1Amending Title 12 (Commerce and Trade) of the Pennsylvania
2Consolidated Statutes, codifying the provisions of the Motor
3Vehicle Sales Finance Act and the Goods and Services
4Installment Sales Act; making conforming amendments to Titles
57 and 42; and making related repeals.

6The General Assembly of the Commonwealth of Pennsylvania
7hereby enacts as follows:

8Section 1. The definitions of "holder" and "installment
9seller" in section 6102 of Title 7 of the Pennsylvania
10Consolidated Statutes are amended to read:

11§ 6102. Definitions.

12The following words and phrases when used in this chapter
13shall have the meanings given to them in this section unless the
14context clearly indicates otherwise:

15* * *

16"Holder." As defined in [section 3 of the act of June 28,
171947 (P.L.1110, No.476), known as the Motor Vehicle Sales
18Finance Act] 12 Pa.C.S. § 6202 (relating to definitions).

19* * *

1"Installment seller." As defined in [section 3 of the act of 
2June 28, 1947 (P.L.1110, No.476), known as the Motor Vehicle 
3Sales Finance Act] 12 Pa.C.S. § 6202 (relating to definitions).

4* * *

5Section 2. Section 6112(13) of Title 7 is amended to read:

6§ 6112. Exceptions to license requirements.

7The following persons shall not be required to be licensed
8under this chapter in order to conduct the mortgage loan
9business:

10* * *

11(13) An installment seller of, or holder of installment
12sales contracts secured by, manufactured homes who is
13licensed under [the act of June 28, 1947 (P.L.1110, No.476),
14known as the Motor Vehicle Sales Finance Act] 12 Pa.C.S. 
15Ch.62 (relating to motor vehicle sales finance), provided the
16installment seller or holder only engages in the mortgage
17loan business regarding installment sales contracts secured
18by manufactured homes that are purchase-money mortgage loans.
19To qualify for the exception under this paragraph, the
20installment seller or holder must:

21(i) Obtain a license as a mortgage originator, if
22licensed as an individual under [the Motor Vehicle Sales
23Finance Act] 12 Pa.C.S. Ch.62.

24(ii) Be registered with the department.

25(iii) Do either of the following:

26(A) In the same manner as a mortgage lender or
27mortgage broker, as applicable depending upon whether
28the installment seller or holder makes or brokers
29installment sales contracts secured by manufactured
30homes that are purchase-money mortgage loans, obtain

1and maintain bond coverage for mortgage originators
2consistent with section 6131(c)(5) or (e)(3) and file
3an annual report consistent with section 6135(a)(3);
4or

5(B) Annually demonstrate to the department that
6the mortgage originators employed by the installment
7seller or holder have obtained and maintained the
8bond coverage required by section 6131(f)(4) in a
9form acceptable to the department.

10(iv) Ensure employees required to be licensed as
11mortgage originators have completed the requirements
12under section 6131.1 and have obtained the required
13mortgage originator license.

14Section 3. Title 12 is amended by adding a part heading to
15read:

16PART IV

17ECONOMIC DEVELOPMENT AND FINANCING

18Section 4. Title 12 is amended by adding a part to read:

19PART V

20CONSUMER CREDIT

21Chapter

2261. General Provisions

2362. Motor Vehicle Sales Finance

2463. Goods and Services Installment Sales

25CHAPTER 61

26GENERAL PROVISIONS

27Sec.

286101. Scope of part.

296102. Definitions.

306103. Contracts and agreements.

16104. Electronic transactions.

2§ 6101. Scope of part.

3This part relates to consumer credit.

4§ 6102. Definitions.

5The following words and phrases when used in this part shall
6have the meanings given to them in this section unless the
7context clearly indicates otherwise:

8"Department." The Department of Banking and Securities of 
9the Commonwealth.

10"Financial institution." A bank, bank and trust company, 
11trust company, savings bank, private bank, savings association 
12or credit union organized and doing business under the 
13provisions of any law of this Commonwealth, another state or the 
14United States.

15"Records." Books, accounts, papers, documents, files and 
16other similar business records and information, including 
17information that is:

18(1) stored in an electronic or other medium that uses
19technology having electrical, digital, magnetic, wireless
20optical, electromagnetic or similar capabilities; and

21(2) retrievable in perceivable form.

22§ 6103. Contracts and agreements.

23(a) General rule.--A contract or agreement under this part
24shall be dated and in writing.

25(b) Clear and conspicuous provisions.--The headings, notices
26and language of a contract or agreement under this part shall be
27clear and conspicuous and meet the following requirements:

28(1) Except as otherwise provided in this subsection, the
29language in a contract or agreement under this part shall be
30in at least eight-point type.

1(2) A heading in a contract or agreement under this part
2shall be in at least ten-point bold type.

3(3) A notice or disclosure in a contract or agreement
4under this part shall be in at least ten-point bold type.

5(4) An acknowledgment under this part shall be in at
6least ten-point bold type.

7§ 6104. Electronic transactions.

8(a) Effect on other law.--Nothing in this part shall be 
9construed to supersede the provisions of the act of December 16, 
101999 (P.L.971, No.69), known as the Electronic Transactions Act.

11(b) Department procedures.--The department may establish
12procedures for electronic transactions under this part,
13including:

14(1) the filing of applications and renewals for licenses
15and registrations;

16(2) the filing of reports and other required records;
17and

18(3) the verification of records and signatures on forms.

19CHAPTER 62

20MOTOR VEHICLE SALES FINANCE

21Subchapter

22A. General Provisions

23B. Licenses

24C. Installment Sale Contracts

25D. Costs and Charges

26E. Repossession

27F. Penalties and Liability

28SUBCHAPTER A

29GENERAL PROVISIONS

30Sec.

16201. Scope of chapter.

26202. Definitions.

36203. Authority of department.

46204. Records.

56205. Appeals.

66206. Deposit of fees and fines.

76207. Distribution of information.

86208. Venue.

96209. Applicability.

106210. Consumer complaints.

11§ 6201. Scope of chapter.

12This chapter relates to motor vehicle sales finance.

13§ 6202. Definitions.

14The following words and phrases when used in this chapter
15shall have the meanings given to them in this section unless the
16context clearly indicates otherwise:

17"Buyer."

18(1) A person who buys, hires or leases a motor vehicle
19under an installment sale contract or a legal successor in
20interest to the person, even if the person may have entered
21into an extension, deferment, renewal or other revision of
22the contract.

23(2) The term includes a person who as surety, endorser,
24guarantor or otherwise is liable on an obligation created by
25a buyer under an installment sale contract.

26"Collateral security."

27(1) Security, other than a security interest in a motor
28vehicle, which is the subject of an installment sale contract
29and given to secure performance of an obligation of a buyer
30or the buyer's surety or guarantor under an installment sale

1contract or an extension, deferment, renewal or other
2revision of the contract.

3(2) The term includes the following:

4(i) The undertakings of a surety or guarantor for a
5buyer.

6(ii) An interest in, encumbrance on or pledge of
7real or personal property other than the motor vehicle
8that is the subject of an installment sale contract.

9"Collector-repossessor."

10(1) A person who, as an independent contractor and not
11as a regular employee of an installment seller or a sales
12finance company, collects payments on installment sale
13contracts or repossesses motor vehicles that are the subject
14of installment sale contracts.

15(2) The term excludes the following:

16(i) A duly constituted public official or an
17attorney-at-law acting in an official capacity.

18(ii) A licensed seller or licensed sales finance
19company making collections or repossessions on
20installment sale contracts, if the seller or sales
21finance company:

22(A) was previously a holder; or

23(B) was not a holder but occasionally makes
24collections or repossessions for other licensed
25sellers or licensed sales finance companies.

26"Commercial purpose." A purpose related to the production, 
27exhibition, marketing, transportation, processing or manufacture 
28of goods or services.

29"Debt cancellation agreement." A contractual arrangement in 
30which a person agrees to pay all or part of a buyer's obligation 

1to repay an extension of credit from a holder upon the 
2occurrence of a specified event.

3"Debt suspension agreement." A contractual arrangement in 
4which a person agrees to pay for a specific period of time all 
5or part of a buyer's obligation to repay an extension of credit 
6from a holder upon the occurrence of a specified event.

7"Down payment." Partial payments made in cash or otherwise 
8and received by or for the benefit of an installment seller 
9prior to or substantially contemporaneous with either the 
10execution of an installment sale contract or the delivery of the 
11items sold under the contract, whichever occurs later.

12"Finance charge." Either of the following:

13(1) The amount of the consideration in excess of the
14purchase price, which a buyer is required to pay to an
15installment seller for:

16(i) the privilege of purchasing a motor vehicle
17under an installment sale contract; or

18(ii) the credit extended by the seller to the buyer
19in conjunction with the sale of a motor vehicle under an
20installment sale contract.

21(2) The difference between the cash sale price of the
22motor vehicle and the time balance, exclusive of insurance
23charges, late charges and other charges that are necessary or
24incidental to an installment sale and specifically authorized
25by this chapter to be included in an installment sale
26contract.

27"Heavy commercial motor vehicle." A new or used motor 
28vehicle, excluding a recreational vehicle, that is:

29(1) a truck or truck tractor having a manufacturer's
30gross vehicular weight of 13,000 pounds or more; or

1(2) a semitrailer or trailer designed for use in
2combination with a truck or truck tractor.

3"Holder." An installment seller or a sales finance company 
4with the rights of the installment seller under the installment 
5sale contract.

6"Installment sale contract."

7(1) A contract for the retail sale of a motor vehicle,
8or a contract that has a similar purpose or effect, whether
9or not the installment seller has retained a security
10interest in the motor vehicle or has taken collateral
11security for a buyer's obligation, if:

12(i) all or part of the purchase price is payable in
13two or more scheduled payments subsequent to the making
14of the contract; or

15(ii) a buyer undertakes to make two or more
16scheduled payments or deposits that may be used to pay
17all or part of the purchase price.

18(2) The term includes any form of contract, however
19nominated, for the bailment or leasing of a motor vehicle,
20which contains both of the following, or any other
21arrangement having a similar purpose or effect:

22(i) The buyer contracts to pay as compensation a sum
23substantially equivalent to or in excess of the value of
24the motor vehicle.

25(ii) Ownership of the motor vehicle may be
26transferred to the buyer.

27(3) The term includes and applies to an extension,
28deferment, renewal or other revision of the installment sale
29contract.

30(4) The term excludes the following:

1(i) A sale or contract for sale upon an open book
2account, if both of the following conditions are met:

3(A) The installment seller has not retained or
4taken a security interest in the motor vehicle sold
5or a collateral security for the buyer's obligation.

6(B) The buyer:

7(I) is not required to pay a sum other than
8the purchase price of the motor vehicle sold in
9connection with the sale or extension of credit;
10and

11(II) is obligated to pay for the motor
12vehicle in full within 90 days from the time the
13sale or contract for sale was made.

14(ii) A right to acquire possession of goods under a
15lease, unless the lease:

16(A) constitutes a security interest as defined 
17in 13 Pa.C.S. § 1201 (relating to general 
18definitions); and

19(B) is subject to 13 Pa.C.S. Div. 9 (relating to 
20secured transactions).

21"Installment seller." A person engaged in the business of 
22selling, hiring or leasing a motor vehicle under an installment 
23sale contract or a legal successor in interest to the person.

24"Insurance charges." Premiums, commissions and other 
25payments authorized by insurance statutes or regulations of this 
26Commonwealth.

27"Licensee." A person who has been issued a license as an 
28installment seller, a sales finance company or a collector-
29repossessor under this chapter, which license has not expired 
30and has not been surrendered or revoked.

1"Manufactured home." The term includes both of the 
2following:

3(1) A manufactured home as it is defined under section 
4603(6) of the National Manufactured Housing Construction and 
5Safety Standards Act of 1974 (Public Law 93-383, 42 U.S.C. § 
65402(6)).

7(2) A mobile home as defined in 75 Pa.C.S. § 102
8(relating to definitions).

9"Mobility vehicle." As defined in section 2 of the act of
10December 22, 1983 (P.L.306, No.84), known as the Board of
11Vehicles Act.

12"Motor vehicle."

13(1) A device in which, upon which or by which a person
14or property is or may be transported or drawn upon a public
15highway.

16(2) The term includes a trailer, semitrailer,
17manufactured home, recreational vehicle and mobility vehicle.

18(3) The term excludes the following:

19(i) A tractor, a power shovel, road machinery,
20agricultural machinery and other machinery not designed
21primarily for highway transportation, but which may
22incidentally transport persons or property on a public
23highway.

24(ii) A device that moves upon or is guided by a
25track or travels through the air.

26"Principal amount financed." The unpaid purchase price 
27balance plus the following:

28(1) The charges for any insurance required or obtained
29as security for or by reason of the sale of a motor vehicle
30under an installment sale contract.

1(2) Other costs or charges necessary or incidental to
2the sale of the motor vehicle under an installment sale
3contract.

4(3) Amounts representing payment of a prior credit or
5lease balance to discharge a security interest, lien or lease
6interest on a motor vehicle or other property traded or
7returned.

8"Purchase price." The price measured in dollars at which an 
9installment seller would in good faith sell to a buyer, and the 
10buyer would in good faith buy from the seller, a motor vehicle 
11that is the subject matter of an installment sale contract, if 
12the sale were a cash sale instead of an installment sale.

13"Recreational vehicle." As defined in section 2 of the act 
14of December 22, 1983 (P.L.306, No.84), known as the Board of 
15Vehicles Act.

16"Retail sale." The sale of a motor vehicle for the buyer's 
17use or another's use from which the buyer derives a benefit or 
18satisfaction.

19"Sales finance company."

20(1) A person engaged as principal, agent or broker in
21the business of financing or soliciting the financing of an
22installment sale contract made between other parties.

23(2) The term includes the following:

24(i) A person in the business of acquiring, investing
25in or lending money or credit on the security of an
26installment sale contract or any interest in the
27contract, whether by discount, purchase or assignment of
28the contract, or otherwise.

29(ii) An installment seller, whether or not licensed
30under this chapter, who finances an installment sale

1contract for another seller or a sales finance company.

2(3) The term excludes a person to the extent that the
3person is exempt under section 6229(e) (relating to
4transfer).

5"Security interest." A security interest as provided by 13 
6Pa.C.S. Div. 9 (relating to secured transactions).

7"Service contract." A written contract, optional on the part 
8of a buyer, to perform over a fixed period of time or for a 
9specified duration services regarding the maintenance or repair 
10of a motor vehicle.

11"Time balance." The sum of the principal amount financed and 
12the finance charge.

13"Unpaid purchase price balance." The difference between the 
14purchase price and the down payment.

15"Warranty."

16(1) Either of the following, which becomes part of the
17basis of the bargain between a buyer and an installment
18seller for purposes other than resale:

19(i) A written declaration of fact or written promise
20made in connection with the sale of a motor vehicle by an
21installment seller or manufacturer to a buyer that
22relates to the nature of the materials or workmanship
23regarding the motor vehicle and affirms or promises that
24the motor vehicle is free of defects or will meet a
25specified level of performance over a specified period of
26time.

27(ii) Any undertaking in writing in connection with
28the sale of a motor vehicle by an installment seller or
29manufacturer to refund, repair, replace or take other
30remedial action with respect to the motor vehicle if the

1motor vehicle fails to meet the specifications set forth
2in the undertaking.

3(2) The term excludes a service contract and an extended
4warranty with the characteristics of a service contract.

5§ 6203. Authority of department.

6(a) Powers.--The department has the authority to do any of
7the following:

8(1) Investigate the business activities of a licensee
9and person engaged in a business contemplated by this chapter
10by the following means:

11(i) Examining the records of the licensee and
12person.

13(ii) Accessing the offices and places of business of
14the licensee and person and the records of the licensee
15and person.

16(2) Examine the records, safes and vaults of a person
17described under subsection (b)(2) for the purpose of
18discovering violations of this chapter.

19(3) Require the attendance and testimony of witnesses
20and the production of records relating to a business that the
21department has the authority to investigate. For the purposes
22of this subsection, a duly authorized representative of the
23department may sign subpoenas, administer oaths and
24affirmations, examine witnesses and receive evidence.

25(4) Prescribe the minimum information to be shown in the
26records of a licensee so as to enable the department to
27determine compliance with the provisions of this chapter.

28(5) Promulgate regulations and issue orders, statements
29of policy and written interpretations as necessary or
30appropriate for the interpretation or enforcement of this

1chapter.

2(6) Reduce the amount of or prohibit entirely a cost
3regarding the retaking, storing or repairing of a motor
4vehicle under section 6256 (relating to buyer's liability for
5costs) if the cost:

6(i) appears to be fictitious, unnecessary,
7unreasonable or exorbitant; or

8(ii) would not have been incurred by a prudent
9person under similar circumstances.

