SENATE AMENDED
        PRIOR PRINTER'S NO. 3266                      PRINTER'S NO. 3716

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 2506 Session of 1978


        INTRODUCED BY MESSRS. SCHMITT, KUKOVICH, PYLES, COHEN AND REED,
           MAY 31, 1978

        SENATOR ZEMPRELLI, BUSINESS AND COMMERCE, IN SENATE, AS AMENDED,
           SEPTEMBER 13, 1978

                                     AN ACT

     1  Amending the act of April 8, 1937 (P.L.262, No.66), entitled, as
     2     amended, "An act relating to consumer credit; requiring
     3     licenses from the Secretary of Banking; restricting licenses
     4     to domestic business corporations; fixing minimum capital
     5     requirements; conferring certain powers on the Secretary of
     6     Banking; limiting interest and other charges; providing
     7     certain exemptions; and imposing penalties," authorizing
     8     certain loans by foreign lenders and limiting interest and
     9     other charges collected by foreign lenders AND CHANGING THE    <--
    10     AMOUNT, CHARGES AND DURATION OF LOANS OR ADVANCES.

    11     The General Assembly of the Commonwealth of Pennsylvania
    12  hereby enacts as follows:
    13     Section 1.  Subsection A of section 3, THE DEFINITION OF       <--
    14  "REVOLVING LOAN ACCOUNT" IN SECTION 2, SECTION 3, CLAUSE E OF
    15  SECTION 13 AND CLAUSE A OF SECTION 14, act of April 8, 1937
    16  (P.L.262, No.66), known as the "Consumer Discount Company Act,"
    17  amended March 3, 1976 (P.L.36, No.17), is ARE amended to read:    <--
    18     SECTION 2.  DEFINITIONS.--THE FOLLOWING TERMS SHALL BE         <--
    19  CONSTRUED IN THE ACT TO HAVE THE FOLLOWING MEANINGS, EXCEPT IN
    20  THOSE INSTANCES WHERE THE CONTEXT CLEARLY INDICATES OTHERWISE:
    21     * * *

     1     "REVOLVING LOAN ACCOUNT" MEANS AN AGREEMENT PURSUANT TO WHICH
     2  (I) THE LICENSEE MAY PERMIT THE BORROWER TO OBTAIN ONE OR A
     3  SERIES OF LOANS OR ADVANCES FROM TIME TO TIME: PROVIDED,
     4  HOWEVER, THAT THE AGGREGATE OF THE UNPAID PRINCIPAL BALANCES DUE
     5  A LICENSEE FROM A CONSUMER UNDER THIS ACT ON ANY DATE SHALL NOT
     6  EXCEED THE SUM OF [FIVE THOUSAND DOLLARS ($5,000)] TEN THOUSAND
     7  DOLLARS ($10,000), (II) THE UNPAID PRINCIPAL BALANCES AND THE
     8  APPROPRIATE CHARGES ARE DEBITED TO AN ACCOUNT, (III) THE CHARGES
     9  FOR THE LOAN ARE COMPUTED ON THE OUTSTANDING UNPAID PRINCIPAL
    10  BALANCES OF THE ACCOUNT FROM TIME TO TIME, AND (IV) THE BORROWER
    11  HAS THE PRIVILEGE OF PAYING THE BALANCES IN INSTALLMENTS.
    12     Section 3.  License Required.--A. On and after the effective
    13  date of this act, no person shall engage or continue to engage
    14  in this Commonwealth, either as principal, employe, agent or
    15  broker, in the business of negotiating or making loans or
    16  advances of money on credit, in the amount or value of [five      <--
    17  thousand dollars ($5,000)] TEN THOUSAND DOLLARS ($10,000) or      <--
    18  less, and charge, collect, contract for or receive interest,
    19  discount, bonus, fees, fines, commissions, charges, or other
    20  considerations which aggregate in excess of the interest that
    21  the lender would otherwise be permitted by law to charge if not
    22  licensed under this act on the amount actually loaned or
    23  advanced, or on the unpaid principal balances when the contract
    24  is payable by stated installments except a domestic business
    25  corporation organized under or existing by virtue of the
    26  Business Corporation Law of this Commonwealth, after first
    27  obtaining a license from the Secretary of Banking of the
    28  Commonwealth of Pennsylvania in accordance with the provisions
    29  of this act. However, any person not maintaining an office or
    30  place of business within the Commonwealth and not represented
    19780H2506B3716                  - 2 -

