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S.B. 136
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UNIFORM CONSUMER CREDIT CODE
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AMENDMENTS
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1999 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Peter C. Knudson
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AN ACT RELATING TO CONSUMER CREDIT; PROHIBITING CERTAIN CHARGES TO
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BE TREATED AS PENALTIES; ADDRESSING WHAT CONSTITUTES A PERMITTED
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CHANGE IN AN OPEN-END CREDIT CONTRACT; AND MAKING TECHNICAL
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CHANGES.
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This act affects sections of Utah Code Annotated 1953 as follows:
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AMENDS:
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70C-1-103, as enacted by Chapter 159, Laws of Utah 1985
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70C-4-102, as last amended by Chapter 177, Laws of Utah 1990
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
70C-1-103
is amended to read:
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70C-1-103. General principles of law apply.
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(1) Unless displaced by the particular provisions of this title, the Uniform Commercial
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Code and the principles of law and equity, including without limitation the law relative to capacity
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to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, and
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bankruptcy shall supplement its provisions.
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(2) A charge or fee described in Section
70C-1-106
assessed by a S [
creditor
]
DEPOSITORY
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INSTITUTION AS DEFINED BY SECTION 7-1-103
s in accordance
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with this title may not be considered void as a penalty or otherwise unenforceable under statute or
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common law.
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Section 2.
Section
70C-4-102
is amended to read:
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70C-4-102. Change of terms of open-end credit contracts.
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(1) For purposes of this section "change" includes to add, delete, or otherwise change a
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term of an open-end consumer contract.
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(2) Notwithstanding [the provisions of] Section
25-5-4
, a creditor may change any written
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term of an open-end consumer credit contract at any time while the agreement is in effect and
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apply the new term to the unpaid balance in the account[, by giving] if:
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(a) the creditor gives all other parties to the open-end consumer contract that may be
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affected not less than h [
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]
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h days advance written notice of the change [to all other parties who
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may
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be affected, but only if]; and
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(b) the contract expressly provides that the creditor may change terms of the agreement
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from time to time.
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[(1)] (3) If the creditor has taken a security interest in any real property of the debtor to
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secure payment of the debt, and if the term to be changed affects the method for calculating
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minimum payments, or is part of the finance charge, the creditor may apply the new term to an
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account balance relating to a credit transaction [which] that occurred prior to the effective date of
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the change only if:
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(a) the debtor expressly so agrees after notice of the change has been given by the creditor;
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or
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(b) (i) the creditor notifies the debtor that:
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(A) further extensions of credit will not be permitted unless the debtor agrees that the new
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term may be applied to an existing account balance[, and];
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(B) any future charges to the account will constitute [such an] agreement[,]; and
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(ii) the debtor makes a charge [or charges] to the account after receiving [such] notice
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described in Subsection (3)(b)(i).
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[(2)] (4) [No notice] Notice under this section is not required when:
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(a) [when] the change involves:
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(i) late payment charges[,];
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(ii) charges for documentary evidence[, or];
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(iii) over-the-limit charges;
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[(ii)] (iv) a reduction of any component of a finance or other charge;
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[(iii)] (v) suspension of future credit privileges; or
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(vi) termination of an account or plan; or
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(b) [when] other than an increase in the periodic rate or other finance charge, the change
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results from:
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(i) an agreement involving a court proceeding[,]; or [from]
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(ii) the consumer's default or delinquency[, other than an increase in the periodic rate or
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other finance charge].
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[(3)] (5) (a) The actual unpaid balance of the account at any point in time is not a term of
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the credit agreement for purposes of this section.
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(b) With regard to a variable or adjustable interest rate, a periodic change in the applicable
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rate is not a change subject to this section if no term of the credit agreement pertaining to
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calculation of the applicable rate is changed.
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(6) (a) A creditor may include a notice required by this section of a change to an open-end
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consumer credit contract on or in the same envelope as a periodic statement or other material sent
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to the borrower by the creditor.
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(b) Notwithstanding Subsection (6)(a), a creditor is not required to include a notice
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required by this section with any other material sent to the borrower.
Legislative Review Note
as of 1-27-99 4:38 PM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.