§ 14A-2-201. Credit service charge for consumer credit sales other than revolving charge accounts.

(1)  With respect to a consumer credit sale, other than a sale pursuant to a revolving charge account, a seller may contract for and receive a credit service charge not exceeding that permitted by this section.

(2)  The credit service charge, calculated according to the actuarial method, may not exceed the equivalent of the greater of either of the following:

(a)the total of

(i)thirty percent (30%) per year on that part of the unpaid balances of the amount financed which is Three Hundred Dollars ($300.00) or less;

(ii)twenty-one percent (21%) per year on that part of the unpaid balances of the amount financed which is more than Three Hundred Dollars ($300.00) but does not exceed One Thousand Dollars ($1,000.00); and

(iii)fifteen percent (15%) per year on that part of the unpaid balances of the amount financed which is more than One Thousand Dollars ($1,000.00); or

(b)twenty-one percent (21%) per year on the unpaid balances of the amount financed.

(3)  This section does not limit or restrict the manner of contracting for the credit service charge, whether by way of add-on, discount, or otherwise, so long as the rate of the credit service charge does not exceed that permitted by this section.  If the sale is precomputed

(a)the credit service charge may be calculated on the assumption that all scheduled payments will be made when due; and

(b)the effect of prepayment is governed by the provisions on rebate upon prepayment (Section 2-210).

(4)  For the purposes of this section, the term of a sale agreement commences with the date the credit is granted or, if goods are delivered or services performed ten (10) days or more after that date, with the date of commencement of delivery or performance. Differences in the lengths of months are disregarded and a day may be counted as one-thirtieth (1/30) of a month.  Subject to classifications and differentiations the seller may reasonably establish, a part of a month in excess of fifteen (15) days may be treated as a full month if periods of fifteen (15) days or less are disregarded and that procedure is not consistently used to obtain a greater yield than would otherwise be permitted.

(5)  Subject to classifications and differentiations the seller may reasonably establish, he may make the same credit service charge on all amounts financed within a specified range.  A credit service charge so made does not violate subsection (2) if

(a)when applied to the median amount within each range, it does not exceed the maximum permitted by subsection (2); and

(b)when applied to the lowest amount within each range, it does not produce a rate of credit service charge exceeding the rate calculated according to paragraph (a) by more than eight percent (8%) of the rate calculated according to paragraph (a).

(6)  Notwithstanding subsection (2), the seller may contract for and receive a minimum credit service charge of not more than Five Dollars ($5.00) when the amount financed does not exceed Seventy-five Dollars ($75.00) or not more than Seven Dollars and fifty cents ($7.50) when the amount financed exceeds Seventy-five Dollars ($75.00).

Added by Laws 1969, c. 352, § 2-201, eff. July 1, 1969.  Amended by Laws 1981, c. 177, § 1.