PRINTER'S NO. 2769
No. 2207 Session of 1991
INTRODUCED BY BUTKOVITZ, McGEEHAN AND FREEMAN, NOVEMBER 20, 1991
REFERRED TO COMMITTEE ON BUSINESS AND COMMERCE,
NOVEMBER 20, 1991
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 service
8 charges on retail installment contracts and retail
9 installment accounts.
10 The General Assembly of the Commonwealth of Pennsylvania
11 hereby enacts as follows:
12 Section 1. Sections 501 and 904 of the act of October 28,
13 1966 (1st Sp.Sess., P.L.55, No.7), known as the Goods and
14 Services Installment Sales Act, amended March 25, 1982, P.L.199,
15 No.68), and reenacted February 21, 1991 (P.L.1, No.1), are
16 amended 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%)] fifteen
4 percent (15%) simple interest 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 (c) A minimum service charge of seventy cents (70¢) per
11 month may be made for each month if the service charge so
12 computed is less than that amount; such minimum service charge
13 may be imposed for a minimum period of six months.
14 Section 904. Subject to the other provisions of this article
15 the seller or holder of a retail installment account may charge,
16 receive and collect the service charge authorized by this act.
17 The service charge shall not exceed the following rates computed
18 on the outstanding balances from month to month:
19 (a) On the outstanding balance, [one and one-half percent (1
20 1/2%)] one and one-quarter percent (1 1/4%) per month.
21 (b) A minimum service charge of seventy cents (70¢) per
22 month may be made for each month if the service charge so
23 computed is less than that amount; such minimum service charge
24 may be imposed for a minimum period of six months.
25 [(b.1) Notwithstanding the rate provided for in clause (a),
26 no issuer of a credit card primarily engaged as a seller or
27 distributor of gasoline shall be permitted to charge, receive or
28 collect a service charge in excess of fifteen percent (15%)
29 simple interest per annum on unpaid balances.]
30 (c) The service charge may be computed on a schedule of
19910H2207B2769 - 2 -
1 fixed amounts if as so computed it is applied to all amounts of
2 outstanding balances equal to the fixed amount minus a
3 differential of not more than five dollars ($5), provided that
4 it is also applied to all amounts of outstanding balances equal
5 to the fixed amount plus at least the same differential.
6 Section 2. This act shall take effect in 60 days.
K15L12VDL/19910H2207B2769 - 3 -