SENATE BILL REPORT

SB 5747

BYSenators Rinehart, von Reichbauer and Moore

Regulating calculation of interest on credit cards.

Senate Committee on Financial Institutions & Insurance

Senate Hearing Date(s):February 17, 1989

Senate Staff:Benson Porter (786-7470)

AS OF FEBRUARY 17, 1989

BACKGROUND:

Retail charge agreements, revolving charge agreements, and lender credit card agreements may not charge more than 1.5 percent per month on outstanding unpaid balances.  The service charge also may be computed on the median amount within a range.  The range may not exceed $10.00 and must be part of a published schedule of consecutive ranges.  If this latter method is used, the median amount must be used in computing the charge for all balances in such range.  Current law allows a service charge to be applied to all outstanding unpaid balances including new purchases. 

SUMMARY:

A service charge may not be imposed until 30 days after the purchase of the last article or service under any retail charge agreement, revolving charge agreement, and lender credit card agreement.

Appropriation:    none

Revenue:    none

Fiscal Note:      none requested