10(b) Applicability.--

11(1) This section applies whether the person acts or
12claims to act as principal, agent or broker, either under or
13without the authority of this chapter.

14(2) A person who is not licensed under this chapter is
15presumed to be engaged in a business contemplated by this
16chapter, if the person, as principal, agent or broker,
17advertises or solicits business for which a license is
18required by the provisions of this chapter.

19(c) Administration.--In the case of disobedience of a
20subpoena or the noncooperation of a witness appearing before the
21department, the department may invoke the aid of the courts, and
22the court shall issue an order requiring the person subpoenaed
23to obey the subpoena, give evidence or produce records relative
24to the matter in question. Failure to obey the court order may
25be punished by the court as contempt.

26(d) Expenses.--The expenses incurred by the department in
27connection with an examination or investigation, including a
28proportionate part of the salary of an examiner or other
29employee of the department and counsel assigned by the
30department, may be assessed by the department upon the

1particular person examined or investigated.

2§ 6204. Records.

3(a) General rule.--A licensee shall maintain, at the place
4of business designated in the license certificate, records of
5the business conducted under the license issued for the place of
6business so as to enable the department to determine whether the
7licensee's business contemplated by this chapter is being
8operated in accordance with the provisions of this chapter.

9(b) Multiple places of business.--A licensee operating two
10or more licensed places of business in this Commonwealth may
11maintain the general control records of all the offices at any
12one of the offices, or at any other office maintained by the
13licensee, upon the following:

14(1) The filing of a written request with the department
15designating the office at which the control records are
16maintained.

17(2) Approval of the request by the department.

18(c) English language.--Records of a licensee shall be
19maintained in the English language.

20(d) Preservation.--Records of a licensee shall be preserved
21and available for examination by the department for at least two
22years after making the final entry therein.

23§ 6205. Appeals.

24An appeal may be taken from the action of the department in 
25suspending and revoking a license under section 6218 (relating 
26to revocation or suspension of license) or imposing a civil 
27penalty under section 6274 (relating to civil penalty by 
28department) in accordance with the procedure prescribed by 2 
29Pa.C.S. Chs. 5 Subch. A (relating to practice and procedure of 
30Commonwealth agencies) and 7 Subch. A (relating to judicial 

1review of Commonwealth agency action).

2§ 6206. Deposit of fees and fines.

3License fees and fines that are received by the department
4under this chapter shall be deposited in the State Treasury to
5the credit of a special fund for the use of the department in
6administering this and other laws of this Commonwealth placed
7under its administration.

8§ 6207. Distribution of information.

9(a) Department.--The department shall provide a copy of the
10provisions of this chapter to each licensee in conjunction with
11the licensee's initial license and all renewal applications.

12(b) Licensee.--

13(1) A licensee shall make the information under
14subsection (a) available to its employees.

15(2) A copy of the information under subsection (a) shall
16be kept at the licensee's place of business for inspection by
17a buyer.

18§ 6208. Venue.

19An action on an installment sale contract shall be commenced
20in a county where any of the following occurred:

21(1) The buyer signed the contract.

22(2) The buyer resides at the commencement of the action.

23(3) The buyer resided when the contract was entered
24into.

25§ 6209. Applicability.

26(a) Consumer discount companies.--The provisions of this 
27chapter do not affect or impair a business conducted lawfully 
28under a license issued under the act of April 8, 1937 (P.L.262, 
29No.66), known as the Consumer Discount Company Act.

30(b) Other extensions of credit.--The provisions of this 

1chapter do not apply to an extension of credit for the purchase 
2of a motor vehicle, including the financing of other costs or 
3charges necessary or incidental to the sale or financing of a 
4motor vehicle, made under the act of November 30, 1965 (P.L.847, 
5No.356), known as the Banking Code of 1965.

6§ 6210. Consumer complaints.

7(a) Review and investigation.--The department shall review
8and investigate, as appropriate, any consumer complaints or
9information obtained through examinations relating to any
10activities regulated by this chapter, including, but not limited
11to, those pertaining to charges for service contracts,
12warranties, debt cancellation agreements, debt suspension
13agreements and insurance products not required by section 6241
14(relating to insurance).

15(b) Annual reports.--The department shall annually report to
16the Consumer Protection and Professional Licensure Committee of
17the Senate and the Consumer Affairs Committee of the House of
18Representatives the number and disposition of such enforcement
19actions and consumer complaint resolutions.

20SUBCHAPTER B

21LICENSES

22Sec.

236211. General license rules.

246212. Initial license application.

256213. Bond.

266214. License fees.

276215. License certificate.

286216. License renewal.

296217. Refusal to issue license or license renewal.

306218. Revocation or suspension of license.

16219. Multiple places of business.

2§ 6211. General license rules.

3(a) License required.--The following persons may engage or
4continue to engage in this Commonwealth as a principal,
5employee, agent or broker only as authorized in this chapter and
6under a license issued by the department:

7(1) An installment seller.

8(2) A sales finance company.

9(3) A collector-repossessor.

10(b) Term.--

11(1) Subject to paragraph (2), unless revoked or
12suspended under section 6218 (relating to revocation or
13suspension of license) or otherwise surrendered, a license
14shall be valid for one year.

15(2) A license shall expire on October 1 annually, after
16the license is initially approved or renewed.

17(c) Transfer or assignment.--A license may not be
18transferred or assigned.

19§ 6212. Initial license application.

20(a) General rule.--An initial license application shall be
21in writing, under oath and in the form prescribed by the
22department.

23(b) Contents.--An initial license application shall contain
24the following:

25(1) The name under which the business is conducted.

26(2) The physical street address of the place of
27business.

28(3) The date of registration with the Secretary of the
29Commonwealth of any fictitious or trade name of the business.

30(4) If the applicant is a corporation:

1(i) the date and place of incorporation; and

2(ii) the names and addresses of the officers and
3directors.

4(5) If the applicant is an individual owner, the name
5and residence address of the owner.

6(6) If the applicant is a partnership, association or
7limited liability company, the name and residence address of
8each owner, partner or member and any managers.

9(7) Any other information that the department requires.

10(c) Process; notice.--

11(1) An application filed by an association or
12corporation shall be accompanied by a power of attorney
13showing the name and address of the authorized agent in this
14Commonwealth upon whom judicial and other process or legal
15notice may be served.

16(2) The department is authorized to accept service of
17process or notice if the agent in paragraph (1):

18(i) has died;

19(ii) is removed from this Commonwealth; or

20(iii) is under a legal disability or otherwise
21disqualified from serving as agent.

22§ 6213. Bond.

23(a) Bond required.--A bond shall accompany each license
24application for a sales finance company and collector-
25repossessor.

26(b) Form.--The bond shall be in the form prescribed by the
27department.

28(c) Amount.--

29(1) A bond for a sales finance company shall be in the
30amount of $10,000.

1(2) A bond for a collector-repossessor shall be in the
2amount of $5,000.

3(d) Execution.--

4(1) Except as provided in paragraph (2), the bond shall
5be executed by a surety company authorized by the laws of
6this Commonwealth to transact business.

7(2) If the bond accompanying a license application for a
8sales finance company is filed by a financial institution
9within this Commonwealth, the financial institution may
10execute the bond on its own behalf.

11(3) The bond shall be executed to the Commonwealth.

12(e) Purpose.--The bond shall be for the use of the
13Commonwealth and for any person aggrieved by the misconduct of
14the licensee.

15(f) Condition.--The condition of the bond is that the
16licensee will:

17(1) comply with and abide by the provisions of this
18chapter and the rules and regulations of the department; and

19(2) pay to the Commonwealth, the department or a person
20all money due to each under the provisions of this chapter.

21(g) Action on bond.--A person may maintain an action on the
22bond in a court having jurisdiction of the amount claimed if all
23the following occur:

24(1) The person is aggrieved by the misconduct of a
25licensee.

26(2) The person receives a judgment against the licensee
27for the misconduct.

28(3) The person executes on the judgment.

29(4) The department assents to the action on the bond.

30§ 6214. License fees.

1(a) Amount.--A license application shall be accompanied by a 
2license fee as set forth in section 603-A of the act of April 9, 
31929 (P.L.177, No.175), known as The Administrative Code of 
41929.

5(b) Abatement.--No abatement in the amount of the license
6fee shall be made if the license is:

7(1) issued for less than one year; or

8(2) surrendered, canceled or revoked prior to the
9expiration of the license period for which the license was
10issued.

11§ 6215. License certificate.

12(a) Issuance.--If the department approves an applicant's
13license application, it shall issue to the applicant a license
14certificate showing the name and address of the person
15authorized to do business under the license.

16(b) Public inspection.--

17(1) An installment seller and a sales finance company
18shall post the license certificate in a conspicuous place in
19the place of business of the licensee, so that the
20certificate is in full view of the public at all times.

21(2) A collector-repossessor shall carry the license
22certificate in the immediate possession of the collector-
23repossessor whenever engaged in the type of business for
24which the license is issued, so that the certificate may be
25presented for inspection upon request by any person entitled
26to inspection.

27(c) Amendment.--

28(1) A licensee desiring to change the address of the
29place of business shall:

30(i) give prior written notice to the department;

1(ii) return the license certificate to the
2department for amendment; and

3(iii) retain a copy of the license certificate.

4(2) The department shall amend the license certificate
5to show the new address and the date. The new address shall
6thereafter be the authorized address of the licensee.

7(3) A licensee is not required to pay a charge for
8amendment of a license certificate to effect a change of
9address.

10§ 6216. License renewal.

11An application for a license renewal shall have the following
12characteristics:

13(1) The application shall be in writing, under oath and
14in the form prescribed by the department.

15(2) The application shall be filed at least 15 days
16prior to October 1.

17(3) The application shall include an update of the
18information under section 6212(b) and (c)(1) (relating to
19initial license application).

20(4) The application shall be accompanied by the
21following:

22(i) A new bond under the same provisions as set
23forth in section 6213 (relating to bond), which shall be
24filed annually at least 15 days prior to October 1.

25(ii) A license fee under the same provisions as set
26forth in section 6214 (relating to license fees), which
27shall be paid annually on or before October 1 for each
28license and place of business.

29§ 6217. Refusal to issue license or license renewal.

30(a) Discretionary refusal.--Subject to subsection (b), the

1department may refuse to issue a license or renew a license
2because of any of the following:

3(1) The applicant has made a material misstatement in
4the application for license or license renewal.

5(2) The existence of any of the grounds under section
66218(a) (relating to revocation or suspension of license).

7(3) The department is not satisfied that the financial
8responsibility, character, reputation, integrity and general
9fitness of the applicant command the confidence of the public
10and warrant the belief that the business for which the
11license application is filed will be operated lawfully,
12honestly, fairly and in accordance with this chapter and the
13general laws of this Commonwealth. In so determining, the
14department shall consider the applicant's:

15(i) owners, partners or members and any managers, if
16the applicant is a partnership, association or limited
17liability company; and

18(ii) officers and directors, if the applicant is a
19corporation.

20(b) Mandatory refusal.--

21(1) The department may not issue a license to an
22applicant under this chapter until the expiration of at least
23one year from the effective date of any revocation of the
24applicant's license or the department's refusal to issue a
25license or license renewal to the applicant.

26(2) The department may not issue a license or renew a 
27license if, within ten years of the date of license 
28application or license renewal application, the applicant or 
29the applicant's affiliate, owner, partner, member, officer, 
30director, employee or agent has pleaded guilty to, has 

1entered a plea of nolo contendere to or has been convicted of 
2a violation under section 6271 (relating to operating without 
3license) or subsection A of section 37 of the former act of 
4June 28, 1947 (P.L.1110, No.476), known as the Motor Vehicle 
5Sales Finance Act.

6(3) Subject to paragraph (4), if an applicant's license
7was previously revoked under this chapter or the former Motor
8Vehicle Sales Finance Act, the department may not issue
9another license to the applicant if, within ten years of the
10date of license application, the applicant or the applicant's
11affiliate, owner, partner, member, officer, director,
12employee or agent has pleaded guilty to, has entered a plea
13of nolo contendere to or has been convicted of any violation
14of this chapter or the former Motor Vehicle Sales Finance
15Act.

16(4) If an applicant's license was previously revoked
17under the former Motor Vehicle Sales Finance Act solely on
18the basis of the conduct of the applicant's spouse, paragraph
19(3) is not applicable.

20(c) License fee.--

21(1) Except as provided in paragraph (2), if the
22department rejects a license application or license renewal
23application, it shall return the license fee that accompanied
24the application.

25(2) The department may retain all or part of the license
26fee if the license application or license renewal application
27was rejected based wholly or partially on false information
28furnished by the applicant in the application.

29§ 6218. Revocation or suspension of license.

30(a) Grounds.--Upon notice under subsection (b), the

1department may revoke or suspend a license if it discovers a
2fact or condition that, had it existed or been discovered at the
3time of filing of any license application, would have warranted
4disapproval of the application or if it finds that the licensee
5has engaged in any of the following:

6(1) Made a material misstatement in the license
7application.

8(2) Violated a provision of this chapter.

9(3) Violated an order or regulation issued by the
10department under and within the authority of this chapter.

11(4) Failed to comply with a demand, order or regulation
12of the department lawfully made by the department under and
13within the authority of this chapter.

14(5) Refused or refuses to permit the department to make
15examinations authorized by this chapter.

16(6) Failed to maintain in effect the bond required under
17section 6213 (relating to bond), in the case of a sales
18finance company and collector-repossessor.

19(7) Failed to maintain satisfactory records required by
20this chapter or prescribed by the department.

21(8) Falsified records required by this chapter to be
22maintained of the business contemplated by this chapter.

23(9) Failed to file a report with the department within
24the time stipulated in this chapter.

25(10) Failed to pay the fine required by this chapter for
26failure to file reports to the department within the time
27stipulated.

28(11) Defrauded a buyer to the buyer's damage or
29willfully failed to perform a written agreement with a buyer.

30(12) With respect to the tax or fee due the Commonwealth

1upon the sale of a motor vehicle:

2(i) Failed to collect the tax or fee.

3(ii) Collected the tax or fee and failed to issue a
4true copy of the tax report to the purchaser, as required
5by law.

6(iii) Issued a false or fraudulent tax report or
7copy thereof.

8(iv) Failed to pay the tax or fee to the
9Commonwealth at the time and in the manner required by
10law.

11(13) Engaged in unfair, deceptive, fraudulent or illegal
12practices or conduct in connection with a business regulated
13by this chapter.

14(b) Notice.--

15(1) The department shall provide 30 days' written notice
16to the licensee for a revocation or suspension of a license.

17(2) The notice under this subsection shall be forwarded
18by registered mail to the place of business of the licensee,
19as shown in the license application or as amended on the
20license certificate in case of change of address subsequent
21to issuance of the license certificate.

22§ 6219. Multiple places of business.

23(a) License application.--A separate license application
24under section 6212 (relating to initial license application)
25shall be filed for each place of business conducted by or to be
26established by a licensee within this Commonwealth.

27(b) Bond.--A bond under section 6213 (relating to bond)
28shall be filed for each place of business conducted by a sales
29finance company and a collector-repossessor within this
30Commonwealth.

1(c) License fee.--With respect to section 6214 (relating to
2license fees), a separate license fee in the same amount shall
3be paid for each place of business conducted by a licensee
4within this Commonwealth.

5(d) Requirements.--

6(1) Except as provided in paragraph (2), only one place
7of business may be operated under the same license.

8(2) For an installment seller, only one license is
9required if:

10(i) every place of business is conducted under one
11name; and

12(ii) the business records are kept in one place.

13(3) A licensee may operate more than one place of
14business only after performing the following actions:

15(i) Filing an application for each additional place
16of business.

17(ii) Furnishing a bond for each additional place of
18business in the case of a sales finance company and
19collector-repossessor.

20(iii) Paying the respective license fee for each
21place of business.

22(e) License suspension and revocation.--

23(1) Subject to paragraph (2), the department may revoke
24or suspend only the particular license to which grounds exist
25under section 6218(a) (relating to revocation or suspension
26of license).

27(2) If the department finds that grounds for revocation
28are of general application to all places of business or more
29than one place of business operated by a licensee, it may
30revoke all the licenses issued to the licensee or those

1licenses to which grounds exist.

2SUBCHAPTER C

3INSTALLMENT SALE CONTRACTS

4Sec.

56221. Requirements.

66222. Contents.

76223. Notice.

86224. Itemization.

96225. Disclosure.

106226. Heavy commercial motor vehicle.

116227. Manufactured homes.

126228. Prohibited provisions.

136229. Transfer.

146230. Statement of account to buyer.

156231. Payment receipts.

166232. Release of liens.

176233. Prohibited charges.

186234. Waiver of statutory protection prohibited.

196235. Effect of license expiration, surrender and revocation on
20contracts.

216236. Enforcement.

22§ 6221. Requirements.

