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APPENDIX M - RETAIL INSTALLMENT SALES ACT

Chapter 16C. RETAIL INSTALLMENT SALESSection17:16C-1 Definitions.17:16C-2 License required; exception.17:16C-3 Application for license; form and content.17:16C-4 Application acted on within 60 days.17:16C-5 Procedure upon refusal to grant license.17:16C-6 License to specify location of office; not transferable or assignable.17:16C-7 Sales finance company license fee.17:16C-8 Motor vehicle installment seller; license, application fee.17:16C-9 No abatement in license fee; expiration.17:16C-10 Suspension, revocation or refusal to renew license; notice; grounds.17:16C-11 Revocation, refusal, etc. of license may be specific or general.17:16C-12 Surrender of license not to affect civil or criminal liability.17:16C-13 Suspension, revocation or refusal to renew license not to impair certain

obligations.17:16C-14 License to remain in force and effect; reinstatement.17:16C-15 Examination of records when violation is suspected.17:16C-16 Power of subpoena; administer oaths.17:16C-17 Court order requiring attendance.17:16C-18 Maintenance of books, accounts and records.17:16C-19 Preservation of books, accounts, records, annual report.17:16C-20 Minimum information to be kept.17:16C-21 Contract in writing and to contain all agreements.17:16C-22 Contents of contract.17:16C-23 Buyer to be furnished copy of contract.17:16C-24 Notice to buyer contained in contract; specifications.17:16C-25 Acknowledgment of receipt of contract; specifications.17:16C-26 Payment of time balance in substantially equal amounts on dates separated by

substantially equal payment-periods; exceptions.17:16C-27 Items to be set forth separately in contract.17:16C-28 Additional purchases after original agreement.17:16C-29 Allocation of payments on continuing retail agreements.17:16C-30 Insurance at retail buyer’s expense; dual protection.17:16C-31 Buyer may supply insurance; premium included in contract; policy furnished;

cancellation; returned premiums credited to unpaid balance.17:16C-32 Notice that policy required in sale of motor vehicle includes no liability or

property damage coverage.17:16C-33 Other insurance.17:16C-34 Premium refund credited to next installment.17:16C-34.1 Entry into retail charge accounts; conditions.17:16C-35 Prohibited contract provisions; acceleration clause.17:16C-36 Waiver of right of action by retail buyer against seller, holder, etc.17:16C-37 Power of attorney to confess judgment; other powers of attorney.17:16C-38 Relief of retail seller from liability under contract.17:16C-38.1 Relief of holder from certain liability prohibited.17:16C-38.2 Forms, terms and conditions of note.17:16C-38.3 Penalty.17:16C-38.4 Certain charges not recoverable in event of violation of act.

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17:16C-39 Assignment of salary, wages, commissions or other compensation for services.

17:16C-39.1 Real property mortgage as additional security for retail sale void and unenforceable.

17:16C-40 Loan of money, etc., in connection with retail installment contract or charge account except in accordance with act.

17:16C-40.1 Passenger motor vehicle loans.17:16C-40.2 Penalty for violation.17:16C-41 Time price differential on retail installment contracts.17:16C-42 Delinquency or collection charge for default in payment; attorney’s fees.17:16C-43 Prepayment; refund.17:16C-44 Extending due date of contract or installment payment; options.17:16C-44.1 Time price differential or retail charge accounts.17:16C-45 Sale, transfer or assignment of contract; conditions.17:16C-46 Failure to notify retail buyer on sale, etc. of contract; payment binding on

subsequent holder.17:16C-47 Provisions of 17:6C-45 not to apply; proviso.17:16C-47.1 Purchases of retail installment contract.17:16C-48 Status of buyer account furnished; limits number.17:16C-49 Receipt for cash payment; contents.17:16C-50 Additional charges prohibited; exceptions.17:16C-51 Advanced amounts not retained on contemplated sales; deposit status not

affected.17:16C-52 Payment in full of contract; action by holder of contract under classes I, II, III

and IV, 17:16C-41.17:16C-53 Certificate of ownership delivered to retail buyer upon final payment.17:16C-54 Unauthorized costs and charges.17:16C-55 Penalty for operating without a license.17:16C-56 Penalty for violation; recovery of penalty.17:16C-57 Provisions severable.17:16C-58 Repealer.17:16C-58.1 Application and construction of act.17:16C-59 License continued; renewal.17:16C-60 Short title. [“Retail Installment Sales Act of 1960”].17:16C-61 Effective date.

17:16C-1. Definitions. In this act [17:16C-1 et seq.], unless the contextotherwise requires, the following words and terms shall have the followingmeanings:

(a) “Goods” means all chattels personal which are primarily for personal,family or household purposes, including merchandise certificates and coupons tobe exchanged for goods or services, having a cash price of $10,000.00 or less, butnot including money or other choses in action. Goods shall not include chattelspersonal sold for commercial or business use.

(b) “Retail installment contract” means any contract, other than a retail chargeaccount or an instrument reflecting a sale pursuant thereto, entered into in thisState between a retail seller and a retail buyer evidencing an agreement to pay theretail purchase price of goods or services, which are primarily for personal, familyor household purposes, or any part thereof, in two or more installments over aperiod of time. This term includes a security agreement, chattel mortgage,conditional sales contract, or other similar instrument and any contract for thebailment or leasing of goods by which the bailee or lessee agrees to pay ascompensation a sum substantially equivalent to or in excess of the value of the

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goods, and by which it is agreed that the bailee or lessee is bound to become, orhas the option of becoming, the owner of such goods upon full compliance withthe terms of such retail installment contract.

(c) “Retail seller” means a person who sells or agrees to sell goods or servicesunder a retail installment contract or a retail charge account to a retail buyer, andshall include a motor vehicle installment seller.

(d) “Retail buyer” means a person who buys or agrees to buy goods or servicesfrom a retail seller, not for the purpose of resale, pursuant to a retail installmentcontract or a retail charge account.

(e) “Person” means an individual, partnership, firm, corporation, bankinginstitution, association or any other group of individuals however organized.

(f) “Sales finance company” means and includes any person engaging in thisState in the business of acquiring or arranging for the acquisition of retailinstallment contracts or obligations incurred pursuant to retail charge accounts bypurchase, discount, pledge or otherwise from a retail seller which is not whollyowned by or does not wholly own such person, and any person engaging, directlyor indirectly, in the business of soliciting the purchase of retail installmentcontracts or obligations incurred pursuant to retail charge accounts from a retailseller which is not wholly owned by or does not wholly own such person, or in thebusiness of aiding the retail seller in selling, assigning or arranging for the sale orassignment of retail installment contracts or obligations incurred pursuant to retailcharge accounts, and any person other than a retail seller who enters into a retailcharge account with a retail buyer.

(g) “Motor vehicle” includes all vehicles used for transportation upon ahighway propelled otherwise than by muscular power, excepting such vehicles asrun only upon rails or tracks.

(h) “Motor vehicle installment seller” means a dealer in motor vehicles, who isrequired to be licensed under chapter 10 of Title 39 of the Revised Statutes andwho sells or offers to sell a motor vehicle to a retail buyer under a retail installmentcontract.

(i) “Cash price” means the minimum price for which the goods or servicessubject to a retail installment contract or a retail charge account or other goods orservices of like kind and quality may be purchased for cash from the seller by thebuyer, as stated in the retail installment contract, the retail charge account or aninstrument reflecting a sale pursuant thereto.

(j) “Down payment” means all payments made in cash or in goods or partly incash and partly in goods, received by the retail seller prior to or substantiallycontemporaneous with either the execution of the retail installment contract or thedelivery of the goods, whichever occurs later.

(k) “Official fees” means the filing or other fees required by law to be paid toa public officer to perfect an interest or lien, on the goods, retained or taken by aretail seller under a retail installment contract and motor vehicle license andtransfer fees paid to the State.

