(1) Any creditor may offer
and extend credit to the debtor under a commercial credit plan. Without limitation,
credit may be extended under a commercial credit plan by the creditor's acquisition
of obligations including, without limitation, obligations arising out of the honoring
by a seller or another person of a credit device made available to the debtor under a
commercial credit plan. A creditor may take such security in connection with a
commercial credit plan as may be acceptable to the creditor and may, if the
agreement governing the commercial credit plan allows, establish separate
accounts for different types of purchases or loans, or both, and impose different
terms for credit extended with respect to each account.
(2) (a) A creditor may charge and collect periodic interest under a
commercial credit plan on the outstanding unpaid indebtedness at a periodic
percentage rate or rates not exceeding forty-five percent per annum. If the
applicable periodic percentage rate under the agreement governing the plan is
other than daily, periodic interest may be calculated on an amount not in excess of
the average outstanding unpaid indebtedness for the applicable billing period. If
the applicable periodic percentage rate under the agreement governing the plan is
daily, periodic interest may be calculated for each day in the billing period on an
amount not in excess of either:
(I) The outstanding unpaid indebtedness on that day; or
(II) The average outstanding unpaid indebtedness for the applicable billing
period. If the applicable periodic percentage rate under the agreement governing
the plan is monthly, a billing period shall be deemed to be a month or monthly if the
last day of each billing period is on the same day of each month or does not vary by
more than four days therefrom.
(b) The rate limitation established by this subsection (2) for periodic interest
shall not apply to the additional interest charges authorized by subsection (3) of
this section regardless of whether such additional interest charges are imposed in
addition to or in lieu of periodic interest.
(3) (a) In addition to or in lieu of interest at a periodic rate or rates, a creditor
may, if the agreement governing the commercial credit plan so provides, either
initially or pursuant to a change in the terms of the agreement made in the manner
prescribed by subsection (5) of this section, charge and collect, in such manner,
form, percentages, or amounts as the agreement governing the plan may provide,
one or more of the following fees or charges:
(I) A fee for participation in the commercial credit plan, whether assessed on
an annual or other periodic basis;
(II) A transaction charge for each separate purchase or loan under the plan;
(III) An automated teller machine charge or similar electronic or interchange
fee or charge;
(IV) A minimum charge for each scheduled billing period under the
commercial credit plan during any portion of which there is an outstanding unpaid
indebtedness;
(V) A late payment charge for each required payment not made on or before
its scheduled due date;
(VI) Fees for services rendered or for reimbursement of expenses incurred by
the creditor or other persons in connection with the commercial credit plan, or other
fees incidental to the application, opening, administration, maintenance, or
termination of a commercial credit plan;
(VII) Returned payment charges;
(VIII) Documentary evidence charges including without limitation charges for
furnishing copies of sales slips, invoices, monthly statements, or other documents;
and
(IX) Any similar fees or charges provided for in the agreement governing the
commercial credit plan, whether initially or pursuant to a change in the terms of the
agreement made in the manner prescribed by subsection (5) of this section; except
that in no event shall this authorization to charge and collect any similar fees or
charges be construed to authorize the imposition of periodic interest on the
outstanding unpaid indebtedness in addition to the periodic interest authorized by
subsection (2) of this section.
(b) Notwithstanding the fact that they are not subject to the rate limitation
established by subsection (2) of this section for periodic interest, all of the fees and
charges permitted by this subsection (3) are interest.
(4) The agreement governing a commercial credit plan may provide for the
payment by the debtor of reasonable attorney's fees of the creditor if the account
of the debtor is referred for collection to an attorney not a salaried employee of the
creditor. The agreement also may provide for the payment by the debtor of all court
and other collection costs actually incurred by the debtor.
(5) (a) Upon written notice furnished at least fifteen days prior to the
effective date of the change, a creditor may change the terms of the agreement
governing the commercial credit plan including, without limitation, periodic interest
and additional interest charges so long as the debtor does not, prior to the effective
date of the change set forth in the notice, furnish written notice to the creditor that
the debtor does not agree to abide by the change. The change may be made
effective with respect to existing balances if so provided in the written notice.