     1  within the Commonwealth by any employe or agent shall not be
     2  required to be a domestic corporation organized under or
     3  existing by virtue of the Business Corporation Law of this
     4  Commonwealth and if such person is licensed under a regulatory
     5  lending law of another state similar in principle to this act,
     6  he shall not be required to obtain a license under this act.
     7     * * *                                                          <--
     8     B.  ANY PERSON WHO SHALL HOLD HIMSELF OUT AS WILLING OR ABLE   <--
     9  TO ARRANGE FOR OR NEGOTIATE SUCH LOANS OF [FIVE THOUSAND DOLLARS
    10  ($5,000)] TEN THOUSAND DOLLARS ($10,000), OR LESS WHERE THE
    11  INTEREST, DISCOUNT, BONUS, FEES, FINES, COMMISSIONS OR OTHER
    12  CONSIDERATIONS IN THE AGGREGATE EXCEEDS THE INTEREST THAT THE
    13  LENDER WOULD OTHERWISE BE PERMITTED BY LAW TO CHARGE OR WHO
    14  SOLICITS PROSPECTIVE BORROWERS OF SUCH LOANS OF [FIVE THOUSAND
    15  DOLLARS ($5,000)] TEN THOUSAND DOLLARS ($10,000), OR LESS SHALL
    16  BE DEEMED TO BE ENGAGED IN THE BUSINESS CONTEMPLATED BY THIS
    17  ACT. THE REFERRING BORROWERS TO A LICENSEE SHALL NOT BE DEEMED
    18  TO BE ENGAGED IN THE BUSINESS CONTEMPLATED BY THIS ACT IF NO
    19  CHARGE, NO MATTER HOW DENOMINATED, FOR SUCH REFERENCE IS IMPOSED
    20  ON THE PROSPECTIVE BORROWER BY THE PERSON MAKING THE REFERENCE.
    21  NO LICENSEE SHALL KNOWINGLY INCLUDE IN ANY LOAN UNDER THIS ACT
    22  ANY AMOUNT WHICH IS TO BE PAID BY THE BORROWER TO ANOTHER AS A
    23  FEE OR CHARGE, NO MATTER HOW DENOMINATED, FOR REFERRING SAID
    24  BORROWER TO THE LICENSEE.
    25     SECTION 13.  POWERS CONFERRED ON LICENSEES.--IN ADDITION TO
    26  THE GENERAL POWERS CONFERRED UPON A CORPORATION BY THE BUSINESS
    27  CORPORATION LAW OF THIS COMMONWEALTH, A CORPORATION LICENSED
    28  UNDER THIS ACT SHALL HAVE POWER AND AUTHORITY:
    29     * * *
    30     E.  TO CHARGE, CONTRACT FOR, RECEIVE OR COLLECT INTEREST OR
    19780H2506B3716                  - 3 -

