AN
ACT Relating to the financing of goods by sellers of the goods; and amending
RCW 63.14.010, 63.14.040, 63.14.110, and 63.14.130.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
63.14.010 and 1997 c 331 s 6 are each amended to read as follows:
In
this chapter, unless the context otherwise requires:
(1)
"Goods" means all chattels personal when purchased primarily for
personal, family, or household use and not for commercial or business use, but
not including money or, except as provided in the next sentence, things in
action. The term includes but is not limited to merchandise certificates or
coupons, issued by a retail seller, to be used in their face amount in lieu of
cash in exchange for goods or services sold by such a seller and goods which,
at the time of sale or subsequently, are to be so affixed to real property as
to become a part thereof, whether or not severable therefrom;
(2)
"Lender credit card" means a card or device under a lender credit
card agreement pursuant to which the issuer gives to a cardholder residing in
this state the privilege of obtaining credit from the issuer or other persons
in purchasing or leasing property or services, obtaining loans, or otherwise,
and the issuer of which is not: (a) Principally engaged in the business of
selling goods; or (b) a financial institution;
(3)
"Lender credit card agreement" means an agreement entered into or
performed in this state prescribing the terms of retail installment
transactions pursuant to which the issuer may, with the buyer's consent,
purchase or acquire one or more retail sellers' indebtedness of the buyer under
a sales slip or memorandum evidencing the purchase, lease, loan, or otherwise
to be paid in accordance with the agreement. The issuer of a lender credit
card agreement shall not be principally engaged in the business of selling
goods or be a financial institution;
(4)
"Financial institution" means any bank or trust company, mutual
savings bank, credit union, or savings and loan association organized pursuant
to the laws of any one of the United States of America or the United States of
America, or the laws of a foreign country if also qualified to conduct business
in any one of the United States of America or pursuant to the laws of the
United States of America;
(5)
"Services" means work, labor, or services of any kind when purchased
primarily for personal, family, or household use and not for commercial or
business use whether or not furnished in connection with the delivery,
installation, servicing, repair, or improvement of goods and includes repairs,
alterations, or improvements upon or in connection with real property, but does
not include services for which the price charged is required by law to be
determined or approved by or to be filed, subject to approval or disapproval,
with the United States or any state, or any department, division, agency,
officer, or official of either as in the case of transportation services;
(6)
"Retail buyer" or "buyer" means a person who buys or agrees
to buy goods or obtain services or agrees to have services rendered or
furnished, from a retail seller;
(7)
"Retail seller" or "seller" means a person engaged in the
business of selling goods or services to retail buyers;
(8)
"Retail installment transaction" means any transaction in which a
retail buyer purchases goods or services from a retail seller pursuant to a
retail installment contract, a retail charge agreement, or a lender credit card
agreement, as defined in this section, which provides for a service charge, as
defined in this section, and under which the buyer agrees to pay the unpaid principal
balance in one or more installments or which provides for no service charge and
under which the buyer agrees to pay the unpaid balance in more than four
installments;
(9)
"Retail installment contract" or "contract" means a
contract, other than a retail charge agreement, a lender credit card agreement,
or an instrument reflecting a sale made pursuant thereto, entered into or
performed in this state for a retail installment transaction. The term
"retail installment contract" may include a chattel mortgage, a
conditional sale contract, and a contract in the form of a bailment or a lease
if the bailee or lessee contracts to pay as compensation for their use a sum
substantially equivalent to or in excess of the value of the goods sold and if
it is agreed that the bailee or lessee is bound to become, or for no other or a
merely nominal consideration, has the option of becoming the owner of the goods
upon full compliance with the provisions of the bailment or lease. The term
"retail installment contract" does not include: (a) A "consumer
lease," heretofore or hereafter entered into, as defined in RCW 63.10.020;
(b) a lease which would constitute such "consumer lease" but for the
fact that: (i) It was entered into before April 29, 1983; (ii) the lessee was
not a natural person; (iii) the lease was not primarily for personal, family,
or household purposes; or (iv) the total contractual obligations exceeded
twenty-five thousand dollars; or (c) a lease-purchase agreement under chapter
63.19 RCW;
(10)
"Retail charge agreement," "revolving charge agreement," or
"charge agreement" means an agreement between a retail buyer and a
retail seller that is entered into or performed in this state and that
prescribes the terms of retail installment transactions with one or more
sellers which may be made thereunder from time to time and under the terms of
