LEGISLATIVE GENERAL COUNSEL S.B. 25
6 Approved for Filing: A. Weenig 6 1st Sub. (Green)
6 01-29-24 5:05 PM 6
Senator Curtis S. Bramble proposes the following substitute bill:
1 CONSUMER LENDER NOTIFICATION AMENDMENTS
2 2024 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Curtis S. Bramble
5 House Sponsor: A. Cory Maloy
6
7 LONG TITLE
8 General Description:
9 This bill modifies the requirements for engaging in business as a consumer lender in the
10 state.
11 Highlighted Provisions:
12 This bill:
13 < amends what is considered a deceptive act or practice by a supplier;
14 < requires a consumer lender to submit to the commissioner of financial institutions
15 evidence of registration through the Nationwide Multistate Licensing System and
16 Registry; and
17 < makes technical changes.
18 Money Appropriated in this Bill:
19 None
20 Other Special Clauses: 1st Sub. S.B. 25
21 None
22 Utah Code Sections Affected:
23 AMENDS:
24 13-11-4, as last amended by Laws of Utah 2021, Chapters 138, 154
25 70C-1-302, as last amended by Laws of Utah 2009, Chapter 72
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26 70C-8-202, as last amended by Laws of Utah 2013, Chapter 73
27 70C-8-203, as last amended by Laws of Utah 2014, Chapter 97
28
29 Be it enacted by the Legislature of the state of Utah:
30 Section 1. Section 13-11-4 is amended to read:
31 13-11-4. Deceptive act or practice by supplier.
32 (1) A deceptive act or practice by a supplier in connection with a consumer transaction
33 violates this chapter whether it occurs before, during, or after the transaction.
34 (2) Without limiting the scope of Subsection (1), a supplier commits a deceptive act or
35 practice if the supplier knowingly or intentionally:
36 (a) indicates that the subject of a consumer transaction has sponsorship, approval,
37 performance characteristics, accessories, uses, or benefits, if it has not;
38 (b) indicates that the subject of a consumer transaction is of a particular standard,
39 quality, grade, style, or model, if it is not;
40 (c) indicates that the subject of a consumer transaction is new, or unused, if it is not, or
41 has been used to an extent that is materially different from the fact;
42 (d) indicates that the subject of a consumer transaction is available to the consumer for
43 a reason that does not exist, including any of the following reasons falsely used in an
44 advertisement:
45 (i) "going out of business";
46 (ii) "bankruptcy sale";
47 (iii) "lost our lease";
48 (iv) "building coming down";
49 (v) "forced out of business";
50 (vi) "final days";
51 (vii) "liquidation sale";
52 (viii) "fire sale";
53 (ix) "quitting business"; or
54 (x) an expression similar to any of the expressions in Subsections (2)(d)(i) through
55 (ix);
56 (e) indicates that the subject of a consumer transaction has been supplied in accordance
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57 with a previous representation, if it has not;
58 (f) indicates that the subject of a consumer transaction will be supplied in greater
59 quantity than the supplier intends;
60 (g) indicates that replacement or repair is needed, if it is not;
61 (h) indicates that a specific price advantage exists, if it does not;
62 (i) indicates that the supplier has a sponsorship, approval, or affiliation the supplier
63 does not have;
64 (j) (i) indicates that a consumer transaction involves or does not involve a warranty, a
65 disclaimer of warranties, particular warranty terms, or other rights, remedies, or obligations, if
66 the representation is false; or
67 (ii) fails to honor a warranty or a particular warranty term;
68 (k) indicates that the consumer will receive a rebate, discount, or other benefit as an
69 inducement for entering into a consumer transaction in return for giving the supplier the names
70 of prospective consumers or otherwise helping the supplier to enter into other consumer
71 transactions, if receipt of the benefit is contingent on an event occurring after the consumer
72 enters into the transaction;
73 (l) after receipt of payment for goods or services, fails to ship the goods or furnish the
74 services within the time advertised or otherwise represented or, if no specific time is advertised
75 or represented, fails to ship the goods or furnish the services within 30 days, unless within the
76 applicable time period the supplier provides the buyer with the option to:
77 (i) cancel the sales agreement and receive a refund of all previous payments to the
78 supplier if the refund is mailed or delivered to the buyer within 10 business days after the day
79 on which the seller receives written notification from the buyer of the buyer's intent to cancel
80 the sales agreement and receive the refund; or
81 (ii) extend the shipping date to a specific date proposed by the supplier;
82 (m) except as provided in Subsection (3)(b), fails to furnish a notice meeting the
83 requirements of Subsection (3)(a) of the purchaser's right to cancel a direct solicitation sale
84 within three business days of the time of purchase if:
85 (i) the sale is made other than at the supplier's established place of business pursuant to
86 the supplier's personal contact, whether through mail, electronic mail, facsimile transmission,
