HB-4710, As Passed House, December 5, 2012
June 7, 2011, Introduced by Reps. Kurtz, Foster, Daley, Scott, Gilbert, Bumstead, Damrow, Kowall, Huuki and Callton and referred to the Committee on Commerce.
A bill to amend 1950 (Ex Sess) PA 27, entitled
"Motor vehicle sales finance act,"
by amending section 2 (MCL 492.102), as amended by 1995 PA 166.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
2. Except where the context indicates otherwise, as As
used in this act:
(a) "Administrator" means the commissioner of the office of
financial and insurance regulation in the department of energy,
labor, and economic growth.
(b) "Cash price" means the price measured in dollars at which
a seller of a motor vehicle would in good faith sell to the buyer
or to any other buyer under like circumstances, and the buyer would
in good faith buy from the seller, the motor vehicle that is the
subject matter of an installment sale contract if the sale were a
sale for cash instead of an installment sale.
(c) "Collateral security" means security, other than a
security interest in a motor vehicle that is the subject of an
installment sale contract, that is given to secure performance of
an obligation of the buyer, or of any surety or guarantor for the
buyer, under an installment sale contract. The term includes the
undertakings of any surety or guarantor for the buyer and any
interest in, encumbrance on, or pledge of real or personal property
other than the motor vehicle that is the subject of the installment
sale contract.
(d) "Down payment" means all partial payments, whether made in
cash or otherwise, received by or for the benefit of the seller
before or substantially contemporaneous with either the execution
of the installment sale contract or the delivery of the motor
vehicle sold under that contract, whichever occurs later.
(e) "Finance charge" means that term as defined in section 106
of the truth in lending act, 15 USC 1605.
(f) "Financial institution" means a state or national
chartered bank, a state or federal chartered savings and loan
association, or a state or federal chartered credit union.
(g) "Holder" means a seller or other person that is currently
entitled to the rights of a seller under an installment sale
contract.
(h) "Installment buyer" or "buyer" means a person that buys,
hires, or leases a motor vehicle for personal, family, or household
use, and not for commercial, business, or agricultural use, under
an installment sale contract or a legal successor in interest to
that person.
(i) "Installment sale contract" or "contract" means an
agreement for the retail sale of a motor vehicle, or that has a
similar purpose or effect, under which part or all of the price is
payable in 2 or more scheduled payments subsequent to the making of
the agreement or under which the obligor undertakes to make 2 or
more scheduled payments or deposits that can be used to pay part or
all of the purchase price, whether or not the seller has retained a
security interest in the motor vehicle or has taken collateral
security for the buyer's obligation, and any extension, deferment,
renewal, or other revision of that agreement. The terms include a
loan, mortgage, conditional sale contract, purchase-money chattel
mortgage, hire-purchase agreement, or agreement for the bailment or
leasing of a motor vehicle under which the hire-purchaser, the
bailee, or the lessee agrees to pay as compensation a sum
substantially equivalent to or in excess of the value of the motor
vehicle, and any other form of agreement that has a similar purpose
or effect. The terms do not include a sale or contract for sale on
an open book account in which the seller has not retained or taken
a security interest in the motor vehicle sold or collateral
security for the buyer's obligation, the buyer is not required to
pay any sum other than the cash price of the motor vehicle sold in
connection with the sale or extension of credit, and the buyer is
obligated to pay for the motor vehicle in full within 90 days after
the time the sale or contract for sale was made.
(j) "Installment seller" or "seller" means a person engaged in
the business of selling, offering for sale, hiring, or leasing
motor vehicles under installment sale contracts or a legal
successor in interest to that person. As used in this subdivision,
"business" does not include an isolated sale.
(k) "Licensed financial institution" means a financial
institution issued a license under this act.
(l) "Licensee" means a person issued a license under this act
as an installment seller or a sales finance company and whose
license has not expired or been surrendered or revoked, and in the
plural means a person or persons licensed under 1 or both of these
2 classifications. The term includes a licensed financial
institution.
(m) 1.
