0001| SENATE BILL 354
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0002| 43rd legislature - STATE OF NEW MEXICO - first session, 1997
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0003| INTRODUCED BY
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0004| BEN D. ALTAMIRANO
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0005|
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0006|
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0007|
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0008|
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0009|
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0010| AN ACT
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0011| RELATING TO COMMERCIAL TRANSACTIONS; INCREASING THE AMOUNT OF
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0012| DELINQUENCY CHARGES AUTHORIZED PURSUANT TO RETAIL INSTALLMENT
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0013| CONTRACTS; AUTHORIZING THE IMPOSITION OF DELINQUENCY CHARGES
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0014| PURSUANT TO RETAIL CHARGE AGREEMENTS; AMENDING SECTIONS OF THE
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0015| NMSA 1978.
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0016|
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0017| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0018| Section 1. Section 56-1-2 NMSA 1978 (being Laws 1965,
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0019| Chapter 258, Section 2, as amended) is amended to read:
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0020| "56-1-2. RETAIL INSTALLMENT CONTRACTS--CONSOLIDATION--
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0021| FIRST BOUGHT, FIRST PAID.--
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0022| A. Each retail installment contract shall be in
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0023| writing, dated, signed by the retail buyer and completed as to
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0024| all essential provisions except as otherwise provided in
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0025| Subsections G and H of this section.
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0001| B. The printed or typed portion of the contract,
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0002| other than instructions for completion, shall be in a size
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0003| equal to at least eight-point type. The contract shall be
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0004| designated "retail installment contract" and shall contain
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0005| substantially the following notice printed or typed in a size
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0006| equal to at least ten-point bold type:
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0007| "NOTICE TO THE BUYER. DO NOT SIGN THIS CONTRACT BEFORE
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0008| YOU READ IT OR IF IT CONTAINS BLANK SPACES. YOU ARE
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0009| ENTITLED TO A COPY OF THE CONTRACT YOU SIGN.".
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0010| C. The retail seller shall deliver to the retail
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0011| buyer or mail to him at his address shown on the retail
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0012| installment contract a copy of the contract as accepted by the
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0013| seller. Until the seller does so, a buyer who has not received
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0014| delivery of the goods or been furnished or rendered the
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0015| services shall have the right to rescind his contract and to
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0016| receive a refund of all payments made and return of all goods
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0017| traded in to the seller on account of or in contemplation of
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0018| the contract or, if such goods cannot be returned, the value
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0019| thereof. Any acknowledgment by the buyer of delivery of a copy
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0020| of the contract shall be in a size equal to at least ten-point
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0021| bold type and, if contained in the contract, shall appear
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0022| directly above the buyer's signature.
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0023| D. The retail installment contract shall contain
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0024| the names of the seller and the buyer, the place of business of
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0025| the seller, the residence or other address of the buyer as
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0001| specified by the buyer and a description or identification of
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0002| the goods sold or to be sold or services furnished or rendered
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0003| or to be furnished or rendered.
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0004| E. The retail installment contract shall contain
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0005| the following items:
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0006| (1) the cash sale price of the goods or
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0007| services;
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0008| (2) the amount of the buyer's down payment,
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0009| identifying the amounts paid in money and allowed for goods
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0010| traded in;
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0011| (3) the difference between the items listed
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0012| in Paragraphs (1) and (2) of this subsection;
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0013| (4) the aggregate amount, if any, included for
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0014| insurance, if a separate identified charge is made therefor,
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0015| specifying the [type or] types of insurance and the [term
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or] terms of coverage;
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0017| (5) the aggregate amount of official fees;
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0018| (6) the principal balance, which is the sum of
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0019| the items listed in Paragraphs (3), (4) and (5) of this
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0020| subsection;
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0021| (7) the amount or rate of the time price
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0022| differential;
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0023| (8) the amount of the time balance owed by the
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0024| buyer to the seller, which is the sum of the items listed in
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0025| Paragraph (6) of this subsection and the amount set out
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0001| under [item] Paragraph (7) of this subsection;
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0002| (9) except as otherwise provided in [the next
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two sentences] this paragraph, the maximum number of
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0004| installment payments required and the amount of each
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0005| installment and the due date of each payment necessary to pay
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0006| the time balance set forth in [item] Paragraph (8) of this
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0007| subsection. If installment payments other than the final
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0008| payment are stated as a series of equal scheduled amounts and
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0009| if the amount of the final installment payment does not
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0010| substantially exceed the scheduled amount of each preceding
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0011| installment payment, the maximum number of payments and the
