Colorado 2024 Regular Session

Colorado House Bill HB1148 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		Second Regular Session
2	2		Seventy-fourth General Assembly
3	3		STATE OF COLORADO
4		-	~~REENGROSSED~~
5		-	This Version Includes All Amendments
6		-	~~Adopted~~ in the House of Introduction
	4	+	ENGROSSED
	5	+	This Version Includes All Amendments Adopted
	6	+	on Second Reading in the House of Introduction
7	7		LLS NO. 24-0731.01 Josh Schultz x5486
8	8		HOUSE BILL 24-1148
9	9		House Committees Senate Committees
10	10		Finance
11	11		A BILL FOR AN ACT
12	12		C
13	13		ONCERNING A MORE INCLUSIV E CALCULATION OF THE FINANCE101
14	14		CHARGE APPLICABLE TO CERTAIN CONSUMER LENDING102
15	15		TRANSACTIONS, AND, IN CONNECTION THEREWITH , REQUIRING103
16	16		A MORE ACCURATE DISCLOSURE OF THE COST OF CREDIT FOR104
17	17		CERTAIN LOANS.105
18	18		Bill Summary
19	19		(Note: This summary applies to this bill as introduced and does
20	20		not reflect any amendments that may be subsequently adopted. If this bill
21	21		passes third reading in the house of introduction, a bill summary that
22	22		applies to the reengrossed version of this bill will be available at
23	23		http://leg.colorado.gov.)
24	24		The bill amends the Colorado "Uniform Consumer Credit Code"
25	25		HOUSE
26		-	3rd Reading Unamended
27		-	March 28, 2024
28		-	HOUSE
29	26		Amended 2nd Reading
30	27		March 26, 2024
31	28		HOUSE SPONSORSHIP
32		-	Weissman and Mabrey, Bacon, Boesenecker, Brown, Daugherty, deGruy Kennedy,
33		-	Froelich, Garcia, Hernandez, Herod, Jodeh, Kipp, Lindsay, Mauro, McCluskie, Ortiz, Parenti,
34		-	Ricks, Rutinel, Sirota, Story, Titone, Willford
	29	+	Weissman and Mabrey,
35	30		SENATE SPONSORSHIP
36	31		Gonzales,
37	32		Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
38	33		Capital letters or bold & italic numbers indicate new material to be added to existing law.
39	34		Dashes through the words or numbers indicate deletions from existing law. to change the terms and interest rates a nondepository institution may
40	35		charge in a consumer credit transaction.
41	36		For a consumer credit transaction in which a nondepository
42	37		institution makes a supervised loan or a consumer credit sale, the bill
43	38		amends the calculation of the total amount of the finance charge that the
44	39		nondepository institution may contract for and receive to include the total
45	40		cost of specific additional charges.
46	41		Be it enacted by the General Assembly of the State of Colorado:1
47	42		SECTION 1. In Colorado Revised Statutes, 5-1-301, add (29.5)2
48	43		as follows:3
49	44		5-1-301. General definitions. In addition to definitions appearing4
50	45		in subsequent articles, as used in this code, unless the context otherwise5
51	46		requires:6
52	47		(29.5) "N
53	48		ONDEPOSITORY INSTITUTION" MEANS A SUPERVISED7
54	49		LENDER OR SELLER THAT IS NOT A SUPERVISED FINANCIAL ORGANIZATION.8
55	50		SECTION 2. In Colorado Revised Statutes, 5-2-201, amend (2)9
56	51		introductory portion and (3)(a); and add (3.1), (3.3), and (3.5) as follows:10
57	52		5-2-201. Finance charge for consumer credit transactions.11
58	53		(2) With respect to a supervised loan or a consumer credit sale, except12
59	54		for a loan or sale pursuant to a revolving account
60	55		OR FOR A LOAN OR A13
61	56		CONSUMER CREDIT SALE MADE BY A NONDEPOSITORY INSTITUTION , a14