87 telephone, or any other form of direct solicitation; and
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88 (ii) the sale price exceeds $25;
89 (n) promotes, offers, or grants participation in a pyramid scheme as defined under Title
90 76, Chapter 6a, Pyramid Scheme Act;
91 (o) represents that the funds or property conveyed in response to a charitable
92 solicitation will be donated or used for a particular purpose or will be donated to or used by a
93 particular organization, if the representation is false;
94 (p) if a consumer indicates the consumer's intention of making a claim for a motor
95 vehicle repair against the consumer's motor vehicle insurance policy:
96 (i) commences the repair without first giving the consumer oral and written notice of:
97 (A) the total estimated cost of the repair; and
98 (B) the total dollar amount the consumer is responsible to pay for the repair, which
99 dollar amount may not exceed the applicable deductible or other copay arrangement in the
100 consumer's insurance policy; or
101 (ii) requests or collects from a consumer an amount that exceeds the dollar amount a
102 consumer was initially told the consumer was responsible to pay as an insurance deductible or
103 other copay arrangement for a motor vehicle repair under Subsection (2)(p)(i), even if that
104 amount is less than the full amount the motor vehicle insurance policy requires the insured to
105 pay as a deductible or other copay arrangement, unless:
106 (A) the consumer's insurance company denies that coverage exists for the repair, in
107 which case, the full amount of the repair may be charged and collected from the consumer; or
108 (B) the consumer misstates, before the repair is commenced, the amount of money the
109 insurance policy requires the consumer to pay as a deductible or other copay arrangement, in
110 which case, the supplier may charge and collect from the consumer an amount that does not
111 exceed the amount the insurance policy requires the consumer to pay as a deductible or other
112 copay arrangement;
113 (q) includes in any contract, receipt, or other written documentation of a consumer
114 transaction, or any addendum to any contract, receipt, or other written documentation of a
115 consumer transaction, any confession of judgment or any waiver of any of the rights to which a
116 consumer is entitled under this chapter;
117 (r) charges a consumer for a consumer transaction or a portion of a consumer
118 transaction that has not previously been agreed to by the consumer;
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119 (s) solicits or enters into a consumer transaction with a person who lacks the mental
120 ability to comprehend the nature and consequences of:
121 (i) the consumer transaction; or
122 (ii) the person's ability to benefit from the consumer transaction;
123 (t) solicits for the sale of a product or service by providing a consumer with an
124 unsolicited check or negotiable instrument the presentment or negotiation of which obligates
125 the consumer to purchase a product or service, unless the supplier is:
126 (i) a depository institution under Section 7-1-103;
127 (ii) an affiliate of a depository institution; [or]
128 (iii) an entity regulated under Title 7, Financial Institutions Act; or
129 (iv) an entity engaging in activities subject to Title 70C, Utah Consumer Credit Code;
130 (u) sends an unsolicited mailing to a person that appears to be a billing, statement, or
131 request for payment for a product or service the person has not ordered or used, or that implies
132 that the mailing requests payment for an ongoing product or service the person has not received
133 or requested;
134 (v) issues a gift certificate, instrument, or other record in exchange for payment to
135 provide the bearer, upon presentation, goods or services in a specified amount without printing
136 in a readable manner on the gift certificate, instrument, packaging, or record any expiration
137 date or information concerning a fee to be charged and deducted from the balance of the gift
138 certificate, instrument, or other record;
139 (w) misrepresents the geographical origin or location of the supplier's business;
140 (x) fails to comply with the restrictions of Section 15-10-201 on automatic renewal
141 provisions;
142 (y) violates Section 13-59-201; or
143 (z) fails to comply with the restrictions of Subsection 13-54-202(2).
144 (3) (a) The notice required by Subsection (2)(m) shall:
145 (i) be a conspicuous statement written in dark bold with at least 12-point type on the
146 first page of the purchase documentation; and
147 (ii) read as follows: "YOU, THE BUYER, MAY CANCEL THIS CONTRACT AT
148 ANY TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY (or time period
149 reflecting the supplier's cancellation policy but not less than three business days) AFTER THE
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150 DATE OF THE TRANSACTION OR RECEIPT OF THE PRODUCT, WHICHEVER IS
151 LATER."
152 (b) A supplier is exempt from the requirements of Subsection (2)(m) if the supplier's
153 cancellation policy:
154 (i) is communicated to the buyer; and
155 (ii) offers greater rights to the buyer than Subsection (2)(m).