(l) “Time price differential” means the amount or amounts, howeverdenominated or computed, in addition to the cash price or prices, to be paid by theretail buyer for the privilege of purchasing goods or services pursuant to a retailinstallment contract or a retail charge account. The term does not include theamount, if a separate charge is made therefor, for insurance and official fees.

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(m) “Holder” means any person, including a retail seller, who is entitled to therights of a retail seller under a retail installment contract or retail charge account.

(n) “Banking institution” means any bank, national banking association,savings bank, or Federally chartered savings bank authorized to do business in thisState, and for the purposes of this act [17:16C-1 et seq.] only, an association asdefined in section 5 of the “Savings and Loan Act (1963),” P.L.1963, c. 144 (C.17:12B-5).

(o) “Commissioner” means the Commissioner of Banking of New Jersey andincludes his deputies or any salaried employee of the Department of Bankingnamed or appointed by the said commissioner to perform any function in theadministration or enforcement of this act [17:16C-1 et seq.].

(p) “Payment-period” means the period of time scheduled by a retailinstallment contract to elapse between the days upon which installment paymentsare scheduled to be made on such contract; except that, when installmentpayments are scheduled to be omitted, pursuant to section 26 [17:16C-26],“payment-period” means the period of time scheduled by the contract to elapsebetween the days upon which installment payments are scheduled to be madeduring that portion of the contract period in which no installment payment isscheduled to be omitted.

(q) “Contract period” means the period beginning on the date of a retailinstallment contract and ending on the date scheduled by the contract for thepayment of the final installment.

(r) “Retail charge account” means any account, other than a retail installmentcontract or a home repair contract which is subject to the “Home Repair FinancingAct” (P.L.1960, c. 41; C. 17:16C-62 et seq.), established by an agreement whichprescribes the terms under which a retail buyer may from time to time purchase orlease goods or services which are primarily for personal, family or householdpurposes, and under which the unpaid balance thereunder, whenever incurred, ispayable in one or more installments and under which a time price differential maybe added in each billing period as provided herein. Retail charge account alsoincludes all accounts arising out of the utilization by the holder of a credit card,letter of credit or other credit identification issued by a sales finance company,giving the holder the privilege of using the credit card, letter of credit or othercredit identification to become a retail buyer in transactions out of which debtarises: (1) by the sales finance company’s payment or agreement to pay the retailbuyer’s obligations; or (2) by the sales finance company’s purchase from the retailseller of the obligations of the user of the credit card, letter of credit or other creditidentification as a retail buyer.

(s) “Services” means and includes work, labor and services, professional andotherwise which are primarily for personal, family or household purposes but doesnot include services which are subject to the “Home Repair Financing Act,” andinsurance premiums financing which is subject to the “Insurance PremiumFinance Company Act” (P.L.1968, c. 221; C. 17:16D-1 et seq.).

(t) “Billing period” means the time interval between regular periodic billingstatement dates. In the case of monthly billing periods, such intervals shall beconsidered equal intervals of time if the billing date of a billing period does notvary more than 4 days from the billing date of the immediately preceding billingperiod. In the case of billing periods which are not monthly, the permissible

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variation in billing dates shall be that proportion of 4 days (adjusted to the nearestwhole number) which the number of days in the billing period bears to 30.

(u) “Professional services” means services rendered or performed by a personauthorized by law to practice a recognized profession whose practice is regulatedby law and the performance of which services requires knowledge of an advancedtype in a field of learning acquired by a prolonged formal course of specializedinstruction and study as distinguished from general academic instruction orapprenticeship and training.Adopted. L. 1960, c. 40, §1. Amended. L. 1961, c. 121, §9; L. 1966, c. 324, §1; L. 1971, c. 399, §1;L. 1971, c. 409, §2; L. 1972, c. 14, §1; L. 1977, c. 220, §1; L. 1980, c. 16, §2; L. 1981, c. 102, §1.

17:16C-2. License required; exception. No person shall hereafter engage inor continue to engage in the business of a sales finance company or in the businessof a motor vehicle installment seller in this State without first obtaining a licensefrom the commissioner as provided for in this act [17:16C-1 et seq.]; provided,however, that no sales finance company shall be required to obtain a license toengage in the business of a motor vehicle installment seller for the purpose ofdisposing of any goods to which it has obtained title as a result of legal or contractright under any retail installment contract; and provided, further, that any bankinginstitution authorized to do business in this State shall be authorized to transactbusiness as a sales finance company, subject to all of the provisions of this act,except that it shall not be required to obtain a license or pay a license feehereunder.Adopted. L. 1960, c. 40, §2.

17:16C-3. Application for license; form and content. An application for anew license or for a renewal thereof shall be accompanied by the requiredapplication and license fees, as appropriate, and shall be made on the forms and inthe manner and accompanied by such evidence in support of the application asmay be prescribed by the commissioner.Adopted. L. 1960, c. 40, §3. Amended. L. 1996, c. 157, §51, effective July 1, 1997.

17:16C-4. Application acted on within 60 days. Within 60 days after thefiling of the application and the payment of the fees hereinafter set forth thecommissioner shall either:

(a) Issue and deliver to the applicant a license to engage in the business of asales finance company or a motor vehicle installment seller in accordance with theprovisions of this act [17:16C-1 et seq.] at the location specified in the saidapplication; or

(b) Refuse to issue the license for any reason for which he may suspend, revokeor refuse to renew any license under section 10 of this act [17:16C-10].Adopted. L. 1960, c. 40, §4.

17:16C-5. Procedure upon refusal to grant license. If the commissionerrefuses to issue a license he shall:

(a) Notify the applicant of the denial and of his right to request a hearing within10 days.

(b) If the applicant does not request a hearing, return the sum paid as a licensefee.

(c) If the applicant requests such a hearing, give notice of the grounds forrefusal and hold a hearing thereon. Within 30 days thereafter the commissioner

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shall file a written decision containing his findings and conclusions and serve acopy thereof upon the applicant.Adopted. L. 1960, c. 40, §5.

17:16C-6. License to specify location of office; not transferable orassignable. (a) Each license shall specify the location of the office or branch andmust be conspicuously displayed therein. In case such location be changed, thecommissioner shall endorse the change of location on the license without charge.

(b) Such license shall not be transferable or assignable.(c) No licensee shall transact the business provided for by this act [17:16C-1 et

seq.] under any other name or maintain an office at any other location than thatdesignated in the license.Adopted. L. 1960, c. 40, §6.

17:16C-7. Sales finance company license fee. Every application for a newlicense shall be accompanied by a nonrefundable application fee as provided insubsection d. of section 8 of P.L. 1996, c. 157 (C. 17:11C-8).

The license shall run from the date of issuance to the end of a term of not lessthan two years as set by the commissioner by regulation.Adopted. L. 1960, c. 40, §7. Amended. L. 1971, c. 58, §1; L. 1981, c. 321, §1; L. 1996, c. 157, §52,effective July 1, 1997; L. 1999, c. 250, §5, effective November 14, 1999; L. 2007, c. 81, §18, effectiveJuly 1, 2006; except that provisions of this act which amend the term of a license shall remaininoperative until the Commissioner of Banking and Insurance adopts regulations establishing the newlicense terms authorized by this act. The Commissioner of Banking and Insurance may immediatelyundertake action to promulgate any regulation necessary to implement the provisions of this act.

