§14A-3-306. Consumer loans not pursuant to revolving loan account.
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(1)This section applies to a consumer loan not made pursuant to a revolving loan account under Section 3-309 of this title.
(2)The lender shall give to the debtor the following information:
(a)The identity of the lender required to make
disclosure.
(i)The amount financed, using that term, which shall
be the amount of credit of which the debtor 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 conspicuously segregated in
accordance with the rule of the Administrator:
(aa)take the principal amount of the loan;
(bb)add any charges which are not part of the
finance charge or of the principal amount of
the loan and which are financed by the
debtor, including the cost of any items
excluded from the finance charge pursuant to
Section 3-202 of this title; and
(cc)subtract any charges which are part of the
finance charge but which will be paid by the
debtor 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 lender shall provide a statement of
the debtor'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 debtor to indicate whether the debtor wants a
written itemization of the amount financed. Upon
receiving an affirmative indication, the lender
shall provide, at the time other disclosures are
required to be furnished, a written itemization
of the amount financed. For the purposes of this
subparagraph, "itemization of the amount
financed" means a disclosure of the following
items, to the extent applicable:
(aa)the amount that is or will be paid directly
to the debtor;
(bb)the amount that is or will be credited to
the debtor's account to discharge
obligations owed to the lender;
(cc)each amount that is or will be paid to third
persons by the lender on the debtor's
behalf, together with an identification of
or reference to the third person; and
(dd)the total amount of any charges described in
the division
(cc)of subparagraph
(i)of
this paragraph.
(c)The "finance charge", not itemized, using that term.
(d)The finance charge expressed as an "annual percentage
rate", using that term. This shall not be required if
the amount financed does not exceed Seventy-five
Dollars ($75.00) and the finance charge does not
exceed Five Dollars ($5.00), or if the amount financed
exceeds Seventy-five Dollars ($75.00) and the finance
charge does not exceed Seven Dollars and fifty cents
($7.50).
(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)Descriptive explanations of the terms "amount
financed", "finance charge", "annual percentage rate"
and "total of payments", as specified by the
Administrator.
(h)Where the credit is secured, a statement that a
security interest has been taken in
(i)the property
which is purchased as part of the credit transaction,
or
(ii)property not purchased as part of the credit
transaction identified by item or type.
(i)Any dollar charge or percentage amount which may be
imposed by a lender solely on account of a late
payment, other than a deferral or extension charge.
(j)A statement indicating whether or not the debtor 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. 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.
A statement that the debtor should refer to the
appropriate contract document for any information such
document provides about nonpayment, default, the right
to accelerate the maturity of the debt, and prepayment
rebates and penalties.
(l)In any transaction in which a mortgage, deed of trust,
or equivalent consensual security interest is created
or retained against the debtor's dwelling to finance
the acquisition or initial construction of the
dwelling, a statement indicating whether a subsequent
purchaser or assignee of the debtor may assume the
debt obligation on its original terms and conditions.
(m)In the case of any variable interest rate residential
mortgage transaction, in disclosures provided at
application as prescribed by the Administrator for a
variable rate transaction secured by the consumer's
principal dwelling, at the option of the creditor, a
statement that the periodic payments may increase or
decrease substantially, and the maximum interest rate
and payment for a ten-thousand-dollar loan originated
at a recent interest rate, as determined by the
Administrator, assuming the maximum periodic increases
in rates and payments under the program, or a
historical example illustrating the effects of
interest rate changes implemented according to the
loan program.
(3)Except as rules of the Administrator may provide, if a lender makes a binding commitment to make a consumer loan by allowing the debtor to draw on the lender and at the time the commitment is made the amount of the loan has not been determined, the lender shall then give to the debtor a statement of the terms under which the loan will be made, including the rate of the loan finance charge calculated in accordance with the provisions on calculation of rate under Section 3-304 of this title. If the rate of the loan finance charge varies according to the amount of the loan, the lender shall state the minimum and maximum annual percentage rates which would be applicable to the amounts which could be drawn pursuant to the commitment. If additional charges under Section 3-202 of this title may be made, the lender shall also state the conditions under which the charges may be made, the amount or method of computing the charges, and a brief description or identification of the charges. Within a reasonable time after the loan is made, and in any event on or before the due date of the first installment, the lender shall give the information required by this section.
Added by Laws 1969, c. 352, § 3-306, eff. July 1, 1969. Amended by Laws 1970, c. 282, § 8; Laws 1982, c. 335, § 40, operative Oct. 1, 1982; Laws 2000, c. 217, § 10, eff. July 1, 2000.