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0012| amount and due date of each payment need not be separately
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0013| stated, and the amount of the scheduled final installment
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0014| payment may be stated as the remaining unpaid balance. The due
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0015| date of the first installment payment may be fixed by a day or
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0016| date or may be fixed by reference to the date of the contract
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0017| or to the time of delivery or installation;
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0018| (10) the time sale price; and
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0019| (11) if any installment, except the down
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0020| payment, is more than double the average of all other
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0021| installments, except the down payment, the following legend
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0022| printed in at least ten point bold type or typewritten: "THIS
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0023| CONTRACT IS NOT PAYABLE IN INSTALLMENTS OF EQUAL AMOUNTS"
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0024| followed, if there [be but] is only one [such] larger
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0025| installment, by: "AN INSTALLMENT OF $_______________ WILL BE
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0001| DUE ON _______________." or, if there [be] is more than one
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0002| [such] larger installment, by: "LARGER INSTALLMENTS WILL BE
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0003| DUE AS FOLLOWS: _______________.", in [such] the latter
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0004| case, inserting the amount of every [such] larger installment
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0005| and of its due date.
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0006| The [above] items set forth in this subsection need
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0007| not be stated in the sequence or order set forth above;
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0008| additional items may be included to explain the computations
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0009| made in determining the amount to be paid by the buyer.
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0010| F. A retail installment contract need not be
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0011| contained in a single document. If the contract is contained
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0012| in more than one document, one such document may be an original
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0013| document signed by the retail buyer, stated to be applicable to
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0014| purchases of goods or services to be made by the retail buyer
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0015| from time to time. In such case, [such] the document,
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0016| together with the sales slip, account book or other written
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0017| statement relating to each purchase, shall set forth all of the
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0018| information required by this section and shall constitute the
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0019| retail installment contract for each purchase. On each
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0020| succeeding purchase pursuant to [such] the original
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0021| document, the sales slip, account book or other written
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0022| statement may at the option of the seller constitute the memor-
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0023|
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0024| andum required by Subsection M of this section.
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0025| G. Retail installment contracts negotiated and
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0001| entered into by mail without personal solicitations by salesmen
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0002| or other representatives of the seller and based upon a catalog
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0003| of the seller, or other printed solicitation which clearly sets
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0004| forth the cash sale prices and other terms of sales to be made
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0005| through such medium, may be made as provided in this
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0006| subsection. The provisions of [this act] Chapter 56,
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0007| Article 1 NMSA 1978 with respect to retail installment
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0008| contracts shall be applicable to such sales, except that:
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0009| (1) the designation and notice provisions of
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0010| Subsection B of this section shall not be applicable to such
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0011| contract; and
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0012| (2) the retail installment contract, when
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0013| completed by the buyer, need not contain the items required by
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0014| Subsection E of this section.
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0015| When the contract is received from the retail buyer, the
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0016| seller shall prepare a written memorandum containing all of the
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0017| information required by Subsection E of this section to be
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0018| included in a retail installment contract. In lieu of
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0019| delivering a copy of the contract to the retail buyer as
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0020| provided in Subsection C of this section, the seller shall
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0021| deliver to the buyer a copy of such memorandum prior to the due
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0022| date of the first installment payable under the contract.
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0023| H. A retail installment contract shall not be signed
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0024| by any party thereto when it contains blank spaces of items
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0025| which are essential provisions of the transaction; provided,
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0001| however, if delivery of the goods is not made at the time of
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0002| the execution of the contract, the identifying numbers [of]
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0003| or marks of the goods or similar information and the due date
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0004| of the first installment may be inserted by the seller in the
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0005| seller's counterpart of the contract after it has been signed
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0006| by the buyer. The buyer's acknowledgment, conforming to the
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0007| requirements of this section, of delivery of a copy of the
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0008| contract shall be presumptive proof or, in the case of a holder
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0009| of the contract without knowledge to the contrary when he
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0010| purchases it, conclusive proof of such delivery and of
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0011| compliance with this subsection and any other requirement
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0012| relating to completion of the contract prior to execution
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0013| thereof by the buyer in any action or proceeding.