17:16C-8. Motor vehicle installment seller; license, application fee. Withrespect to a license fee imposed prior to the implementation of the assessmentpursuant to P.L.2005, c.199 (C.17:1C-33 et al.), every motor vehicle installmentseller shall pay to the commissioner at the time of making the application andbiennially thereafter upon renewal a license fee for its principal office and for eachadditional place of business conducted in this State. The commissioner shallcharge for a license such fee as he shall prescribe by rule or regulation. Each feeshall not exceed $300. The license shall run from the date of issuance to the endof the licensing period of not less than two years as set by the commissioner byregulation. Upon implementation of the assessment pursuant to P.L.2005, c.199(C.17:1C-33 et al.), a license fee shall no longer be imposed or collected by thecommissioner pursuant to this section, however a motor vehicle installment sellershall pay to the commissioner at the time of application a nonrefundableapplication fee not to exceed $300.Adopted. L. 1960, c. 40, §8. Amended. L. 1971, c. 58, §2; L. 1981, c. 321, §2; L. 2005, c. 199, §18,approved August 18, 2005, upon the adoption of regulations pursuant to sections 3 and 14 of this act,but no assessment shall be payable earlier than July 1, 2006. The commissioner may take thoseanticipatory actions necessary to effectuate the provisions of this act; L. 2007, c. 81, §19, effective July1, 2006; except that provisions of this act which amend the term of a license shall remain inoperativeuntil the Commissioner of Banking and Insurance adopts regulations establishing the new licenseterms authorized by this act. The Commissioner of Banking and Insurance may immediately undertakeaction to promulgate any regulation necessary to implement the provisions of this act.

17:16C-9. No abatement in license fee; expiration. No abatement in theamount of the said license fee shall be made if the license is issued for less than 1year, nor if the license is surrendered, canceled or revoked prior to the expirationof the period for which such license was issued. Every license shall expire onDecember 31 of each year.Adopted. L. 1960, c. 40, §9.

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17:16C-10. Suspension, revocation or refusal to renew license; notice;grounds. a. The commissioner may refuse to issue and may revoke, suspend orrefuse to renew a license or impose a penalty pursuant to this act if thecommissioner finds, after notice and an opportunity for a hearing in accordancewith the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.)and any rules adopted thereunder, that any person, applicant for or holder of thelicense has:

(1) violated any of the provisions of P.L.1960, c.40 (C.17:16C-1 et seq.) or anyorder, rule or regulation made or issued pursuant to that act;

(2) Withheld information or made a material misstatement in the applicationfor the license;

(3) Been convicted of an offense involving breach of trust, moral turpitude orfraudulent or dishonest dealing, or had a final judgment entered against him in acivil action upon grounds of fraud, misrepresentation or deceit;

(4) Become insolvent, or failed to attain or maintain the required net worth;(5) Demonstrated unworthiness, incompetence, bad faith or dishonesty in the

transacting of business as a licensee; or(6) Engaged in any other conduct which would be deemed by the commissioner

to be the cause for denial of the license.b. A license of a corporation, partnership, association or other entity may be

suspended or revoked if any officer, director or member of the licensee hascommitted any act which would be cause for suspending or revoking a license tohim as an individual.

c. No license issued under this act to a motor vehicle installment seller shall bevalid unless such seller is the holder of a valid and subsisting license issuedpursuant to chapter 10 of Title 39 of the Revised Statutes.Adopted. L. 1960, c. 40, §10. Amended. L. 1971, c. 409, §3; L. 1996, c. 157, §53, effective July 1,1997.

17:16C-11. Revocation, refusal, etc. of license may be specific or general.The commissioner may suspend, revoke or refuse to renew the particular licensewith respect to which grounds for revocation, suspension or refusal to renew mayoccur or exist, or, if he finds that such grounds for suspension or revocation are ofgeneral application to all offices, or more than 1 office, operated by the licensee,he may revoke, suspend or refuse to renew all of the licenses issued to the licenseeor such number of licenses as such grounds apply to, as the case may be.Adopted. L. 1960, c. 40, §11.

17:16C-12. Surrender of license not to affect civil or criminal liability. Anylicensee may surrender his license by delivering the license to the commissionerwith written notice that he thereby surrenders the license, but such surrender shallnot affect the licensee’s civil or criminal liability for acts committed prior to thesurrender.Adopted. L. 1960, c. 40, §12.

17:16C-13. Suspension, revocation or refusal to renew license not toimpair certain obligations. No suspension, revocation or refusal to renew anylicense shall impair or affect the obligation of any lawful retail installmentcontract or retail charge account acquired previously thereto by the licensee.Adopted. L. 1960, c. 40, §13. Amended. L. 1971, c. 409, §4.

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17:16C-14. License to remain in force and effect; reinstatement. Everylicense issued hereunder shall remain in force and effect until the same shall haveexpired or been surrendered, revoked or suspended in accordance with theprovisions of this act [17:16C-1 et seq.], but the commissioner may reinstatesuspended licenses or issue new licenses to a licensee whose license or licenseshave been revoked, if the conditions under which such licenses were revoked havebeen corrected and the commissioner is satisfied as the result of an investigationthat such conditions are not likely to reoccur.Adopted. L. 1960, c. 40, §14.

17:16C-15. Examination of records when violation is suspected. Thecommissioner, if he has reasonable cause to believe that any licensee, or any otherperson, has violated any of the provisions of this act [17:16C-1 et seq.] or of anyother law relating to retail installment sales or contracts, shall have the power tomake such investigations as he shall deem necessary, and may examine the books,accounts, records and files of such licensee or any other such person believed tohave violated this act or any other law relating to retail installment sales orcontracts.Adopted. L. 1960, c. 40, §15.

17:16C-16. Power of subpoena; administer oaths. The commissioner shallhave power to issue subpoenas to compel the attendance of witnesses and theproduction of documents, papers, books, records and other evidence before him inany matter over which he has jurisdiction, control or supervision pertaining to thisact [17:16C-1 et seq.]. The commissioner shall have the power to administer oathsand affirmations to any person whose testimony is required.Adopted. L. 1960, c. 40, §16.

17:16C-17. Court order requiring attendance. In case of a failure of anyperson to comply with any subpoena issued by the commissioner or to testify withrespect to any matter concerning which he may be lawfully interrogated, theSuperior Court, on application of the commissioner, may issue an order requiringthe attendance of such person and the giving of testimony or production ofevidence. Any person failing to obey the court’s order may be punished by thecourt as for contempt.Adopted. L. 1960, c. 40, §17.

17:16C-18. Maintenance of books, accounts and records. Every retail seller,sales finance company, motor vehicle installment seller and holder shall maintainat its place or places of business in this State such books, accounts and recordsrelating to all transactions within this act [17:16C-1 et seq.] as will enable thecommissioner to enforce full compliance with the provisions of this act.Adopted. L. 1960, c. 40, §18. Amended. L. 2005, c. 199, §19, approved August 18, 2005, upon theadoption of regulations pursuant to sections 3 and 14 of this act, but no assessment shall be payableearlier than July 1, 2006. The commissioner may take those anticipatory actions necessary to effectuatethe provisions of this act.

17:16C-19. Preservation of books, accounts, records, annual report. Allbooks, accounts and records of the licensee shall be preserved and kept availableas provided herein for such period of time as the commissioner may by regulationrequire. The commissioner may require a licensee to file an annual reportcontaining that information required by the commissioner by regulationconcerning business conducted as a licensee in the preceding calendar year. The

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report shall be submitted under oath and in the form specified by thecommissioner by regulation.

A licensee that fails to make and file its annual report in the form and withinthe time provided in this section shall be subject to a penalty of not more than $100for each day’s failure, and the commissioner may revoke or suspend its authorityto do business in this State. The penalty may be collected in a summaryproceeding pursuant to the “Penalty Enforcement Law of 1999,” P.L.1999, c.274(C.2A:58-10 et seq.). A warrant may issue in lieu of a summons.Adopted. L. 1960, c. 40, §19. Amended. L. 2005, c. 199, §20, approved August 18, 2005, upon theadoption of regulations pursuant to sections 3 and 14 of this act, but no assessment shall be payableearlier than July 1, 2006. The commissioner may take those anticipatory actions necessary to effectuatethe provisions of this act; L. 2007, c. 81, §20, effective July 1, 2006; except that provisions of this actwhich amend the term of a license shall remain inoperative until the Commissioner of Banking andInsurance adopts regulations establishing the new license terms authorized by this act. TheCommissioner of Banking and Insurance may immediately undertake action to promulgate anyregulation necessary to implement the provisions of this act.

17:16C-20. Minimum information to be kept. The commissioner is herebyauthorized to prescribe the minimum information to be shown in such books,accounts and records of the licensee so that such records will enable thecommissioner to determine compliance with the provisions of this act [17:16C-1et seq.].Adopted. L. 1960, c. 40, §20.