"Motor vehicle" means a
self-propelled device by which
a person or property may be transported upon a public highway or a
recreational
vehicle. Motor vehicle The term
does not include
tractors,
motorcycles, trailers, semitrailers, power shovels, a
tractor, motorcycle, trailer, semitrailer, or power shovel. The
term
does not include road machinery,
agricultural machinery, and
or other machinery not designed primarily for highway
transportation
but which that incidentally transports persons or
property
on a public highway. Motor vehicle also The term does not
include
devices that move a device
that moves upon or are is
guided
by
a track or travel travels through the air.
(n) 2.
"Person" means an individual, partnership, association,
corporation, limited liability company, governmental entity, or any
other legal entity.
(o) "Principal amount financed" means the unpaid cash price
balance after deducting the down payment, adding the cost of any
insurance premiums required or obtained as security for or by
reason of the sale of a motor vehicle under an installment sale
contract, and adding other costs necessary or incidental to the
sale of the motor vehicle under the contract that the seller
contracts to pay on behalf of the buyer and for the amount of which
the seller agrees to extend credit to the buyer and for which the
buyer contracts voluntarily.
(p) "Public sale" means a public sale after advertisement of
each motor vehicle in at least 2 successive publications in a
newspaper having general circulation in the village, city, or
township in which the sale is to be held. The advertisement shall
disclose the place where the motor vehicle is stored and may be
inspected, the date, time, and place of the sale, and the make,
model, and serial number of the vehicle.
(q) "Recreational vehicle" means a recreational vehicle, as
that term is defined in section 49a of the Michigan vehicle code,
1949 PA 300, MCL 257.49a, except a park model trailer as defined in
section 38a of the Michigan vehicle code, 1949 PA 300, MCL 257.38a.
(r) "Retail sale" means a sale of a motor vehicle for use by a
buyer or for the benefit or satisfaction that the buyer may derive
from the use of the motor vehicle by another.
3.
"Installment buyer" or "buyer" means a person who buys,
hires,
or leases a motor vehicle for personal, family, or household
use
and not for commercial, business, or agricultural use, under an
installment
sale contract or a legal successor in interest to that
person,
and shall continue to designate that person notwithstanding
that
he or she may have entered into 1 or more extensions,
deferments,
renewals, or other revisions of the original contract.
4.
"Installment seller" or "seller" means a person engaged in
the
business of selling, offering for sale, hiring, or leasing
motor
vehicles under installment sale contracts or a legal
successor
in interest to that person. As used in this subdivision,
"business"
does not include an isolated sale.
5.
"Holder" means a person, including a seller, who is
currently
entitled to the rights of a seller under an installment
sale
contract.
(s)
6. "Sales finance
company" means a person engaged as
a
principal, agent, or broker in the business of financing or
soliciting the financing of installment sale contracts made between
other
parties, and includes in the business of acquiring, investing
in, or lending money or credit on the security of the retail
seller's
interest in such those contracts whether by discount,
purchase, or assignment of those contracts, or otherwise. The term
includes a licensee or other person who as a seller finances
installment sale contracts for other sellers or sales finance
companies. The term includes a licensed financial institution. The
term
does not include a any of
the following:
(i) A person, financial institution, or sales finance company
that
takes assignments an
assignment of , or an interest
in , an
aggregation of installment sale contracts only as security for bona
fide commercial loans under which, in the absence of default or
other bona fide breach of the loan contract, ownership of the
contracts remains vested in the assignor and collection of payments
on
the contracts is made by the assignor. , nor a
(ii) A person who purchases installment sale contracts from a
sales
finance company or from a
licensed financial institution. The
term
includes a person, whether or not licensed under this act, who
as
a seller finances installment sale contracts for other sellers
or
sales finance companies. The term includes a financial
institution.
7.
"Financial institution" means a state or national chartered
bank,
a state or federal chartered savings and loan association, or
state
or federal chartered credit union that elects to come under
the
provisions of this act.
8.
"Retail sale" means the sale of a motor vehicle for use by
the
buyer or for the benefit or satisfaction which the buyer may
derive
from the use of the motor vehicle by another.
9.
