Agreement: means the bargain of the parties in fact as stated in a written contract or otherwise as found in the parties' language or by implication from other circumstances, including:
Contract: A legal written agreement that becomes binding when signed.
Contract: means a document containing written terms and conditions of a credit agreement. See Utah Code 70C-1-302
Creditor: means :
(i)
a party:
(A)
who regularly extends consumer credit that is subject to a finance charge or is payable by written agreement in more than four installments, not including a down payment; and
(B)
to whom the obligation is initially payable, either on the face of the note or contract, or by agreement when there is no note or contract;
(ii)
an issuer of a credit card that extends either open-end credit or credit that:
(A)
is not subject to a finance charge; and
(B)
is not payable by written agreement in more than four installments; and
(iii)
an issuer of a credit card that extends closed-end credit that:
(A)
is subject to a finance charge; or
(B)
is payable by written agreement in more than four installments. See Utah Code 70C-1-302
Dwelling: means a residential structure attached to real property that contains one to four units including any of the following if used as a residence:
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
Lien: A claim against real or personal property in satisfaction of a debt.
Right of rescission: Right to cancel, within three business days, a contract that uses the home of a person as collateral, except in the case of a first mortgage loan. There is no fee to the borrower, who receives a full refund of all fees paid. The right of rescission is guaranteed by the Truth in Lending Act (TILA). Source: OCC
United States: includes each state, district, and territory of the United States of America. See Utah Code 68-3-12.5
(a)
Subject to the other provisions of this section, a debtor may prepay the unpaid balance of a closed-end consumer credit debt at any time without penalty.
(b)
Notwithstanding Subsection (1)(a), a debtor may be required to pay a prepayment fee for prepaying a closed-end extension of credit secured by a subordinate lien on a dwelling that is not subject to Section 32 of Regulation Z, 12 C.F.R., Sec. 226.32 if:
(i)
the creditor offers the debtor the option of entering into either:
(A)
a contract that does not contain a prepayment fee; or
(B)
a contract containing:
(I)
a prepayment fee; and
(II)
a rate of finance charge or fee that is lower than the rate of finance charge or fee under the contract described in Subsection (1)(b)(i)(A); and
(ii)
the debtor enters into the contract described in Subsection (1)(b)(i)(B).
(2)
For purposes of this section:
(a)
The unpaid balance of a closed-end consumer credit debt at any point in time shall consist only of:
(i)
any unpaid earned finance charge;
(ii)
the unpaid principal of the debt; and
(iii)
any delinquency or deferral and other allowable charges that may have been assessed prior to prepayment.
(b)
Except as provided in Subsection (2)(c), the earned finance charge and unpaid principal shall be calculated only by the actuarial or United States Rule method from the date the credit is first extended to the debtor, but the creditor may accrue finance charges during any delay period pertaining to a right of rescission.
(c)
(i)
Any prepaid finance charge not exceeding 5% of the original principal amount of the debt which the parties expressly agree is nonrefundable in the event of prepayment shall be fully earned on the date the credit is extended.
(ii)
Any prepaid finance charges in addition to the prepaid finance charges described in Subsection (2)(c)(i) are considered to be earned proportionally over the entire term of the agreement, and in that event of prepayment, any unearned portion of such charge, calculated on a pro rata basis according to the remaining term of the agreement, shall be rebated.
(iii)
Notwithstanding Subsections (2)(c)(i) and (ii), on a closed-end extension of credit secured by a subordinate lien on a dwelling that is not subject to Section 32 of Regulation Z, 12 C.F.R., Sec. 226.32 any prepaid finance charge shall be fully earned on the date the credit is extended.
(d)
Any costs, charges, or fees paid to third parties in connection with setting up the credit are not subject to rebate unless the creditor becomes entitled to a rebate of any part of the cost, charge, or fee as a result of the prepayment.
(3)
If the maturity of a closed-end consumer credit debt is accelerated for any reason and judgment is obtained, the debtor is entitled to have the unpaid balance of the debt calculated, less any legal offset, as if payment in full had been made on the date judgment was entered. Interest on the judgment shall be the rate agreed on by the parties with respect to the debt.
(4)
The provisions of this section for calculating the unpaid balance of a debt apply to all prepayments of closed-end consumer credit debts after September 1, 1985, unless a different method for calculating the unpaid balance on prepayment is expressly provided for in a consumer credit contract which was entered into prior to July 1, 1985, and was lawful when made.