     1  DISCOUNT AT A RATE NOT TO EXCEED NINE DOLLARS AND FIFTY CENTS
     2  ($9.50) PER ONE HUNDRED DOLLARS ($100) PER YEAR WHEN THE
     3  CONTRACT IS REPAYABLE WITHIN THIRTY-SIX (36) MONTHS FROM THE
     4  DATE OF MAKING. WHEN THE CONTRACT IS REPAYABLE MORE THAN THIRTY-
     5  SIX (36) MONTHS FROM THE DATE OF MAKING, THE RATE OF INTEREST OR
     6  DISCOUNT WHICH MAY BE CHARGED, CONTRACTED FOR, RECEIVED OR
     7  COLLECTED, SHALL NOT EXCEED NINE DOLLARS AND FIFTY CENTS ($9.50)
     8  PER ONE HUNDRED DOLLARS ($100) PER YEAR FOR THE FIRST THIRTY-SIX
     9  (36) MONTHS OF THE TERM OF THE CONTRACT PLUS SIX DOLLARS ($6)
    10  PER ONE HUNDRED DOLLARS ($100) PER YEAR FOR ANY REMAINDER OF THE
    11  TERM OF THE CONTRACT. SUCH INTEREST OR DISCOUNT SHALL BE
    12  COMPUTED AT THE TIME THE LOAN IS MADE ON THE FACE AMOUNT OF THE
    13  CONTRACT FOR THE FULL TERM OF THE CONTRACT FROM THE DATE OF THE
    14  CONTRACT TO THE DATE OF THE SCHEDULED MATURITY NOTWITHSTANDING
    15  ANY REQUIREMENT FOR INSTALLMENT PAYMENTS. ON CONTRACTS FOR
    16  PERIODS WHICH ARE LESS OR GREATER THAN ONE YEAR, OR WHICH ARE
    17  NOT A MULTIPLE OF ONE YEAR, THE INTEREST OR DISCOUNT SHALL BE
    18  COMPUTED PROPORTIONATELY ON EVEN CALENDAR MONTHS: PROVIDED,
    19  HOWEVER, THAT FOR A PERIOD OF LESS THAN ONE MONTH THE
    20  COMPUTATION MAY BE BASED ON A FULL CALENDAR MONTH. THE FACE
    21  AMOUNT OF ANY NOTE OR CONTRACT MADE PURSUANT TO THIS [ACT]
    22  SECTION MAY, NOTWITHSTANDING ANY OTHER PROVISION, EXCEED FIVE
    23  THOUSAND DOLLARS ($5,000) BY THE AMOUNT OF INTEREST OR DISCOUNT
    24  AND SERVICE OR OTHER CHARGE AUTHORIZED BY THIS [ACT] SECTION
    25  COLLECTED OR DEDUCTED IN ADVANCE OR ADDED TO THE PRINCIPAL AT
    26  THE TIME OF MAKING THE LOAN.
    27     * * *
    28     SECTION 14.  LICENSEE REQUIREMENTS AND LIMITATIONS.--A. A
    29  LICENSEE SHALL NOT PERMIT ANY PERSON TO BECOME OBLIGATED TO SUCH
    30  LICENSEE AS A CONSUMER ON ONE OR MORE LOAN CONTRACTS FOR AN
    19780H2506B3716                  - 4 -

     1  AGGREGATE AMOUNT IN EXCESS OF [FIVE THOUSAND DOLLARS ($5,000)]
     2  TEN THOUSAND DOLLARS ($10,000), EXCLUSIVE OF CHARGES AUTHORIZED
     3  BY THIS ACT. [A HUSBAND AND WIFE FOR THE PURPOSES OF THIS
     4  LIMITATION SHALL BE CONSTRUED AS ONE CONSUMER.] THIS LIMITATION
     5  SHALL NOT APPLY TO THE PURCHASE OF CONTRACTS WHICH ARISE FROM
     6  THE BONA FIDE SALE OF GOODS OR SERVICES BY A SELLER REGULARLY
     7  ENGAGED IN THE SALE OF SUCH GOODS OR SERVICES. THIS LIMITATION
     8  SHALL NOT IMPAIR THE AUTHORITY OF A LICENSEE TO LEND MONEY,
     9  CREDIT, GOODS OR THINGS IN ACTION, OR TO PURCHASE CONTRACTS IN
    10  AMOUNTS IN EXCESS OF [FIVE THOUSAND DOLLARS ($5,000)] TEN
    11  THOUSAND DOLLARS ($10,000) AND CHARGE, CONTRACT FOR, RECEIVE OR
    12  COLLECT INTEREST OR DISCOUNT ON THE ENTIRE AMOUNT OF THE LOAN AT
    13  THE LEGAL RATE ESTABLISHED BY THE GENERAL USURY STATUTE OF THE
    14  COMMONWEALTH.
    15     * * *
    16     SECTION 2.  SECTION 17.1 OF THE ACT, ADDED DECEMBER 30, 1970
    17  (P.L.959, NO.301), IS AMENDED TO READ:
    18     SECTION 17.1.  [REVOLVING LOAN ACCOUNTS] SIMPLE INTEREST
    19  ACCOUNTS.--A.  A LICENSEE MAY IN LIEU OF CONTRACTING FOR,
    20  COLLECTING AND RECEIVING CHARGES IN THE MANNER AUTHORIZED BY
    21  SECTION 13, CONTRACT FOR, CHARGE, COLLECT AND RECEIVE CHARGES ON
    22  A LOAN OTHER THAN A REVOLVING LOAN ACCOUNT OR ON A REVOLVING
    23  LOAN ACCOUNT AT A RATE NOT IN EXCESS OF TWO PER CENT (2%) PER
    24  MONTH ON THE UNPAID PRINCIPAL BALANCES FROM TIME TO TIME
    25  OUTSTANDING ON THAT PORTION NOT EXCEEDING FIVE THOUSAND DOLLARS
    26  ($5,000) AND ONE PER CENT (1%) PER MONTH ON THE REMAINING UNPAID
    27  PRINCIPAL BALANCES FROM TIME TO TIME OUTSTANDING; WHICH CHARGES
    28  SHALL NOT BE PAID, DEDUCTED OR RECEIVED IN ADVANCE NOR
    29  COMPOUNDED BUT SHALL BE COMPUTED AND PAID ONLY AS A PERCENTAGE
    30  PER MONTH OF THE UNPAID PRINCIPAL BALANCE OR PORTIONS THEREOF
    19780H2506B3716                  - 5 -