156 (4) (a) A gift certificate, instrument, or other record that does not print an expiration
157 date in accordance with Subsection (2)(v) does not expire.
158 (b) A gift certificate, instrument, or other record that does not include printed
159 information concerning a fee to be charged and deducted from the balance of the gift
160 certificate, instrument, or other record is not subject to the charging and deduction of the fee.
161 (c) Subsections (2)(v) and (4)(b) do not apply to a gift certificate, instrument, or other
162 record useable at multiple, unaffiliated sellers of goods or services if an expiration date is
163 printed on the gift certificate, instrument, or other record.
164 Section 2. Section 70C-1-302 is amended to read:
165 70C-1-302. Definitions.
166 As used in this title:
167 (1) "Agreement" means the bargain of the parties in fact as stated in a written contract
168 or otherwise as found in the parties' language or by implication from other circumstances,
169 including:
170 (a) course of dealing;
171 (b) usage of trade; or
172 (c) course of performance.
173 (2) "Commissioner" means the commissioner of financial institutions appointed under
174 Section 7-1-202.
175 [(2)] (3) "Contract" means a document containing written terms and conditions of a
176 credit agreement.
177 [(3)] (4) (a) "Creditor" means:
178 (i) a party:
179 (A) who regularly extends consumer credit that is subject to a finance charge or is
180 payable by written agreement in more than four installments, not including a down payment;
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181 and
182 (B) to whom the obligation is initially payable, either on the face of the note or
183 contract, or by agreement when there is no note or contract;
184 (ii) an issuer of a credit card that extends either open-end credit or credit that:
185 (A) is not subject to a finance charge; and
186 (B) is not payable by written agreement in more than four installments; and
187 (iii) an issuer of a credit card that extends closed-end credit that:
188 (A) is subject to a finance charge; or
189 (B) is payable by written agreement in more than four installments.
190 (b) (i) For purposes of this Subsection [(3),] (4), a party is considered to extend
191 consumer credit regularly only if the party extends credit in the preceding calendar year:
192 (A) more than 25 times; or
193 (B) more than five times for a transaction secured by a dwelling.
194 (ii) If a person does not meet the numerical standards described in Subsection
195 [(3)(b)(i)] (4)(b)(i) in the preceding calendar year, the numerical standards shall be applied to
196 the current calendar year.
197 [(4)] (5) "Dwelling" means a residential structure attached to real property that contains
198 one to four units including any of the following if used as a residence:
199 (a) a condominium unit;
200 (b) a cooperative unit;
201 (c) a manufactured home; or
202 (d) a house.
203 [(5)] (6) "Earnings" means compensation paid or payable to an individual or for the
204 individual's account for personal services rendered or to be rendered by the individual whether
205 denominated as wages, salary, commission, bonus, or otherwise, and includes periodic
206 payments pursuant to a pension, retirement, or disability program.
207 [(6)] (7) "Installment" means a payment upon a debt that is part of a series of
208 payments, each of which is less than the original amount of the debt and scheduled as to a
209 specific amount and due date by agreement of the parties for the purpose of repaying the debt.
210 (8) "Nationwide database" means the Nationwide Multistate Licensing System and
211 Registry, described in 12 U.S.C. Sec. 5101.
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212 [(7)] (9) "Party" means an individual and any other entity legally capable of entering
213 into a binding contract.
214 Section 3. Section 70C-8-202 is amended to read:
215 70C-8-202. Notification.
216 (1) (a) A party who is subject to this part shall file notification with the department at
217 least 30 days before commencing business in this state.
218 (b) After filing the notification required by Subsection (1)(a), a party shall file a
219 notification on or before [January] December 31 of each year.
220 (c) A notification required by this Subsection (1) shall:
221 (i) state the name of the party;
222 (ii) state the name in which the business is transacted if different from that required in
223 Subsection (1)(c)(i);
224 (iii) state the address of the party's principal office, which may be outside this state;
225 (iv) state the address of:
226 (A) each office or retail store, if any, in this state at which credit is offered or extended
227 to a consumer; or
228 (B) in the case of a party taking an assignment of an obligation, each office or place of
229 business within this state at which business is transacted;
230 (v) if credit is extended to a consumer other than at an office or retail store in this state,
231 state a brief description of the manner in which the credit transaction occurs;
232 (vi) state the name and address in this state of a designated agent upon whom service of
233 process may be made;
234 (vii) [submit] include evidence satisfactory to the commissioner that the [person] party
235 is authorized to conduct business in this state as a domestic or foreign entity pursuant to filings
236 with the Division of Corporations and Commercial Code under Title 16, Corporations, or Title