17:16C-21. Contract in writing and to contain all agreements. Every retailinstallment contract shall be in writing and shall contain all of the agreementsbetween the retail buyer and retail seller relating to the installment sale of thegoods purchased and shall be signed both by the retail buyer and the retail seller.Adopted. L. 1960, c. 40, §21.

17:16C-22. Contents of contract. Every retail installment contract shall statethe names and addresses of all parties thereto, the date when signed by the retailbuyer, and shall contain a description of the goods sold which shall be sufficientfor identification. No retail installment contract shall be signed by any partythereto when such contract contains blank spaces to be filled in after such contracthas been signed; however, this provision shall not apply to serial numbers or otheridentifying marks which are not available for the description of the goods at thetime of the execution of the contract.Adopted. L. 1960, c. 40, §22.

17:16C-23. Buyer to be furnished copy of contract. A copy of the retailinstallment contract shall be furnished by the retail seller to the retail buyer at thetime the retail buyer signs the contract except that such copy need not contain thesignature of the retail seller. Such copy shall be furnished the retail buyer withoutcharge.Adopted. L. 1960, c. 40, §23.

17:16C-24. Notice to buyer contained in contract; specifications. Everyretail installment contract shall contain the following notice printed prominently,in the form herein indicated, in 10-point bold type or larger, directly above thenotice required by section 25 [17:16C-25]:

“NOTICE TO RETAIL BUYERDo not sign this contract in blank.You are entitled to a copy of the contract at the time you sign.

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Keep it to protect your legal rights.”Adopted. L. 1960, c. 40, §24.

17:16C-25. Acknowledgment of receipt of contract; specifications. Anyacknowledgment by the retail buyer of receipt of a copy of the contract shall beprinted or written in a size equal to at least 10-point bold type and, if contained inthe contract, shall appear directly above the space provided in the contract formfor the signature of the retail buyer.Adopted. L. 1960, c. 40, §25.

17:16C-26. Payment of time balance in substantially equal amounts ondates separated by substantially equal payment-periods; exceptions. Everyretail installment contract shall provide for the payment of the time balance insubstantially equal amounts on dates separated by substantially equal payment-periods; except that the retail seller may defer the initial installment for any periodof time up to one year from the date of the execution of the retail installmentcontract; and, provided further, that when appropriate for the purpose offacilitating payment, in accordance with a retail buyer’s intermittent income, acontract may provide for payment on a schedule which reduces or omits paymentsover a period or periods not in excess of 93 days in any 12-month period or acontract may provide an installment schedule which reduces or omits paymentsover any period or periods of time during which period or periods the retailbuyer’s income is reduced or suspended. When a retail installment contractprovides for unequal or irregular installments, the time price differential shall notexceed the effective rate provided in section 41 of P.L.1960, c.40 (C.17:16C-41)[17:16C-41], having due regard for the schedule of installments. When in anyretail installment contract the purchase of goods is combined with the purchase offood, the time balance on which is stated as one amount, that part of the timebalance on the sale of goods shall be subject to the provisions of this section, butthat part of the time balance on the purchase of food may be payable in a shortertime and added to the equal payment installment on goods.Adopted. L. 1960, c. 40, §26. Amended. L. 1966, c. 324, §2; L. 1969, c. 172, §1; L. 1973, c. 34, §1;L. 1995, c. 53, §8, effective March 17, 1995.

17:16C-27. Items to be set forth separately in contract. Every retailinstallment contract shall set forth the following separate items:

(a) The cash price of the goods which are the subject matter of the retailinstallment contract;

(b) The down payment made by the retail buyer, indicating whether made incash or in goods or partly in cash and partly in goods. The amount of the paymentin cash and in goods shall be shown separately. A description of the goods, if any,sufficient for identification, shall be shown;

(c) The unpaid cash balance which shall be the difference between the cashprice (subsection (a)) and the down payment (subsection (b));

(d) The amount, if any, if a separate charge is made therefor, included forinsurance and other benefits, specifying the coverages and benefits;

(e) The amount of official fees;(f) The principal balance, which is the sum of subsections (c), (d) and (e);(g) The amount of the time price differential;(h) The time balance, which is the sum of subsections (f) and (g), owed by the

retail buyer to the retail seller, the number of installments required, the amount ofeach installment expressed in dollars and the due date or period thereof;

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(i) The time sales price, which is the sum of subsections (b) and (h).Adopted. L. 1960, c. 40, §27.

17:16C-28. Additional purchases after original agreement. Whenever aretail installment contract by its terms permits the inclusion of additional goodspurchased after the original agreement, and such goods are so purchased and theamount due on the new purchase is combined with an unpaid balance on any priorpurchase so as to permit the retail seller to retain title to or reserve a lien upon allgoods under the combined agreement, the retail seller shall, at the time of theadditional purchase, deliver to the retail buyer and attach to the originalagreement:

(a) A statement containing all the information with respect to the additionalpurchase required to be included in a retail installment contract; and

(b) A statement showing the amount due on the agreement immediatelyprevious to the new purchase, the amount due after the new purchase, thepayments agreed to be made thereafter, and the number of additional monthsrequired to complete the payments.Adopted. L. 1960, c. 40, §28.

17:16C-29. Allocation of payments on continuing retail agreements.Whenever a payment is made on such a continuing agreement after additionalpurchases have been added, the payment shall be considered as allocated amongeach of the separate purchases included, in full to the purchase made earliest intime, and the retail seller before repossessing or attempting to repossess any goodsunder any such agreement shall actually allocate in such manner all such paymentsmade to him by the retail buyer. When the amount owing on any separate purchasehas been fully paid, the goods so paid for shall become the absolute property ofthe retail buyer and shall not be subject to repossession for any subsequent defaulton the agreement. The retail buyer under any such agreement may at any timeprepay the amount due on any of the separate purchases and in case ofrepossession may redeem any of such separate purchases by payment of theamount due on such purchase alone.Adopted. L. 1960, c. 40, §29. Amended. L. 1981, c. 324, §1.

17:16C-30. Insurance at retail buyer’s expense; dual protection. Wheretitle to or a lien upon goods sold by the retail seller is retained or taken by the retailseller the retail buyer may be required to insure the goods at the retail buyer’sexpense for the protection of the retail seller or subsequent holder which insurancemay be purchased by the holder. Such insurance shall be written for the dualprotection of the retail buyer and the retail seller or subsequent holder to the extentof his interest in the goods and shall be limited to insurance against substantial riskof damage, destruction, or theft of such goods and shall be upon terms andconditions, which are reasonable and appropriate, considering the type andconditions of such goods. When the retail buyer fails or is unable to acquireinsurance or the retail seller or subsequent holder is unable to purchase insurancecovering the dual protection of the retail buyer and retail seller or subsequentholder, the retail seller or holder may purchase a single interest insurance policyon the goods and may collect the premium therefor from the retail buyer.Adopted. L. 1960, c. 40, §30. Amended. L. 1971, c. 409, §5.

17:16C-31. Buyer may supply insurance; premium included in contract;policy furnished; cancellation; returned premiums credited to unpaid

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balance. The retail buyer shall have the privilege of supplying insurance on thegoods through an agent or broker of his own selection and selecting an insurancecompany acceptable to the retail seller; provided, however, the inclusion of thepremium for such insurance in the retail installment contract, when the retail buyerselects the company, agent or broker, shall be optional with the retail seller. Theamount, if any, included for such insurance shall not exceed the premiumschargeable in accordance with the applicable rates filed with the commissioner forsuch insurance. The retail seller or holder, if the premium for dual insurance onthe goods is included in a retail installment contract, shall within 25 days after theexecution of the retail installment contract send or cause to be sent to the retailbuyer a policy or policies or certificate of insurance, written by an insurancecompany authorized to do business in this State, clearly setting forth the amountof the premium, the kind or kinds of insurance and the scope of the coverage andall the terms, exceptions, limitations, restrictions and conditions of the contract orcontracts of insurance. The holder of a retail installment contract shall, if thegoods described therein have been repossessed and sold, cancel any insurance onthe goods and any other insurance or other benefits then in force and shall creditthe amount of the return premium thereon to the unpaid balance outstanding onthe retail installment contract.Adopted. L. 1960, c. 40, §31.