62	57		supervised lender or seller may contract for and receive a finance charge,15
63	58		calculated according to the actuarial method, not exceeding the equivalent16
64	59		of the greater of either of the following:17
65	60		(3) (a) Except as provided in paragraph (b) of this subsection (3)
66	61		18
67	62		SUBSECTION (3)(b) OF THIS SECTION, OR FOR A LOAN OR A CONSUMER19
68	63		CREDIT SALE MADE BY A NONDEPOSITORY INSTITUTION , the finance charge20
69	64		for a supervised loan or consumer credit sale pursuant to a revolving21
70	65		1148-2- credit account, calculated according to the actuarial method, may not1
71	66		exceed twenty-one percent per year on the unpaid balance of the amount2
72	67		financed.3
73	68		(3.1) W
74	69		ITH RESPECT TO A SUPERVISED LOAN OR A CONSUMER4
75	70		CREDIT SALE MADE BY A NONDEPOSITORY INSTITUTION , EXCEPT AS SET5
76	71		FORTH IN SUBSECTION (3.3) OF THIS SECTION WITH RESPECT TO A6
77	72		SUPERVISED LOAN OR CONSUMER CREDIT SALE MADE PURSUANT TO A7
78	73		REVOLVING CREDIT ACCOUNT , A SUPERVISED LENDER OR SELLER MAY8
79	74		CONTRACT FOR AND RECEIVE A FINANCE CHARGE . THE AMOUNT OF THE9
80	75		FINANCE CHARGE, CALCULATED ACCORDING TO THE ACTUARIAL METHOD ,10
81	76		MUST NOT EXCEED THE EQUIVALENT OF THE GREATER OF EITHER OF THE11
82	77		FOLLOWING:12
83	78		(a) AN AMOUNT EQUAL TO THE TOTAL OF THE FOLLOWING , MINUS13
84	79		THE TOTAL COST OF ALL ADDITIONAL CHARGES LISTED IN SUBSECTION14
85	80		(3.5) OF THIS SECTION:15
86	81		(I) THIRTY-SIX PERCENT PER YEAR ON THAT PART OF THE UNPAID16
87	82		BALANCES OF THE AMOUNT FINANCED THAT IS ONE THOUSAND DOLLARS17
88	83		OR LESS;18
89	84		(II) TWENTY-ONE PERCENT PER YEAR ON THAT PART OF THE19
90	85		UNPAID BALANCES OF THE AMOUNT FINANCED THAT IS MORE THAN ONE20
91	86		THOUSAND DOLLARS BUT DOES NOT EXCEED THREE THOUSAND DOLLARS;21
92	87		AND22
93	88		(III) FIFTEEN PERCENT PER YEAR ON THAT PART OF THE UNPAID23
94	89		BALANCES OF THE AMOUNT FINANCED THAT IS MORE THAN THREE24
95	90		THOUSAND DOLLARS; OR 25
96	91		(b) A
97	92		N AMOUNT EQUAL TO TWENTY -ONE PERCENT PER YEAR ON26
98	93		THE UNPAID BALANCES OF THE AMOUNT FINANCED , MINUS THE TOTAL27
99	94		1148
100	95		-3- COST OF ALL ADDITIONAL CHARGES LISTED IN SUBSECTION (3.5) OF THIS1
101	96		SECTION.2
102	97		(3.3) (a) E
103	98		XCEPT AS PROVIDED IN SUBSECTION (3.3)(b) OF THIS3
104	99		SECTION, THE TOTAL AMOUNT OF THE FINANCE CHARGE FOR A SUPERVISED4
105	100		LOAN OR CONSUMER CREDIT SALE PURSUANT TO A REVOLVING CREDIT5
106	101		ACCOUNT, CALCULATED ACCORDING TO THE ACTUARIAL METHOD , MAY6
107	102		NOT EXCEED TWENTY-ONE PERCENT PER YEAR ON THE UNPAID BALANCE7
108	103		OF THE AMOUNT FINANCED, MINUS THE TOTAL COST OF ALL ADDITIONAL8
109	104		CHARGES LISTED IN SUBSECTION (3.5) OF THIS SECTION.9
110	105		(b) N
111	106		OTWITHSTANDING SUBSECTION (3.3)(a) OF THIS SECTION, IF10
112	107		THERE IS AN UNPAID BALANCE ON THE DATE ON WHICH THE FINANCE11
113	108		CHARGE IS APPLIED, THE CREDITOR MAY CONTRACT FOR AND RECEIVE A12
114	109		MINIMUM FINANCE CHARGE NOT EXCEEDING FIFTY CENTS .13
115	110		(3.5) IF A SUPERVISED LENDER OR SELLER THAT IS A14
116	111		NONDEPOSITORY INSTITUTION CONTRACTS FOR CHARGES FOR OTHER15
117	112		BENEFITS CONFERRED ON THE CONSUMER AS DESCRIBED IN SECTION16
118	113		5-2-202 (1)(d), THE TOTAL AMOUNT OF ALL OF THE CHARGES MUST BE17
119	114		INCLUDED IN THE CALCULATION OF THE FINANCE CHARGE PURSUANT TO18
