HOUSE AMENDED
PRIOR PRINTER'S NO. 308 PRINTER'S NO. 1496
No. 306 Session of 1981
INTRODUCED BY LOEPER AND LLOYD, FEBRUARY 10, 1981
AS REPORTED FROM COMMITTEE ON BUSINESS AND COMMERCE, HOUSE OF
REPRESENTATIVES, AS AMENDED, NOVEMBER 24, 1981
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," FURTHER PROVIDING FOR THE CONTENTS <--
8 OF CONTRACTS, FOR A CERTAIN NOTICE OF CLAIMS OR DEFENSES, FOR
9 JUDGMENTS, FOR SERVICE CHARGES AND CERTAIN FEES AND
10 eliminating the duty of the Department of Banking to supply
11 rate charts to retail sellers and finance agencies.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. Section 1002, act of October 28, 1966 (1st <--
15 Sp.Sess., P.L.55, No.7), known as the "Goods and Services
16 Installment Sales Act," is amended to read:
17 [Section 1002. The Department of Banking of the Commonwealth
18 of Pennsylvania shall supply upon request to each retail seller
19 and financing agency, engaged in the extension of credit, a rate
20 chart with principal balances of from one dollar ($1) to one
21 thousand dollars ($1,000) for installment periods from three (3)
1 months to thirty-six (36) months and for principal balances of
2 from one dollar ($1) to two hundred fifty dollars ($250) for
3 installment periods of from ten (10) weeks to twenty-six (26)
4 weeks calculated at the maximum service charge rates permitted
5 under this act.]
6 Section 2. This act shall take effect immediately.
7 SECTION 1. SECTIONS 303, 402, 501, 904, CLAUSE (D) OF <--
8 SECTION 905 AND SECTION 1002, ACT OF OCTOBER 28, 1966 (1ST
9 SP.SESS., P.L.55, NO.7), KNOWN AS THE "GOODS AND SERVICES
10 INSTALLMENT SALES ACT," ARE AMENDED AND SECTIONS ARE ADDED TO
11 READ:
12 SECTION 303. EXCEPT AS PROVIDED IN ARTICLE VIII OF THIS ACT,
13 A CONTRACT SHALL CONTAIN THE FOLLOWING:
14 (A) THE NAMES OF THE SELLER AND THE BUYER, THE PLACE OF
15 BUSINESS OF THE SELLER, THE RESIDENCE OR PLACE OF BUSINESS OF
16 THE BUYER AS SPECIFIED BY THE BUYER AND A DESCRIPTION OF THE
17 GOODS OR SERVICES SUFFICIENT TO IDENTIFY THEM. SERVICES OR
18 MULTIPLE ITEMS OF GOODS MAY BE DESCRIBED IN GENERAL TERMS AND
19 MAY BE DESCRIBED IN DETAIL SUFFICIENT TO IDENTIFY THEM IN A
20 SEPARATE WRITING.
21 (B) THE CASH SALE PRICE OF THE GOODS, SERVICES AND
22 ACCESSORIES WHICH ARE THE SUBJECT MATTER OF THE RETAIL
23 INSTALLMENT SALE.
24 (C) THE AMOUNT OF THE BUYER'S DOWN PAYMENT, ITEMIZING THE
25 AMOUNTS PAID IN MONEY AND IN GOODS AND CONTAINING A BRIEF
26 DESCRIPTION OF THE GOODS, IF ANY, TRADED IN.
27 (D) THE DIFFERENCE BETWEEN ITEM (B) AND ITEM (C).
28 (E) THE AMOUNT, IF ANY, INCLUDED FOR INSURANCE, SPECIFYING
29 THE COVERAGES AND THE COST OF EACH TYPE OF COVERAGE.
30 (F) THE AMOUNT, IF ANY, OF OFFICIAL FEES.
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1 (G) THE UNPAID BALANCE, WHICH IS THE SUM OF ITEMS (D), (E)
2 AND (F).
3 (H) THE AMOUNT OF THE SERVICE CHARGE, IF ANY.[, AND THE
4 FOLLOWING STATEMENT IN AT LEAST TEN-POINT BOLD TYPE: "THE
5 SERVICE CHARGE HEREIN CONTAINED DOES NOT EXCEED THE EQUIVALENT
6 OF FIFTEEN PERCENT (15%) SIMPLE INTEREST PER ANNUM ON THE UNPAID
7 BALANCE, EXCEPT THAT A MINIMUM SERVICE CHARGE OF SEVENTY CENTS
8 (70¢) PER MONTH MAY BE MADE."]
9 (I) THE TIME BALANCE, WHICH IS THE SUM OF ITEMS (G), AND
10 (H), PAYABLE BY THE BUYER TO THE SELLER, THE NUMBER OF
11 INSTALLMENTS REQUIRED, THE AMOUNT OF EACH INSTALLMENT EXPRESSED
12 IN DOLLARS AND THE DUE DATE OR PERIOD THEREOF.
13 (J) THE TIME SALE PRICE.