17:16C-32. Notice that policy required in sale of motor vehicle includes noliability or property damage coverage. Whenever, in the sale of a motor vehicle,the retail buyer is required, under the provisions of this act [17:16C-1 et seq.], toprovide a policy of insurance and such policy of insurance does not contain theliability insurance required by section 1 of P.L.1972, c. 197 (C. 39:6B-1), the retailinstallment contract shall contain, immediately following the statement thereinconcerning insurance, the following notice printed prominently, in the form hereinindicated or in such other form as may be approved by the commissioner, in 10-point type or larger:

“THIS DOES NOT INCLUDE INSURANCE ON YOUR LIABILITY FORBODILY INJURY OR PROPERTY DAMAGE. WITHOUT SUCHINSURANCE, YOU MAY NOT OPERATE THIS VEHICLE ON PUBLICHIGHWAYS.”Adopted. L. 1960, c. 40, §32. Amended. L. 1973, c. 346, §1.

17:16C-33. Other insurance. In addition to insurance on the goods, byagreement with the retail buyer, the retail seller may purchase such otherinsurance and other benefits as the retail buyer shall contract for; provided,however, that the retail buyer may cancel such additional insurance and otherbenefits, other than credit life and credit accident and health insurance, at any timeprior to the expiration of such insurance contracts or benefits.Adopted. L. 1960, c. 40, §33.

17:16C-34. Premium refund credited to next installment. If any policy orpolicies or certificates of insurance or other benefits are canceled, or the premiumsthereon adjusted, the unearned insurance premium refund or refund on otherbenefits received by the retail seller or subsequent holder of the retail installmentcontract shall be credited to the next maturing installments of the retail installmentcontract, except to the extent applied toward payment for similar insuranceprotecting the interest of the buyer and the retail seller or holder of the contract or

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any of them; provided that in the case of credit life or credit accident and healthinsurance, the refund to the buyer shall be made in accordance with chapter 169of the laws of 1958, and provided further that if the amount of such refund is lessthan the minimum prescribed by the commissioner, no refund need be made.Adopted. L. 1960, c. 40, §34.

17:16C-34.1. Entry into retail charge accounts; conditions. (a) A retailcharge account may be entered into between a retail buyer and a retail seller or aperson wholly owned by or which wholly owns a retail seller or between a retailbuyer and a sales finance company on its own behalf or on behalf of one or moreretail sellers from whom the sales finance company may purchase or acquire theobligations of the retail buyer incurred pursuant to a retail charge account.

(b) A retail charge account shall be subject to such provisions not inconsistentwith this act or otherwise prohibited by law which may be agreed upon, but shallbe subject to the requirements for open end credit accounts as prescribed byregulations of the Board of Governors of the Federal Reserve System issuedpursuant to Title I of the Consumer Credit Protection Act (Act of May 29, 1968,Public Law 90-321), referred to in this act as the “Truth in Lending Act andRegulations.”

(c) A retail charge account shall become effective when an agreement is signedby the retail buyer or when the retail buyer or someone authorized by the retailbuyer makes a purchase pursuant to the terms of the account.Adopted. L. 1971, c. 409, §16.

17:16C-35. Prohibited contract provisions; acceleration clause. No retailinstallment contract or retail charge account or separate instruments executed inconnection therewith shall contain any acceleration clause under which any partor all of the balance, not yet matured, may be declared immediately due andpayable because the retail seller or holder deems himself to be insecure and anysuch provision shall be void and unenforceable.Adopted. L. 1960, c. 40, §35. Amended. L. 1971, c. 409, §6.

17:16C-36. Waiver of right of action by retail buyer against seller, holder,etc. No retail installment contract or retail charge account or separate instrumentsexecuted in connection therewith shall contain any provisions whereby the retailbuyer waives any right of action or defense against the retail seller, sales financecompany, holder or other person acting on his or her behalf for any illegal actcommitted in the collection of the payments under the contract or account or in therepossession of the goods, the subject of the retail installment contract or retailcharge account and any such provision shall be void and unenforceable.Adopted. L. 1960, c. 40, §36. Amended. L. 1971, c. 409, §7.

17:16C-37. Power of attorney to confess judgment; other powers ofattorney. No retail installment contract or retail charge account or separateinstruments executed in connection therewith shall contain any power of attorneyto confess judgment or any other power of attorney and any such provision shallbe void and unenforceable.Adopted. L. 1960, c. 40, §37. Amended. L. 1971, c. 409, §8.

17:16C-38. Relief of retail seller from liability under contract. No retailinstallment contract or retail charge account or separate instruments executed inconnection therewith shall contain any provision relieving the retail seller fromliability for any legal remedies which the retail buyer may have against the retail

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seller under the contract or account and any such provision shall be void andunenforceable.Adopted. L. 1960, c. 40, §38. Amended. L. 1971, c. 409, §9.

17:16C-38.1. Relief of holder from certain liability prohibited. No retailinstallment contract shall contain any provision relieving the holder, or otherassignee, from liability for any civil remedy sounding in contract which the retailbuyer may have against the retail seller under the retail installment contract orunder any separate instrument executed in connection therewith.Adopted. L. 1971, c. 399, §2.

17:16C-38.2. Forms, terms and conditions of note. No retail installmentcontract shall require or entail the execution of any note unless such note shallhave printed the words “CONSUMER NOTE” in 10-point bold type or larger onthe face thereof. Such a note with the words “CONSUMER NOTE” printedthereon shall be subject to the terms and conditions of the retail installmentcontract and shall not be a negotiable instrument within the meaning of chapter 3(Negotiable Instruments) N.J.S.12A:3-101 et seq., or a security interest within themeaning of chapter 9 (Secured Transactions) N.J.S.12A:9-101 et seq. of theUniform Commercial Code. Any subsequent holder of a consumer note shall besubject to all claims and defenses of the retail buyer against the retail seller arisingout of the transaction but no such claim or defense may be asserted against suchholder in excess of the time sales price under the retail installment contract for anysale, except that, in the case of the sale of a new motor vehicle, as defined inR.S.39:10-2, no claim or defense may be asserted against such holder in excess ofthe time balance under the retail installment contract. No claim or defense whichthe retail buyer may have against the retail seller arising otherwise than out of theretail installment contract or any separate instrument executed in connectiontherewith shall be asserted against any subsequent holder.Adopted. L. 1971, c. 399, §3. Amended. L. 1995, c. 28, §12, effective June 1, 1995.

17:16C-38.3. Penalty. Any person who procures the execution of a note inviolation of this act [17:16C-38.1 to 17:16C-38.4]shall be liable to a penalty of notmore than $500.00 for each offense.Adopted. L. 1971, c. 399, §4.

17:16C-38.4. Certain charges not recoverable in event of violation of act.In the event that a note is executed in connection with a retail installment contractin violation of this act [17:16C-38.1 to 17:16C-38.4], no finance, delinquency,collection, repossession or refinancing charges may be recovered in any action orproceeding based on the contract or the consumer note.Adopted. L. 1971, c. 399, §5.

17:16C-39. Assignment of salary, wages, commissions or othercompensation for services. No retail seller, sales finance company or holder shallat any time take in a retail installment contract, a retail charge account or in aseparate instrument, any assignment of or order for the payment of any salary,wages, commissions, or other compensation for services, or any part thereof,earned or to be earned and any such provision shall be void and unenforceable.Adopted. L. 1960, c. 40, §39. Amended. L. 1971, c. 409, §10.

