HOUSE BILL REPORT

SB 5079

BYSenators Pullen and Talmadge

Discussing variable interest rates in relation to the uniform commercial code.

House Committe on Judiciary

Majority Report:  Do pass.  (15)

      Signed by Representatives Appelwick, Chair; Crane, Vice Chair; Padden, Ranking Republican Member; Belcher, Dellwo, Hargrove, Inslee, P. King, R. Meyers, Moyer, H. Myers, Patrick, Schmidt, Scott and Tate.

House Staff:Pat Shelledy (786-7149)

AS PASSED HOUSE MARCH 29, 1989

BACKGROUND:

Under current law, promissory notes and other instruments are required to have stated interest or stated installments to be negotiable instruments under the Uniform Commercial Code (UCC).  At the present time most mortgages, commercial loans, and personal loans have variable interest rates or variable installment payments.  It is suggested that the UCC should be amended to ensure that instruments with variable rates or variable payments are negotiable instruments. 

SUMMARY:

Language defining negotiable instruments under the UCC is amended to include instruments which have variable interest rates or variable installment payments.

A variable rate of interest is a "stated interest" if the rate is readily ascertainable.

Graduated, variable, annuity or price-level adjusted payments are "stated installments."

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    None Presented.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    None Presented.

House Committee - Testimony Against:      None Presented.