120	115		SUBSECTION (3.1) OR (3.3) OF THIS SECTION. 19
121	116		SECTION 3. In Colorado Revised Statutes, 5-2-202, amend (1)20
122	117		introductory portion and (1)(d); and repeal (1)(b), (1)(c.5), (1)(c.7), and21
123	118		(3) as follows:22
124	119		5-2-202. Additional charges. (1) S
125	120		UBJECT TO THE PROVISIONS OF23
126	121		SECTION 5-2-201 (3.5), in addition to the finance charge permitted by this24
127	122		article 2 and in a consumer lease, a creditor may contract for and receive25
128	123		the following additional charges in connection with a consumer credit26
129	124		transaction:27
130	125		1148
131	126		-4- (b) Charges for insurance as described in subsection (3) of this1
132	127		section;2
133	128		(c.5) Charges for debt cancellation contracts or debt suspension3
134	129		contracts offered in compliance with 12 CFR 37 or 12 CFR 721 or other4
135	130		federal law;5
136	131		(c.7) Charges for guaranteed asset protection agreements, as6
137	132		defined in section 5-9.3-103 (4), offered in compliance with article 9.3 of7
138	133		this title 5;8
139	134		(d) Charges for other benefits conferred on the consumer9
140	135		including insurance, if the benefits are of value to the consumer and if the10
141	136		charges are reasonable in relation to the benefits, are of a type that is not11
142	137		for credit, and are authorized as permissible additional charges by rule12
143	138		adopted by the administrator, INCLUDING:13
144	139		(I) INSURANCE WRITTEN IN CONNECTION WITH THE TRANSACTION,14
145	140		OTHER THAN INSURANCE PROTECTING THE CREDITOR AGAINST THE15
146	141		CONSUMER'S DEFAULT OR OTHER CREDIT LOSS, IF:16
147	142		(A) WITH RESPECT TO INSURANCE AGAINST LOSS OF OR DAMAGE17
148	143		TO PROPERTY OR AGAINST LIABILITY, THE CREDITOR FURNISHES A CLEAR18
149	144		AND SPECIFIC STATEMENT IN WRITING TO THE CONSUMER SETTING FORTH19
150	145		THE COST OF THE INSURANCE IF OBTAINED FROM OR THROUGH THE20
151	146		CREDITOR AND STATING THAT THE CONSUMER MAY CHOOSE THE PERSON21
152	147		THROUGH WHOM THE INSURANCE IS TO BE OBTAINED ; AND22
153	148		(B) WITH RESPECT TO CONSUMER CREDIT INSURANCE PROVIDING23
154	149		LIFE, ACCIDENT, OR HEALTH COVERAGE, THE INSURANCE COVERAGE IS NOT24
155	150		A FACTOR IN THE APPROVAL BY THE CREDITOR OF THE EXTENSION OF25
156	151		CREDIT AND THIS FACT IS CLEARLY DISCLOSED IN WRITING TO THE26
157	152		CONSUMER AND IF, IN ORDER TO OBTAIN THE INSURANCE IN CONNECTION27
158	153		1148
159	154		-5- WITH THE EXTENSION OF CREDIT, THE CONSUMER GIVES SPECIFIC1
160	155		AFFIRMATIVE WRITTEN INDICATION OF THE CONSUMER'S DESIRE TO DO SO2
161	156		AFTER WRITTEN DISCLOSURE TO THE CONSUMER OF THE COST OF THE3
162	157		INSURANCE;4
163	158		(II) CHARGES FOR DEBT CANCELLATION CONTRACTS OR DEBT5
164	159		SUSPENSION CONTRACTS OFFERED IN COMPLIANCE WITH 12 CFR 37 OR 126
165	160		CFR 721 OR OTHER FEDERAL LAW;7
166	161		(III) CHARGES FOR GUARANTEED ASSET PROTECTION8
167	162		AGREEMENTS, AS DEFINED IN SECTION 5-9.3-101 (4), OFFERED IN9
168	163		COMPLIANCE WITH ARTICLE 9.3 OF THIS TITLE 5;10
169	164		(IV) FOR INSURANCE NOT COVERED UNDER SUBSECTION (1)(d)(I)11
170	165		OF THIS SECTION, ANY CREDIT INSURANCE PREMIUM OR FEE, ANY CHARGE12
171	166		FOR SINGLE PREMIUM CREDIT INSURANCE , ANY FEE FOR A DEBT13
172	167		CANCELLATION CONTRACT, OR ANY FEE FOR A DEBT SUSPENSION14
173	168		AGREEMENT; AND15