23(a) General rule.--An installment sale contract shall:

24(1) be in writing;

25(2) contain all the agreements between a buyer and an
26installment seller relating to the installment sale of the
27motor vehicle sold;

28(3) be signed by the buyer and seller; and

29(4) be complete as to all essential provisions before
30the buyer signs the contract.

1(b) Copies.--

2(1) The installment seller shall furnish an exact copy
3of the installment sale contract without charge to the buyer
4at the time the buyer signs the contract.

5(2) The buyer's copy of the contract shall contain the
6signature of the seller identical to the signature on the
7original contract.

8(3) Upon request, a holder shall furnish to the buyer a
9duplicate copy of the contract upon payment of a reasonable
10fee not to exceed the cost of production.

11(c) Acknowledgment.--

12(1) The installment seller shall obtain from the buyer a
13written acknowledgment of the buyer's receipt of a copy of
14the contract.

15(2) The acknowledgment shall be:

16(i) printed below the buyer's signature to the
17contract, if attached to the contract; and

18(ii) independently signed by the buyer.

19(d) Equal periods and amounts.--An installment sale contract
20shall provide for payment of the time balance in substantially
21equal periods and amounts except in the following instances:

22(1) The buyer expects the buyer's income to vary because
23of seasonal employment, seasonal sales, use of accelerated
24depreciation for tax purposes or other known causes, in which
25case the contract may provide for payment of the time balance
26in amounts that vary with the expected varying income.

27(2) The sale of a heavy commercial motor vehicle.

28(3) The sale of a motor vehicle to a salesperson 
29licensed under the act of December 22, 1983 (P.L.306, No.84), 
30known as the Board of Vehicles Act.

1(4) When the contract provides for fixed residual value
2financing.

3(e) Disclosures.--

4(1) Prior to a buyer's execution of an installment sale
5contract, an installment seller shall provide to the buyer an
6oral and a written disclosure in plain language.

7(2) The written disclosure shall:

8(i) be separate from the contract to be signed by
9the buyer;

10(ii) be complete without any blank spaces; and

11(iii) advise that the purchase of specific items
12related to acquiring the motor vehicle is voluntary and
13not required as a condition of the buyer's receiving the
14installment sale contract loan. The items to which this
15subparagraph applies:

16(A) include a service contract, warranty, debt
17cancellation agreement, debt suspension agreement and
18insurance products not required by section 6241
19(relating to insurance); and

20(B) exclude an option or accessory physically
21attached to the motor vehicle.

22(3) The completed written disclosure shall be copied
23exactly and furnished by the seller to the buyer at no cost
24when the buyer receives a copy of the contract.

25(f) Definition.--As used in this section, the term "fixed 
26residual value financing" means the manner of purchase whereby a 
27buyer listed as the owner on the motor vehicle title agrees, at 
28the conclusion of a predetermined schedule of installment 
29payments made in substantially equal periods and amounts, to:

30(1) satisfy the balance of the contractual amount owing;

1(2) refinance any balance owing on the terms previously
2agreed upon at the time of executing the installment sale
3contract; or

4(3) surrender the motor vehicle at the time and manner
5agreed upon at the time of executing the contract.

6§ 6222. Contents.

7An installment sale contract shall contain the following:

8(1) The full name and address of all the parties to the
9contract.

10(2) The date that the buyer signed the contract.

11(3) A description of the motor vehicle sold, which shall
12be sufficient for accurate identification.

13(4) The notice under section 6223 (relating to notice).

14(5) The following items in writing and in a clear and
15conspicuous manner, with each component of each subparagraph
16listed separately:

17(i) The purchase price of the motor vehicle, which
18shall include the following:

19(A) Taxes.

20(B) Charges for delivery.

21(C) Charges for servicing, repairing or
22improving the motor vehicle.

23(D) Charges for a service contract, which:

24(I) shall appear as separate items after the
25following or substantially similar words, which
26shall be boldface, underlined, adjacent to the
27purchase price and in type print size not smaller
28than that used for all item categories:
29"including optional service contracts and/or
30extended warranties in the amount of"; or

1(II) may be separately included as "other
2charges" under subparagraph (v).

3(E) Charges for accessories and installation.

4(F) Other charges normally included in the
5delivered purchase price of a motor vehicle.

6(ii) The down payment made by the buyer at the time
7of or prior to execution of the contract, which shall
8separately indicate the extent to which it is made in
9cash or represented by either or both of the following:

10(A) The agreed-upon value of a trade-in motor
11vehicle, along with a description of the trade-in
12sufficient for accurate identification.

13(B) Other goods.

14(iii) The unpaid purchase price balance, which is
15the difference between the following:

16(A) The purchase price under subparagraph (i).

17(B) The down payment under subparagraph (ii).

18(iv) Insurance charges, the payment for which the
19seller agrees to extend credit to the buyer, which shall
20set forth the term of insurance, a concise description of
21the coverage and the amount of the premium.

22(v) Other charges necessary or incidental to the
23sale or financing of a motor vehicle:

24(A) which the seller contracts to retain,
25receive or pay on behalf of the buyer; or

26(B) for which the seller agrees to extend credit
27to the buyer as authorized by this chapter, including
28charges for a debt cancellation agreement and debt
29suspension agreement.

30(vi) The principal amount financed, which is the sum

1of the following:

2(A) The unpaid purchase price balance under
3subparagraph (iii).

4(B) The insurance charges under subparagraph
5(iv).

6(C) The other charges under subparagraph (v).

7(D) Amounts representing payment of a prior
8credit or lease balance to discharge a security
9interest, lien or lease interest on a motor vehicle
10or other property traded or returned.

11(vii) The finance charge, which is the consideration
12in excess of the purchase price under subparagraph (i),
13excluding insurance charges under subparagraph (iv) and
14other charges under subparagraph (v), and which the buyer
15agrees to pay to the seller for the privilege of
16purchasing the motor vehicle under the installment sale
17contract.

18(viii) The time balance, which represents the total
19obligation of the buyer and which is the sum of the
20following:

21(A) The principal amount financed under
22subparagraph (vi).

23(B) The finance charge under subparagraph (vii).

24(ix) The payment schedule, which shall state the
25number, amount and timing of the payments required to
26liquidate the time balance.

27(6) A description that reasonably identifies collateral 
28security in which a security interest is provided to secure 
29the buyer's obligation pursuant to 13 Pa.C.S. § 9108 
30(relating to sufficiency of description), including the motor 

1vehicle and other collateral.

2(7) A summary notice of the buyer's principal legal
3rights regarding prepayment of the contract, rebate of
4finance charge and reinstatement of the contract in the event
5of repossession and notice of the right to receive the
6statement of account under section 6230(a) (relating to
7statement of account to buyer).

8(8) Specific provisions regarding the following:

9(i) The holder's right to accelerate the maturity of
10the contract upon default or other breach of contract.

11(ii) The buyer's liability respecting nonpayment.

12(iii) The dollar or percentage amount of late
13charges that may be imposed due to a late payment, other
14than a deferral or extension charge.

15(iv) Repossession and sale of the motor vehicle, in
16case of default or other breach of contract.

17(9) The following statement:

18If you encounter a problem, you may have additional rights
19under the Unfair Trade Practices and Consumer Protection Law,
20which is enforced by the Pennsylvania Office of Attorney
21General, Bureau of Consumer Protection.

22§ 6223. Notice.

23(a) Requirement.--An installment sale contract shall contain
24the notice under subsection (b), which shall be printed directly
25above the space provided for the signature of the buyer.

26(b) Form.--

27(1) Except as provided in paragraph (2), the notice
28shall be in the following form:

29NOTICE TO BUYER: Do not sign this contract in blank. You
30are entitled to an exact copy of the contract you sign.

1Keep it to protect your legal rights. Any holder of this
2consumer credit contract is subject to all claims and
3defenses which the buyer could assert against the seller
4of goods or services obtained pursuant hereto or with the
5proceeds hereof. Recovery hereunder by the buyer shall
6not exceed amounts paid by the buyer hereunder.

7(2) In the notice, the words "lessee" or "mortgagor" may
8be substituted for the word "buyer," and the words "lease" or
9"mortgage" may be substituted for the word "contract."

10§ 6224. Itemization.

11Costs and charges under sections 6222 (relating to contents)
12and 6242 (relating to other costs included in amount financed)
13shall be separately itemized in an installment sale contract as
14to their nature and amounts.

15§ 6225. Disclosure.

16If an installment seller retains a portion of the charge for
17a good or service provided by another person, the seller shall
18disclose that the seller may retain a portion of the charge.

19§ 6226. Heavy commercial motor vehicle.

20(a) Variable finance charge percentage rate.--
21Notwithstanding any provision of law to the contrary, the
22finance charge percentage rate included in an installment sale
23contract for the sale of a heavy commercial motor vehicle may
24vary during the term of the contract pursuant to a formula or
25index set forth in the contract that is made readily available
26to and verifiable by the buyer and beyond the control of the
27holder of the contract.

28(b) Determinations.--Notwithstanding that the finance charge
29percentage rate may increase or decrease over the term of the
30contract according to a formula or index set forth in the

1contract, the rate applicable to the transaction as of the date
2of execution of the contract may be used to determine the
3following:

4(1) The amount of finance charge under section 6222(5)
5(vii) (relating to contents).

6(2) The time balance under section 6222(5)(viii).

7(3) The payment schedule under section 6222(5)(ix).

8§ 6227. Manufactured homes.

9(a) Optional contract provisions.--An installment sale
10contract for the sale of a manufactured home may:

11(1) require the buyer to pay real estate taxes that may
12thereafter be levied upon the manufactured home and furnish
13the installment seller or holder with proof of payment of
14real estate taxes in the manner that the contract prescribes;
15and

16(2) upon the buyer's failure to pay the real estate
17taxes or furnish the required proof of payment, allow the
18seller or holder to accelerate payments or repossess the
19manufactured home, or both.

20(b) Sale.--If the manufactured home is sold by a tax-
21levying unit of government for nonpayment of real estate taxes
22by the buyer, the following is not affected or divested:

23(1) A lien or encumbrance contained in the title of the 
24vehicle pursuant to 75 Pa.C.S. (relating to vehicles).

25(2) An encumbrance filed of record against the vehicle 
26under the provisions of 13 Pa.C.S. (relating to commercial 
27code).

28§ 6228. Prohibited provisions.

29An installment sale contract may not contain any of the
30following:

1(1) Blank spaces to be filled in after the contract has
2been signed, except regarding serial numbers or other
3identifying marks that are not available for description of
4the motor vehicle at the time of execution of the contract.

5(2) An acceleration clause under which all or part of
6the time balance represented by payments not yet matured may
7be declared immediately payable because the installment
8seller or holder deems itself to be insecure. This paragraph
9does not apply to an acceleration clause authorizing the
10seller or holder to declare the entire time balance due and
11payable in case of any of the following:

12(i) The buyer's default in the payment of one or
13more installment payments.

14(ii) The buyer's failure to pay taxes levied against
15the motor vehicle.

16(iii) The buyer's failure to furnish proof of
17payment of taxes levied against the motor vehicle.

18(iv) Use of the motor vehicle for illegal purposes.

19(v) The buyer's filing for bankruptcy.

20(vi) The buyer's default in the payment of a cross-
21collateralized obligation.

22(vii) The buyer's intentionally providing fraudulent
23and misleading information on a credit application.

24(3) A provision authorizing a person acting on behalf of
25the seller or holder to enter upon the premises of the buyer
26unlawfully or to commit a breach of the peace in the
27repossession of the motor vehicle or collateral security.

28(4) A provision whereby the buyer waives a right of
29action against the seller, holder, collector-repossessor or
30other person acting on behalf of the holder for an illegal

1act committed in the collection of payments under the
2contract or in the repossession of the motor vehicle or
3collateral security.

4(5) A provision whereby the buyer executes a power of
5attorney appointing the seller, the holder, a collector-
6repossessor or the agent of any of them as the buyer's agent
7in the collection of payments under the contract or in the
8repossession of the motor vehicle or collateral security.
9This paragraph does not apply to a power of attorney issued
10by the buyer to an attorney-at-law to be used only in the
11collection of the obligation by legal process.

12(6) A provision relieving the holder or other assignee
13from liability for legal remedies that the buyer may have had
14against the seller under the contract or a separate
15instrument executed in connection with the contract.

16(7) A provision requiring or entailing the execution of
17a note or series of notes by the buyer, which when separately
18negotiated will extinguish as to third parties a right of
19action or defense that the buyer may have against the
20original seller.

21§ 6229. Transfer.

22(a) Installment seller.--An installment seller of a motor
23vehicle under an installment sale contract executed in this
24Commonwealth may not sell, transfer or assign the obligation
25represented by the contract to a person in this Commonwealth or
26elsewhere unless the person is licensed as a sales finance
27company under this chapter.

28(b) Sales finance company.--A sales finance company licensed
29under this chapter may not sell, transfer or assign the
30obligation represented by an installment sale contract executed

1in this Commonwealth, which it has lawfully acquired, to a
2person in this Commonwealth or elsewhere unless the person is
3licensed as a sales finance company under this chapter.

4(c) Notice; effect on subsequent holder.--If an installment
5sale contract is lawfully sold, transferred or assigned to a
6person who is licensed as a sales finance company under this
7chapter, the buyer's payment or tender of payment made to, and
8service of notice on, the last known holder is binding on a
9subsequent holder until the new holder furnishes to the buyer a
10written notice of the sale, transfer or assignment that sets
11forth the name and address of the new holder authorized to
12receive future payments on the contract.

13(d) Default; notice; effect on subsequent holder.--

14(1) If an installment sale contract lawfully acquired by
15a sales finance company is in default, the holder may resell,
16retransfer or reassign the contract to the installment seller
17from whom the contract was originally acquired.

18(2) The buyer's payment or tender of payment made to and
19service of notice on the last known holder is binding on a
20subsequent holder until the new holder furnishes to the buyer
21a written notice of the resale, retransfer or reassignment
22that sets forth the following:

23(i) The name and address of the new holder
24authorized to receive future payments on the contract.

25(ii) The unpaid time balance.

26(iii) The accrued late charges due under the
27contract.

28(e) Applicability.--

29(1) This section does not apply to an assignment of an
30aggregation of installment sale contracts:

1(i) which is executed by a seller or sales finance
2company only as a security interest securing payment or
3performance of a bona fide commercial loan, obtained at
4lawful rates of interest from a person regularly engaged
5in the business of lending money on the security of the
6assigned collateral or amounts due pursuant to a security
7or debt instrument; and

8(ii) under which, in the absence of default or other
9bona fide breach of the loan contract:

10(A) ownership of the assigned contracts remains
11vested in the assignor; and

12(B) collection of payments on the assigned
13contracts is made by the assignor.

14(2) An assignment of an aggregation of loan contracts
15under this section may not be for the purpose of evading or
16circumventing the provisions of this chapter.

17§ 6230. Statement of account to buyer.

18(a) Information to be included.--At any time after the
19execution of an installment sale contract and within one year
20after the termination of the contract, a holder of the contract
21shall furnish to the buyer upon request a complete and detailed
22statement of account showing the following:

23(1) All amounts paid by the buyer on account of the
24obligation, dates of payment and the allocation of the
25payments to the reduction of:

26(i) The time balance.

27(ii) Refinance charges.

28(iii) Late charges.

29(iv) Court costs.

30(v) Attorney fees.

1(vi) The costs of retaking, repairing and storing
2the motor vehicle.

3(vii) Other costs permitted under the provisions of
4this chapter and the contract.

5(2) All amounts credited to the buyer as rebates for
6prepayment and unexpired premiums on canceled insurance.

7(3) The amount of the installment payments, accrued
8charges and expenses incurred, which are due and payable.

9(4) The number, amount and due dates of installment
10payments to become due and payable.

11(b) Copies.--

12(1) The buyer shall be furnished with one statement of
13account without charge during the term of the contract or
14within one year after the termination of the contract.

15(2) Upon request and payment of a reasonable fee not to
16exceed the cost of production, a holder shall furnish to the
17buyer an additional statement of account.

18§ 6231. Payment receipts.

19(a) When necessary.--When payment is made on an installment
20sale contract, the person receiving the payment shall, at the
21time of receiving the payment, furnish a complete written
22payment receipt to the buyer or individual making the payment on
23behalf of the buyer if:

24(1) the buyer requests such receipt; or

25(2) payment is made in cash.

26(b) Contents.--The payment receipt shall contain the
27following:

28(1) The date, amount and nature of the payment.

29(2) An identification of the obligation to which the
30payment is applicable.

