With respect to a closed-end loan, a delinquency charge may not be assessed on a payment that is a payment in full for the scheduled installment period solely because of an unpaid delinquency charge relating to an earlier installment.
Terms Used In Utah Code 70C-3-103
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
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
Installment: means a payment upon a debt that is part of a series of payments, each of which is less than the original amount of the debt and scheduled as to a specific amount and due date by agreement of the parties for the purpose of repaying the debt. See Utah Code 70C-1-302
(2)
(a)
With respect to a closed-end loan other than one in which the finance charge is based on unpaid daily balances, if two payments or parts of two payments are past due for more than 10 days, the lender may convert the loan to one in which the finance charge is based on unpaid daily balances.
(b)
In the event of conversion under Subsection (2)(a):
(i)
the creditor shall calculate the unpaid balance of the debt in accordance with the provisions governing rebate on prepayment under Section 70C-3-101 as of the due date of the first delinquent installment; and
(ii)
after the conversion the creditor may collect a finance charge not exceeding the annual rate agreed upon by the parties.
