Louisiana Revised Statutes 6:969.15 – Maximum delinquency charges
Terms Used In Louisiana Revised Statutes 6:969.15
- Consumer: means a natural person who enters into a consumer loan or consumer credit sale of a motor vehicle to be used primarily for personal, family, or household purposes. See Louisiana Revised Statutes 6:969.6
- Contract: A legal written agreement that becomes binding when signed.
- Contract: means the consumer's retail installment contract, note, agreement, or other evidence of indebtedness executed in connection with a motor vehicle credit transaction. See Louisiana Revised Statutes 6:969.6
- Credit service charge: means the sum of the following:
(i) All charges payable directly or indirectly by the consumer and imposed directly or indirectly by the seller as a requirement of the extension of credit, including any of the following types of charges that are applicable: interest; time price differential; service; carrying or other charge, however denominated; points and discount fees; and premium or other charge for any guarantee or insurance protecting the extender of credit against the consumer's default or other credit loss. See Louisiana Revised Statutes 6:969.6
- Finance charge: The total cost of credit a customer must pay on a consumer loan, including interest. The Truth in Lending Act requires disclosure of the finance charge. Source: OCC
- Grace period: The number of days you'll have to pay your bill for purchases in full without triggering a finance charge. Source: Federal Reserve
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Loan finance charge: means the sum of the following:
(i) All charges payable directly or indirectly by the consumer and imposed directly or indirectly by the lender as a requirement of the extension of credit, including any of the following types of charges that are applicable: interest, and any amount payable under a point, discount, or other system of charges, however denominated. See Louisiana Revised Statutes 6:969.6
- Motor vehicle: means any new or used transportation device, including automobiles, motorcycles, trucks, and other vehicles that are operated over the public highways and the streets of this state, but does not include traction engines, boat trailers, road rollers, implements of husbandry, and other agricultural vehicles. See Louisiana Revised Statutes 6:969.6
- Motor vehicle credit transaction: means a consumer loan or a consumer credit sale involving a Louisiana consumer, or that is otherwise made subject to this Chapter. See Louisiana Revised Statutes 6:969.6
- Precomputed transaction: means a motor vehicle credit transaction under which loan finance charges or credit service charges are computed in advance over the entire scheduled term of the transaction and capitalized into the face amount of the contract. See Louisiana Revised Statutes 6:969.6
- Simple interest transaction: means a motor vehicle credit transaction under which loan finance charges or credit service charges are assessed by application of a contractual simple interest rate or rates to the unpaid principal balance of the contract. See Louisiana Revised Statutes 6:969.6
A. The parties to a motor vehicle credit transaction may contract for the payment of a delinquency charge on any installment or other regular payment not paid in full within ten days after its scheduled or deferred due date in either one of the following amounts:
(1) Five percent of the amount of the installment in default,or ten dollars, whichever is greater.
(2) The deferral charge that would be permitted to defer the unpaid amount of the delinquent installment for the period that it is delinquent.
B.(1) A delinquency charge may be collected only once on an installment or other payment however long it remains delinquent. No such delinquency charge may be collected if the installment or other payment has been deferred and a deferral charge has been paid or incurred, provided that the deferred payment is paid within ten days of its deferred date. Such a delinquency charge may be collected at the time it accrues or at any time thereafter.
(2) No such delinquency charge may be collected on an installment or other regular payment that is paid in full within ten days after its scheduled due date even though an earlier maturing installment or other payment or a delinquency charge on an earlier installment or other payment may not have been paid in full. For purposes of determining delinquency, payments are deemed to be applied first to current installments or other payments due and then to delinquent installments or other payments and then to delinquency and other charges.
(3) An extender of credit is prohibited from levying or collecting any delinquency charge on a payment when the only delinquency is attributable to delinquency charges assessed on earlier installments, and the payment is otherwise a full payment for the applicable period and is paid on its due date or within an applicable grace period.
(4) Nothing in this Section shall be construed to prohibit the extender of credit from assessing and collecting a loan finance charge or credit service charge on any delinquency or deferral charges not paid when due. Such loan finance charges or credit service charges shall not exceed the contract rate of interest charged on the motor vehicle credit transaction.
C. If two installment payments or parts thereof of a precomputed transaction are in default for ten days or more, the extender of credit may, upon first giving the consumer written notice, elect to convert the precomputed transaction into a simple interest transaction. The notice must state the exact date on which the conversion will occur, the loan finance charge or credit service charge rate to be charged under the simple interest transaction, the balance due at the time of the conversion, and whether or not there will be a balloon payment. In this event, the extender of credit shall make a rebate pursuant to the provisions on rebate upon prepayment as of the maturity date of a delinquent installment or other regular payment, and thereafter may make a loan finance charge or credit service charge as authorized by this Part. The amount of the rebate shall not be reduced by the amount of any minimum loan finance charge or minimum credit service charge as provided in this Part; however, the extender of credit may deduct a prepayment charge as provided in La. Rev. Stat. 6:969.20(A).
D. An extender of credit may contractually reserve the right to prospectively increase the simple interest rate under a motor vehicle credit transaction upon or at any time following the consumer’s default. However, such a default interest rate shall not exceed the loan finance charge or credit service charge rate, as applicable, and as authorized in this Part.
Acts 1999, No. 794, §1, eff. July 2, 1999; Acts 2003, No. 337, §1.