     1  AND BE COMPUTED UPON THE BASIS OF THE NUMBER OF DAYS ACTUALLY
     2  ELAPSED. FOR A LOAN OTHER THAN A REVOLVING LOAN ACCOUNT, THE
     3  INTEREST CHARGE MAY BE CONTRACTED FOR AND EARNED AT THE SINGLE
     4  ANNUAL PERCENTAGE RATE THAT WOULD EARN THE SAME INTEREST CHARGE
     5  AS THE GRADUATED RATES WHEN THE DEBT IS PAID ACCORDING TO THE
     6  AGREED TERMS AND THE CALCULATIONS ARE MADE ACCORDING TO THE
     7  ACTUARIAL METHOD. FOR THE PURPOSE OF COMPUTING CHARGES UNDER
     8  THIS SECTION, WHETHER AT THE MAXIMUM RATE OR LESS, A MONTH SHALL
     9  BE FROM ONE DATE IN A MONTH TO THE CORRESPONDING DATE IN THE
    10  FOLLOWING MONTH BUT IF THERE IS NO SUCH CORRESPONDING DATE, THEN
    11  TO THE LAST DAY OF SUCH FOLLOWING MONTH AND A DAY SHALL BE
    12  CONSIDERED ONE-THIRTIETH (1/30) OF A MONTH WHEN COMPUTATION IS
    13  MADE FOR A FRACTION OF A MONTH. IF PART OR ALL OF THE
    14  CONSIDERATION FOR A LOAN CONTRACT MADE UNDER THIS SUBSECTION IS
    15  THE UNPAID PRINCIPAL BALANCE OF A PRIOR LOAN, THEN THE PRINCIPAL
    16  PAYABLE UNDER SUCH LOAN CONTRACT MAY INCLUDE ANY UNPAID CHARGES
    17  ON THE PRIOR LOAN WHICH HAVE ACCRUED WITHIN SIXTY (60) DAYS
    18  BEFORE THE MAKING OF SUCH NEW LOAN CONTRACT.
    19     B.  REVOLVING LOAN ACCOUNTS MAY BE MADE UNDER THE PROVISIONS
    20  OF THIS SECTION. IN LIEU OF THE STATEMENT REQUIRED BY SECTION 15
    21  BEFORE MAKING A LOAN PURSUANT TO A REVOLVING LOAN ACCOUNT, THE
    22  LICENSEE SHALL DISCLOSE TO THE BORROWER THE MAXIMUM AMOUNT THAT
    23  MAY BE BORROWED, THE METHOD BY WHICH LOANS OR ADVANCES ARE TO BE
    24  MADE, WHETHER BY CHECK OR DRAFT DRAWN ON THE LICENSEE OR
    25  OTHERWISE; A SIMPLE STATEMENT OF THE METHOD BY WHICH THE AMOUNT
    26  OF THE CHARGES IS TO BE CALCULATED; A SIMPLE STATEMENT OF THE
    27  INSURANCE COVERAGES TO BE AFFORDED THE BORROWER, IF OBTAINED BY
    28  OR THROUGH THE LICENSEE, AND IF A CHARGE FOR INSURANCE IS TO BE
    29  MADE A SIMPLE STATEMENT OF THE AMOUNT OF SUCH CHARGE OR THE
    30  METHOD BY WHICH IT WILL BE CALCULATED. IF, DURING A BILLING
    19780H2506B3716                  - 6 -