14 (K) THE FOLLOWING PROVISION IN AT LEAST TEN-POINT, BOLDFACE
15 TYPE:
16 NOTICE
17 ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL
18 CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE
19 SELLER OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH THE
20 PROCEEDS HEREOF. RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT
21 EXCEED AMOUNT PAID BY THE DEBTOR HEREUNDER.
22 THE ITEMS NEED NOT BE STATED IN THE SEQUENCE OR ORDER SET
23 FORTH ABOVE; ADDITIONAL ITEMS MAY BE INCLUDED TO EXPLAIN THE
24 COMPUTATIONS MADE IN DETERMINING THE AMOUNT TO BE PAID BY THE
25 BUYER.
26 SECTION 402. NO RIGHT OF ACTION OR DEFENSE ARISING OUT OF A
27 RETAIL INSTALLMENT SALE WHICH THE BUYER HAS AGAINST THE SELLER,
28 OTHER THAN AS PROVIDED IN SECTION 1202, AND WHICH WOULD BE CUT
29 OFF BY ASSIGNMENT, SHALL BE CUT OFF BY ASSIGNMENT OF THE
30 CONTRACT TO ANY THIRD PARTY WHETHER OR NOT HE ACQUIRES THE
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1 CONTRACT IN GOOD FAITH AND FOR VALUE. [UNLESS THE ASSIGNEE GIVES
2 NOTICE OF THE ASSIGNMENT TO THE BUYER AS PROVIDED IN THIS
3 SECTION, AND WITHIN FORTY-FIVE (45) DAYS OF THE MAILING OF SUCH
4 NOTICE RECEIVES NO WRITTEN NOTICE OF THE FACTS GIVING RISE TO
5 THE CLAIM OR DEFENSE OF THE BUYER. A NOTICE OF ASSIGNMENT SHALL
6 BE IN WRITING ADDRESSED TO THE BUYER AT THE ADDRESS SHOWN ON THE
7 CONTRACT AND SHALL: IDENTIFY THE CONTRACT; STATE THE NAME OF THE
8 SELLER AND BUYER; DESCRIBE THE GOODS OR SERVICES; STATE THE TIME
9 BALANCE AND THE NUMBER AND AMOUNTS OF THE INSTALLMENTS. THE
10 NOTICE OF ASSIGNMENT SHALL CONTAIN THE FOLLOWING WARNING TO THE
11 BUYER:
12 "YOU HAVE FORTY-FIVE (45) DAYS WITHIN WHICH TO NOTIFY US OF
13 ANY CLAIMS OR DEFENSES WHICH YOU MAY HAVE AGAINST THE SELLER. IF
14 YOU HAVE ANY COMPLAINTS OR OBJECTIONS TO MAKE, YOU SHOULD NOTIFY
15 USE AT THIS TIME."]
16 SECTION 501. (A) A SELLER MAY, IN A RETAIL INSTALLMENT
17 CONTRACT, CONTRACT FOR AND, IF SO CONTRACTED FOR, THE HOLDER
18 THEREOF MAY CHARGE, RECEIVE AND COLLECT A SERVICE CHARGE [WHICH
19 SHALL NOT EXCEED THE FOLLOWING RATES MULTIPLIED BY THE NUMBER OF
20 MONTHS, INCLUDING ANY FRACTION IN EXCESS OF MORE THAN FIFTEEN
21 DAYS AS ONE MONTH, ELAPSING] MEASURED FOR A PERIOD BETWEEN THE
22 DATE OF SUCH CONTRACT AND THE DUE DATE OF THE LAST INSTALLMENT[:
23 (A) ON THE UNPAID BALANCE, TWO-THIRDS (2/3) OF ONE PERCENT
24 (1%).