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0014| I. Notwithstanding the provisions of any other law, a
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0015| retail installment contract may provide for, and the seller or
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0016| holder may then charge, collect and receive, a time price
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0017| differential.
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0018| The time price differential on a retail installment
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0019| contract shall be computed on the principal balance of each
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0020| transaction as determined under Subsection E of this section
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0021| on contracts payable in successive monthly payments substan-
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0022|
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0023| tially equal in amount from the date of the contract to the
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0024| maturity of the final payment, notwithstanding that the total
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0025| time balance thereof is required to be paid in one or more de-
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0001|
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0002| ferred payments. When a retail installment contract provides
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0003| for payment other than in substantially equal successive
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0004| monthly payments, the time price differential shall not exceed
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0005| the amount which will provide the same return as is permitted
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0006| on substantially equal successive monthly payment contracts,
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0007| having due regard for the schedule of payments. The time price
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0008| differential may be computed on the basis of a full month for
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0009| any fractional portion of a month in excess of ten days.
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0010| J. Notwithstanding the provisions of any retail
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0011| installment contract to the contrary, any buyer may prepay in
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0012| full the unpaid time balance [thereof] of the contract at
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0013| any time before its final due date and, if he does so, shall
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0014| receive a refund credit [thereon] for [such] the
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0015| prepayment. The amount of [such] the refund credit shall
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0016| represent at least as great a proportion of the original time
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0017| price differential, after deducting [therefrom] a maximum of
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0018| ten dollars ($10.00), as [(1)] the sum of the monthly
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0019| balances under the schedule of payments in the contract begin-
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0020|
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0021| ning as of the date after [such] the prepayment which is
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0022| the next succeeding monthly anniversary date of the due date of
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0023| the first installment under the contract or, if the prepayment
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0024| is prior to the due date of the first installment under the
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0025| contract, [then] as of the date after [such] the prepay-
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0001|
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0002| ment which is the next succeeding monthly anniversary date of
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0003| the date of the contract bears to [(2)] the sum of all the
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0004| monthly balances under the schedule of installment payments in
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0005| the contract. Where the amount of refund credit is less than
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0006| one dollar ($1.00), no refund credit need be made.
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0007| K. The holder of any retail installment contract, if
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0008| it so provides, may collect a delinquency and collection charge
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0009| on each installment in default for a period of more than ten
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0010| days in [the] an amount not to exceed [five percent of
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each installment or five dollars ($5.00), whichever is less, or
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in lieu thereof, interest after maturity of each such
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installment not to exceed the highest lawful contract rate]
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0014| ten dollars ($10.00). In addition, [such] the contract
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0015| may provide for the payment of an attorney's reasonable fee
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0016| [where] when it is referred for collection to an attorney
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0017| not a salaried employee of the holder of the contract and for
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0018| court costs and disbursements.
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0019| L. Upon written request of the buyer, the holder of a
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0020| retail installment contract shall give or forward to the buyer
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0021| a written statement of the dates and amounts of payments and
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0022| the total amount unpaid under the contract. A buyer shall be
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0023| given a written receipt for any payment when made in cash.
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0024| Such a statement or receipt shall be given the buyer once
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0025| without charge; if any additional statement is requested by the
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0001| buyer, it shall be supplied by the holder at a charge not in
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0002| excess of one dollar ($1.00) for each additional statement or
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0003| receipt so supplied.
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0004| M.
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0005| (1) If, in a retail installment transaction, a
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0006| retail buyer makes any subsequent purchases of goods or
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0007| services from a retail seller from whom he has previously
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0008| purchased goods or services under one or more retail
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0009| installment contracts and the amounts under such previous
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0010| [contract or] contracts have not been fully paid, the subse-
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0011|
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0012| quent purchases may, at the seller's option, be included in and
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0013| consolidated with one or more of the previous [contract or]
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0014| contracts. Each subsequent purchase shall be a separate retail
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0015| installment contract under [this act] Chapter 56, Article 1
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0016| NMSA 1978, notwithstanding that the same may be included in
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0017| and consolidated with one or more [of such] previous
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0018| [contract or] contracts. All the provisions of [this act]
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0019| Chapter 56, Article 1 NMSA 1978 with respect to retail
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0020| installment contracts shall be applicable to such subsequent
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0021| purchases except as [hereinafter] stated in this subsection.