     1  CYCLE, THE LICENSEE MAKES A LOAN OR ADVANCE OR THE BORROWER
     2  MAKES A PAYMENT THE LICENSEE SHALL GIVE TO THE BORROWER WITHIN A
     3  REASONABLE TIME AFTER THE END OF THE BILLING CYCLE A WRITTEN
     4  STATEMENT OF (I) THE OUTSTANDING BALANCE AT THE BEGINNING OF THE
     5  BILLING CYCLE, (II) THE LOANS OR ADVANCES MADE DURING THE
     6  BILLING PERIOD EXCLUDING CHARGES, (III) THE AMOUNT OF CHARGES
     7  ACCRUED OR DEBITED DURING THE PERIOD, (IV) PAYMENTS MADE BY THE
     8  BORROWER, (V) THE BALANCE AT THE END OF THE BILLING CYCLE, AND
     9  (VI) THE AMOUNT WHICH MUST BE PAID AND THE DATE BY WHICH IT MUST
    10  BE PAID TO AVOID A DEFAULT.
    11     Section 2 3.  The act is amended by adding a section to read:  <--
    12     Section 17.2.  Persons Not Maintaining a Place of Business or
    13  Agent in the Commonwealth.--A.  Any person who does not maintain
    14  an office or place of business within the Commonwealth and is
    15  not represented within the Commonwealth by any employe or agent,
    16  and is licensed under a regulatory lending law of another state
    17  similar in principle to this act, shall have the powers granted
    18  to licensees in section 13 and shall be subject to sections 13,
    19  14, 15, 16 and 17.1 and the regulations relating thereto
    20  promulgated pursuant to section 12. For the purposes of this
    21  act, the formation of a contract for the loan or advance of
    22  money or credit shall constitute making a contract within the
    23  Commonwealth for the supply of services within the Commonwealth
    24  in accordance with 42 Pa.C.S. § 5322(a)(2), (relating to bases
    25  of personal jurisdiction over persons outside this
    26  Commonwealth), if the offer, solicitation or advertisement of
    27  the loan was delivered to the prospective debtor within the
    28  Commonwealth by mail or otherwise and the debtor signed the
    29  contract or document evidencing the obligation within the
    30  Commonwealth.
    19780H2506B3716                  - 7 -

     1     B.  Any person not maintaining an office or place of business
     2  within the Commonwealth and not represented within the
     3  Commonwealth by any employe or agent shall forfeit the right to
     4  all interest, discount, bonus, fees, fines, commissions, charges
     5  or other considerations which would otherwise be due on a loan
     6  or advance of money or credit, with respect to any loan or
     7  advance of money or credit for which:
     8         (1)  the principal amount is five thousand dollars
     9     ($5,000) or less and the interest, discount, bonus, fees,
    10     fines, commissions, charges or other considerations aggregate
    11     in excess of what a lender is permitted to charge under this
    12     act and the other laws of the Commonwealth; or
    13         (2)  the principal amount is in excess of the amount
    14     which a lender is permitted to loan or advance under this act
    15     and the other laws of the Commonwealth.
    16     C.  Whenever the Attorney General has reason to believe that
    17  any person not licensed under this act is using or is about to
    18  use any method, act or practice declared to be unlawful by this
    19  act, and that proceedings would be in the public interest, he
    20  may bring an action in the name of the Commonwealth against such
    21  person to restrain by temporary or permanent injunction the use
    22  of such method, act or practice. The action may be brought in
    23  the court of common pleas or the Commonwealth Court. The said
    24  courts are authorized to issue temporary or permanent
    25  injunctions to restrain and prevent violations of this act, and
    26  such injunctions shall be issued without bond. Whenever any
    27  court issues a permanent injunction to restrain and prevent
    28  violations of this act as authorized in this section, the court
    29  may in its discretion provide for payment by defendant or
    30  defendants to the Commonwealth of the court costs of the action.
    19780H2506B3716                  - 8 -