25 (B) A SERVICE CHARGE SHALL NOT EXCEED THE EQUIVALENT OF
26 FIFTEEN PERCENT (15%) SIMPLE INTEREST PER ANNUM ON THE UNPAID
27 BALANCE] AND CALCULATED FOR THAT PERIOD ACCORDING TO THE
28 ACTUARIAL METHOD OF COMPUTATION OR BY APPLICATION OF THE UNITED
29 STATES RULE AT A RATE WHICH DOES NOT EXCEED THE EQUIVALENT OF
30 EIGHTEEN PERCENT (18%) SIMPLE INTEREST PER ANNUM.
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1 (B) NOTWITHSTANDING THE RATES PROVIDED FOR IN THIS SECTION,
2 NO ISSUER OF A CREDIT CARD PRIMARILY ENGAGED AS A SELLER OR
3 DISTRIBUTOR OF GASOLINE SHALL BE PERMITTED TO CHARGE, RECEIVE OR
4 COLLECT A SERVICE CHARGE IN EXCESS OF FIFTEEN PERCENT (15%)
5 SIMPLE INTEREST PER ANNUM ON UNPAID BALANCES.
6 (C) A MINIMUM SERVICE CHARGE OF SEVENTY CENTS (70¢) PER
7 MONTH MAY BE MADE FOR EACH MONTH IF THE SERVICE CHARGE SO
8 COMPUTED IS LESS THAN THAT AMOUNT; SUCH MINIMUM SERVICE CHARGE
9 MAY BE IMPOSED FOR A MINIMUM PERIOD OF SIX MONTHS.
10 SECTION 605. (A) A JUDGMENT BY CONFESSION SHALL NOT SERVE
11 AS THE BASIS FOR A LEVY, EXECUTION OR GARNISHMENT IN ANY ACTION
12 BY A SELLER, HOLDER OR ASSIGNEE ARISING OUT OF A RETAIL
13 INSTALLMENT SALE, CONTRACT OR ACCOUNT. TO ENFORCE A JUDGMENT
14 ENTERED BY CONFESSION, PLAINTIFF SHALL FILE AN APPROPRIATE
15 PROCEEDING AND PROCEED AGAINST DEFENDANT AS IN ANY ORIGINAL
16 PROCEEDING. A JUDGMENT ENTERED BY CONFESSION MAY BE AMENDED OR
17 MODIFIED BY THE COURT IN A PROCEEDING FILED FOR THE PURPOSE OF
18 ENFORCING THE JUDGMENT ENTERED BY CONFESSION; HOWEVER, THE
19 PRIORITY OF ANY LIEN BASED ON THE CONFESSED JUDGMENT SHALL NOT
20 BE AFFECTED THEREBY. THE PARTIES TO THE ENFORCEMENT PROCEEDING
21 SHALL HAVE THE SAME RIGHTS AS PARTIES IN OTHER ORIGINAL
22 PROCEEDINGS.
23 (B) WITHIN SIXTY (60) DAYS AFTER PAYMENT OF THE FULL AMOUNT
24 DUE ON A JUDGMENT ENTERED BY CONFESSION, PLAINTIFF SHALL SATISFY
25 THE JUDGMENT AND DISCONTINUE WITH THE PREJUDICE ANY PROCEEDING
26 BROUGHT FOR THE PURPOSE OF ENFORCING A JUDGMENT ENTERED BY
27 CONFESSION OR SATISFY ANY JUDGMENT ENTERED IN SAID PROCEEDING.
28 PLAINTIFF SHALL NOT REQUIRE ANY ACT OR PAYMENT BY THE DEFENDANT
29 TO COVER THE COST OF SATISFYING THE JUDGMENT. ANY SUCH CONFESSED
30 JUDGMENT NOT REVIVED WITHIN ONE (1) YEAR FROM THE DATE ON WHICH
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1 THE LIEN OF SAID JUDGMENT HAS LAPSED BY OPERATION OF LAW SHALL
2 BE CONSIDERED SATISFIED AND MAY NOT THEREAFTER BE REVIVED.
3 (C) THE PREVAILING PARTY IN ANY ACTION TO REMOVE, SUSPEND OR
4 ENFORCE SUCH A JUDGMENT ENTERED BY CONFESSION SHALL BE ENTITLED
5 TO RECOVER REASONABLE ATTORNEY'S FEES AND COSTS AS DETERMINED BY
6 THE COURT.
7 SECTION 904. SUBJECT TO THE OTHER PROVISIONS OF THIS ARTICLE
8 THE SELLER OR HOLDER OF A RETAIL INSTALLMENT ACCOUNT MAY CHARGE,
9 RECEIVE AND COLLECT THE SERVICE CHARGE AUTHORIZED BY THIS ACT.
10 THE SERVICE CHARGE SHALL NOT EXCEED THE FOLLOWING RATES COMPUTED
11 ON THE OUTSTANDING BALANCES FROM MONTH TO MONTH:
12 (A) ON THE OUTSTANDING BALANCE, [ONE AND ONE-QUARTER PERCENT
13 (1 1/4%)] ONE AND ONE-HALF PERCENT (1 L/2%) PER MONTH.