174	169		(V) ANY FEE FOR A CREDIT-RELATED ANCILLARY PRODUCT SOLD16
175	170		IN CONNECTION WITH THE CREDIT TRANSACTION ; AND17
176	171		(3) An additional charge may be made for insurance written in18
177	172		connection with the transaction, other than insurance protecting the19
178	173		creditor against the consumer's default or other credit loss, if:20
179	174		(a) With respect to insurance against loss of or damage to property21
180	175		or against liability, the creditor furnishes a clear and specific statement in22
181	176		writing to the consumer setting forth the cost of the insurance if obtained23
182	177		from or through the creditor and stating that the consumer may choose the24
183	178		person through whom the insurance is to be obtained; and25
184	179		(b) With respect to consumer credit insurance providing life,26
185	180		accident, or health coverage, the insurance coverage is not a factor in the27
186	181		1148
187	182		-6- approval by the creditor of the extension of credit and this fact is clearly1
188	183		disclosed in writing to the consumer and if, in order to obtain the2
189	184		insurance in connection with the extension of credit, the consumer gives3
190	185		specific affirmative written indication of the consumer's desire to do so4
191	186		after written disclosure to the consumer of the cost thereof.5
192	187		SECTION 4. In Colorado Revised Statutes, 5-6-104, amend (2)6
193	188		as follows:7
194	189		5-6-104. Powers of administrator - harmony with federal8
195	190		regulations - reliance on rules. (2) The administrator may adopt rules9
196	191		not inconsistent with the federal "Truth in Lending Act" and federal10
197	192		"Consumer Leasing Act" to assure a meaningful disclosure of credit terms11
198	193		so that a prospective consumer will be able to compare more readily the12
199	194		various credit terms available to him or her THE CONSUMER and to avoid13
200	195		the uninformed use of credit. Such rules shall supersede any provisions14
201	196		of this code that are inconsistent with the federal "Truth in Lending Act"15
202	197		and federal "Consumer Leasing Act", may contain classifications,16
203	198		differentiations, or other provisions and may provide for adjustments and17
204	199		exceptions for any class of transactions subject to this code that, in the18
205	200		judgment of the administrator, are necessary or proper to effectuate the19
206	201		purposes of, or to prevent circumvention or evasion of, or to facilitate20
207	202		compliance with, the provisions of this code relating to disclosure of21
208	203		credit terms.22
209	204		SECTION 5. Act subject to petition - effective date. This act23
210	205		takes effect at 12:01 a.m. on the day following the expiration of the24
211	206		ninety-day period after final adjournment of the general assembly; except25
212	207		that, if a referendum petition is filed pursuant to section 1 (3) of article V26
213	208		of the state constitution against this act or an item, section, or part of this27
214	209		1148
215	210		-7- act within such period, then the act, item, section, or part will not take1
216	211		effect unless approved by the people at the general election to be held in2
217	212		November 2024 and, in such case, will take effect on the date of the3
218	213		official declaration of the vote thereon by the governor.4
219	214		1148
220	215		-8-