§ 14A-2-306 — Consumer credit sales not pursuant to revolving charge

account. (1) This section applies to a consumer credit sale not made pursuant to a revolving charge account (Section 2-310). (2) The seller shall give to the buyer the following information: (a) the identity of the seller required to make disclosure; (b) (i) the amount financed, using that term, which shall be the amount of credit of which the buyer has actual use. This amount shall be computed as follows, but the computations need not be disclosed and shall not be disclosed with the disclosures required to be conspicuously segregated in accordance with the rule of the Administrator. (aa) Take the cash price of the goods, services, or interest in land less the amount of the down payment paid in money and the portion paid by an allowance for property traded in; (bb) add any charges which are not part of the finance charge, or of the cash price and which are financed by the buyer, including the cost of any items excluded from the finance charge pursuant to Section 2-202; and (cc) subtract any charges which are part of the finance charge but which will be paid by the buyer before or at the time of the consummation of the transaction or have been withheld from the proceeds of the credit. (ii) In conjunction with the disclosure of the amount financed, a seller shall provide a statement of the buyer's right to obtain, upon a written request, a written itemization of the amount financed. The statement shall include spaces for a "yes" and "no" indication to be initialed by the buyer to indicate whether the buyer wants a written itemization of the amount financed. Upon receiving an affirmative indication, the seller shall provide, at the time other disclosures are required to be furnished, a written itemization of the amount financed. For this purpose, itemization of the amount financed means a disclosure to the extent applicable of: (aa) any amount that is or will be paid directly to the buyer, (bb) the amount that is or will be credited to the buyer's account to discharge obligations owed to the seller, (cc) each amount that is or will be paid to third persons by the seller on the buyer's behalf, together with an identification of or reference to the third person, and (dd) the total amount of any charges described in the preceding subparagraph (i)(cc). (c) the finance charge not itemized, using that term; (d) the finance charge expressed as an "annual percentage rate" using that term except in the case of a finance charge which does not exceed Five Dollars ($5.00) when the amount financed does not exceed Seventy-five Dollars ($75.00) or Seven Dollars and fifty cents ($7.50) when the amount financed exceeds Seventy-five Dollars ($75.00); (e) the sum of the amount financed and the finance charge, which shall be termed the "total of payments"; (f) the number, amount, and due dates or period of payments scheduled to repay the total of payments; (g) the "total sale price" using that term, which shall be the total of the cash price of the property or services, additional charges, and the finance charge; (h) descriptive explanations of the terms "amount financed", "finance charge", "annual percentage rate", "total of payments", and "total sale price", including in the latter case a reference to the amount of the down payment, as specified in the rules of the Administrator; (i) any dollar charge or percentage amount which may be imposed by the seller solely on account of late payments other than a deferral or extension charge; (j) where the credit is secured, a statement that a security interest has been taken in the property which is purchased as part of the credit transaction, or property not purchased as part of the credit transaction identified by item or type; (k) a statement indicating whether or not the buyer is entitled to a rebate of any finance charge upon refinancing or prepayment in full pursuant to acceleration or otherwise if the obligation involves a precomputed finance charge, and a statement indicating whether or not a penalty will be imposed in those same circumstances if the obligation involves a finance charge computed from time to time by application of a rate to the unpaid principal balance; (l) a statement that the buyer should refer to the appropriate contract document for any information the document provides about nonpayment, default, the right to accelerate the maturity of the debt, and prepayment rebates and penalties; and (m) in any transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained against the buyer's dwelling to finance the acquisition or initial construction of the dwelling, a statement indicating whether a subsequent purchaser or assignee of the buyer may assume the debt obligation on its original terms and conditions.

Legislative History

Added by Laws 1969, c. 352, § 2-306, eff. July 1, 1969. Amended by Laws 1970, c. 282, § 4; Laws 1982, c. 335, § 17, operative Oct. 1, 1982.