TITLE XXXI
TRADE AND COMMERCE
Chapter 358-K
REGULATION OF CONSUMER CREDIT TRANSACTIONS
Section 358-K:1
358-K:1 Definitions. –
In this chapter:
I. "Actuarial method" means the method of allocating payments made on a debt between the unpaid principal balance and the interest and other charges pursuant to which a payment is applied first to the interest and other charges due and any remainder is subtracted from the unpaid principal balance.
II. "Closed-end consumer credit transaction" means a consumer credit transaction other than one pursuant to open-end credit.
III. "Consumer" means the buyer or debtor other than an organization to whom credit is extended in a consumer credit transaction.
IV. "Consumer credit sale" means a sale of goods or services in which the seller is a creditor, the buyer is a consumer, the goods or services are purchased primarily for a personal, family or household purpose, and the debt is payable in installments or an interest or other charge is made.
V. "Consumer credit transaction" means a consumer credit sale or a consumer loan.
VI. "Consumer loan" means a loan made by a creditor to a debtor when the debt is incurred primarily for a personal, family or household purpose and when the debt is payable in installments or an interest or other charge is made.
VII. "Credit" means the right to defer payments of debt or to incur debt and defer its payment.
VIII. "Creditor" means a person who regularly extends credit that is subject to an interest or other charge or is payable, by written agreement, in more than 4 installments.
IX. "Goods" means any tangible goods, including manufactured housing as defined in RSA 674:31, which are used or bought primarily for a personal, family or household purpose. The term includes goods which are to become fixtures or which are to become incorporated into a structure. Goods shall not include money or choses in action or other intangible property.
X. "Precomputed consumer credit transaction" means a consumer credit transaction in which the debt is a sum comprising the amount of the credit or loan and the amount of the interest and other charges computed in advance.
XI. "Open-end credit" means an arrangement pursuant to which:
(a) A creditor may permit a consumer, from time to time, to purchase on credit from the creditor or pursuant to a credit card, or to obtain loans from the creditor or pursuant to a credit card;
(b) The amounts financed and the interest and other appropriate charges are debited to an account;
(c) The interest and other charges, if made, are computed on the account periodically; and
(d) Either the consumer has the privilege of paying in full or in installments or the creditor periodically imposes charges computed on the account for delaying payment and permits the consumer to continue to purchase on credit.
XII. "Interest" means the price charged for money loaned or debt deferred, and shall not include other charges as defined in paragraph XIII.
XIII. "Other charges" or "other charge," notwithstanding any other law to the contrary, means any cost or charge, other than interest as defined in paragraph XII, including but not limited to origination fees, loan discount, transaction costs, buydown funds, or other fees, including late fees, or assessments, whether or not expressed as a percentage of the amount of the loan or debt, payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit.
Source. 1983, 463:1. 1986, 92:1. 1994, 206:1, eff. Jan. 1, 1995.
Section 358-K:2
358-K:2 Rebate of Interest Upon Prepayment of Precomputed Consumer Credit Transaction Entered Into Prior to July 1, 1985. –
I. Notwithstanding any other law to the contrary, upon prepayment in full of a precomputed consumer credit transaction, pursuant to acceleration or otherwise, the creditor shall rebate to the consumer an amount not less than the unearned portion of the interest computed according to this section. If the rebate otherwise required is less than $1, no rebate need be made.
II. With respect to a precomputed consumer credit transaction payable according to its original terms in more than 48 monthly installments, the rebate of the unearned portion of the interest shall be computed by applying, according to the actuarial method, the contract rate of interest to the actual unpaid balances of the amount financed for the actual time that the unpaid balances were outstanding as of the date of payment, giving effect to each payment as of the date of the payment. The bank commissioner may adopt rules under RSA 541-A, relative to simplifying the calculation of the unearned portion of the interest, including allowance of the use of tables or other methods and based on the assumption that all payments were made as originally scheduled.
III. With respect to a precomputed consumer credit transaction payable according to its original terms in 48 monthly installments or less, the rebate of the unearned portion of the interest may be computed according to the sum of the balances method, also known as the "Rule of 78," or by any other method to which the consumer is entitled by contract. If a rebate of interest may be computed according to the sum of the balances method, the creditor shall, prior to the closing of the transaction, furnish the consumer with a written explanation of such method of rebating in a form approved for that use by the bank commissioner.
IV. This section does not preclude the collection or retention by the creditor of delinquency charges.
V. This section only applies with respect to precomputed consumer credit transactions entered into on or after July 1, 1984 and prior to July 1, 1985.
Source. 1983, 463:1, eff. Aug. 26, 1983. 2019, 36:1, eff. May 15, 2019.
Section 358-K:3
358-K:3 Advance Collection of Interest in Consumer Credit Transactions Prohibited After June 30, 1985. –
Notwithstanding any other law to the contrary, with respect to closed-end consumer credit transactions entered into after June 30, 1985, interest shall be collected only as earned, and no interest on such transactions shall be paid, deducted or added to principal in advance. This section shall not preclude the advance collection or prepayment of other charges to which the transaction is subject. This section shall not apply to the advance collection of interest at the inception of a closed-end consumer credit transaction for origination fees or for a fractional part of a month in order to achieve a common or convenient monthly payment date as provided by RSA 358-K:4-a.
Source. 1983, 463:1. 1986, 92:2, eff. July 18, 1986.
Section 358-K:4
358-K:4 Actuarial Method Required for Computation of Interest on Closed-End Consumer Credit Transactions Entered Into After June 30, 1985. –
Interest on closed-end consumer credit transactions entered into after June 30, 1985 shall be contracted for at an annual rate or rates and computed only on the scheduled outstanding balances of the amount financed according to the actuarial method. Interest on such transactions shall be collected only as earned on actual unpaid balances for the actual time outstanding, and the consumer shall not be entitled to any rebate of interest on prepayment in full of a closed-end consumer credit transaction.
Source. 1983, 463:1, eff. Aug. 26, 1983.
Section 358-K:4-a
358-K:4-a Exception to Achieve a Common or Convenient Monthly Payment Date. –
Any provision of this chapter to the contrary notwithstanding, interest on any closed-end consumer credit transaction may be collected in advance for origination fees at the inception of such transaction or for a fractional part of a month (less than 30 days) from the inception of such consumer credit transaction to a monthly payment date that the creditor commonly uses in such transactions, or that the creditor considers to be more convenient administratively as a monthly payment date than the transaction inception date, such as the first day of the month.
Source. 1986, 92:3, eff. July 1, 1986.
Section 358-K:5
358-K:5 Penalty. –
Any person who willfully violates any provision of this chapter shall be guilty of a misdemeanor.
Source. 1983, 463:1, eff. Aug. 26, 1983.
Section 358-K:6
358-K:6 Application of Chapter to Types of Transactions. –
The provisions of this chapter shall apply to all consumer credit transactions, both secured and unsecured, including those transactions secured by a real property mortgage. The provisions of this chapter shall not apply to student loans, the proceeds of which are exclusively for the payment of tuition and other education-related expenses.
Source. 1986, 92:4. 2001, 263:5, eff. July 13, 2001.