which a service charge, as defined in this section, is to be computed in
relation to the buyer's unpaid balance from time to time;
(11)
"Service charge" however denominated or expressed, means the amount
which is paid or payable for the privilege of purchasing goods or services to
be paid for by the buyer in installments over a period of time. It does not
include the amount, if any, charged for insurance premiums, delinquency
charges, attorneys' fees, court costs, any vehicle dealer administrative fee
under RCW 46.12.042, or official fees;
(12)
"Sale price" means the price for which the seller would have sold or
furnished to the buyer, and the buyer would have bought or obtained from the seller,
the goods or services which are the subject matter of a retail installment
transaction. The sale price may include any taxes, registration and license
fees, any vehicle dealer administrative fee, and charges for transferring
vehicle titles, delivery, installation, servicing, repairs, alterations, or
improvements;
(13)
"Official fees" means the amount of the fees prescribed by law and
payable to the state, county, or other governmental agency for filing,
recording, or otherwise perfecting, and releasing or satisfying, a retained
title, lien, or other security interest created by a retail installment
transaction;
(14)
"Time balance" means the principal balance plus the service charge;
(15)
"Principal balance" means the sale price of the goods or services
which are the subject matter of a retail installment contract less the amount
of the buyer's down payment in money or goods or both, plus the amounts, if
any, included therein, if a separate identified charge is made therefor and
stated in the contract, for insurance, any vehicle dealer administrative fee,
and official fees; and the amount actually paid or to be paid by the retail
seller pursuant to an agreement with the buyer to discharge a security interest
or lien on like-kind goods traded in or lease interest in the circumstance of a
lease for like goods being terminated in conjunction with the sale pursuant to
a retail installment contract;
(16)
"Person" means an individual, partnership, joint venture,
corporation, association, or any other group, however organized;
(17)
"Rate" means the percentage which, when multiplied times the
outstanding balance for each month or other installment period, yields the
amount of the service charge for such month or period.
Sec.
2. RCW
63.14.040 and 1981 c 77 s 3 are each amended to read as follows:
(1)
The retail installment contract shall contain the names of the seller and the
buyer, the place of business of the seller, the residence or other address of
the buyer as specified by the buyer and a description or identification of the
goods sold or to be sold, or service furnished or rendered or to be furnished
or rendered. The contract also shall contain the following items, which shall
be set forth in the sequence appearing below:
(((1)))(a)
The sale price of each item of goods or services;
(((2)))(b)
The amount of the buyer's down payment, if any, identifying the amounts paid in
money and allowed for goods traded in;
(((3)))(c)
The difference between items (((1)))(a) and (((2)))(b);
(((4)))(d)
The aggregate amount, if any, included for insurance, specifying the type or
types of insurance and the terms of coverage;
(((5)))(e)
The aggregate amount of official fees, if any;
(((6)))(f)
The amount, if any, actually paid or to be paid by the retail seller
pursuant to an agreement with the buyer to discharge a security interest or
lien on like-kind goods traded in or lease interest in the circumstance of a
lease for like goods being terminated in conjunction with the sale pursuant to
a retail installment contract;
(g)
The principal balance, which is the sum of items (((3)))(c), (((4)))(d)
((and (5))), (e), and (f);
(((7)(g)))
(h) The dollar amount or rate of the service charge;
(((8)(h)))
(i) The amount of the time balance owed by the buyer to the seller,
which is the sum of items (((6)(f))) (g) and (((7)(g))) (h),
if (((7)(g))) (h) is stated in a dollar amount; and
(((9)(i)))
(j) Except as otherwise provided in the next two sentences, the maximum
number of installment payments required and the amount of each installment and
the due date of each payment necessary to pay such balance. If installment
payments other than the final payment are stated as a series of equal scheduled
amounts and if the amount of the final installment payment does not
substantially exceed the scheduled amount of each preceding installment
payment, the maximum number of payments and the amount and due date of each
payment need not be separately stated and the amount of the scheduled final installment
payment may be stated as the remaining unpaid balance. The due date of the
first installment payment may be fixed by a day or date or may be fixed by
reference to the date of the contract or to the time of delivery or
installation.
Additional
items may be included to explain the calculations involved in determining the
balance to be paid by the buyer.
(2)
Every retail installment contract shall contain the following notice in ten
point bold face type or larger directly above the space reserved in the
contract for the signature of the buyer: "NOTICE TO BUYER:
(a)
Do not sign this contract before you read it or if any spaces intended for the
agreed terms, except as to unavailable information, are blank.
