method of computation or by
2 application of the United States rule at a rate which does not
3 exceed the equivalent of eighteen percent (18%) simple interest
4 per annum.
5 (b) Notwithstanding the rates provided for in this section,
6 no issuer of a credit card primarily engaged as a seller or
7 distributor of gasoline shall be permitted to charge, receive or
8 collect a service charge in excess of fifteen percent (15%)
9 simple interest per annum on unpaid balances.
10 * * *
11 Section 904. Subject to the other provisions of this article
12 the seller or holder of a retail installment account may charge,
13 receive and collect the service charge authorized by this act.
14 The service charge shall not exceed the following rates computed
15 on the outstanding balances from month to month:
16 (a) On the outstanding balance, one and one-half percent (1
17 1/2%) per month.
18 * * *
19 Section 2. Section 904(b.1) of the act, amended March 25,
20 1982 (P.L.199, No.68), is amended to read:
21 Section 904. Subject to the other provisions of this article
22 the seller or holder of a retail installment account may charge,
23 receive and collect the service charge authorized by this act.
24 The service charge shall not exceed the following rates computed
25 on the outstanding balances from month to month:
26 * * *
27 (b.1) Notwithstanding the rate provided for in clause (a),
28 no issuer of a credit card primarily engaged as a seller or
29 distributor of gasoline nor any seller or holder charging an
30 annual or other periodic fee in any amount as authorized by the
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1 second paragraph of section 906 of this act, or as authorized by
2 any other statute, rule or regulation which permits the
3 imposition of a fee for privileges made available under a retail
4 installment account shall be permitted to charge, receive or
5 collect a service charge in excess of fifteen percent (15%)
6 simple interest per annum on unpaid balances.
7 * * *
8 Section 3. Section 904.1 of the act added March 1, 1985
9 (P.L.2, No.2), is repealed.
10 Section 4. Section 906 of the act is amended to read:
11 Section 906. The service charge shall include all charges
12 incident to investigating the making of the retail installment
13 account. No fee, expense, delinquency, collection or other
14 charge whatsoever shall be taken, received, reserved or
15 contracted by the seller or holder of a retail installment
16 account except as provided in this article. A seller may,
17 however, in an agreement which is signed by the buyer and of
18 which a copy is given or furnished to the buyer provide for the
19 payment of attorney's fees and costs in conformity with Article
20 X of this act.
21 Notwithstanding the foregoing, a seller or holder may,
22 pursuant to an agreement with a buyer, charge on an annual or
23 other periodic basis, fees for privileges made available under a
24 retail installment account. Such fees may not be in excess of
25 fifteen dollars ($15.00) in any twelve-month period for each
26 account and may be collected in addition to the service charge
27 and any other charges permitted by this act. At least fifteen
28 (15) days prior to the effective date of any such fee, or an
29 increase in the amount thereof, the seller or holder shall mail
30 or deliver to the buyer a written notice that the fee or
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1 increase will be incurred only if the buyer expressly agrees or
2 if the buyer or any authorized person uses the account by making
3 a purchase after the effective date stated in the notice. Such
4 notice shall be given in compliance with the disclosure
5 requirements of the Truth in Lending Act (Public Law 90-321, 15
6 U.S.C. § 1601 et seq.) and regulations thereunder.
7 Section 5. Section 12 of the act of March 25, 1982 (P.L.199,
8 No.68), entitled "An act amending the act of October 28, 1966
9 (1st Sp.Sess., P.L.55, No.7), entitled 'An act defining,
10 regulating and relating to retail installment contracts for all
11 goods and services except certain motor vehicles and home
12 improvements; prescribing the requirements of such contracts and
13 limitations on the enforcement thereof; and providing remedies
14 and penalties,' further providing for applicability of the act,
15 for the contents of contracts, for a certain notice of claims or
16 defenses, for judgments, for service charges and certain fees
17 and eliminating the duty of the Department of Banking to supply
18 rate charts to retail sellers and finance agencies," is
19 repealed.
20 Section 6. This act shall take effect immediately.
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