"Installment sale contract" or "contract" means a contract
for
the retail sale of a motor vehicle, or which has a similar
purpose
or effect, under which part or all of the price is payable
in
2 or more scheduled payments subsequent to the making of the
contract,
or as to which the obligor undertakes to make 2 or more
scheduled
payments or deposits that can be used to pay part or all
of
the purchase price, whether or not the seller has retained a
security
interest in the motor vehicle or has taken collateral
security
for the buyer's obligation, and includes a loan, mortgage,
conditional
sale contract, purchase-money chattel mortgage, hire-
purchase
agreement, or contract for the bailment or leasing of a
motor
vehicle under which the hire-purchaser, the bailee, or the
lessee
contracts to pay as compensation a sum substantially
equivalent
to or in excess of the value of the motor vehicle, and
any
other form of contract that has a similar purpose or effect.
The
terms do not include a sale or contract for sale upon an open
book
account in which the seller has not retained or taken a
security
interest in the motor vehicle sold or collateral security
for
the buyer's obligation, the buyer is not required to pay any
sum
other than the cash price of the motor vehicle sold in
connection
with the sale or extension of credit, and the buyer is
obligated
to pay for the motor vehicle in full within 90 days after
the
time the sale or contract for sale was made. These terms also
mean
and apply to any extension, deferment, renewal, or other
revision
of an installment sale contract.
10.
"Cash price" means the price measured in dollars at which
the
seller would in good faith sell to the buyer or to any other
buyer
under like circumstances, and the buyer would in good faith
buy
from the seller, the motor vehicle that is the subject matter
of
the installment sale contract if the sale were a sale for cash
instead
of an installment sale.
11.
"Down payment" means all partial payments, whether made in
cash
or otherwise, received by or for the benefit of the seller
before
or substantially contemporaneous with either the execution
of
the installment sale contract or the delivery of the goods sold
under
that contract, whichever occurs later.
12.
"Principal amount financed" means the unpaid cash price
balance
after deducting the down payment, adding the cost of any
insurance
premiums required or obtained as security for or by
reason
of the sale of a motor vehicle under an installment sale
contract,
and adding other costs necessary or incidental to the
sale
of the motor vehicle under the contract which the seller
contracts
to pay on behalf of the buyer and for the amount of which
the
seller agrees to extend credit to the buyer and for which the
buyer
contracts voluntarily.
13.
"Finance charge" means that term as defined in section 106
of
chapter 1 of the truth in lending act, title I of the consumer
credit
protection act, Public Law 90-321, 15 U.S.C. 1605.
14.
"Time balance" means the sum of the principal amount
financed
and the finance charge.
(t) 15.
"Security interest" means a property right in the a
motor vehicle that is the subject of an installment sale contract,
if the right is retained to secure performance of an obligation of
the
buyer under that contract. and an extension, deferment,
renewal,
or other revision of that contract. The
term includes a
lien
or encumbrance against that the motor vehicle, a mortgage
interest
in that the motor vehicle, and a reservation of title to
that
the motor vehicle, whether or not expressed to be
absolute, if
the title is in substance retained only for security.
16.
"Collateral security" means security, other than a
security
interest in a motor vehicle that is the subject of an
installment
sale contract, which is given to secure performance of
an
obligation of the buyer, or of any surety or guarantor for the
buyer,
under an installment sale contract or an extension,
deferment,
renewal, or other revision of that contract. The term
includes
the undertakings of any surety or guarantor for the buyer
and
any interest in, encumbrance on, or pledge of real or personal
property
other than the motor vehicle which is the subject of the
installment
sale contract.
17.
"Administrator" means the commissioner of the financial
institutions
bureau, department of commerce.
18.
"Licensee" means a person issued a license under this act
as
an installment seller or a sales finance company, which license
has
not expired or has not been surrendered or revoked, and, in the
plural,
means a person or persons licensed under 1 or both of these
2
classifications. The term includes financial institution as
defined
in this section.
19.
"Public sale" means a public sale after advertisement of
each
motor vehicle in at least 2 successive publications in a
newspaper
having general circulation in the village, city, or
township
in which the sale is to be held. The advertisement shall
disclose
the place where the motor vehicle is stored and may be
inspected,
the date, time, and place of the sale, and the make,
model,
and serial number of the vehicle.
(u) "Time balance" means the sum of the principal amount
financed and the finance charge.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No.____ or House Bill No. 4711(request no.
01200'11 a) of the 96th Legislature is enacted into law.