AN ACT
Relating to consumer credit transactions; amending RCW 63.14.135; reenacting
and amending RCW 63.14.130; creating a new section; providing an expiration
date; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE
OF THE STATE OF WASHINGTON:
Sec.
1. RCW
63.14.130 and 1989 c 112 s 1 and 1989 c 14 s 5 are each reenacted and amended
to read as follows:
The
service charge shall be inclusive of all charges incident to investigating and
making the retail installment contract or charge agreement and for the
privilege of making the installment payments thereunder and no other fee,
expense or charge whatsoever shall be taken, received, reserved or contracted
therefor from the buyer.
(1) ((Except
as provided in subsections (2) and (3) of this section,)) The
service charge, in a retail installment contract, shall not exceed the ((highest
of the following:
(a)
A rate on outstanding unpaid balances which exceeds six percentage points above
the average, rounded to the nearest one‑quarter of one percent, of the
equivalent coupon issue yields (as published by the Board of Governors of the
Federal Reserve System) of the bill rates for twenty-six week treasury bills
for the last market auctions conducted during February, May, August, and
November of the year prior to the year in which the retail installment contract
is executed; or
(b)
Ten dollars.
(2)
The service charge in a retail installment contract for the purchase of a motor
vehicle shall not exceed the highest of the following:
(a)
A rate on outstanding unpaid balances which exceeds six percentage points above
the average, rounded to the nearest one‑quarter of one percent, of the
equivalent coupon issue yield (as published by the Board of Governors of the
Federal Reserve System) of the bill rate for twenty-six week treasury bills for
the last market auction conducted during February, May, August, or November, as
the case may be, prior to the quarter in which the retail installment contract
for purchase of the motor vehicle is executed; or
(b)
Ten dollars.
As
used in this subsection, "motor vehicle" means every device capable
of being moved upon a public highway and in, upon, or by which any person or
property is or may be transported or drawn upon a public highway, except for
devices moved by human or animal power or used exclusively upon stationary
rails or tracks.
(3)
The service charge in a retail installment contract for the purchase of a
vessel shall not exceed the highest of the following:
(a)
A rate on outstanding balances which exceeds six percentage points above the
average, rounded to the nearest one‑quarter of one percent, of the
equivalent coupon issue yield, as published by the federal reserve bank of San
Francisco, of the bill rate for twenty-six week treasury bills for the last
market auction conducted prior to the quarter in which the retail installment
contract for purchase of the vessel is expected; or
(b)
Ten dollars.
As
used in this subsection, "vessel" means any watercraft used or
capable of being used as a means of transportation on the water, other than a
seaplane)) dollar amount or rate agreed to by contract and
disclosed under RCW 63.14.040(1)(7)(g).
(((4)))
(2) The service charge in a retail charge agreement, revolving charge
agreement, lender credit card agreement, or charge agreement, shall not exceed
((one and one-half percent per month on the outstanding unpaid balances))
the schedule or rate agreed to by contract and disclosed under RCW
63.14.120(1). If the service charge so computed is less than one dollar
for any month, then one dollar may be charged.
(((5)
A service charge may be computed on the median amount within a range which does
not exceed ten dollars and which is a part of a published schedule of
consecutive ranges applied to an outstanding balance, provided the median
amount is used in computing the service charge for all balances within such
range.))
Sec.
2. RCW
63.14.135 and 1989 c 112 s 2 are each amended to read as follows:
(1) On
or before December 5th of each year the state treasurer shall compute the
maximum service charge allowed under a retail installment contract or charge
agreement under RCW 63.14.130(1)(a) for the succeeding calendar year. The treasurer
shall file this charge with the state code reviser for publication in the first
issue of the Washington State Register for the succeeding calendar year in
compliance with RCW 34.08.020.
(2) On
or before the first Wednesday of the last month of each calendar quarter the
state treasurer shall compute the maximum service charge allowed for a retail
installment contract for the purchase of a motor vehicle or vessel pursuant to
RCW 63.14.130(2)(a) and (3)(a) respectively for the succeeding calendar quarter.
The treasurer shall file this charge with the state code reviser for
publication in the first issue of the Washington State Register for the
succeeding calendar quarter in compliance with RCW 34.08.020.
(3)
This section shall not apply from the effective date of this act until June 30,
1995.
NEW
SECTION. Sec. 3. (1)
The joint select committee on consumer credit is created. Membership of the
committee shall consist of four members from the senate, two from each caucus,
appointed by the president of the senate, and four members from the house of
representatives, two from each caucus, appointed by the speaker of the house of
representatives.
(2)
The committee shall review state and federal statutes governing consumer credit
transactions and shall prepare a report:
(a)
Summarizing federal and state statutes governing consumer credit transactions;
(b)
Identifying any state statutes preempted or superseded by federal law or
judicial interpretation;
(c)
Identifying any duplication or inconsistency among federal and state laws;
(d)
Discussing the beneficial and detrimental effects of state interest rate
regulation and deregulation upon the state consumer credit market; and
(e)
Containing legislation that to the greatest extent possible adopts a single,
comprehensive statutory title regulating consumer credit transactions including
any regulation of interest rates, services charges, and other fees on consumer
credit.
(3)
The committee shall review the professional and academic literature addressing
the impact of interest rate regulation on retail credit markets. The committee
also shall consult with representatives of labor, consumer, retail, financial,
and legal organizations possessing a working knowledge of consumer credit
transactions.
(4)
The committee shall submit its report to the legislature by December 1, 1994.
NEW
SECTION. Sec. 4. Section
1 of this act shall expire June 30, 1995.
NEW
SECTION. Sec. 5. This
act is necessary for the immediate preservation of the public peace, health, or
safety, or support of the state government and its existing public institutions,
and shall take effect immediately.