1(3) The signature or initials of the person receiving
2the payment on behalf of the holder.

3(4) The unpaid time balance remaining due after
4crediting the payment.

5(5) The amount attributed to late charges, independent
6of the payment applied to the reduction of the time balance.

7(c) Self-addressed stamped envelope.--The holder may require
8the buyer to supply a self-addressed stamped envelope as a
9condition of mailing the receipt if the buyer:

10(1) elects to make a payment by mail; and

11(2) is previously notified of the need for the envelope.

12§ 6232. Release of liens.

13(a) Duty of holder.--Upon payment in full of the time
14balance and other amounts lawfully due under an installment sale
15contract, a holder shall perform the following:

16(1) Upon request, return to the buyer all instruments in
17the form maintained by the holder, except those filed or
18recorded with a public official and retained in the files of
19the official, which:

20(i) evidence the buyer's indebtedness or constitute
21security under the contract; and

22(ii) were signed by the buyer or the buyer's surety
23or guarantor, in conjunction with the contract.

24(2) Specify on the instruments under paragraph (1) that
25the buyer's obligation has been paid in full.

26(3) Release all security interests in the motor vehicle
27or collateral security for the obligation of the buyer under
28the contract.

29(4) Deliver to the buyer any assignments and documents
30of title as may be necessary to vest the buyer with complete

1evidence of title.

2(b) Delivery of certificate of title.--The certificate of
3title for the motor vehicle shall be delivered to the buyer
4within ten days of the date of tender of payment in full by mail
5or other arrangements made between the buyer and holder.

6§ 6233. Prohibited charges.

7(a) General rule.--Except as provided in subsections (b) and
8(c), a licensee may directly or indirectly charge, contract for,
9collect or receive from the buyer, in connection with the retail
10sale of a motor vehicle under an installment sale contract,
11insurance charges, other charges necessary or incidental to the
12sale of the motor vehicle, finance charges, refinance charges,
13late charges, recording and satisfaction fees, court costs,
14attorney fees and costs of retaking, repairing and storing a
15repossessed motor vehicle, which are disclosed as required by
16section 6222(5) (relating to contents).

17(b) Exception.--A licensee may not directly or indirectly
18charge, contract for, collect or receive from the buyer, in
19connection with the retail sale of a motor vehicle under an
20installment sale contract, any further or other amount for
21costs, charges, examination, appraisal, service, brokerage,
22commission, expense, interest, discount, fees, fines, penalties
23or other thing of value in excess of the amounts permitted under
24subsection (a) or (c).

25(c) Manufactured homes.--An installment seller of a
26manufactured home may charge appraisal fees, brokerage fees and
27commissions, if they represent actual charges and are properly
28disclosed to the buyer.

29(d) Charges if contract not consummated.--

30(1) Subject to paragraph (2), a licensee may not collect

1a charge in connection with a contemplated sale of a motor
2vehicle under an installment sale contract if the contract is
3not consummated.

4(2) Paragraph (1) does not affect the legal status of a
5deposit paid by a prospective buyer to a seller as a binder
6on the contemplated purchase of a motor vehicle.

7(e) Unenforceable provision.--If an installment sale
8contract contains a provision that authorizes a prohibited
9charge, the provision is unenforceable.

10§ 6234. Waiver of statutory protection prohibited.

11(a) General rule.--A buyer may not validly waive through an
12action, agreement or statement any provision of this chapter
13intended to protect a buyer of a motor vehicle.

14(b) Choice of law.--A buyer's waiver of the provisions of
15this chapter, including any purported waiver effected by a
16contractual choice of the law of another jurisdiction contained
17in an installment sale contract, shall be deemed contrary to
18public policy and is void and unenforceable.

19§ 6235. Effect of license expiration, surrender and revocation
20on contracts.

21(a) Effect.--The expiration, surrender or revocation of a
22license issued under this chapter to an installment seller or
23sales finance company does not impair or affect the obligation
24under an installment sale contract entered into lawfully or
25lawfully acquired by the licensee prior to the effective date of
26the expiration, surrender or revocation of the license.

27(b) Charges by holder prohibited.--A holder of an
28installment sale contract forfeits the right to charge, contract
29for, receive or collect refinance charges authorized by this
30chapter for renewal of the contract, if the holder's license has

1expired, was surrendered or was revoked prior to the date of the
2renewal.

3(c) Sale, transfer and assignment of contracts.--A licensee
4whose license has expired, was surrendered or was revoked may
5sell, transfer or assign contracts entered into or acquired
6prior to the expiration, surrender or revocation to a licensed
7sales finance company, which may renew the contracts in
8accordance with the provisions of this chapter.

9(d) Prohibitions regarding contracts.--A licensee whose
10license has expired, was surrendered or was revoked may not:

11(1) enter into new contracts for the retail sale of
12motor vehicles under installment sale contracts; or

13(2) discount, purchase or otherwise acquire the new
14contracts.

15§ 6236. Enforcement.

16(a) When obligation unenforceable.--An obligation of the
17buyer of a motor vehicle under an installment sale contract that
18was consummated in this Commonwealth is not enforceable in this
19Commonwealth if:

20(1) the installment seller was not licensed under this
21chapter when the seller entered into the contract; or

22(2) the holder was not licensed under this chapter when
23the holder acquired the contract.

24(b) Cancellation of contract; release of liens.--Upon
25payment or tender of payment to the holder of the principal
26amount financed under the contract described in subsection (a),
27less payments on account of the obligation exclusive of down
28payment which had been made previously, the buyer under the
29contract is entitled to:

30(1) cancellation of the contract; and

1(2) release of all liens against:

2(i) the motor vehicle sold under the contract; and

3(ii) collateral security owned by the buyer or the
4buyer's surety or guarantor.

5(c) Applicability.--This section shall not be construed to
6prevent the enforcement in this Commonwealth of an obligation
7arising from the sale of a motor vehicle made outside this
8Commonwealth under an installment sale contract entered into or
9executed by the buyer outside this Commonwealth, whether or not
10the buyer was a resident of this Commonwealth at the time the
11buyer entered into the contract.

12SUBCHAPTER D

13COSTS AND CHARGES

14Sec.

156241. Insurance.

166242. Other costs included in amount financed.

176243. Finance charges.

186244. Refinance charges.

196245. Late charges.

206246. Refund for prepayment of contract.

21§ 6241. Insurance.

22(a) General rule.--

23(1) The insurance purchased under this section shall be:

24(i) Limited to insurance against risk of damage,
25destruction or theft of the motor vehicle.

26(ii) Written for the dual protection of the buyer
27and installment seller or holder to the extent of their
28respective interests in the motor vehicle.

29(iii) Subject to terms and conditions, including the
30amount and period of time, that are reasonable and

1appropriate considering the type and condition of the
2motor vehicle, the amount of the time balance and the
3schedule of payments in the installment sale contract.

4(2) The provisions of paragraph (1) may not interfere
5with the following:

6(i) The liberty of contract of the buyer and
7installment seller to contract for other or additional
8insurance as security for, or by reason of the obligation
9of, the buyer.

10(ii) The inclusion of charges for insurance in the
11principal amount advanced under the installment sale
12contract.

13(b) Purchase by buyer.--

14(1) An installment seller may require a buyer of a motor
15vehicle under an installment sale contract to purchase
16insurance on the motor vehicle at the buyer's expense from an
17insurance company acceptable to the installment seller.

18(2) The buyer may select the insurance company agent or
19broker, in which case the inclusion of insurance charges in
20the contract shall be at the option of the installment
21seller.

22(c) Purchase by installment seller generally.--If an
23installment seller or a holder contracts to purchase at the
24buyer's expense insurance on a motor vehicle sold under an
25installment sale contract, the following apply:

26(1) The insurance shall be purchased through an agent or
27broker authorized to conduct business in this Commonwealth.

28(2) The insurance shall be written by an insurance
29company qualified to do business in this Commonwealth.

30(3) The status of the buyer and installment seller or

1holder, as set forth in the insurance contract, shall reflect
2their respective interests in the motor vehicle.

3(4) The insurance charges to the buyer may not exceed
4the following:

5(i) The insurance charges that others are required
6to pay to the insurance company for similar coverage.

7(ii) The limitations on premiums, commissions and
8other charges established by the Commonwealth.

9(5) A copy of the policy or certificate of insurance
10shall be delivered to the buyer within 30 days of the date of
11the buyer's signing of the contract.

12(6) The insurance policy shall contain the following:

13(i) Complete information as to the effective dates,
14amounts of premiums and coverage.

15(ii) All the terms of the insurance contract.

16(7) If a certificate of insurance issued under a master
17policy is furnished to the buyer in lieu of an individual
18policy, the certificate shall contain the following:

19(i) Complete information as to effective dates,
20amounts of premiums and coverage.

21(ii) All the terms of the insurance contract
22embodied in the master policy to the same extent as would
23appear if an individual policy were issued.

24(iii) Notice that it is not an insurance policy.

25(d) Early termination of policy.--

26(1) This subsection applies if an installment seller or
27holder has placed insurance at the buyer's expense on a motor
28vehicle sold under an installment sale contract.

29(2) If the buyer prepays the time balance under the
30contract prior to the expiration date of the insurance:

1(i) The insurance shall remain in force unless the
2buyer requests cancellation of the insurance.

3(ii) The installment seller or holder may not cancel
4the insurance without the buyer's consent.

5(iii) The installment seller or holder may not
6coerce the buyer to cancel the insurance.

7(iv) Any unexpired insurance premiums received by
8the installment seller or holder, resulting from
9cancellation of insurance originally placed at the
10buyer's expense, shall be paid to the buyer or credited
11to matured unpaid installments under the contract.

12(3) If the insurance company cancels the insurance prior
13to expiration, the installment seller or subsequent holder
14shall:

15(i) obtain comparable insurance from another
16insurance company and furnish the buyer with a copy of
17the insurance policy, subject to the same requirements of
18this chapter applicable to the original policy; or

19(ii) if unable to obtain comparable insurance from
20another insurance company, immediately notify the buyer
21who may then obtain insurance from an insurance company,
22agent or broker of the buyer's own selection, in which
23case the installment seller or holder shall be liable to
24the buyer for the following:

25(A) Any additional insurance charges incurred by
26the buyer in rewriting the insurance for the
27unexpired period for which the original insurance was
28written.

29(B) Any loss suffered by the buyer through
30negligence on the part of the installment seller or

1holder in promptly advising the buyer of the
2inability to obtain replacement insurance.

3§ 6242. Other costs included in amount financed.

4(a) Costs payable by buyer.--An installment seller of a
5motor vehicle under an installment sale contract may require the
6buyer to pay the following other costs incurred in the sale of a
7motor vehicle under the contract:

8(1) Fees payable to the Commonwealth for filing a lien
9or encumbrance on the certificate of title to a motor vehicle
10sold under the contract or collateral security for the motor
11vehicle.

12(2) Fees payable to a public official for filing,
13recording, satisfying or releasing the contract or
14instruments securing the buyer's obligation.

15(3) Fees for notarization required in connection with
16the filing, recording, satisfying or releasing a mortgage,
17judgment lien or encumbrance.

18(b) Costs for which buyer voluntarily contracts.--The
19installment seller of a motor vehicle under an installment sale
20contract may contract with the buyer to pay on behalf of the
21buyer the following other incidental costs relating to the sale
22of the motor vehicle, for which the buyer has voluntarily
23contracted:

24(1) Fees payable to the Commonwealth for registration of
25the motor vehicle and issuance or transfer of registration
26plates.

27(2) Fees payable to the Commonwealth for the buyer's
28driver's license.

29(3) Costs of messenger service and other costs
30associated with the submission of documents to the

1Commonwealth or other governmental entity.

2(4) Licensing costs under section 27.1 of the act of
3December 22, 1983 (P.L.306, No.84), known as the Board of
4Vehicles Act.

5(c) Collection and credit for fees and costs.--With respect
6to the fees and costs under subsections (a) and (b), the
7installment seller may:

8(1) contract for, collect or receive the fees and costs
9from the buyer independently of the contract; or

10(2) extend credit to the buyer for the fees and costs
11and include them in the principal amount financed under the
12contract.

13(d) Amount of fees and costs.--Unless otherwise permitted by
14the laws of this Commonwealth, the fees and costs under
15subsections (a) and (b) that are paid or payable by the buyer
16may not exceed the amount that the installment seller expends or
17intends to expend for them.

18(e) Costs not disbursed.--Costs that are collected from a
19buyer or included in the buyer's obligation under an installment
20sale contract but that are not disbursed by the seller as
21contemplated shall be immediately refunded or credited to the
22buyer.

23(f) Incidental charges.--

24(1) Subject to paragraph (2), the installment seller of
25a motor vehicle under an installment sale contract may
26contract with the buyer to pay on behalf of the buyer other
27charges necessary or incidental to the sale of a motor
28vehicle and contracted for by the buyer, if the charges are
29not:

30(i) in violation of section 6218(a)(12) (relating to

1revocation or suspension of license); or

2(ii) restricted under this chapter or any other
3statute.

4(2) Only the costs of necessary repairs disclosed at the
5time of the installment sale may be included in the contract.
6Necessary repairs arising after the execution of the contract
7may not be added to the original contract.

8(3) This subsection does not otherwise authorize the
9mark-up of costs under subsection (a) or (b).

10§ 6243. Finance charges.

11(a) General rule.--An installment seller licensed under this
12chapter may charge, contract for, receive or collect a finance
13charge under this chapter on an installment sale contract
14covering the retail sale of a motor vehicle in this
15Commonwealth.

16(b) Method of computation.--

17(1) An installment seller may compute a finance charge
18authorized by this section by any method, if the charge does
19not exceed the applicable maximum percentage under
20subsections (d) and (e).

21(2) A finance charge under this section shall be
22computed:

23(i) On the principal amount financed as determined
24under section 6222(5)(vi) (relating to contents).

25(ii) At the annual rate indicated on a one-year
26installment sale contract.

27(iii) Proportionately on an installment sale
28contract that extends for a period that is less than or
29greater than one year.

30(3) A finance charge under this section may be computed

1on the basis of a full month for a fractional month period in
2excess of ten days and interest may continue to be charged
3during a period of time for which a late charge is also
4imposed.

5(c) Manufactured homes.--If an installment sale contract 
6involves a manufactured home, whether or not the sale on credit 
7or loan is insured or guaranteed in whole or in part by the 
8Federal Housing Administration pursuant to the National Housing 
9Act (48 Stat. 1246, 12 U.S.C. § 1701 et seq.), the percentage 
10established as a maximum finance charge for a manufactured home 
11by regulation of the Federal Housing Administration shall 
12govern.

13(d) New motor vehicles.--

14(1) Except as otherwise provided in this section, a
15finance charge for a new motor vehicle may not exceed the
16equivalent of 18% simple interest per year on the unpaid
17balance.

18(2) Except as provided in paragraph (3), a finance
19charge for a new motor vehicle having a purchase price of
20$10,000 or more and used primarily for a commercial purpose
21may not exceed the equivalent of 7.5% per year.

22(3) A finance charge may not exceed the equivalent of
2310% per year for the following:

24(i) A new truck and truck tractor having a
25manufacturer's gross vehicular weight of 13,000 pounds or
26more.

27(ii) A new semitrailer and trailer designed for use
28in combination with a truck tractor.

29(e) Used motor vehicles.--

30(1) A finance charge for a used motor vehicle, of a

1model designated by the manufacturer during a year not more
2than two years prior to the year in which the sale is made,
3may not exceed the equivalent of 18% simple interest per year
4on the unpaid balance.

5(2) A finance charge for an older used motor vehicle, of
6a model designated by the manufacturer during a year more
7than two years prior to the year in which the sale is made,
8may not exceed the equivalent of 21% simple interest per year
9on the unpaid balance.

10(f) Federally insured loans.--Subject to subsection (c), if
11a sale on credit or loan is insured or guaranteed in whole or in
12part by the Department of Veterans Affairs or another Federal
13department or agency, the laws or regulations that govern the
14Department of Veterans Affairs or other Federal department or
15agency regarding the maximum finance charge and rate of interest
16for the sale shall govern.

17§ 6244. Refinance charges.

18(a) General rule.--

19(1) A holder of an installment sale contract may:

20(i) extend the scheduled due date or defer the
21scheduled payment of all or part of an unpaid installment
22payment;

23(ii) renew the unpaid time balance of the contract;
24or

25(iii) contract for, receive and collect a refinance
26charge for an extension, deferment or renewal under
27subparagraphs (i) and (ii).

28(2) A refinance charge for a motor vehicle under section
296243(d) and (e) (relating to finance charges) may not exceed
30the amount determined under this section.

