CMP.2.7.040 Consumer Financial Services: General Terms

(a) Interest. A Licensee may charge and collect interest in respect of a Loan at such daily, weekly, monthly, annual, or other periodic percentage rate or rates as the agreement governing the Loan provides or as established in the manner provided in such agreement and may calculate such interest by way of simple interest or such other method as the agreement governing the Loan provides. If the interest is precomputed it may be calculated on the assumption that all scheduled payments will be made when due. For purposes hereof, a year may but need not be a calendar year and may be such period of from 360 to 366 days, including or disregarding leap year, as the Licensee may determine.

(b) Variable Rates. If the agreement governing the Loan so provides, the periodic percentage rate or rates of interest charged and collected in respect of the Loan may, if the interest is not precomputed and taken in advance, vary in accordance with a schedule or formula. Such periodic percentage rate or rates may vary from time to time as the rate determined in accordance with such schedule or formula varies and such periodic percentage rate or rates, as so varied, may be made applicable to all or any part of outstanding unpaid amounts of such Loan on and after the effective date of such variation. This section shall not be construed to limit the authority of a Licensee to charge and collect interest in respect of a Loan in the manner and at the rate or rates authorized in any other Section of this subchapter. Without limitation, a permissible schedule or formula hereunder may include provisions in the agreement governing the Loan for a change in the periodic percentage rate or rates of interest applicable to all or any part of outstanding unpaid amounts whether by variation of the then applicable periodic percentage rate or rates of interest, variation of an index or margin or otherwise, contingent upon the happening of any event or circumstance specified in the Loan agreement, which event or circumstance may include the failure of the Consumer to perform in accordance with the terms of the Loan agreement.

(c) Additional Charges. In addition to or in lieu of interest at a periodic percentage rate or rates permitted by Section CMP.2.7.040(a) and Section CMP.2.7.040(b), the Licensee may charge and collect, in respect of a Loan:

(1) Loans.

(A) If the agreement governing the Loan so provides, charge and collect any other fees or charges, costs, points, premiums, and all other expenses which may be assessed by the Licensee in connection with the Loan.

(B) If the agreement governing a Loan so provides, a License may impose, as interest, a late or delinquency charge upon any outstanding unpaid installment payments or portions thereof under the Loan agreement which are in default; provided, however, that no more than 1 such delinquency charge may be imposed in respect of any single such installment payment or portion thereof regardless of the period during which it remains in default. Nothing contained in this subdivision shall limit, restrict, or otherwise affect the right of a Licensee under and pursuant to § 2.702 (5) of this subchapter to change the periodic percentage rate or rates of interest applicable to the Loan agreement between the Licensee and a Consumer upon the occurrence of a delinquency or default or other failure of the Consumer to perform in accordance with the terms of the Loan agreement.

(C) Such other charges as are set forth in the Agreement governing the Loan including, but not limited to, costs, fees, services, points, premiums and all other reasonable expenses which may be incurred by such Applicant in connection with a Loan. No Licensee shall demand, collect, or receive from any Applicant for a Loan, directly or indirectly, any other charges, or any greater amounts for any authorized charges than those permitted by this subchapter.

(D) Licensee may also charge a transaction charge or credit extension fee as well as a minimum charge for each scheduled period under the plan where there is an outstanding unpaid indebtedness.

(2) Leases.

(A) A Licensee may elect to charge an administrative fee to the Consumer for inventory management or other costs, which fee shall not exceed the lesser of $100 or 20 percent (20%) of the ascribed value of the leased good or goods, and minimum rentals based upon the first 45 days of the lease in the event the lessee terminates the lease. These charges to not constitute penalties. A fixed price purchase option in a lease does not of itself create a security interest. This is particularly true if the fixed price is substantial in relation to the reasonably predictable fair market value of the goods at the time the option is to be performed. Other prices are also sufficient provided they are not nominal.

(d) Deferred Installments. A Licensee may at any time or from time to time permit a Consumer to defer installment payments of a Loan and may, in connection with such deferral, charge and collect deferral charges.

(e) Refinancing.

(1) A Consumer may, with the consent of the Licensee, refinance the entire outstanding and unpaid amount of a Loan, and the Licensee may charge and collect a refinancing charge in connection with any such refinancing.

(2) For the purposes of this section, the entire outstanding and unpaid amount of a Loan shall be deemed to be the total of the unpaid balance and the accrued and unpaid interest and charges on the date of refinancing.

(f) Attorney's Fees; Costs. In the event a Consumer defaults under the terms of a Loan, the Licensee may, if the Consumer's account is referred to an attorney (not a regularly salaried employee of the Licensee) or to a third party for collection and, if the agreement governing, or the bond, note or other evidence of, the Loan so provides, charge and collect from the Consumer a reasonable attorney's fee. In addition, following a Consumer's default, the Licensee may, if the agreement governing, or the bond, note or other evidence of, the Loan so provides, recover from the Consumer all court, alternative dispute resolution or other collection costs (including, without limitation, fees, and charges of collection agencies) actually incurred by the Licensee.

(g) No Oral Agreements. A Loan agreement may provide that it represents the entire agreement of the parties and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties. Such provisions are enforceable and disallow evidence of oral agreements.

(h) Credits, Debits & Payments. A Licensee may rely on the ACH network as the funding and primary payment mechanism for its consumer financial services, however, alternative payment methods shall available, which include US Postal Service and card payments.

(i) Complaints, Credit Counseling & Bankruptcy. All Consumer complaints are handled by individuals authorized to manage complaints, credit counseling, and/or bankruptcy.

(j) Nonpayment. No Licensee shall pursue, or threaten to pursue, criminal action against an individual Consumer in connection with the nonpayment of any amount due, including the unpaid return of any check or automated clearing house transaction.

(k) Right of Recission. In addition to such other limitations and requirements as are imposed pursuant to other provisions of this subchapter, no Licensee shall make a Loan unless such Loan is subject to a right of rescission of no less than 2 business days on the part of the individual Consumer.