     1  In addition, the court may in its discretion direct that the
     2  defendant or defendants restore to any person in interest any
     3  moneys or property, real or personal, which may have been
     4  acquired by means of any violation of this act, under terms and
     5  conditions to be established by the court.
     6     D.  In the enforcement of this act as authorized by this
     7  section, the Attorney General may accept an assurance of
     8  voluntary compliance with respect to any method, act or practice
     9  deemed to be violative of the act from any person who has
    10  engaged or was about to engage in such method, act or practice.
    11  Such assurance may include a stipulation for voluntary payment
    12  by the alleged violator providing for the restitution by the
    13  alleged violator to consumers, of money, property or other
    14  things received from them in connection with a violation of this
    15  act. Any such assurance shall be in writing and be filed with
    16  the appropriate court of common pleas or the Commonwealth Court.
    17  Such assurance of voluntary compliance shall not be considered
    18  an admission of violation for any purpose. Matters thus closed
    19  may at any time be reopened by the Attorney General for further
    20  proceedings in the public interest, pursuant to this section.
    21     SECTION 4.  SECTION 18 OF THE ACT, AMENDED MARCH 3, 1976       <--
    22  (P.L.36, NO.17), IS AMENDED TO READ:
    23     SECTION 18.  PENALTIES.--ANY PERSON WHO HAS NOT OBTAINED A
    24  LICENSE FROM THE SECRETARY OF BANKING OF THE COMMONWEALTH OF
    25  PENNSYLVANIA IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT, AND
    26  WHO SHALL ENGAGE IN THE BUSINESS OF NEGOTIATING OR MAKING LOANS
    27  OR ADVANCES OF MONEY OR CREDIT, IN THE AMOUNT OR VALUE OF [FIVE
    28  THOUSAND DOLLARS ($5,000)] TEN THOUSAND DOLLARS ($10,000) OR
    29  LESS, AND CHARGE, COLLECT, CONTRACT FOR OR RECEIVE INTEREST,
    30  DISCOUNT, BONUS, FEES, FINES, COMMISSIONS, CHARGES OR OTHER
    19780H2506B3716                  - 9 -

     1  CONSIDERATIONS WHICH AGGREGATE IN EXCESS OF THE INTEREST THAT
     2  THE LENDER WOULD OTHERWISE BE PERMITTED BY LAW TO CHARGE IF NOT
     3  LICENSED UNDER THIS ACT ON THE AMOUNT ACTUALLY LOANED OR
     4  ADVANCED, OR ON THE UNPAID PRINCIPAL BALANCES WHEN THE CONTRACT
     5  IS PAYABLE BY STATED INSTALLMENTS, SHALL BE GUILTY OF A
     6  MISDEMEANOR, UPON CONVICTION THEREOF SHALL BE SENTENCED TO PAY A
     7  FINE OF NOT LESS THAN FIVE HUNDRED DOLLARS ($500) OR MORE THAN
     8  FIVE THOUSAND DOLLARS ($5,000), AND/OR SUFFER IMPRISONMENT NOT
     9  LESS THAN SIX (6) MONTHS NOR MORE THAN THREE (3) YEARS, IN THE
    10  DISCRETION OF THE COURT.
    11     EXCEPT AS THE RESULT OF AN ACCIDENTAL BONA FIDE ERROR, A
    12  CORPORATION LICENSED UNDER THE PROVISIONS OF THIS ACT OR ANY
    13  DIRECTOR, OFFICER, EMPLOYE OR AGENT WHO SHALL VIOLATE ANY
    14  PROVISION OF THIS ACT OR SHALL DIRECT OR CONSENT TO SUCH
    15  VIOLATIONS, SHALL BE GUILTY OF A MISDEMEANOR, AND, UPON
    16  CONVICTION THEREOF, SHALL BE SENTENCED TO PAY A FINE OF NOT MORE
    17  THAN TWO THOUSAND DOLLARS ($2,000) FOR THE FIRST OFFENSE, AND
    18  FOR EACH SUBSEQUENT OFFENSE A LIKE FINE, AND/OR SUFFER
    19  IMPRISONMENT NOT TO EXCEED ONE YEAR, IN THE DISCRETION OF THE
    20  COURT.
    21     THE PAYMENT OF [FIVE THOUSAND DOLLARS ($5,000)] TEN THOUSAND
    22  DOLLARS ($10,000 OR LESS, IN MONEY, CREDIT, GOODS OR THINGS IN
    23  ACTION AS CONSIDERATION FOR ANY SALE OR ASSIGNMENT OF, OR ORDER
    24  FOR, THE PAYMENT OF WAGES, SALARY, COMMISSIONS OR OTHER
    25  COMPENSATION FOR SERVICES, WHETHER EARNED OR TO BE EARNED,
    26  SHALL, FOR THE PURPOSES OF REGULATION UNDER THIS ACT, BE DEEMED
    27  A LOAN SECURED BY SUCH ASSIGNMENT, AND THE AMOUNT BY WHICH SUCH
    28  ASSIGNED COMPENSATION EXCEEDS THE AMOUNT OF SUCH CONSIDERATION
    29  ACTUALLY PAID SHALL FOR THE PURPOSE OF REGULATION UNDER THIS
    30  ACT, BE DEEMED INTEREST OR CHARGES UPON SUCH LOAN FROM THE DATE
    19780H2506B3716                 - 10 -