1(b) Rates and computation.--

2(1) For a motor vehicle under section 6243(d)(1) and
3(e), the refinance charge shall be determined by either of
4the following:

5(i) Subject to subsection (c), the refinance charge
6on the amount of a refinanced full or partial installment
7payment for which each full or partial payment is
8extended or deferred may not exceed the equivalent of the
9following rates:

10(A) One percent per month for a vehicle under
11section 6243(d)(1).

12(B) One and one-half percent per month for a
13vehicle under section 6243(e)(1).

14(C) Two percent per month for a vehicle under
15section 6243(e)(2).

16(ii) Subject to subsection (d), the refinance charge
17on the amount obtained shall be determined by:

18(A) Adding the unpaid time balance of the
19contract, insurance charges, other charges incidental
20to refinancing and unpaid late charges that may be
21accrued.

22(B) Deducting a rebate that may be due to the
23buyer for prepayment incidental to refinancing, at
24the rate of the finance charge in the original
25contract, for the term of the renewal contract and
26subject to the provisions of this chapter governing
27computation of the original finance charge.

28(2) For a motor vehicle under section 6243(d)(2) and
29(3), the refinance charge shall be determined by the method
30of computation under paragraph (1)(ii).

1(3) For a manufactured home under section 6243(c), the 
2refinance charge shall be determined by regulation of the 
3Federal Housing Administration pursuant to the National 
4Housing Act (48 Stat. 1246, 12 U.S.C. § 1701 et seq.).

5(4) Subject to paragraph (3), if the refinancing of a
6motor vehicle is insured or guaranteed in whole or in part by
7the Department of Veterans Affairs or another Federal
8department or agency, the laws or regulations that govern the
9Federal department or agency regarding the maximum refinance
10charge and rate of interest for the refinancing shall govern.

11(c) Fractional month.--A computed refinance charge under
12subsection (b)(1) may be computed on the basis of a full month
13for any fractional month period in excess of ten days.

14(d) Other provisions not applicable to computation.--The
15provisions of this chapter governing minimum prepayment rebate
16shall not apply in calculating refinance charges on the contract
17renewed under subsection (b)(2).

18(e) Prohibited contents.--Except as provided in subsection
19(f) and subject to subsection (g), the holder of an installment
20sale contract may not include in a refinancing contract a cash
21loan to the buyer or credit extended to the buyer incidental to
22the purchase of goods or services.

23(f) Permissible contents.--A holder under subsection (e) may
24include the following in the refinance contract:

25(1) Charges for accessories, equipment and parts for the
26motor vehicle sold under the contract.

27(2) Charges for repairs and services to the motor
28vehicle.

29(3) Finance charges.

30(g) Loan.--

1(1) A loan under subsection (e) shall not include and
2nothing in this chapter shall be construed to otherwise
3prohibit a rearrangement of payments under an installment
4sale contract by a refinance transaction involving a
5restoration of certain installment payments made under the
6contract.

7(2) A refinance charge on an amount restored pursuant to
8paragraph (1) may not exceed the equivalent of 6% simple
9interest per year.

10§ 6245. Late charges.

11(a) General rule.--A late charge may be collected on the
12following:

13(1) An installment payment that is not paid on or before
14the due date of the payment.

15(2) A contract subject to this chapter, regardless of
16the classification of vehicle under section 6243 (relating to
17finance charges) or the method by which the finance charge is
18computed.

19(b) Rate and computation.--

20(1) Under a contract for the sale of a motor vehicle
21other than a heavy commercial motor vehicle, a late charge
22may not, for any payment not made within ten days of its
23scheduled due date, exceed the rate of 2% on the amount of
24the payment in arrears.

25(2) Under a contract for the sale of a heavy commercial
26motor vehicle, a late charge may not, for any payment not
27made within ten days of its scheduled due date, exceed the
28rate of 4% of the amount of the payment in arrears.

29(3) The late charges under paragraphs (1) and (2) may be
30collected only once on each payment in arrears.

1(c) Collection.--

2(1) Late charges may be:

3(i) collected when earned during the term of a
4contract for the sale of a motor vehicle; or

5(ii) accumulated and collected at final maturity or
6at the time of final payment under a contract for the
7sale of a motor vehicle.

8(2) A late charge may not be collected on a payment in
9default because of an acceleration provision in the contract.

10§ 6246. Refund for prepayment of contract.

11(a) Right to prepay unpaid time balance.--Notwithstanding
12the provisions of an installment sale contract, a buyer may
13prepay at any time all or part of the unpaid time balance under
14the contract.

15(b) Rebate generally.--If the entire time balance is
16liquidated prior to maturity by prepayment, refinancing or
17termination by surrender or repossession and resale of the motor
18vehicle, a holder of the contract for the sale of the motor
19vehicle shall immediately rebate to the buyer any unearned
20portion of the finance charge. The rebate may be made in cash or
21credited to the amount due on the obligation of the buyer.

22(c) Rebate amount.--

23(1) Subject to paragraph (2), the proportion of the
24unearned finance charge that shall be rebated to the buyer to
25the total finance charge shall be at least the proportion of
26the sum of the periodic time balances after the date of
27prepayment to the sum of all the periodic time balances under
28the schedule of payments in the original contract.

29(2) The holder is not required to rebate:

30(i) a portion of the unearned finance charge that

1results in a net minimum finance charge on the contract
2of less than $10; or

3(ii) an unearned finance charge if the computed
4amount due is less than $1.

5SUBCHAPTER E

6REPOSSESSION

7Sec.

86251. Repossession authorized.

96252. Who may repossess.

106253. Legal proceedings.

116254. Notice of repossession.

126255. Personal property in repossessed motor vehicle.

136256. Buyer's liability for costs.

146257. Notice to police.

156258. Reinstatement of contract after repossession.

166259. Redemption and termination of contract after
17repossession.

186260. Sale of motor vehicle after repossession.

196261. Deficiency judgment.

206262. Procedures for manufactured homes.

21§ 6251. Repossession authorized.

22(a) When repossession may occur.--An installment seller or a
23holder, who has lawfully acquired a motor vehicle installment
24sale contract, may retake possession of the motor vehicle if the
25buyer:

26(1) is in default in the payment of an amount due under
27the contract; or

28(2) has committed another breach of contract, which is
29by the contract specifically made a ground for retaking the
30motor vehicle.

1(b) Legal process.--

2(1) Unless the motor vehicle can be retaken without
3breach of the peace, it shall be retaken by legal process.

4(2) This subchapter shall not be construed to authorize
5a violation of the criminal laws of this Commonwealth.

6(c) Limitation.--Except as provided in this chapter, in a 
7transaction involving a commercial purpose, the provisions of 
8this chapter regarding repossession of a motor vehicle are 
9limited by the provisions of 13 Pa.C.S. Div. 9 (relating to 
10secured transactions).

11§ 6252. Who may repossess.

12(a) With legal process.--Repossession of a motor vehicle
13when effected by legal process shall be made only by a duly
14constituted public official.

15(b) Without legal process.--Repossession of a motor vehicle
16when effected otherwise than by legal process under subsection
17(a) shall be made only by the following:

18(1) The holder.

19(2) An official or full-time employee of the holder.

20(3) A collector-repossessor licensed under this chapter.

21(4) The person who originally sold the motor vehicle to
22the buyer under the installment sale contract.

23(5) A licensed seller or sales finance company that is
24not regularly engaged in the business of repossessing motor
25vehicles but occasionally does so as an accommodation for
26another seller or sales finance company.

27(6) An official or full-time employee of a licensed
28seller or sales finance company under paragraph (5).

29§ 6253. Legal proceedings.

30(a) When to commence action.--If repossession and sale of a

1motor vehicle subject to an installment sale contract or its
2collateral security is effected by legal process, the holder may
3commence legal proceedings immediately upon the buyer's default
4or breach of the contract.

5(b) Rights and duties of buyer.--In a proceeding under
6subsection (a), the buyer shall receive notice, have the rights
7and be liable for the costs of suit and reasonable attorney fees
8as provided by the laws of this Commonwealth governing legal
9proceedings.

10§ 6254. Notice of repossession.

11(a) General rule.--If repossession of a motor vehicle
12subject to an installment sale contract is effected other than
13by legal process, the holder shall immediately furnish the buyer
14with a written notice of repossession.

15(b) Delivery.--The notice of repossession shall be delivered
16in person or sent by registered or certified mail to the last
17known address of the buyer.

18(c) Contents.--The notice of repossession shall contain the
19following:

20(1) The buyer's right to reinstate the contract, if the
21holder extends the privilege of reinstatement and redemption
22of the motor vehicle.

23(2) An itemized statement of the total amount required
24to redeem the motor vehicle by reinstatement or payment of
25the contract in full.

26(3) Notice to the buyer of the holder's intent to resell
27the motor vehicle at the expiration of 15 days from the date
28of mailing the notice.

29(4) The place where the motor vehicle is stored.

30(5) The name and address of the person to whom the buyer

1shall make payment or on whom the buyer may serve notice.

2(6) A statement that any personal property left in the
3repossessed vehicle will be held for 30 days from the date of
4the mailing of the notice.

5(7) The name and address of the person that the buyer
6may contact to receive a full statement of account as
7provided by section 6230 (relating to statement of account to
8buyer).

9§ 6255. Personal property in repossessed motor vehicle.

10A buyer may reclaim personal property left in the repossessed
11motor vehicle within 30 days of the mailing of the notice under
12section 6254 (relating to notice of repossession). If personal
13property is left in the motor vehicle after the 30-day time
14period, the holder may dispose of the personal property in any
15manner that it chooses.

16§ 6256. Buyer's liability for costs.

17If repossession of a motor vehicle subject to an installment
18sale contract is effected other than by legal process, the buyer
19shall be liable for costs incurred by the holder in retaking,
20storing and repairing the motor vehicle only if:

21(1) The default exceeds 15 days at the time of
22repossession.

23(2) The costs are actual, necessary and reasonable,
24excluding repossession costs for services by an individual
25who is a regular full-time employee of the holder.

26(3) The costs are supported by receipts or other
27satisfactory evidence of payment.

28(4) The records of the holder show detailed information
29as to the nature and amount of each cost, the date of payment
30and the recipient of the payment.

1§ 6257. Notice to police.

2The repossessor of a motor vehicle shall give notice within
324 hours after the repossession to:

4(1) the local municipal police department having
5jurisdiction of the area where the motor vehicle was located
6at the time of repossession; or

7(2) the Pennsylvania State Police, if no municipal
8police jurisdiction exists.

9§ 6258. Reinstatement of contract after repossession.

10(a) When reinstatement may occur.--If a motor vehicle
11subject to an installment sale contract has been repossessed by
12legal process or otherwise because of default or other breach of
13contract, the holder may reinstate the contract and return the
14motor vehicle to the buyer if the buyer:

15(1) pays all past due installments; or

16(2) makes mutually satisfactory arrangements with the
17holder regarding the following:

18(i) Accrued late charges.

19(ii) Costs of suit under the contract and authorized
20by this chapter in repossession by legal process.

21(iii) The costs of retaking, repairing and storing
22under section 6256 (relating to buyer's liability for
23costs), if default at the time of repossession exceeds 15
24days.

25(b) Refinancing.--If an installment sale contract for a
26motor vehicle is reinstated after repossession, the holder may
27contemporaneously or subsequently enter into a contract with the
28buyer for refinancing the obligation as provided in this
29chapter.

30§ 6259. Redemption and termination of contract after

1repossession.

2(a) Retaining motor vehicle.--Unless the right of redemption 
3is waived in a nonconsumer transaction under 13 Pa.C.S. § 
49624(c) (relating to waiver), if repossession of a motor vehicle 
5subject to an installment sale contract is effected within or 
6outside this Commonwealth other than by legal process, the 
7holder shall retain the repossessed motor vehicle for a period 
8of 15 days after the mailing of the notice of repossession under 
9section 6254 (relating to notice of repossession).

10(b) Redemption.--During the 15-day period after the mailing
11of the notice of repossession, the buyer may redeem the motor
12vehicle and terminate the installment sale contract by payment
13or tender of payment to the holder of the following amounts:

14(1) If default at the time of repossession is 15 days or
15less, the sum of the following, less rebate of any unearned
16finance charge and excluding the costs of retaking, repairing
17and storing under section 6256 (relating to buyer's liability
18for costs):

19(i) The unpaid time balance.

20(ii) Accrued late charges authorized by this
21chapter.

22(iii) Any other amount lawfully due under the
23contract.

24(2) If default at the time of repossession exceeds 15
25days, the sum of the following, less rebate of any unearned
26finance charge:

27(i) The unpaid time balance.

28(ii) Accrued late charges authorized by this
29chapter.

30(iii) The costs of retaking, repairing and storing

1under section 6256.

2(iv) Any other amount lawfully due under the
3contract.

4(c) Return of motor vehicle and collateral.--

5(1) If the buyer redeems the motor vehicle and 
6terminates the installment sale contract by payment or tender 
7as provided in subsection (b), the holder shall return the 
8motor vehicle and other collateral in a manner consistent 
9with 13 Pa.C.S. § 9623 (relating to right to redeem 
10collateral).

11(2) Property is deemed to be returned in a manner in 
12compliance with this chapter and 13 Pa.C.S. § 9623 by 
13delivery to one of the following sites designated by the 
14buyer:

15(i) The county in this Commonwealth or within a
16comparable governmental unit outside this Commonwealth
17where repossession occurred.

18(ii) The county in this Commonwealth where the buyer
19resides.

20(iii) The county in this Commonwealth where the
21vehicle was purchased under the contract.

22(3) Upon receipt of the funds necessary to redeem the
23motor vehicle as provided in subsection (b), the holder shall
24return the repossessed motor vehicle as soon as is reasonably
25possible, but not later than ten business days from the
26receipt of the funds.

27§ 6260. Sale of motor vehicle after repossession.

28(a) Forfeiture.--If the repossessed motor vehicle subject to
29an installment sale contract is not redeemed by the buyer either
30by termination or reinstatement of the contract within the 15-

1day notice of redemption period, the buyer shall forfeit all
2claim to the motor vehicle and collateral security.

3(b) Deficiency.--If the buyer does not redeem the
4repossessed motor vehicle within the 15-day notice of redemption
5period, the installment seller or holder may not bring an action
6or proceeding against the buyer for a deficiency under section
76261 (relating to deficiency judgment), unless there has been a
8public or private sale of the repossessed motor vehicle and
9collateral security.

10(c) Motor vehicle title.--At the sale of a repossessed motor
11vehicle to a purchaser, the installment seller or holder shall
12provide to the purchaser the title to the vehicle and all
13necessary documents to effect the transfer of the motor vehicle.

14§ 6261. Deficiency judgment.

15(a) General rule.--If the proceeds of a resale under section
166260 (relating to sale of motor vehicle after repossession) are
17not sufficient to defray the expenses regarding the repossessed
18motor vehicle, including the costs under section 6256 (relating
19to buyer's liability for costs), the net balance due on the
20installment sale contract and the amount of accrued late charges
21authorized by this chapter, the installment seller or holder may
22recover the deficiency from the buyer or from any person who has
23succeeded to the obligations of the buyer.

24(b) Reasonable value.--

25(1) The reasonable value of the motor vehicle at the
26time of resale shall be determined in an action or a
27proceeding brought by:

28(i) the installment seller or holder to recover the
29deficiency; or

30(ii) the buyer.

1(2) The resale price of the motor vehicle is prima
2facie, but not conclusive, evidence of the reasonable value
3of the motor vehicle.

4(3) The determined reasonable value or the resale price
5of the motor vehicle, whichever is higher, shall be credited
6against the buyer's indebtedness.

7(c) Reasonable costs.--In an action or a proceeding for a
8deficiency, the buyer may have the reasonableness of the costs
9incurred determined under section 6256.

10(d) Deficiency notice.--Within 30 days after the sale of a
11repossessed motor vehicle, the installment seller or holder
12shall deliver in person or send by registered or certified mail
13to the last known address of the buyer a deficiency notice
14containing the following:

15(1) The sale price of the repossessed motor vehicle.

16(2) The itemized costs associated with the repossession
17and sale of the repossessed motor vehicle.

18(3) The amount of the deficiency owed by the buyer.

19(e) Nonapplicability.--Subsections (b)(1)(ii) and (d) shall
20not apply to a deficiency on a resale that was held prior to the
21effective date of this section.

22§ 6262. Procedures for manufactured homes.

23(a) Notice.--

24(1) A holder of an installment sale contract for a
25manufactured home shall give the buyer notice under this
26subsection before the holder takes any of the following
27actions:

28(i) Accelerates the maturity of the installment sale
29contract for the manufactured home.

30(ii) Commences a legal action to recover under the

1contract.

2(iii) Takes possession of any collateral of the
3buyer for the obligation.