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0022| (2) In the event of such consolidation, in lieu
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0023| of the buyer's executing a retail installment contract
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0024| respecting each subsequent purchase as provided in this
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0025| section, it [shall be] is sufficient if the seller [shall
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prepare] prepares a written memorandum of each subsequent
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0002| purchase, in which case the provisions of Subsections A, B, C
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0003| and E of this section shall not be applicable. Unless
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0004| previously furnished in writing to the buyer by the seller by
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0005| sales slip, memorandum or otherwise, such memorandum shall
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0006| contain, with respect to each subsequent purchase, [items]
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0007| Paragraphs (1) through (8) of Subsection E of this section
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0008| and, in addition, the outstanding balance of the previous
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0009| [contract or] contracts, the consolidated time balance and
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0010| the revised installments applicable to the consolidated time
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0011| balance, if any.
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0012| The seller shall deliver to the buyer a copy of such
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0013| memorandum prior to the due date of the first installment of
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0014| [such] the consolidated contract.
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0015| (3) When such subsequent purchases are made, if
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0016| the seller has retained title or taken a lien or other security
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0017| interest in any of the goods purchased under any one of the
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0018| contracts included in the consolidation, the entire amount of
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0019| all payments made prior to [such] the subsequent purchases
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0020| shall be deemed to have been applied on the previous purchases,
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0021| and each payment after [such] the subsequent purchase made
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0022| on the consolidated contract shall be deemed to have been
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0023| allocated to the purchases earliest in time. The payments
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0024| shall be credited first to the current carrying charges and
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0025| then in reduction of the purchase price of merchandise in the
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0001| order in which it was purchased. Articles of merchandise for
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0002| which the sales price and carrying charges have been paid
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0003| [for] under this section shall not thereafter be repossessed
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0004| or considered security for payment of any charge arising out of
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0005| any subsequent purchases made by the buyer. However, the
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0006| amount of any down payment on the subsequent purchase shall be
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0007| allocated in its entirety to [such] the subsequent
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0008| purchase. The provisions of this paragraph shall not apply to
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0009| cases where [such] previous and subsequent purchases involve
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0010| equipment, parts or other goods attached or affixed to goods
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0011| previously purchased and not fully paid or to services in con-
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0012|
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0013| nection therewith rendered by the seller at the buyer's
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0014| request."
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0015| Section 2. Section 56-1-3 NMSA 1978 (being Laws 1965,
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0016| Chapter 258, Section 3, as amended) is amended to read:
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0017| "56-1-3. RETAIL CHARGE AGREEMENTS.--
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0018| A. Each retail charge agreement shall be in writing
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0019| and signed by the buyer. A copy of any such agreement executed
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0020| on or after the effective date of this [act] section shall
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0021| be delivered or mailed to the buyer prior to the date on which
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0022| the first payment is due [thereunder] under the agreement.
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0023| Any acknowledgment by the buyer of delivery of a copy of the
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0024| agreement contained in the body thereof shall be in a size
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0025| equal to at least ten-point bold type and shall appear directly
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0001| above the buyer's signature. No agreement executed on or after
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0002| the effective date of this [act] section shall be signed by
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0003| the buyer when it contains blank spaces to be filled in after
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0004| it has been signed. The buyer's acknowledgment, conforming to
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0005| the requirements of this subsection, of delivery of a copy of
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0006| an agreement shall be presumptive proof in any action or
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0007| proceeding of such delivery and that the agreement, when
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0008| signed, did not contain any blank spaces as [herein] provided
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0009| in this section. All retail charge agreements executed on or
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0010| after the effective date of this [act] section shall state
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0011| the maximum amount and rate of the time price differential to
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0012| be charged and paid [pursuant thereto]. Any such agreement
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0013| shall contain substantially the following notice printed or
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0014| typed in a size equal to at least ten-point bold type:
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0015| "NOTICE TO THE BUYER--DO NOT SIGN THIS AGREEMENT BEFORE
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0016| YOU READ IT OR IF IT CONTAINS BLANK SPACES. YOU ARE
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0017| ENTITLED TO A COPY OF THE AGREEMENT YOU SIGN.".