17:16C-39.1. Real property mortgage as additional security for retail salevoid and unenforceable. No retail installment contract, retail charge account orseparate instrument executed in connection therewith shall contain any provision

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whereby the retail seller, sales finance company or holder takes a real propertymortgage as additional security in connection with a retail sale. Any suchprovision shall be void and unenforceable.Adopted. L. 1981, c. 324, §2.

17:16C-40. Loan of money, etc., in connection with retail installmentcontract or charge account except in accordance with act. No retail seller, salesfinance company or holder shall make any loan of money or advance of credit toa retail buyer on or in connection with any retail installment contract or retailcharge account and charge, contract for or receive thereon a greater rate of interestthan he would otherwise be permitted by law to charge except in accordance withthe provisions of this act [17:16C-1 et seq.]; provided, however, that nothingcontained in this section shall prohibit a banking institution from making any loanwhich it otherwise is permitted by law to make.Adopted. L. 1960, c. 40, §40. Amended. L. 1971, c. 409, §11.

17:16C-40.1. Passenger motor vehicle loans. A sales finance companylicensed under the provisions of the “Retail Installment Sales Act” of 1960(P.L.1960, c. 40), as amended and supplemented, or any act replacing orsucceeding thereto which regulates “retail installment sales,” may loan to any oneperson any sum of money up to a maximum of $10,000.00 secured by a purchasemoney security interest to finance the purchase of a passenger motor vehicle notintended to be used for the transportation of passengers for hire or upon a contractbasis. The principal amount of such loan may be repaid in not more than 48substantially equal monthly installments. Notwithstanding the provisions of R.S.31:1-1 or any other law to the contrary, the sales finance company may chargeinterest at a rate or rates agreed to by the sales finance company and the borrower.Such interest shall be computed on the full amount of such loan for the periodfrom the making of the loan to the date of maturity of the final installment, andshall be added to the principal amount of the loan. For the purpose of this act[17:16C-40.1 and 17:16C-40.2], a purchase money security interest is herebydefined to be a security interest taken by a sales finance company, pursuant to theprovisions of chapter 9 of Title 12A of the New Jersey Statutes, in connection withand as security for an advance of money on behalf of a retail buyer of a motorvehicle of the motor vehicle dealer in payment of the unpaid balance of the cashprice.

Effective on the first day of the twelfth month following the effective date ofthis act, when the unpaid balance owing upon a precomputed loan is repaid in fullor the maturity of the unpaid balance of such loan is accelerated before the datescheduled for the payment of the final installment, the association shall allow acredit on account of the precomputed interest, calculated according to the actuarialrefund method, as if all payments were made as scheduled, or if deferred, asdeferred; provided, however, that if the loan is prepaid within 12 months after thefirst payment is due, an association may charge a prepayment penalty of not morethan (a) $20.00 on any loan up to and including $2,000.00; (b) an amount equal to1% of the loan on any loan greater than $2,000.00 and up to and including$5,000.00; and (c) $100.00 on any loan exceeding $5,000.00.Adopted. L. 1961, c. 95, §1. Amended. L. 1970, c. 200, §2; L. 1980, c. 16, §1; L. 1981, c. 103, §12.

17:16C-40.2. Penalty for violation. A violation of any provision of this act[17:16C-40.1 and 17:16C-40.2] shall be cause for the revocation or suspension of

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the license of the sales finance company by the commissioner upon notice andopportunity to be heard in accordance with the provisions of P.L.1958, chapter 68.Adopted. L. 1961, c. 95, §2.

17:16C-41. Time price differential on retail installment contracts. A retailseller and a motor vehicle installment seller, under the provisions of this act[17:16C-1 et seq.], shall have authority to charge, contract for, receive or collecta time price differential as defined in this act, on any retail installment contractevidencing the sale of goods or services in an amount or amounts as agreed to bythe retail seller or motor vehicle installment seller and the buyer on motor vehiclesand on all other goods or services.

The retail installment contract may provide for an increase, or may provide fora decrease, or both, in the time price differential applicable to the contract. Noincrease during the entire loan term shall result in an interest rate of more than 6%per annum over the rate applicable initially, nor shall the rate be raised more than3% per annum during any 12-month period. The lender shall not be obligated todecrease the interest rate more than 6% over the term of the loan, nor more than3% per annum during any 12-month period. If a rate increase is applied to the loan,the lender shall also be obligated to adopt and implement uniform standards fordecreasing the rate. If the contract provides for the possibility of an increase ordecrease, or both, in the rate, that fact shall be clearly described in plain language,in at least 8-point bold face type on the face of the contract. No rate increase shalltake effect during the first 3 years of the term of the contract, or thereafter, (a)unless at least 90 days prior to the effective date of the first such increase, or 30days prior to the effective date of any subsequent increase, a written notice hasbeen mailed or delivered to the retail buyer that clearly and conspicuouslydescribes such increase, and (b) unless at least 365 days have elapsed without anyincrease. No increase during the entire contract term shall result in an interest rateof more than 6% per annum over the rate applicable initially, nor shall the rate beraised more than 3% per annum during any 12-month period.

If the retail installment contract does provide that the time price differentialmay be increased then, notwithstanding the provisions of section 43 of P.L.1960,c. 40 (C. 17:16C-43), when the unpaid balance owing upon a contract is paid infull or the maturity of the unpaid balance of such contract is accelerated before thedate scheduled for the payment of the final installment, the holder of the contractshall allow a credit on account of the precomputed time price differentialcalculated according to the actuarial refund method, as if all payments were madeas scheduled, or if deferred, as deferred; provided, however, that if the contract isprepaid within 12 months after the first payment is due, a holder may charge aprepayment penalty of not more than (a) $20.00 on any contract up to andincluding $2,000.00; (b) an amount equal to 1% of the loan on any contract greaterthan $2,000.00 and up to and including $5,000.00; and (c) $100.00 on any contractexceeding $5,000.00. Effective on the first day of the twelfth month following theeffective date of this act [17:16C-1 et seq.], if the retail installment contract doesprovide for a time price differential, then, notwithstanding the provisions ofsection 43 of P.L.1960, c. 40 (C. 17:16C-43), when the unpaid balance owingupon a contract is paid in full or the maturity of the unpaid balance of such contractis accelerated before the date scheduled for the payment of the final installment,the holder of the contract shall allow a credit on account of the precomputed timeprice differential calculated according to the actuarial refund method, as if all

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payments were made as scheduled, or if deferred, as deferred; provided, however,that if the contract is prepaid within 12 months after the first payment is due, aholder may charge a prepayment penalty of not more than (a) $20.00 on anycontract up to and including $2,000.00; (b) an amount equal to 1% of the loan onany contract greater than $2,000.00 and up to and including $5,000.00; and (c)$100.00 on any contract exceeding $5,000.00.

The time price differential shall be computed on the amount of the principalbalance as determined in section 27(f) [17:16C-27], from the date of the contractto the due date of the final installment, notwithstanding the fact that the contractis to be repaid in installments.

If the time price differential so computed is less than $12.00, and if the due dateof the last installment of the contract is more than 8 months after the date of thecontract, a charge of not more than $12.00 may be made in lieu of the time pricedifferential. If the time price differential so computed is less than $10.00, and ifthe due date of the last installment of the contract is 8 months or less after the dateof contract, a charge of not more than $10.00 may be made in lieu of the time pricedifferential.Adopted. L. 1960, c. 40, §41. Amended. L. 1971, c. 409, §12; L. 1980, c. 16, §3; L. 1981, c. 103, §13.

17:16C-42. Delinquency or collection charge for default in payment;attorney’s fees. (a) The holder of any retail installment contract may collect adelinquency or collection charge for default in the payment of any such contractor any installment thereof, if provided for in the contract when such default shallhave continued for a period of 10 days, such charge not to exceed $10. Suchcharge may be collected by the holder of the retail installment contract or chargedto the buyer’s retail installment contract account. If charged to the buyer’s retailinstallment contract account, such charge shall be made within 35 days from thedate of such default and then a written notification that such charge has been madeshall be mailed to the retail buyer within 5 days from the date when such chargewas made.