4(2) Notice of the intention to take an action under
5paragraph (1) shall be in writing and:

6(i) Sent to the buyer at least 30 days in advance of
7the action by registered or certified mail at the address
8where the manufactured home is located.

9(ii) Clearly and conspicuously state the following:

10(A) The particular obligation or security
11interest.

12(B) The nature of the default claimed.

13(C) The right of the buyer to cure the default
14as provided in this section and exactly what
15performance, including the sum of money, that must be
16tendered to cure the default.

17(D) The right of the buyer to cure the default
18at any time before title to the manufactured home is
19lawfully transferred from the buyer, which shall be
20at least 45 days after receipt of the notice.

21(E) The method by which the buyer's ownership or
22possession of the manufactured home may be
23terminated.

24(3) Notice under this subsection shall not be required
25if the buyer has abandoned or voluntarily surrendered the
26property that is the subject of the contract.

27(b) Cure of default.--

28(1) Notwithstanding any other provision of law, the
29buyer of a manufactured home under an installment sale
30contract or another person on the buyer's behalf may cure the

1buyer's default and prevent the sale or other disposition of
2the manufactured home and avoid acceleration:

3(i) After the notice under subsection (a) has been
4given.

5(ii) At any time before title to the manufactured
6home is lawfully transferred from the buyer, which shall
7be at least 45 days after the buyer's receipt of the
8notice.

9(iii) Not more than three times in a calendar year.

10(iv) By tendering the amount or performance
11specified in this section.

12(2) To cure a default under this subsection, the buyer
13shall take the following actions:

14(i) Pay by cash, cashier's check or certified check
15all sums which would have been due at the time of
16payment, in the absence of default or exercise of an
17acceleration clause.

18(ii) Perform any other obligation which the buyer
19would have been bound to perform, in the absence of
20default or exercise of an acceleration clause.

21(iii) Pay reasonable fees allowed under subsection
22(d) and reasonable costs of proceeding to commence legal
23action as specified in writing by the holder and actually
24incurred to the date of payment.

25(iv) Pay a reasonable late penalty, if provided for
26in the contract.

27(v) Pay the costs that are reasonable and actually
28incurred by the holder for detaching and transporting the
29manufactured home to the site of the sale.

30(3) The cure of a default under this subsection shall

1restore the buyer to the same position as if the default had
2not occurred.

3(c) Prepayment.--An obligation under an installment sale
4contract for a manufactured home may be prepaid without penalty
5or other charge for prepayment at any time before the end of the
6period of the loan.

7(d) Attorney fees.--A holder of an installment sale contract
8for a manufactured home may not contract for or receive attorney
9fees from the buyer except as follows:

10(1) Upon commencement of legal action regarding the
11contract, attorney fees that are reasonable and actually
12incurred by the holder may be charged to the buyer.

13(2) Prior to commencement of legal action regarding the
14contract, attorney fees may be charged if they are:

15(i) Reasonable and actually incurred.

16(ii) Not in excess of $150.

17(iii) Incurred after the 30-day notice period under
18subsection (a).

19(e) Waiver prohibited.--Notwithstanding any other provision
20of law, a person may not waive the provisions of this section by
21an oral or written agreement.

22(f) Applicability.--Notwithstanding this section, the act of
23November 24, 1976 (P.L.1176, No.261), known as the Manufactured
24Home Community Rights Act, shall govern procedures regarding
25abandoned manufactured homes.

26SUBCHAPTER F

27PENALTIES AND LIABILITY

28Sec.

296271. Operating without license.

306272. Violation of chapter provisions.

16273. Use of unlicensed collector-repossessor.

26274. Civil penalty by department.

36275. Liability of sales finance company.

4§ 6271. Operating without license.

5(a) Prohibition; penalty.--An entity or individual under
6subsection (b) engaging in business in this Commonwealth as an
7installment seller, sales finance company or collector-
8repossessor without having obtained a license under this chapter
9commits a violation of this chapter and shall, upon conviction,
10be sentenced at the discretion of the court to either or both of
11the following:

12(1) Pay a fine of not less than $2,000 nor more than
13$10,000.

14(2) Imprisonment for not more than three years.

15(b) Applicability.--Subsection (a) applies to the following:

16(1) A person, partnership, association, business
17corporation, financial institution, nonprofit corporation,
18common law trust, joint stock company or any other group of
19individuals, however organized.

20(2) An owner, partner, member, officer, director,
21trustee, employee, agent, broker or representative of an
22entity under paragraph (1).

23§ 6272. Violation of chapter provisions.

24A licensee or an owner, partner, member, officer, director,
25trustee, employee, agent, broker or representative of the
26licensee who violates a provision of this chapter or directs a
27violation of this chapter commits a violation of this chapter,
28and shall, upon conviction, be sentenced at the discretion of
29the court to the following:

30(1) Pay a fine of not more than $2,000 for the first

1offense.

2(2) For each subsequent offense, to either or both of
3the following:

4(i) Pay a fine of not more than $2,000.

5(ii) Imprisonment for not more than one year.

6§ 6273. Use of unlicensed collector-repossessor.

7A licensed seller or sales finance company acting as holder
8of a motor vehicle installment sale contract who hires,
9authorizes or permits an unlicensed collector-repossessor, as
10defined in this chapter, to collect payments on the contract or
11repossess a motor vehicle sold under the contract within this
12Commonwealth commits a violation of this chapter and shall, upon
13conviction, be sentenced at the discretion of the court to the
14following:

15(1) Pay a fine of not more than $2,000 for the first
16offense.

17(2) For each subsequent offense, to either or both of
18the following:

19(i) Pay a fine of not more than $2,000.

20(ii) Imprisonment for not more than one year.

21§ 6274. Civil penalty by department.

22A person required to be licensed under this chapter that
23violates this chapter, directs a violation of this chapter or
24engages in an activity for which a license could be suspended or
25revoked under section 6218 (relating to revocation or suspension
26of license) shall be subject to a civil penalty levied by the
27department of not more than $2,000 for each offense.

28§ 6275. Liability of sales finance company.

29(a) Exemption from liability.--A sales finance company
30licensed under this chapter and engaged in the purchase, sale,

1assignment, securitization or servicing of installment sale
2contracts may not be held liable under this chapter for either
3of the following:

4(1) Excessive markups of charges by installment sellers.

5(2) A failure to disclose under section 6221(e)
6(relating to requirements).

7(b) Federal status preserved.--This section does not affect 
8the liability of a sales finance company that is a holder under 
9the Federal Trade Commission Act (38 Stat. 717, 15 U.S.C. § 41 
10et seq.).

11CHAPTER 63

12GOODS AND SERVICES INSTALLMENT SALES

13Subchapter

14A. General Provisions

15B. Closed-End Credit Agreements

16C. Open-End Credit Agreements

17D. Costs and Charges

18E. Enforcement and Penalties

19SUBCHAPTER A

20GENERAL PROVISIONS

21Sec.

226301. Scope of chapter.

236302. Definitions.

246303. Waiver.

256304. Applicability.

266305. Prohibited activities and provisions.

276306. Assignment.

286307. Venue.

296308. Attorney fees and costs.

306309. Repossession; acceleration; right to cure.

16310. Lien.

26311. Validity.

36312. Discharge of obligation.

46313. Prepayment of obligation.

56314. Acknowledgment of payment in full.

6§ 6301. Scope of chapter.

7This chapter relates to goods and services installment sales.

8§ 6302. Definitions.

9The following words and phrases when used in this chapter
10shall have the meanings given to them in this section unless the
11context clearly indicates otherwise:

12"Actuarial method." The method of allocating payments made 
13on a debt between the amount financed and the finance charge at 
14the interest rate stated in the closed-end credit agreement, as 
15defined in Regulation Z, adopted under the Truth in Lending Act 
16(Public Law 90-321, 15 U.S.C. § 1601 et seq.).

17"Buyer." A person who buys goods or obtains services from a 
18seller in a sale, if the acquisition is not principally for the 
19purpose of resale.

20"Closed-end credit agreement." Either of the following:

21(1) A contract for a sale between a buyer and seller in
22which the buyer promises to pay in installments the
23outstanding balance incurred in the sale, whether or not the
24contract contains a security interest, and which contains
25either of the following:

26(i) A finance charge, which is computed and added to
27the unpaid balance.

28(ii) A provision specifying that if the buyer had
29not contracted to pay in installments, the buyer could
30have received the goods or services at a lesser price or

1additional or higher quality goods or services at no
2added cost.

3(2) A contract for a sale between a buyer and seller
4that includes a security agreement or a contract for the
5bailment or leasing of goods in which both of the following
6occur:

7(i) The consideration that the bailee or lessee
8contracts to pay as compensation for the use of the goods
9is a sum substantially equivalent to or in excess of
10their value and is an obligation for the term of the
11lease that is not subject to termination by the bailee or
12lessee.

13(ii) The bailee or lessee agrees to become or has
14the option of becoming the owner of the goods for no or
15nominal additional consideration upon full compliance
16with the terms of the contract.

17"Finance charge."

18(1) The amount, regardless of how expressed, that a
19buyer contracts to pay or pays for the privilege of
20purchasing goods or services to be paid in installments.

21(2) Includes all charges incident to investigating and
22making a closed-end credit agreement or an open-end credit
23agreement and for the extension of the credit under that
24agreement.

25(3) Excludes the following:

26(i) Amounts charged for insurance premiums under
27section 6342 (relating to insurance).

28(ii) Late fees under section 6343 (relating to late
29fees).

30(iii) The costs of collection under section 6344

1(relating to costs of collection).

2(iv) Costs from nonaffiliated entities under section
36346 (relating to costs from nonaffiliated entity).

4(v) Extension and deferment charges under section
56347 (relating to extension and deferment).

6(vi) Attorney fees.

7(vii) Court costs.

8(viii) Official fees.

9"Financing agency." A person, including a financial 
10institution, engaged in this Commonwealth in whole or in part in 
11the business of purchasing closed-end credit agreements or open-
12end credit agreements from at least one seller.

13"Goods."

14(1) Personal property bought primarily for personal,
15family or household use.

16(2) The term includes the following:

17(i) Certificates, coupons or gift cards exchangeable
18for goods.

19(ii) Electronic media items.

20(iii) Items purchased through the Internet.

21(3) The term excludes the following:

22(i) Goods covered under the act of August 14, 1963 
23(P.L.1082, No.464), known as the Home Improvement Finance 
24Act.

25(ii) A motor vehicle covered under Chapter 62
26(relating to motor vehicle sales finance).

27(iii) A security covered under the act of December 
285, 1972 (P.L.1280, No.284), known as the Pennsylvania 
29Securities Act of 1972.

30"Holder."

1(1) Either of the following:

2(i) A seller who acquires a closed-end credit
3agreement or an open-end credit agreement that is
4executed, incurred or entered into by a buyer.

5(ii) A financing agency or other assignee that
6purchases the agreement under subparagraph (i).

7(2) Excludes a pledgee or holder of a security interest
8in an aggregate number of agreements to secure a bona fide
9loan on them.

10"Official fees." The fees required by law and actually to be 
11paid to the appropriate public officer to perfect a lien or 
12other security interest that is retained or taken by a seller 
13under a closed-end credit agreement or an open-end credit 
14agreement.

15"Open-end credit agreement." A contract:

16(1) in which a buyer promises to pay in installments to
17a seller or financing agency the outstanding balance incurred
18in a sale, whether or not the seller retains a security
19interest in the goods sold; and

20(2) that provides for a finance charge expressed as a
21percent of the periodic balances to accrue thereafter, if the
22charge is not capitalized or stated as a dollar amount in the
23contract.

24"Purchase price." The price of goods sold or services 
25furnished, which may include applicable taxes, as specified in a 
26closed-end credit agreement or an open-end credit agreement.

27"Sale." The sale of goods or furnishing of services by a 
28seller to a buyer for a time sale price payable in installments.

29"Seller." A person engaged in the business of selling goods 
30or furnishing services to a buyer.

1"Service contract." A written contract, optional on the part 
2of a buyer, to perform over a fixed period of time or for a 
3specified duration services regarding the maintenance or repair 
4of goods.

5"Services."

6(1) Work, labor and services for other than a commercial
7or business use.

8(2) The term includes the following:

9(i) Services furnished in connection with the
10purchase or repair of goods or the repair of motor
11vehicles.

12(ii) A service contract.

13(iii) Services purchased through the Internet.

14(3) The term excludes the following:

15(i) Services covered under the act of August 14, 
161963 (P.L.1082, No.464), known as the Home Improvement 
17Finance Act.

18(ii) A service contract or warranty covered under
19Chapter 62 (relating to motor vehicle sales finance).

20(iii) Services for which the tariffs, rates,
21charges, costs or expenses, including in each instance
22the time sale price, are required by law to be filed with
23or approved by any of the following:

24(A) The Commonwealth.

25(B) The Federal Government.

26(C) An official department, commission or agency
27of the Commonwealth or the United States.

28"Time balance." The total of the unpaid balance and the 
29amount of the finance charge.

30"Time sale price." The total of the purchase price and the 

1amounts included for insurance, official fees and finance 
2charge.

3"Unpaid balance." The purchase price and the amounts 
4included for insurance and official fees, less the amount of a 
5buyer's down payment in money or goods.

6"Warranty."

7(1) Either of the following, which becomes part of the
8basis of the bargain between a buyer and seller for purposes
9other than resale:

10(i) A written affirmation of fact or written promise
11made in connection with the sale of goods by a seller or
12manufacturer to a buyer that relates to the nature of the
13material or workmanship and affirms or promises that the
14material or workmanship is free of defects or will meet a
15specified level of performance over a specified period of
16time.

17(ii) Any undertaking in writing in connection with
18the sale of goods by a seller or manufacturer to refund,
19repair, replace or take other remedial action with
20respect to the goods if the goods fail to meet the
21specifications set forth in the undertaking.

22(2) Excludes a service contract and an extended warranty
23with the characteristics of a service contract.

24§ 6303. Waiver.

25A buyer's waiver of the provisions of this chapter, including
26any purported waiver effected by a contractual choice of the law
27of another jurisdiction contained in a closed-end credit
28agreement or an open-end credit agreement, shall be deemed
29contrary to public policy and is void and unenforceable.

30§ 6304. Applicability.

1(a) Agreements.--A closed-end credit agreement and an open-
2end credit agreement are deemed to be made in this Commonwealth
3and subject to the provisions of this chapter if either of the
4following occurs:

5(1) The seller offers or agrees in this Commonwealth to
6sell to a resident buyer of this Commonwealth.

7(2) A resident buyer of this Commonwealth accepts or
8makes the offer in this Commonwealth to buy, regardless of
9the situs specified in the agreement.

10(b) Offer to sell.--A verbal or written solicitation or
11communication to sell that originates outside this Commonwealth
12and is forwarded to and received in this Commonwealth by a
13resident buyer of this Commonwealth shall be deemed an offer or
14agreement to sell in this Commonwealth and subject to the
15provisions of this chapter.

16(c) Offer to buy.--A verbal or written solicitation or
17communication to buy that originates within this Commonwealth
18from a resident buyer of this Commonwealth and is forwarded to
19and received by a seller outside this Commonwealth shall be
20deemed an acceptance or offer to buy in this Commonwealth and
21subject to the provisions of this chapter.

22(d) Subsequent goods and services.--Goods or services that
23subsequently result from a solicitation or communication under
24subsection (b) or (c) are subject to the provisions of this
25chapter.

26(e) Exclusivity.--Notwithstanding any provision of law to
27the contrary, this chapter shall exclusively govern and regulate
28the terms and conditions of all extensions of credit, except
29cash advances, for the purchase of goods and services within
30this Commonwealth.

1§ 6305. Prohibited activities and provisions.

2(a) Activities.--In attempting to collect a buyer's 
3obligation, a seller or holder shall comply with the act of 
4March 28, 2000 (P.L.23, No.7), known as the Fair Credit 
5Extension Uniformity Act.

6(b) Provisions.--A closed-end credit agreement, an open-end
7credit agreement or other agreement may not contain a provision
8by which any of the following may occur:

9(1) Except as provided in section 6306 (relating to
10assignment), the buyer agrees not to assert a claim or
11defense arising from the sale against a seller or an
12assignee.

13(2) In the absence of the buyer's default in the
14performance of an obligation, the holder may accelerate the
15maturity of all or part of the amount owed.

16(3) The seller or holder of the agreement, or a person
17acting on behalf of the seller or holder, is given authority
18to enter the buyer's premises unlawfully or commit a breach
19of the peace in the repossession of goods.

20(4) The buyer waives a right of action against the
21seller or holder of the agreement, or a person acting on
22behalf of the seller or holder, for an illegal act committed
23in the collection of payments under the agreement or the
24repossession of goods.