     1  OF SUCH PAYMENT TO THE DATE SUCH COMPENSATION IS PAYABLE. SUCH
     2  TRANSACTIONS SHALL BE GOVERNED BY AND SUBJECT TO THE PROVISIONS
     3  OF THIS ACT.
     4     THE PAYMENT OF [FIVE THOUSAND DOLLARS ($5,000)] TEN THOUSAND
     5  DOLLARS ($10,000) OR LESS, IN MONEY, CREDIT, GOODS OR THINGS IN
     6  ACTION AS CONSIDERATION FOR ANY SALE OF REAL OR PERSONAL
     7  PROPERTY WHICH IS MADE ON CONDITION OR AGREEMENT, EXPRESSED OR
     8  IMPLIED, THAT SUCH PROPERTY BE SOLD BACK AT A GREATER PRICE
     9  SHALL, FOR THE PURPOSE OF THIS ACT, BE DEEMED TO BE A LOAN
    10  SECURED BY SUCH PROPERTY, AND THE AMOUNT BY WHICH THE REPURCHASE
    11  PRICE EXCEEDS SUCH ORIGINAL PURCHASE PRICE ACTUALLY PAID SHALL
    12  BE DEEMED INTEREST OR CHARGES UPON SUCH LOAN FROM THE DATE SUCH
    13  ORIGINAL PAYMENT IS MADE UNTIL THE DATE SUCH REPURCHASE PRICE IS
    14  PAID. SUCH TRANSACTION SHALL BE GOVERNED BY AND SUBJECT TO THE
    15  PROVISIONS OF THIS ACT.
    16     WHEN REAL OR PERSONAL PROPERTY IS PLEDGED AS SECURITY ON A
    17  LOAN OF [FIVE THOUSAND DOLLARS ($5,000)] TEN THOUSAND DOLLARS
    18  ($10,000) OR LESS, AND THE LENDER REQUIRES THE BORROWER TO PAY
    19  FOR INSURANCE THEREON, SUCH CHARGE FOR INSURANCE SHALL BE
    20  CONSTRUED AS INTEREST UNDER THIS ACT WHEN THE LENDER HAS FAILED
    21  TO HAVE SUCH INSURANCE WRITTEN BY AN INSURANCE COMPANY LEGALLY
    22  AUTHORIZED TO CONDUCT BUSINESS IN PENNSYLVANIA. WHEN THE AMOUNT
    23  CHARGED FOR SUCH INSURANCE IS IN EXCESS OF THE STANDARD COST OF
    24  SIMILAR INSURANCE IN OTHER INSURANCE COMPANIES LEGALLY
    25  AUTHORIZED TO CONDUCT BUSINESS IN PENNSYLVANIA, THE EXCESS SHALL
    26  BE CONSTRUED AS INTEREST UNDER THIS ACT.
    27     Section 3 5.  This act shall take effect in 60 days AND SHALL  <--
    28  APPLY TO CONTRACTS MADE, RENEWED OR REFINANCED THEREAFTER.


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