§ 5-2-206 — Finance charge on consolidation

If a consumer owes an unpaid
balance to a creditor with respect to a consumer credit transaction and becomes
obligated on another consumer credit transaction with the same creditor, the
parties may agree to a consolidation resulting in a single schedule of payments. If
the previous consumer credit transaction was not precomputed, the parties may
agree to add the unpaid amount of the amount financed and accrued charges on
the date of consolidation to the amount financed with respect to the subsequent
consumer credit transaction. If the previous consumer credit transaction was
precomputed, the parties may agree to refinance the unpaid balance pursuant to
the provisions on refinancing contained in section 5-2-205 and to consolidate the
amount financed resulting from the refinancing by adding it to the amount financed
with respect to the subsequent consumer credit transaction. In either case, the
creditor may contract for and receive a finance charge based on the aggregate
amount financed resulting from the consolidation at a rate not in excess of that
permitted by the provisions on finance charges.

Legislative History

Source: L. 2000: Entire article R&RE, p. 1201, � 1, effective July 1.