(b) Upon receipt by the creditor of a timely written notice stating that the
debtor does not agree to abide by the change, the debtor shall have the remainder
of the time under the existing terms in which to pay all sums owed to the creditor as
of the effective date of the change set forth in the notice. If there is an authorized
charge to the account on or after the effective date of the change set forth in the
notice, the debtor shall be deemed to have accepted the new terms even if the
debtor previously submitted to the creditor a timely written notice stating that the
debtor does not agree to abide by the change.
(6) All terms, conditions, and other provisions of and relating to a commercial
credit plan as contained in this section or in the agreement governing such plan,
other than those fees and charges that are interest under this section, shall be and
hereby are deemed to be material to the determination of interest applicable to a
commercial credit plan under Colorado law, under the most favored lender doctrine,
and under the National Bank Act, 12 U.S.C. sec. 85 or section 521, 522, or 523 of
the Depository Institutions Deregulation and Monetary Control Act of 1980, 12
U.S.C. secs. 1463 (g), 1785 (g), and 1831d.
(7) A commercial credit plan established by a creditor and the extensions of
credit made pursuant thereto shall be governed by Colorado law. Unless the
agreement governing the commercial credit plan expressly states that it is subject
to another law of this state, a commercial credit plan shall be governed exclusively
by this section and shall not be subject to any other law of this state that otherwise
would apply to the commercial credit plan including, but not limited to, laws limiting
the amount or duration of credit or the rate or amount of interest or other charges
that may be charged, taken, collected, received, or reserved.
(8) As used in this section:
(a) Average outstanding unpaid indebtedness means the amount
determined by dividing the total of the amounts of the outstanding unpaid
indebtedness for each day in the applicable billing period by the number of days in
the billing period.
(b) Commercial credit plan or plan means a plan contemplating the
extension of credit pursuant to an account governed by an agreement between a
creditor and a debtor, whether or not providing for a security interest, pursuant to
which:
(I) A creditor permits the debtor and, if allowed by a creditor, persons acting
on behalf of or with authorization from the debtor, from time to time to make
purchases on credit or obtain loans, or both, whether or not by use of a credit
device;
(II) The purchases on credit are made or the loans are obtained primarily for
business, commercial, investment, or agricultural purposes;
(III) The indebtedness of the debtor arising from such purchases or loans, or
both, and other charges provided for in this section are debited to the account; and
(IV) (A) The debtor undertakes an obligation to pay the outstanding unpaid
indebtedness at one time; or
(B) The debtor has the privilege of paying the outstanding unpaid
indebtedness in one or more installments.
(c) Credit means the right granted by a creditor to the debtor to defer
payment of debt or to incur debt and defer its payment.
(d) Credit device means any card, check, identification code, account
number, or other means of identification contemplated by the agreement governing
the plan.
(e) Creditor means any seller or any lender located or maintaining a place
of business in this state that enters into a commercial credit plan agreement with a
debtor wherever located, including, without limitation, sellers of goods or services,
small loan companies, licensed lenders, commercial banks and trust companies,
savings and loan associations, and savings banks. The term creditor includes any
transferee, whether such transferee acquires its interest by assignment or
otherwise.
(f) Debtor means any natural person or individual or any corporation,
partnership, cooperative, association, government or governmental subdivision or
agency, trust, estate, or other entity.
(g) Interest includes both periodic interest authorized by subsection (2) of
this section and additional interest charges authorized by subsection (3) of this
section.
(h) Loans means cash advances or loans to be paid to or for the account of
the debtor.
(i) Outstanding unpaid indebtedness means on any day an amount not in
excess of the total amount of purchases, loans, and other debits charged to the
debtor's account under the plan that is outstanding and unpaid at the end of the
day, after adding the aggregate amount of any new purchases, loans, and other
debits charged to the account as of that day, including, without limitation, the
amount of any periodic interest, additional interest charges, and other charges
permitted by this section that have accrued, or been charged, to the account as of
that day, and deducting the aggregate amount of any payments and other credits
applied to that indebtedness as of that day.
(j) Purchases means payment obligations for property of whatever nature,
real or personal, tangible or intangible, and payment obligations for services
including, without limitation, insurance, licenses, taxes, official fees, fines, private
or governmental obligations, or any other thing of value.