HB-4991, As Passed Senate, December 17, 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOUSE BILL No. 4991

 

May 26, 2009, Introduced by Reps. Johnson and Melton and referred to the Committee on Insurance.

 

      A bill to amend 1950 (Ex Sess) PA 27, entitled

 

"Motor vehicle sales finance act,"

 

by amending section 13 (MCL 492.113), as amended by 2002 PA 699.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

 1        Sec. 13. (1) An installment sale contract shall state

 

 2  include the full names and addresses of all the parties to the

 

 3  contract, and the date when signed by the buyer, and shall

 

 4  contain a description of the motor vehicle sold that is

 

 5  sufficient for accurate identification.

 

 6        (2) An installment sale contract shall set forth all of the

 

 7  following separate items in the following order:

 

 8        (a) The cash price of the motor vehicle. This amount shall

 

 9  include any taxes, the cash price of agreed upon accessories and

 

10  installation of the accessories, the cash price of any extended


 

 1  warranty or service contract, and a documentary preparation fee.

 

 2  The documentary preparation fee shall not exceed 5% of the cash

 

 3  price of the motor vehicle or $160.00, whichever is less.

 

 4  Beginning on January 1, 2005, the administrator shall adjust the

 

 5  $160.00 maximum amount then in effect for the documentary

 

 6  preparation fee described in this subdivision every 2 years to

 

 7  reflect the cumulative percentage change in the consumer price

 

 8  index for the 2 immediately preceding calendar years, as

 

 9  determined by the administrator. The administrator shall round

 

10  the adjustment to the nearest $10.00 increment to set the fee

 

11  every 2 years under this subdivision, but shall carry over and

 

12  use the absolute value to calculate the next 2-year adjustment.

 

13  As used in this subdivision, "consumer price index" means the

 

14  United States consumer price index for all urban consumers, U.S.

 

15  city average, as defined and reported by the United States

 

16  department of labor, bureau of labor statistics.

 

17        (b) The down payment made by the buyer at the time of or

 

18  before execution of the contract, indicating whether made in

 

19  cash, or represented by the agreed value of a trade-in motor

 

20  vehicle or other goods, or both. The amount of cash and the value

 

21  of any trade-in shall be shown stated separately. A description

 

22  that is sufficient for identification of any trade-in shall be

 

23  shown included.

 

24        (c) The unpaid cash price balance, which is the difference

 

25  between the cash price under subdivision (a) and the down payment

 

26  under subdivision (b).

 

27        (d) The cost of any insurance premium or travel emergency


 

 1  benefits pertaining to the operation of the automobile that the

 

 2  seller agrees to extend credit to the buyer to obtain. The

 

 3  installment sale contract shall set forth the term of the

 

 4  insurance and a concise description of the terms of the insurance

 

 5  policy and the travel emergency benefits. If the precise cost of

 

 6  the insurance is not available at the time the contract is

 

 7  signed, an estimated amount, ascertained from the current

 

 8  published applicable manual of a recognized standard insurance

 

 9  rating bureau, may be set forth in the contract. The seller

 

10  shall, within Within 25 days after making the installment sale

 

11  contract, the seller shall mail or cause to be mailed to the

 

12  buyer at his or her address as shown on the installment contract

 

13  a certificate or policy of insurance and a statement showing the

 

14  exact cost of the insurance. Each installment sale contract shall

 

15  contain the following warning, printed prominently in red ink and

 

16  in 12-point type or larger, directly preceding the notice

 

17  provided for in section 12(d), enclosed by a continuous heavy

 

18  line:

 

 

19

 

_________________________________________________________

20

 

Warning: The insurance afforded hereunder does not cover

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liability for injury to persons or damage to property of

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others unless so indicated hereon.

23

 

________________________________________________________

 

 

24        (e) The cost of any guaranteed asset protection waiver that

 

25  the seller agrees to extend credit to the buyer to obtain. For

 

26  purposes of this subdivision, all of the following apply:


 

 1        (i) "Guaranteed asset protection waiver" means that term as

 

 2  defined in section 3 of the guaranteed asset protection waiver

 

 3  act.

 

 4        (ii) A guaranteed asset protection waiver may be included as

 

 5  part of, or as an addendum to, an installment sale contract.

 

 6        (iii) An installment seller that offers, sells, or provides

 

 7  guaranteed asset protection waivers to installment buyers in this

 

 8  state must comply with the guaranteed asset protection waiver

 

 9  act.

 

10        (iv) Any cost to an installment buyer for a guaranteed asset

 

11  protection waiver entered into in compliance with the truth in

 

12  lending act, 15 USC 1601 to 1667f, and the regulations

 

13  promulgated under that act, 12 CFR part 226, must be separately

 

14  stated and is not considered a finance charge or interest.

 

15        (f) (e) Other necessary or incidental costs that the seller

 

16  contracts to pay on behalf of the buyer and for the amount of

 

17  which the seller agrees to extend credit to the buyer as

 

18  authorized by under this act. The contract shall contain an

 

19  itemization of the nature and amount of the costs.

 

20        (g) (f) The principal amount financed, which is the total of

 

21  the amounts described in subdivisions (c), (d), and (e), and (f).

 

22        (h) (g) The finance charge, which is the consideration in

 

23  excess of the total of the cash price under subdivision (a),

 

24  excluding the amounts described in subdivisions (d), and (e), and

 

25  (f).

 

26        (i) (h) The time balance, which is the total of the amounts

 

27  described in subdivisions (f) and (g) and (h) and represents the


 

 1  total obligation of the buyer that he or she agrees to pay in 2

 

 2  or more scheduled payments.

 

 3        (j) (i) The payment schedule, which shall state include the

 

 4  number of payments, the amount of the payments, and the time of

 

 5  the payments required to liquidate the time balance.

 

 6        (3) An installment sale contract shall state clearly any

 

 7  collateral security taken for given to secure the buyer's

 

 8  obligation under the contract.

 

 9        (4) An installment sale contract shall contain a summary

 

10  notice of the buyer's principal legal rights respecting

 

11  prepayment of the contract and rebate of the finance charge and

 

12  reinstatement of the contract in the event of repossession.

 

13        (5) An installment sale contract shall contain specific

 

14  provisions as to concerning the buyer's liability respecting for

 

15  default charges, repossession, and sale of the motor vehicle in

 

16  case of default or other breach of contract, and respecting the

 

17  seller's or holder's rights concerning any collateral security. ,

 

18  if any.

 

19        Enacting section 1. This amendatory act takes effect 180

 

20  days after the date this amendatory act is enacted into law.

 

21        Enacting section 2. This amendatory act does not take effect

 

22  unless all of the following bills of the 95th Legislature are

 

23  enacted into law:

 

24        (a) Senate Bill No.____ or House Bill No. 4989(request no.

 

25  01431'09).

 

26        (b) Senate Bill No.____ or House Bill No. 4990(request no.

 

27  01431'09 a).


 

 1        (c) Senate Bill No.____ or House Bill No. 4992(request no.

 

 2  03362'09).