25(5) The buyer executes a power of attorney appointing
26the seller or holder of the agreement, or a person acting on
27behalf of the seller or holder, as the buyer's agent in the
28collection of payments under the agreement or the
29repossession of goods.

30(6) The buyer relieves the seller from liability for

1legal remedies that the buyer may have against the seller
2under the agreement or a separate instrument executed in
3connection with the agreement.

4(7) The buyer agrees to the payment of a charge by
5reason of the exercise of the right to rescind or avoid the
6agreement.

7(8) The seller or holder of the agreement is given the
8right to commence an action on the agreement under the
9provisions of this chapter in a county other than the county
10where any of the following occurred:

11(i) The buyer signed the agreement.

12(ii) The buyer resides at the commencement of the
13action.

14(iii) The buyer resided when the agreement was
15entered into.

16(iv) The goods purchased under the agreement have
17been so affixed to real property as to become a part of
18the real property.

19(9) An assignment of wages is given.

20(10) The seller or holder of the agreement, or a person
21acting on behalf of the seller or holder, is given authority
22to execute upon a judgment by confession.

23(11) The seller or holder of the agreement, or a person
24acting on behalf of the seller or holder, is given authority
25to take a mortgage or other security against residential real
26estate of the buyer or another obligee to the agreement.

27§ 6306. Assignment.

28Except as provided in section 6352 (relating to
29noncompliance; costs and charges), a right of action or defense
30arising from a sale that a buyer has against a seller is not

1eliminated by assignment of the buyer's closed-end credit
2agreement or open-end credit agreement to a third party,
3regardless of whether the third party acquires the agreement in
4good faith and for value.

5§ 6307. Venue.

6An action on a closed-end credit agreement or an open-end
7credit agreement shall be commenced in a county where any of the
8following occurred:

9(1) The buyer signed the agreement.

10(2) The buyer resides at the commencement of the action.

11(3) The buyer resided when the agreement was entered
12into.

13(4) The goods purchased under the agreement have been so
14affixed to real property as to become a part of the real
15property.

16§ 6308. Attorney fees and costs.

17(a) Award.--Reasonable attorney fees and costs shall be
18awarded to the prevailing party in an action on a closed-end
19credit agreement or an open-end credit agreement, regardless of
20whether the action is instituted by the seller, holder or buyer.

21(b) Agreement.--A seller may provide for the payment of
22attorney fees and costs under subsection (a) in an agreement
23signed by the buyer, if a copy of the agreement is given or
24furnished to the buyer.

25(c) Definition.--For purposes of this section, a defendant
26is deemed to be a prevailing party if both of the following
27occur:

28(1) The defendant:

29(i) Alleges in its answer that it tendered to the
30plaintiff the full amount to which the plaintiff was

1entitled.

2(ii) Deposits the amount with the court.

3(2) The allegation in paragraph (1)(i) is found to be
4true.

5§ 6309. Repossession; acceleration; right to cure.

6(a) Rights of holder.--If a buyer defaults in the
7performance of an obligation under a closed-end credit agreement
8or an open-end credit agreement, the holder, pursuant to the
9rights granted under the agreement:

10(1) May proceed to recover judgment for the balance due
11or retake the goods.

12(2) Shall comply with and be limited by the requirements 
13of 13 Pa.C.S. (relating to commercial code).

14(b) Prohibited actions.--Unless the buyer is in default and
15the seller or holder provides the buyer with the notice under
16subsection (c), a seller or holder may not:

17(1) accelerate the maturity of the agreement; or

18(2) commence legal action or repossess without legal
19process.

20(c) Notice.--

21(1) Notice under this section shall be:

22(i) sent by certified mail to the buyer's last known
23address; or

24(ii) delivered personally to the residence of the
25buyer.

26(2) The notice shall inform the buyer of all the
27following:

28(i) The right to cure the default within 21 days of
29the date of receipt of the notice upon the payment of all
30the following:

1(A) The amount in default.

2(B) Late fees under section 6343 (relating to
3late fees).

4(C) Extension and deferment charges under
5section 6347 (relating to extension and deferment).

6(D) Actual repossession costs.

7(ii) The name, address and telephone number of the
8seller or holder.

9(iii) The total amount due, which is the sum of the
10items in subparagraph (i).

11(iv) The exact date by which the amount due must be
12paid.

13(v) The name, address and telephone number of the
14person to whom payment must be made.

15(vi) Other performance necessary to cure a default
16arising from other than nonpayment of the obligation.

17(3) The seller or holder is not required to provide the
18notice under this subsection more than once in any 12-month
19period.

20(d) Rights of buyer; curing default.--

21(1) The buyer shall have the rights specified in the
22notice under subsection (c).

23(2) The act of curing a default restores to the buyer
24the rights under the agreement as though no default had
25occurred.

26§ 6310. Lien.

27A contract, other than for services, may not provide for a
28lien on goods that are fully paid for or have not been sold by
29the seller.

30§ 6311. Validity.

1A provision in a closed-end credit agreement or an open-end
2credit agreement that is prohibited by this chapter is void but
3does not otherwise affect the validity of the agreement.

4§ 6312. Discharge of obligation.

5Unless a buyer has notice of the actual or intended
6assignment of a closed-end credit agreement or an open-end
7credit agreement, payment made by the buyer to the last known
8holder of the agreement shall, to the extent of the payment,
9discharge the buyer's obligation.

10§ 6313. Prepayment of obligation.

11(a) Right to prepay.--Notwithstanding the provisions of a
12closed-end credit agreement or an open-end credit agreement, a
13buyer may prepay without additional charge at any time all or
14part of the time balance under the agreement.

15(b) Refund credit.--

16(1) Pursuant to a closed-end credit agreement and
17subject to this chapter, the seller or holder may accelerate
18the balance due on the agreement but shall provide a refund
19credit calculated as of the date of the acceleration if:

20(i) the finance charges had been computed and added
21to the unpaid balance at the time the agreement was
22entered into; and

23(ii) the entire time balance under the agreement is
24prepaid prior to maturity.

25(2) The amount of the refund credit shall be computed by
26the actuarial method.

27(3) If the amount of the refund credit is less than $1,
28a refund does not need to be made.

29§ 6314. Acknowledgment of payment in full.

30Upon a buyer's request and after the payment of all sums for

1which the buyer is obligated under a closed-end credit agreement
2or an open-end credit agreement, the holder shall deliver or
3mail to the buyer at the buyer's last known address an
4instrument that:

5(1) Acknowledges that the obligation of the buyer under
6the agreement has been paid in full.

7(2) Releases all security in the goods under the
8agreement.

9SUBCHAPTER B

10CLOSED-END CREDIT AGREEMENTS

11Sec.

126321. General rules.

136322. Contents.

146323. Copy of agreement.

156324. Agreement resulting from telephone or mail
16communications.

176325. Purchase money loan; notice.

186326. Statement to buyer.

196327. Refinancing.

206328. New payment schedule.

216329. Add-on sales.

22§ 6321. General rules.

23(a) Entire agreement.--Except as provided in section 6329(c)
24(relating to add-on sales), a closed-end credit agreement shall
25contain the entire agreement of the parties regarding the costs
26and terms of payment for the goods and services, including a
27promissory note or other evidence of indebtedness between the
28parties relating to the transaction.

29(b) Signature.--A seller may not obtain the signature of the
30buyer on the agreement if the agreement contains blank spaces to

1be filled in after it has been signed.

2(c) Installments.--A closed-end credit agreement may provide
3for unequal or irregular installments.

4(d) Incorporation by reference.--A holder may, in a buyer's
5subsequent closed-end credit agreement, incorporate by reference
6the buyer's previous closed-end credit agreement and a
7description of the collateral for the items purchased under the
8previous agreement.

9§ 6322. Contents.

10Except as provided in section 6329 (relating to add-on
11sales), a closed-end credit agreement shall contain all the
12following:

13(1) One of the following headings at the top of the
14agreement or directly above the space reserved for the
15signature of the buyer:

16(i) "Security Agreement" if the seller retains a
17security interest in the goods as security for the goods
18or services purchased.

19(ii) "Lien Contract" if the seller obtains a lien on
20other goods or nonresidential real estate as security for
21the goods or services purchased.

22(iii) "Closed-End Credit Agreement" if the seller
23does not obtain security for the goods or services
24purchased.

25(2) The names of the seller and buyer.

26(3) The place of business of the seller.

27(4) The residence or place of business of the buyer as
28specified by the buyer.

29(5) A description of the goods or services sufficient to
30identify them. Services or multiple items of goods may be

1described in general terms but in detail sufficient to
2identify them, in a separate writing.

3(6) The purchase price of the goods and services that
4are the subject matter of the sale.

5(7) The amount of the buyer's down payment, including
6the following:

7(i) An itemization of the amount paid in money and
8goods.

9(ii) A brief description of traded-in goods.

10(8) The difference between the purchase price under
11paragraph (6) and the amount under paragraph (7).

12(9) The amount included for insurance, including the
13specific coverage and cost.

14(10) The amount of official fees.

15(11) The unpaid balance, which is the sum of the amounts
16under paragraphs (8), (9) and (10).

17(12) The amount of the finance charge.

18(13) The time balance, which is the sum of the unpaid
19balance under paragraph (11) and the amount under paragraph
20(12), and the following:

21(i) The number of installments required.

22(ii) The amount of each installment expressed in
23dollars.

24(iii) The due date or period for each installment.

25(14) The time sale price.

26(15) The following notice provision:

27NOTICE TO THE BUYER

28Do not sign this agreement before you read it or if it
29contains any blank spaces. You are entitled to a
30completely filled-in copy of this agreement. You have the

1right to pay off in advance the full amount due. Under
2certain conditions, you may obtain a partial refund of
3the finance charge.

4(16) The following notice provision:

5NOTICE

6A holder of this agreement is subject to all the claims
7and defenses that the buyer could assert against the
8seller of goods or services obtained by this agreement or
9with the proceeds of this agreement. Recovery under this
10agreement by the buyer may not exceed the amount paid by
11the buyer under the agreement.

12(17) A statement that the seller may collect from the
13buyer late fees, costs of collection, costs from
14nonaffiliated entities and charges for deferment and
15extension as provided for in this chapter.

16§ 6323. Copy of agreement.

17(a) Delivery of copy.--Except as provided in section 6324(b)
18(relating to agreement resulting from telephone or mail
19communications), a seller shall provide a legible and complete
20copy of a closed-end credit agreement to a buyer when the buyer
21executes the agreement.

22(b) Obligation of buyer.--Until the seller completes the
23obligation under subsection (a), the buyer is obligated to pay
24only the purchase price under the agreement.

25(c) Acknowledgment.--

26(1) The seller shall present an acknowledgment to the
27buyer specifying that the buyer has received a copy of the
28agreement.

29(2) The acknowledgment may be a separate document or
30contained in the agreement.

1(3) If the acknowledgment is contained in the agreement,
2it shall appear directly above the space reserved for the
3buyer's signature.

4(4) The buyer's written acknowledgment of delivery of a
5copy of the agreement in conformity with this subsection
6shall be a rebuttable presumption of delivery and compliance
7with this subsection in an action or proceeding by or against
8an assignee of the agreement without knowledge to the
9contrary when the agreement is purchased.

10§ 6324. Agreement resulting from telephone or mail
11communications.

12(a) General rule.--A closed-end credit agreement that is
13negotiated and entered into by a buyer and seller by telephone
14or mail is permitted under this subchapter and subject to this
15section if:

16(1) the seller did not personally solicit the sale; and

17(2) a catalog or other printed solicitation that is
18generally available to the public clearly sets forth the
19purchase price, time sale price and other terms regarding the
20sale of the goods or services.

21(b) Applicability.--For a sale under this section, section
226323(a) (relating to copy of agreement) does not apply.

23(c) Seller's completion of agreement.--If a seller under
24this section receives a closed-end credit agreement from a buyer
25and the agreement contains blank spaces, the seller may insert
26in the appropriate blank spaces the purchase price, time sale
27price and other terms regarding the sale of the goods or
28services, as set forth in the seller's current catalog or other
29printed solicitation.

30(d) Copy of agreement or statement.--Prior to the due date

1of the first installment under the agreement, the seller shall
2furnish to the buyer either a legible and complete copy of the
3agreement or a written statement of the items inserted in the
4blank spaces described in subsection (c).

5§ 6325. Purchase money loan; notice.

6(a) General rule.--Unless an instrument that evidences or
7embodies a debt arising from a purchase money loan contains the
8notice under subsection (b):

9(1) a purchase money lender may not take or receive the
10instrument; and

11(2) a seller may not accept the proceeds of the purchase
12money loan as full or partial payment for the sale.

13(b) Notice.--An instrument under subsection (a) shall
14contain the following notice:

15NOTICE

16A holder of this agreement is subject to all the claims and
17defenses that the buyer could assert against the seller of
18goods or services obtained with the proceeds of this
19agreement. Recovery under this agreement by the buyer may not
20exceed the amount paid by the buyer under the agreement.

21(c) Definitions.--As used in this section the following
22words and phrases shall have the meanings given to them in this
23subsection:

24"Purchase money lender." Either a seller or financing agency 
25making or extending a purchase money loan.

26"Purchase money loan." An advance that is received by a 
27buyer in return for a finance charge or interest that is applied 
28to a purchase of goods or services from a seller who is 
29affiliated, by common control or business arrangement, with the 
30person extending the credit to the buyer.

1§ 6326. Statement to buyer.

2(a) Request; contents.--At any time after the execution of a
3closed-end credit agreement and within one year after the last
4payment is made under the agreement, the holder of the agreement
5shall upon the good faith written request of the buyer promptly
6give or forward to the buyer a detailed written statement that
7accurately states the total unpaid amount under the agreement.

8(b) Copies.--

9(1) The buyer shall be furnished with one statement
10under this section each year without charge.

11(2) The holder shall upon request furnish the buyer a
12duplicate copy of the statement upon payment of a reasonable
13fee not to exceed the cost of production.

14(c) Applicability.--This section does not apply to a
15transaction that, instead of periodic statements of account, the
16buyer is provided with a passbook or payment book in which
17payments, credits, charges and the unpaid balance are entered.

18§ 6327. Refinancing.

19(a) General rule.--Upon agreement in writing with the buyer,
20the holder of a closed-end credit agreement may refinance the
21payment of the unpaid time balance of the agreement by providing
22for a new schedule of installment payments.

23(b) Charges.--

24(1) The holder may contract for and collect the payment
25of a refinance charge by the buyer.

26(2) A refinance charge shall be based on the amount
27refinanced and include the following:

28(i) The additional cost of insurance and official
29fees incident to the refinancing.

30(ii) The deduction of a refund credit in an amount

1equal to that to which the buyer would have been entitled
2under section 6313 (relating to prepayment of obligation)
3if the buyer had prepaid in full the obligations under
4the agreement.

5(3) A refinance charge may not exceed the rate of
6finance charges under section 6345 (relating to finance
7charges).

8(4) Subject to section 6342 (relating to insurance), an
9agreement may provide for payment of the additional cost of
10or premiums for continuing insurance coverage under the
11contract until the maturity of the contract.

12(c) Contents of agreement.--The refinancing agreement shall
13set forth all the following:

14(1) The amount of the unpaid time balance to be
15refinanced.

16(2) The amount of a refund credit.

17(3) The amount to be refinanced after the deduction of
18the refund credit.

19(4) The amount of the finance charge under the
20refinancing agreement.

21(5) The additional cost of insurance and official fees
22to the buyer.

23(6) The new unpaid time balance.

24(7) The new schedule of installment payments.

25(d) Consolidation of contracts.--If there is a consolidation
26of two or more agreements, the provisions of section 6329(a) and
27(b) (relating to add-on sales) apply.

28§ 6328. New payment schedule.

29(a) Right to new payment schedule.--If a closed-end credit
30agreement provides for the payment of an installment that is

1more than double the amount of the average of the preceding
2installments, the buyer upon default of this installment shall
3have an absolute right to obtain a new payment schedule.

4(b) Payments.--Unless agreed to by the buyer, the periodic
5payments under the new schedule may not be greater than the
6average of the preceding installments.

7§ 6329. Add-on sales.

8(a) Add-on provisions.--A closed-end credit agreement that
9includes an add-on sales provision shall comply with the
10requirements of this chapter and may contain the following
11provisions:

12(1) The seller may add subsequent purchases made by the
13buyer to the agreement.

14(2) The total price of the goods or services covered by
15the agreement shall be increased by the price of the
16additional goods or services.

17(3) The seller may increase finance charges and
18installment payments proportionately.

19(4) The terms and conditions of the agreement shall
20apply equally to the additional goods or services.

21(5) The goods purchased under the previous agreement
22shall be security for the goods purchased under the
23subsequent agreement but only until the time sale price under
24the previous agreement is fully paid.