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0018| B. The buyer under the retail charge agreement shall
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0019| promptly be supplied with a statement as of the end of each
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0020| monthly period, which need not be a calendar month, or other
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0021| regular period agreed upon in writing, at the end of which
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0022| there is any unpaid balance [thereunder], which statement
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0023| shall recite the following:
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0024| (1) the unpaid balance under the retail charge
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0025| agreement at the beginning and at the end of the period;
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0001| (2) the dollar amount of each purchase by the
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0002| buyer during the period and, unless a sales slip or a
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0003| memorandum of each purchase has previously been furnished the
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0004| buyer or is attached to the statement, the purchase or posting
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0005| date, a brief description or identification and the cash price
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0006| of each purchase;
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0007| (3) the payments made by the buyer and any other
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0008| credits to the buyer during the period;
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0009| (4) the amount, if any, of any time price
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0010| differential for [such] the period; and
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0011| (5) a legend to the effect that the buyer may at
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0012| any time pay his total unpaid balance or any part thereof.
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0013| C. Notwithstanding the provisions of any other law, a
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0014| retail charge agreement may provide for, and the seller or
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0015| holder may then charge, collect and receive, a time price
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0016| differential for the privilege of paying in installments
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0017| [thereunder].
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0018| D. The time price differential on a retail charge
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0019| agreement shall be computed from month to month, which need not
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0020| be a calendar month, or other regular period, on all amounts
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0021| unpaid under the agreement at the beginning of each such
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0022| period. The time price differential under this subsection may
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0023| be computed for all unpaid balances within a range of not in
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0024| excess of ten dollars ($10.00) on the basis of the median
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0025| amount within such range, if as so computed [such] the time
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0001| price differential is applied to all unpaid balances within
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0002| such range.
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0003| E. A retail charge agreement may also provide for,
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0004| and the seller or holder may then charge, collect and receive
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0005| a delinquency charge on each installment in default for a
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0006| period of more than ten days in an amount not to exceed ten
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0007| dollars ($10.00). In addition, the agreement may provide for
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0008| the payment of an attorney's reasonable fee [where] when it
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0009| is referred for collection to an attorney not a salaried
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0010| employee of the holder of the retail charge agreement or any
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0011| unpaid balance thereunder and for court costs and dis-
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0012|
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0013| bursements."
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0014| Section 3. Section 56-1-9 NMSA 1978 (being Laws 1965,
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0015| Chapter 258, Section 9) is amended to read:
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0016| "56-1-9. VIOLATION--BAR TO RECOVERY.--Any seller who
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0017| enters into any contract or agreement which does not comply
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0018| with the provisions of [this act] Chapter 56, Article 1 NMSA
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0019| 1978 or who violates any provision of [this act] that
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0020| article except as a result of an accidental or bona fide error
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0021| shall be barred from the recovery of any time price
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0022| differential, official fees or any delinquency or collection
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0023| charge under or in connection with the [related retail
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installment] contract or [purchases under a retail charge]
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0025| agreement. [but] The seller may nevertheless recover from the
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0001| buyer an amount equal to the cash price of the goods or
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0002| services and the cost to the seller of any insurance included
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0003| in the transaction."
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0004| Section 4. EFFECTIVE DATE.--The effective date of the
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0005| provisions of this act is July 1, 1997.
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0006|
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0007|
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0008| FORTY-THIRD LEGISLATURE
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0009| FIRST SESSION, 1997
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0010|
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0011|
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0012| February 6, 1997
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0013|
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0014| Mr. President:
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0015|
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0016| Your CORPORATIONS & TRANSPORTATION COMMITTEE, to
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0017| whom has been referred
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0018|
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0019| SENATE BILL 354
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0020|
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0021| has had it under consideration and reports same with
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0022| recommendation that it DO PASS, and thence referred to the
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0023| FINANCE COMMITTEE.
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0024|
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0025| Respectfully submitted,
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0001|
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0002|
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0003|
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0004|
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0005| __________________________________
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0006| Roman M. Maes, III, Chairman
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0007|
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0008|
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0009|
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0010| Adopted_______________________ Not
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0011| Adopted_______________________
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0012| (Chief Clerk) (Chief Clerk)
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0013|
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0014|
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0015| Date ________________________
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0016|
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0017|
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0018| The roll call vote was 4 For 2 Against
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0019| Yes: 4
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0020| No: McKibben, Maes
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0021| Excused: Fidel, Robinson, Wilson, Maloof
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0022| Absent: None
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0023|
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0024|
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0025| S0354CT1
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0001|
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