(b) The holder of any retail charge account may collect a delinquency orcollection charge in an amount not to exceed $10, if provided for in the retailcharge account agreement, on any minimum payment which has not been paid infull for a period of 10 days after its due date, as originally scheduled.

(c) A delinquency or collection charge under this section may be collected onlyonce on each minimum payment due however long it remains in default. Adelinquency charge may be collected at the time it accrues or at any timeafterward.

(d) The retail installment contract or retail charge account may provide for thepayment of attorney’s fees not exceeding 20% of the first $500.00 and 10% on anyexcess of the amount due and payable under such contract or account whenreferred to an attorney, not a salaried employee of the holder of the contract oraccount, for collection.

(e) The retail installment contract or retail charge account may provide for areturn check fee not to exceed $20 which the holder of the contract may charge thebuyer if a check of the buyer is returned to the holder uncollected due toinsufficient funds in the buyer’s account. Adopted. L. 1960, c. 40, §42. Amended. L. 1971, c. 409, §13; L. 1995, c. 43, §1, effective June 5,1995; L. 1995, c. 53, §9, effective March 17, 1995.

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17:16C-43. Prepayment; refund. When the balance owing on a retailinstallment contract is repaid in full at any time before the end of the contractperiod, the holder of the contract shall allow a credit on account of the time pricedifferential, the amount of which shall be determined by the application of theformula C = AN/D, in which “C” represents the amount of the credit to be given;“A” represents the amount of the time price differential, less an acquisition cost of$15.00; “D” represents an amount determined as follows: there shall be ascribedto each payment-period included in the contract period, beginning with the firstpayment-period scheduled by the contract, the cardinal number descriptive of thenumber of payment-periods scheduled by the contract to elapse from thebeginning of each such payment-period to the end of the contract period, and thesum of all such cardinal numbers shall constitute the quantity “D”; and “N”represents the difference between the quantity “D” and the sum of all the cardinalnumbers ascribed to the payment-periods which have elapsed, in whole or in part,from the date of the contract to the date upon which such repayment is made. Thissection shall not apply when the amount of the credit is less than $1.00.Adopted. L. 1960, c. 40, §43. Amended. L. 1966, c. 324, §3.

17:16C-44. Extending due date of contract or installment payment;options. The holder of a retail installment contract may extend the scheduled duedate of any retail installment contract and defer the scheduled due date of any orall installment payments, or reduce the amount of any or all installments and may,as a consideration therefor, make a total additional charge not to exceed theamount ascertained under either of the following methods of computation at therespective rates indicated by the following options:

Option 1. The additional charge shall be computed on the amount of thescheduled installment or installments extended, deferred or reduced for the periodor periods for which each installment or part thereof is extended, deferred orreduced at the following rates on contracts originally in the respectiveclassifications set forth in section 41 of this act [17:16C-41]:

Class I. 1% per month;Class II. 1 1/2% per month;Class III. 2% per month;Class IV. 2% per month;Option 2. The holder of a retail installment contract by written agreement may

renew the entire unpaid balance on any retail installment contract and may makea charge therefor at the rates charged in the original contract from the date ofrenewal to the maturity of the final installment. The amount of the balance to berenewed shall be obtained by adding to the existing unpaid balance on the originalcontract, the cost of any insurance or other benefits for the period of the extensionand any accrued default charges and refunding the unearned portion of the timeprice differential charged according to the formula provided in section 43 of thisact [17:16C-43]; provided, however, that in computing the unearned time pricedifferential charge no allowance shall be taken for the amount of the acquisitioncost permitted therein.Adopted. L. 1960, c. 40, §44.

17:16C-44.1. Time price differential or retail charge accounts. (a)Notwithstanding any other law to the contrary, a retail seller, sales financecompany, banking institution or other holder may charge, receive and collect atime price differential in each billing period on obligations incurred pursuant to

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any retail charge account, which shall be determined as specified in the terms ofthe account, subject to the limitations provided herein. Such time price differentialfor each monthly billing period shall not exceed the amount resulting fromapplying the periodic rates provided herein to the greater of the following amounts(including unpaid time price differentials):

(i) The average daily balance of the account for such billing period, or(ii) The balance of the account at the beginning or end of such billing period.The periodic rate or rates shall not exceed an amount agreed to by the retail

seller, sales finance company, banking institution, or other holder and the retailbuyer.

The terms of the retail charge account may provide that the time pricedifferential may be increased or may be decreased or both from time to time;provided, however, that no increase shall be effective unless: (1) at least 90 daysprior to the effective date of the first such increase, or 30 days prior to the effectivedate of any subsequent increase, a written notice has been mailed or delivered tothe retail buyer that clearly and conspicuously describes such change and theindebtedness to which it applies and states that the incurrence by the retail buyeror another person authorized by him of any further indebtedness under the plan towhich the agreement relates on or after the effective date of the increase specifiedin the notice shall constitute acceptance of the increase and (b) either the retailbuyer agrees in writing to the increase or the retail buyer or another personauthorized by him incurs such further indebtedness on or after the effective dateof the increase stated in the notice. The provisions of this paragraph permitting anincrease in the time price differential shall not apply in the case of an agreementwhich expressly prohibits changing of the time price differential or whichprovides limitations on changing of the time price differential which are morerestrictive than the requirements of this paragraph. If the terms of the retail chargeaccount provide for the possibility of an increase or decrease, or both, in the timeprice differential, that fact shall be clearly described in plain language, in at least8-point bold face type on the face of the written notice.

Notwithstanding the foregoing limitation, if the terms of the account soprovide, the time price differential may be computed on the median amount withina specified range. Such time price differential for each monthly billing period shallnot exceed the amount resulting from applying the respective periodic ratesspecified above to the median amount within the specified range in which thegreater of the amounts specified in (i) and (ii) is included; provided, subject to theclassifications and differentiations as may reasonably be established by the retailseller, sales finance company, banking institution or other holder, the same timeprice differential is charged on all balances within the specified range andprovided further that the time price differential determined by applying therespective periodic rates specified above to the median amount within the rangedoes not exceed by more than 8% the amount of the time price differentialdetermined by applying the respective periodic rates specified above to the lowestamount in the range.

(b) If the billing period is not monthly, the maximum periodic rate shall be thatrate which bears the same relation to the respective periodic rates per monthspecified above as the number of days in the billing period bears to 30.

(c) Notwithstanding the limitation provided in (a) above, for any monthlybilling period in which a time price differential may be charged pursuant to the

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terms of the account a minimum time price differential of not more than $0.50may be charged; if the billing period is not monthly, a minimum time pricedifferential may be charged in such amount which bears the same relation to $0.50as the number of days in the billing period bears to 30.Adopted. L. 1971, c. 409, §17. Amended. L. 1981, c. 103, §14.

17:16C-45. Sale, transfer or assignment of contract; conditions. No retailseller under a retail installment contract, executed in this State, shall sell, transferor assign the obligation represented by such contract or any evidence ofindebtedness thereunder to any person who is not authorized as a sales financecompany pursuant to the provisions of this act [17:16C-1 et seq.], except that suchobligation or evidence of indebtedness may be sold, transferred or assigned to aState or national bank outside of this State if the retail installment contract isretained by the retail seller or sales finance company and collection of paymentsthereon is made to the retail seller or sales finance company.Adopted. L. 1960, c. 40, §45.

17:16C-46. Failure to notify retail buyer on sale, etc. of contract; paymentbinding on subsequent holder. If a retail installment contract is lawfully sold,transferred or assigned, pursuant to the provisions of this act [17:16C-1 et seq.],and a written notice of such sale, transfer or assignment setting forth the name andaddress of the new holder and of the person authorized to receive future paymentson such contract is not given to the retail buyer, any payment or tender of paymentmade to and any service of notice on the last known holder by the retail buyer shallbe binding upon any subsequent holder.Adopted. L. 1960, c. 40, §46.