25(b) Allocation.--

26(1) When a subsequent purchase is made, the entire
27amount of all previously made payments is deemed to have been
28applied toward the payment of the previous time sale price.

29(2) A payment received after a subsequent purchase is
30made is deemed to be allocated to all the various time sale

1prices in the same proportion or ratio as the original
2purchase prices of the various purchases bear to one another.

3(3) If the amount of each installment payment is
4increased in connection with the subsequent purchase, the
5subsequent payments at the seller's election may be deemed to
6be allocated as follows:

7(i) An amount equal to the original installment
8payment, to the previous time sale price.

9(ii) An amount equal to the increase, to the
10subsequent time sale price.

11(4) The amount of an initial or down payment on a
12subsequent purchase is deemed to be allocated in its entirety
13to the subsequent purchase.

14(c) New agreement.--When a subsequent purchase is made, the
15seller shall deliver to the buyer prior to the due date of the
16first installment a new agreement that sets forth all the
17following:

18(1) The information under section 6322(1), (2), (3),
19(4), (5), (6), (7), (8), (9), (10), (11) and (12) (relating
20to contents) as it relates to the subsequent purchase.

21(2) The unpaid time balance of the prior agreement with
22the seller.

23(3) The new unpaid balance, which is the sum of the
24amount under paragraph (2) and the amount described in
25section 6322(11) for the subsequent purchase.

26(4) The consolidated time balance, which is the sum of
27the unpaid balance under paragraph (3) and the amount of the
28finance charge payable by the buyer to the seller, including
29the following:

30(i) The number of installments required.

1(ii) The amount of each installment expressed in
2dollars.

3(iii) The due date or period for each installment.

4(5) A statement that the seller is adding the subsequent
5purchase to the buyer's existing agreement in accordance with
6the provisions of that agreement.

7SUBCHAPTER C

8OPEN-END CREDIT AGREEMENTS

9Sec.

106331. Establishment.

116332. Requirements.

126333. Applicability and effect of subchapter.

13§ 6331. Establishment.

14(a) Seller.--A seller may enter into an open-end credit
15agreement upon the request of a buyer or prospective buyer.

16(b) Financing agency.--Subject to the other provisions of
17this chapter, a financing agency may enter into an open-end
18credit agreement on behalf of a seller from whom the financing
19agency may, with the buyer's consent, purchase or acquire the
20buyer's indebtedness, to be paid according to the agreement.

21§ 6332. Requirements.

22(a) Signature.--A seller may not obtain the signature of a
23buyer on an application for an open-end credit agreement if it
24contains blank spaces to be filled in after it has been signed.

25(b) Separate agreement unnecessary.--A buyer does not need
26to sign a separate account agreement when a new purchase is made
27under an existing agreement.

28(c) Heading.--The following heading shall appear at the top
29of the agreement or directly above the space reserved for the
30signature of the buyer:

1(1) "Security Agreement" if the seller retains a 
2security interest in the goods as security for the goods or 
3services purchased.

4(2) "Lien Contract" if the seller obtains a lien on 
5other goods or nonresidential real estate as security for the 
6goods or services purchased.

7(3) "Open-End Credit Agreement" if the seller does not 
8obtain security for the goods or services purchased.

9(d) Entire agreement.--The written agreement shall contain
10the entire agreement of the parties regarding the costs and
11terms of payment for the goods and services.

12§ 6333. Applicability and effect of subchapter.

13(a) Security interest.--This subchapter does not prohibit
14the execution of an agreement between a buyer and seller whereby
15the seller retains a security interest in goods sold to the
16buyer until full payment has been made.

17(b) Allocation.--Section 6329(b) (relating to add-on sales)
18governs goods sold under an agreement under subsection (a).

19(c) Notes; third party rights.--An open-end credit agreement
20may not require or entail the execution of a note by the buyer
21that when separately negotiated will eliminate as to a third
22party a right of action or defense that the buyer may have
23against the seller.

24SUBCHAPTER D

25COSTS AND CHARGES

26Sec.

276341. Applicability.

286342. Insurance.

296343. Late fees.

306344. Costs of collection.

16345. Finance charges.

26346. Costs from nonaffiliated entity.

36347. Extension and deferment.

46348. Interest rate after maturity.

5§ 6341. Applicability.

6A seller may contract for or collect a fee, expense or charge
7only if the fee, expense or charge is specifically set forth in
8this chapter.

9§ 6342. Insurance.

10(a) Compliance with law.--The following shall comply with 
11the act of September 2, 1961 (P.L.1232, No.540), known as the 
12Model Act for the Regulation of Credit Life Insurance and Credit 
13Accident and Health Insurance:

14(1) The seller and buyer, if:

15(i) the cost of the insurance is included in the
16closed-end credit agreement; and

17(ii) a separate charge is made to the buyer for the
18insurance.

19(2) The seller or holder, if the insurance is to be
20procured by the seller or holder under an open-end credit
21agreement.

22(b) Separate charge; agreement.--

23(1) If the cost of insurance is to be separately charged
24to the buyer under an open-end credit agreement, the buyer
25and seller must so specify in a signed agreement.

26(2) A copy of the agreement under paragraph (1) shall be
27given or furnished to the buyer.

28(3) The agreement shall state whether the insurance is
29to be procured by the buyer, seller or holder.

30§ 6343. Late fees.

1(a) Closed-end credit agreement.--

2(1) A closed-end credit agreement may provide for the
3payment by the buyer of a late fee on each installment in
4default for a period of not less than ten days in an amount
5not in excess of 5% of the installment or $10, whichever is
6less.

7(2) Only one late fee may be collected on an installment
8regardless of the period that it remains in default.

9(b) Open-end credit agreement.--A late fee may be assessed
10on an open-end credit agreement regarding each minimum payment
11not paid in full on the payment due date of the statement on
12which the minimum payment first appears.

13§ 6344. Costs of collection.

14A closed-end credit agreement or an open-end credit agreement
15may provide for payment of actual and reasonable costs of
16collection only if any of the following occurs:

17(1) If the goods are subject to a security interest, the
18goods are removed from this Commonwealth without the written
19permission of the holder.

20(2) The buyer fails to notify the holder of a change of
21residence.

22(3) The buyer fails to communicate with the holder for a
23period of 45 days after a default in making payments due
24under the agreement.

25§ 6345. Finance charges.

26(a) General rule.--Pursuant to this section and the
27provisions of a closed-end credit agreement or an open-end
28credit agreement, a seller and holder may charge, receive and
29collect a finance charge.

30(b) Closed-end credit agreement.--A finance charge under a

1closed-end credit agreement shall be:

2(1) measured for a period between the date of the
3agreement and the due date of the last installment; and

4(2) calculated for the period according to the actuarial
5method or the United States Rule method, at a rate agreed to
6by the buyer and the seller or holder.

7(c) Open-end credit agreement.--

8(1) Except as provided in paragraph (2), a finance
9charge on an open-end credit agreement:

10(i) shall be computed based on the outstanding
11monthly balances; and

12(ii) may not exceed the rate agreed to by the buyer
13and the seller or holder.

14(2) A minimum finance charge of $1 per month may be made
15for each month, if the finance charge so computed is less
16than that amount.

17§ 6346. Costs from nonaffiliated entity.

18A closed-end credit agreement and an open-end credit
19agreement may provide for the reimbursement from a buyer of
20costs for a service provided by an entity that is not otherwise
21affiliated with the seller or holder if all the following
22conditions exist:

23(1) The buyer requests that the seller or holder provide
24the service.

25(2) The service is for the convenience of the buyer.

26(3) The seller or holder contracts with the entity to
27provide the service to the buyer or other buyers.

28(4) The seller or holder actually incurs the costs of
29the service provided by the entity.

30(5) The costs incurred for the service are reasonable

1and necessary.

2(6) The reimbursement costs received from the buyer do
3not exceed the costs incurred by the seller or holder.

4§ 6347. Extension and deferment.

5(a) General rule.--Upon agreement with the buyer, the holder
6of a closed-end credit agreement or an open-end credit agreement
7may extend the scheduled due date or defer the scheduled payment
8of all or part of an installment payable under the agreement.

9(b) Charges.--

10(1) A charge may not be made for an extension or a
11deferment unless the extension or deferment agreement is in
12writing and signed by the parties.

13(2) Subject to paragraph (3), the holder may contract
14for and collect the payment of an extension or deferment
15charge by the buyer.

16(3) Except as provided in paragraph (4), the charge
17under paragraph (2) may not exceed an amount equal to 1.5%
18per month simple interest on the full amount or part of the
19installment for the extension or deferment period, which may
20not exceed the period:

21(i) from the date when the extended or deferred
22installment would have been payable in the absence of the
23extension or deferment; and

24(ii) to the date when the installment is made
25payable under the extension or deferment agreement.

26(4) A minimum charge of $10 for the extension or
27deferment period may be made if the computed extension or
28deferment charge amounts to less than $10.

29(5) Subject to section 6342 (relating to insurance), the
30agreement may provide for payment of the additional cost of

1or premiums for continuing insurance coverage under the
2agreement until the end of the extension or deferment period.

3§ 6348. Interest rate after maturity.

4If a balance remains unpaid at the expiration of the
5scheduled maturity date of a closed-end credit agreement, the
6rate of the finance charge for the period beginning at the date
7of the maturity until payment in full may not exceed the rate of
8the finance charge under the original agreement.

9SUBCHAPTER E

10ENFORCEMENT AND PENALTIES

11Sec.

126351. Willful and intentional violations.

136352. Noncompliance; costs and charges.

146353. Willful violations regarding finance charges.

156354. Corrections.

166355. Unfair trade practice.

17§ 6351. Willful and intentional violations.

18A person who willfully and intentionally violates, or directs
19or consents to the violation of, a provision of this chapter
20commits a misdemeanor and shall, upon conviction, be sentenced
21to pay a fine of not more than $1,000 or to imprisonment for not
22more than one year, or both.

23§ 6352. Noncompliance; costs and charges.

24(a) Bar to recovery.--If a seller fails to comply with the
25provisions of this chapter, the seller or holder who acquires a
26closed-end credit agreement or an open-end credit agreement with
27knowledge of the noncompliance is barred from recovery of the
28following costs and charges imposed in connection with the
29agreement:

30(1) Refinance charges under section 6327 (relating to

1refinancing).

2(2) Late fees under section 6343 (relating to late
3fees).

4(3) Costs of collection under section 6344 (relating to
5costs of collection).

6(4) Finance charges under section 6345 (relating to
7finance charges).

8(5) Extension and deferment charges under section 6347
9(relating to extension and deferment).

10(6) Interest after maturity under section 6348 (relating
11to interest rate after maturity).

12(b) Remedy of buyer.--The buyer shall have the right to
13recover from the person under subsection (a) an amount equal to
14the charges under subsection (a) that were paid by the buyer.

15§ 6353. Willful violations regarding finance charges.

16(a) Penalty.--If a seller or holder willfully violates a
17provision of this chapter regarding the imposition, computation
18or disclosure of a finance charge on a consolidated total of two
19or more agreements under section 6329 (relating to add-on
20sales), the buyer may recover from the seller or holder an
21amount equal to three times the total of the following, which
22have been actually paid by the buyer:

23(1) Refinance charges under section 6327 (relating to
24refinancing).

25(2) Late fees under section 6343 (relating to late
26fees).

27(3) Costs of collection under section 6344 (relating to
28costs of collection).

29(4) Finance charges under section 6345 (relating to
30finance charges).

1(5) Extension and deferment charges under section 6347
2(relating to extension and deferment).

3(6) Interest after maturity under section 6348 (relating
4to interest rate after maturity).

5(b) Bar to recovery.--If a violation has occurred under this
6section, the seller or holder is barred from the recovery of the
7costs and charges under subsection (a).

8§ 6354. Corrections.

9(a) General rule.--Notwithstanding the provisions of this
10chapter and subject to subsection (b), a seller or holder may
11correct a failure to comply with a provision of this chapter in
12accordance with this section unless a willful violation has
13occurred.

14(b) Concurrence by buyer.--A correction that will increase
15the amount owed by the buyer or the amount of a payment is not
16permitted unless the buyer concurs in writing with the
17correction.

18(c) No liability.--If a seller or holder corrects a
19violation in accordance with this section, the seller and holder
20are not subject to penalty under this subchapter.

21(d) Delivery.--Within 30 days of the execution of the
22original closed-end credit agreement or open-end credit
23agreement by the buyer, a correction may be delivered to the
24buyer in the form of a corrected copy of the agreement.

25(e) Credit.--An amount improperly collected from the buyer
26shall be:

27(1) credited against the indebtedness evidenced by the
28agreement; or

29(2) refunded to the buyer if the debt has already been
30satisfied.

1§ 6355. Unfair trade practice.

2A violation of any provision of this chapter shall be deemed 
3to be a violation of the act of December 17, 1968 (P.L.1224, No.

4387), known as the Unfair Trade Practices and Consumer 
5Protection Law.

6Section 5. Title 12 is amended by adding a part heading and
7part analysis to read:

8PART IX

9MISCELLANEOUS PROVISIONS

10Chapter

1197. Foreign Currency

1298. Assembled Industrial Plant Doctrine

13Section 6. The definition of "rental-purchase agreement" in
14section 6902 of Title 42 is amended to read:

15§ 6902. Definitions.

16The following words and phrases when used in this chapter
17shall have the meanings given to them in this section unless the
18context clearly indicates otherwise:

19* * *

20"Rental-purchase agreement." An agreement for the use of
21personal property by an individual primarily for personal,
22family or household purposes for an initial period of four
23months or less that is automatically renewable with each rental
24payment after the initial period and that permits the lessee to
25acquire ownership of the property. The term shall not be
26construed to be, nor is it subject to laws governing, any of the
27following:

28(1) A lease for agricultural, business or commercial
29purposes.

30(2) A lease made to an organization.

1(3) A lease of money or intangible personal property.

2(4) A lease of a motor vehicle, motor home, mobile home
3or manufactured housing.

4(5) A home solicitation sale under section 7 of the act
5of December 17, 1968 (P.L.1224, No.387), known as the Unfair
6Trade Practices and Consumer Protection Law.

7(6) [A retail installment sale, retail installment
8contract or retail installment account as defined in the act
9of October 28, 1966 (1st Sp.Sess., P.L.55, No.7), known as
10the Goods and Services Installment Sales Act.] A closed-end 
11credit agreement, open-end credit agreement or sale as 
12defined in 12 Pa.C.S. § 6302 (relating to definitions).

13(7) A security interest as defined in 13 Pa.C.S. § 1201
14(relating to general definitions).

15Section 7. Section 6911 of Title 42 is amended to read:

16§ 6911. Conflict with other law.

17In the event of a conflict between this chapter and [the act
18of October 28, 1966 (1st Sp.Sess., P.L.55, No.7), known as the
19Goods and Services Installment Sales Act] 12 Pa.C.S. Ch. 63 
20(relating to goods and services installment sales), the
21provisions of this chapter shall be controlling.

22Section 8. The following apply:

23(1) The remedies under 12 Pa.C.S. Ch. 62 for violations
24of a provision of 12 Pa.C.S. Ch. 62 are not exclusive and
25shall be in addition to other procedures or remedies for a
26violation or conduct provided for in other law.

27(2) The provisions of 12 Pa.C.S. Ch. 62 shall apply to
28any license, license renewal and license application issued
29or made on or after the effective date of this act.

30(3) The provisions of 12 Pa.C.S. Ch. 62 do not apply to

1or affect the validity of the following:

2(i) A license issued prior to the effective date of
3this act.

4(ii) A contract that is otherwise within the purview
5of 12 Pa.C.S. Ch. 62 and was made prior to the effective
6date of this act.

7(4) Nothing in 12 Pa.C.S. Ch. 63 shall affect the
8validity of an agreement or contractual relationship entered
9into prior to April 1, 1967, except that a rate in excess of
10that allowed by 12 Pa.C.S. Ch. 63 shall be reduced to the
11permissible rate on or before April 1, 1967.

12(5) The remedies under 12 Pa.C.S. Ch. 63 for violation
13of a provision of 12 Pa.C.S. Ch. 63 are not exclusive and
14shall be in addition to other procedures or remedies for a
15violation or conduct provided for in other law.

16Section 9. Repeals are as follows:

17(1) The General Assembly declares that the repeals under
18paragraphs (2) and (3) are necessary to effectuate the
19addition of 12 Pa.C.S. Pt. V.

20(2) The act of June 28, 1947 (P.L.1110, No.476), known
21as the Motor Vehicle Sales Finance Act, is repealed.

22(3) The act of October 28, 1966 (1st Sp.Sess., P.L.55, 
23No.7), known as the Goods and Services Installment Sales Act,
24is repealed.

25Section 10. This act shall take effect in one year.