(b)
You are entitled to a copy of this contract at the time you sign it.
(c)
You may at any time pay off the full unpaid balance due under this contract,
and in so doing you may receive a partial rebate of the service charge.
(d)
The service charge does not exceed . . . .% (must be filled in) per
annum computed monthly.
(e)
You may cancel this contract if it is solicited in person, and you sign it, at
a place other than the seller's business address shown on the contract, by
sending notice of such cancellation by certified mail return receipt requested
to the seller at his address shown on the contract which notice shall be posted
not later than midnight of the third day (excluding Sundays and holidays)
following your signing this contract. If you choose to cancel this contract,
you must return or make available to the seller at the place of delivery any
merchandise, in its original condition, received by you under this
contract."
Clause
(2)(e) needs to be included in the notice only if the contract is solicited in
person by the seller or his representative, and the buyer signs it, at a place
other than the seller's business address shown on the contract.
Sec.
3. RCW
63.14.110 and 1967 c 234 s 6 are each amended to read as follows:
(1)
If, in a retail installment transaction, a retail buyer makes any subsequent
purchases of goods or services from a retail seller from whom he has previously
purchased goods or services under one or more retail installment contracts, and
the amounts under such previous contract or contracts have not been fully paid,
the subsequent purchases may, at the seller's option, be included in and
consolidated with one or more of the previous contracts. All the provisions of
this chapter with respect to retail installment contracts shall be applicable
to such subsequent purchases except as hereinafter stated in this subsection.
In the event of such consolidation, in lieu of the buyer's executing a retail
installment contract respecting each subsequent purchase, as provided in this
section, it shall be sufficient if the seller shall prepare a written
memorandum of each such subsequent purchase, in which case the provisions of
RCW 63.14.020, 63.14.030 and 63.14.040 shall not be applicable. Unless
previously furnished in writing to the buyer by the seller, by sales slip,
memoranda or otherwise, such memorandum shall set forth with respect to each
subsequent purchase items (a) to (((g))) (h) inclusive of RCW
63.14.040(1), and in addition, if the service charge is stated as a dollar
amount, the amount of the time balance owed by the buyer to the seller for the
subsequent purchase, the outstanding balance of the previous contract or
contracts, the consolidated time balance, and the revised installments
applicable to the consolidated time balance, if any, in accordance with RCW
63.14.040. If the service charge is not stated in a dollar amount, in addition
to the items (a) to (((g))) (h) inclusive of RCW 63.14.040(1),
the memorandum shall set forth the outstanding balance of the previous contract
or contracts, the consolidated outstanding balance and the revised installments
applicable to the consolidated outstanding balance, in accordance with RCW
63.14.040.
The
seller shall deliver to the buyer a copy of such memorandum prior to the due
date of the first installment of such consolidated contract.
(2)
When such subsequent purchases are made, if the seller has retained title or
taken a lien or other security interest in any of the goods purchased under any
one of the contracts included in the consolidation:
(a)
The entire amount of all payments made prior to such subsequent purchases shall
be deemed to have been applied on the previous purchases;
(b)
The amount of any down payment on the subsequent purchase shall be allocated in
its entirety to such subsequent purchase.
(c)
Each payment received after the subsequent purchase shall be deemed to be
allocated to all of the various time balances in the same proportion or ratio
as the original cash sale prices of the various retail installment transactions
bear to one another: PROVIDED, That the seller may elect, where the amount of
each installment payment is increased in connection with the subsequent
purchase, to allocate only the increased amount to the time balance of the
subsequent retail installment transaction, and to allocate the amount of each
installment payment prior to the increase to the time balance(s) existing at
the time of the subsequent purchase.
The
provisions of this subsection shall not apply to cases where such previous and
subsequent purchases involve equipment, parts, or other goods attached or
affixed to goods previously purchased and not fully paid, or to services in
connection therewith rendered by the seller at the buyer's request.
Sec.
4. RCW
63.14.130 and 1997 c 331 s 7 are each 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, except for any vehicle dealer administrative fee under
RCW 46.12.042.
(1)
The service charge, in a retail installment contract, shall not exceed the
dollar amount or rate agreed to by contract and disclosed under RCW
63.14.040(1)(((7)(g))) (h).
(2) The service charge in a retail charge agreement, revolving
charge agreement, lender credit card agreement, or charge agreement, shall not
exceed 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.