17:16C-47. Provisions of 17:6C-45 not to apply; proviso. The provisions ofsection 45 [17:16C-45] shall not apply to any assignment of an aggregation ofretail installment contracts, which is executed by a retail seller or sales financecompany as collateral security only for a bona fide commercial loan, and underwhich, in the absence of default or other bona fide breach of the contract,ownership of the assigned retail installment contracts remains vested in the retailseller or sales finance company, and collection of payments on such assignedcontracts is made by the retail seller or sales finance company; and provided suchassignment of contracts is not made for the purpose of evading or circumventingthe provisions of this act [17:16C-1 et seq.].Adopted. L. 1960, c. 40, §47.

17:16C-47.1. Purchases of retail installment contract. A sales financecompany may purchase a retail installment contract or obligations incurredpursuant to a retail charge account from a retail seller or sales finance company onsuch terms and conditions and for such price as may be mutually agreed upon.Adopted. L. 1971, c. 409, §19.

17:16C-48. Status of buyer account furnished; limits number. Upon writtenrequest from the retail buyer, the retail seller or holder of the retail installmentcontract shall give or forward to the retail buyer within 10 days from receipt of thewritten request a written statement of the retail buyer’s account, showing the datesand amounts of all payments made or credited to the account and the total amount,if any, unpaid under such contract. No more than 2 such statements shall berequired from a holder in any 12-month period.Adopted. L. 1960, c. 40, §48.

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17:16C-49. Receipt for cash payment; contents. Whenever payment is madeon account of any retail installment contract in cash, the person receiving suchpayment shall, at the time of receiving such payment, furnish to the retail buyer,or the person making such payment on behalf of the retail buyer, a completewritten receipt therefor, showing the date, identification of the account and theamount paid.Adopted. L. 1960, c. 40, §49.

17:16C-50. Additional charges prohibited; exceptions. No retail seller, salesfinance company, or holder shall charge, contract for, collect or receive from anyretail buyer, directly or indirectly, any further or other amount for costs, charges,insurance premiums, examination, appraisal service, brokerage, commission,expense, interest, discount, fees, fines, penalties or other things of value inconnection with retail installment contracts or retail charge accounts other than thecharges permitted by this act [17:16C-1 et seq.], except court costs, attorney feesand the expenses of retaking and storing repossessed goods which are authorizedby law.Adopted. L. 1960, c. 40, §50. Amended. L. 1971, c. 409, §14.

17:16C-51. Advanced amounts not retained on contemplated sales;deposit status not affected. No retail seller shall collect or retain any amountwhatsoever in connection with the contemplated sale of goods under a retailinstallment sales contract, if such sale is not made; provided, however, thatnothing contained herein shall affect the legal status of a deposit paid by aprospective retail buyer to a retail seller as a binder on the contemplated purchaseof goods.Adopted. L. 1960, c. 40, §51.

17:16C-52. Payment in full of contract; action by holder of contract underclasses I, II, III and IV, 17:16C-41. Upon payment in full by the retail buyer ofthe time balance and other amounts lawfully due under a retail installmentcontract, the holder shall:

(a) Return to the retail buyer either the original instruments evidencingindebtedness or constituting security under a retail installment contract, whichwere signed by the retail buyer or his sureties or guarantors in conjunction withsuch contract or a copy thereof, excepting such instruments as are filed or recordedwith a public official and retained in the files of such official;

(b) Release all security interest in the goods or in any collateral security to theobligation of the retail buyer under such contract;

(c) Deliver to the retail buyer such good and sufficient assignments andcertificates of title as may be necessary to vest the retail buyer with completeevidence of title.Adopted. L. 1960, c. 40, §52. Amended. L. 1995, c. 33, §2, effective March 1, 1995.

17:16C-53. Certificate of ownership delivered to retail buyer upon finalpayment. When the final payment on a retail installment contract is made in cashby the retail buyer, or his authorized representative, at the designated licensedoffice of the holder, the certificate of ownership and other evidence of lien, or acopy thereof, showing satisfaction of the encumbrance, unless otherwise providedby rule or regulation of the commissioner, shall be delivered at the time of suchpayment if demanded by the retail buyer, otherwise delivery may be made at alater date in person or by mail as may be arranged between retail buyer and holder;

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all other instruments, or a copy thereof, shall be delivered or mailed to the retailbuyer within 35 days from the date of final payment.Adopted. L. 1960, c. 40, §53. Amended. L. 1995, c. 33, §3, effective March 1, 1995.

17:16C-54. Unauthorized costs and charges. Whenever, in any retailinstallment contract or retail charge account under this act [17:16C-1 et seq.], theretail seller, sales finance company or holder has knowingly charged, contractedfor or received from the retail buyer any costs or charges not authorized by thisact, all costs and charges in connection with such contract or account, other thanfor insurance authorized by this act, shall be void and unenforceable, and any suchcosts or charges other than for insurance authorized by this act shall be applied tothe unpaid balance or, if the account has been fully paid, remitted to the retailbuyer, and the retail buyer shall be entitled to recover all such costs or charges.Adopted. L. 1960, c. 40, §54. Amended. L. 1971, c. 409, §15.

17:16C-55. Penalty for operating without a license. Any person, and anydirector, officer, employee, agent, or representative thereof, who or which shallengage in this State in the business of a sales finance company or motor vehicleinstallment seller without having first obtained a license, as required by this act[17:16C-1 et seq.], shall be liable to a penalty of not more than $1,000.00 for eachoffense.Adopted. L. 1960, c. 40, §55.

17:16C-56. Penalty for violation; recovery of penalty. (a) Any personconducting business under this act [17:16C-1 et seq.] and any director, officer,partner, member, employee, agent, or representative thereof who shall knowinglyviolate any provision of this act or shall directly or indirectly counsel, aid or abetsuch violation shall be liable to a penalty of not more than $500.00 for eachoffense.

(b) The penalties provided for by this act shall be sued for and recovered by andin the name of the commissioner and shall be collected and enforced by summaryproceedings pursuant to the Penalty Enforcement Law (N.J.S. 2A:58-1 et seq.).Adopted. L. 1960, c. 40, §56.

17:16C-57. Provisions severable. If any provision of this act [17:16C-1 etseq.] or the application thereof to any person or circumstance is heldunconstitutional, the remainder of the act and the application of such provision toother persons or circumstances shall not be affected thereby.Adopted. L. 1960, c. 40, §57.

17:16C-58. Repealer. Chapter 419, P.L.1948, entitled, “An act to define andregulate retail installment sales in the amount of or of the value of $3,000.00 orless and to license and regulate sales finance companies,” approved September 29,1948, is hereby repealed, and all laws and parts of laws which are inconsistentwith or repugnant to the provisions of this act [17:16C-1 et seq.] are herebysuperseded; provided, however, that nothing herein contained shall be construedto impair or affect any rights, obligations, liabilities or criminal, civil oradministrative proceedings arising under the aforesaid act.Adopted. L. 1960, c. 40, §58.

17:16C-58.1. Application and construction of act. (a) The provisions of thisact relating to retail charge accounts shall apply to such accounts in existence onthe effective date of this act.

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(b) Nothing in this act shall be construed to make invalid any retail chargeaccount or retail installment contract, or any transaction thereunder, made prior tothe effective date of this act.Adopted. L. 1971, c. 409, §18. Amended. L. 1972, c. 14, §2.

17:16C-59. License continued; renewal. Any sales finance company holdinga license under the provisions of chapter 419, P.L.1948, approved September 29,1948, and doing business on the date this act [17:16C-1 et seq.] takes effect, shallbe considered to have been licensed under and subject to the provisions of this actfor the period ending December 31, 1960, at which time it must obtain a licenseunder the provisions of this act.Adopted. L. 1960, c. 40, §59.

17:16C-60. Short title. [“Retail Installment Sales Act of 1960”] This actshall be known and may be cited as the “Retail Installment Sales Act of 1960.”Adopted. L. 1960, c. 40, §60.

17:16C-61. Effective date. This act [17:16C-1 et seq.] shall take effect 90 daysfrom the date of its approval.Adopted. L. 1960, c. 40, §61.