14 (B) A MINIMUM SERVICE CHARGE OF SEVENTY CENTS (70¢) PER
15 MONTH MAY BE MADE FOR EACH MONTH IF THE SERVICE CHARGE SO
16 COMPUTED IS LESS THAN THAT AMOUNT; SUCH MINIMUM SERVICE CHARGE
17 MAY BE IMPOSED FOR A MINIMUM PERIOD OF SIX MONTHS.
18 (B.1) NOTWITHSTANDING THE RATE PROVIDED FOR IN CLAUSE (A),
19 NO ISSUER OF A CREDIT CARD PRIMARILY ENGAGED AS A SELLER OR
20 DISTRIBUTOR OF GASOLINE SHALL BE PERMITTED TO CHARGE, RECEIVE OR
21 COLLECT A SERVICE CHARGE IN EXCESS OF FIFTEEN PERCENT (15%)
22 SIMPLE INTEREST PER ANNUM ON UNPAID BALANCES.
23 (C) THE SERVICE CHARGE MAY BE COMPUTED ON A SCHEDULE OF
24 FIXED AMOUNTS IF AS SO COMPUTED IT IS APPLIED TO ALL AMOUNTS OF
25 OUTSTANDING BALANCES EQUAL TO THE FIXED AMOUNT MINUS A
26 DIFFERENTIAL OF NOT MORE THAN FIVE DOLLARS ($5), PROVIDED THAT
27 IT IS ALSO APPLIED TO ALL AMOUNTS OF OUTSTANDING BALANCES EQUAL
28 TO THE FIXED AMOUNT PLUS AT LEAST THE SAME DIFFERENTIAL.
29 SECTION 905. THE SELLER OR HOLDER OF A RETAIL INSTALLMENT
30 ACCOUNT SHALL PROMPTLY PROVIDE THE BUYER WITH A STATEMENT AS OF
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1 THE END OF EACH MONTHLY PERIOD (WHICH NEED NOT BE A CALENDAR
2 MONTH) SETTING FORTH THE FOLLOWING:
3 * * *
4 (D) THE AMOUNT OF THE SERVICE CHARGE[, AND THE FOLLOWING
5 STATEMENT: THE SERVICE CHARGE HEREIN CONTAINED DOES NOT EXCEED
6 THE EQUIVALENT OF FIFTEEN PERCENT (15%) SIMPLE INTEREST PER
7 ANNUM ON THE UNPAID BALANCE EXCEPT THAT A MINIMUM SERVICE CHARGE
8 OF SEVENTY CENTS (70¢) PER MONTH MAY BE MADE].
9 * * *
10 SECTION 912. CONSISTENT WITH THE PROVISIONS OF THIS ACT, A
11 SELLER OR HOLDER MAY INCREASE THE RATE OF THE SERVICE CHARGE BY
12 PROVIDING THE BUYER WITH A NOTICE OF THE INCREASE TO THE EXTENT
13 REQUIRED AND IN THE MANNER SPECIFIED BY THE TRUTH IN LENDING
14 ACT, TITLE I OF THE FEDERAL CONSUMER CREDIT PROTECTION ACT
15 (PUBLIC LAW 90-321) AND THE REGULATIONS ISSUED PURSUANT THERETO
16 BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
17 (REGULATION Z) AS SUCH ACT AND REGULATIONS MAY FROM TIME TO TIME
18 BE AMENDED. ANY SUCH INCREASE SHALL BE LIMITED IN ITS
19 APPLICATION TO INDEBTEDNESS INCURRED AFTER THE EFFECTIVE DATE OF
20 THIS ACT.
21 SECTION 913. COMPLIANCE WITH THE FEDERAL TRUTH IN LENDING
22 ACT AND REGULATIONS THEREUNDER SHALL CONSTITUTE COMPLIANCE WITH
23 ALL DISCLOSURE REQUIREMENTS UNDER PENNSYLVANIA LAW RELATING TO
24 TRANSACTIONS WITHIN THE COVERAGE OF THIS ACT.
25 [SECTION 1002. THE DEPARTMENT OF BANKING OF THE COMMONWEALTH
26 OF PENNSYLVANIA SHALL SUPPLY UPON REQUEST TO EACH RETAIL SELLER
27 AND FINANCING AGENCY, ENGAGED IN THE EXTENSION OF CREDIT, A RATE
28 CHART WITH PRINCIPAL BALANCES OF FROM ONE DOLLAR ($1) TO ONE
29 THOUSAND DOLLARS ($1,000) FOR INSTALLMENT PERIODS FROM THREE (3)
30 MONTHS TO THIRTY-SIX (36) MONTHS AND FOR PRINCIPAL BALANCES OF
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1 FROM ONE DOLLAR ($1) TO TWO HUNDRED FIFTY DOLLARS ($250) FOR
2 INSTALLMENT PERIODS OF FROM TEN (10) WEEKS TO TWENTY-SIX (26)
3 WEEKS CALCULATED AT THE MAXIMUM SERVICE CHARGE RATES PERMITTED
4 UNDER THIS ACT.]
5 SECTION 2. THE AMENDMENT TO SECTION 303 SHALL APPLY TO ANY
6 CONTRACT EXECUTED MORE THAN 60 DAYS FROM THE DATE OF FINAL
7 ENACTMENT OF THIS AMENDATORY ACT.
8 SECTION 3. THIS ACT SHALL TAKE EFFECT IMMEDIATELY.
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