69V-60.003: Excessive Charges, Correction
69V-60.080: Computations of Interest for Simple Interest Retail Installment Contracts
69V-60.090: Application of Payments for Retail Installment Contracts
PURPOSE AND EFFECT: Rule 69V-60.003, F.A.C., which relates to excessive charges, is clarified to apply to retail installment sellers. Rule 69V-60.080, F.A.C., is created to provide guidance regarding computations of interest for simple interest retail installment contracts. Rule 69V-60.090, F.A.C., is created to provide guidance regarding the method of applying payments for retail installment contracts.
SUBJECT AREA TO BE ADDRESSED: Retail Installment Sales.
SPECIFIC AUTHORITY: 520.994(5) FS.
LAW IMPLEMENTED: 520.34, 520.345 FS.
IF REQUESTED IN WRITING AND NOT DEEMED UNNECESSARY BY THE AGENCY HEAD, A RULE DEVELOPMENT WORKSHOP WILL BE NOTICED IN THE NEXT AVAILABLE FLORIDA ADMINISTRATIVE WEEKLY.
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE DEVELOPMENT AND A COPY OF THE PRELIMINARY DRAFT, IF AVAILABLE, IS: Andy Grosmaire, Chief, Bureau of Finance Regulation, Office of Financial Regulation, The Fletcher Building, 200 E. Gaines Street, Tallahassee, Florida 32399, (850)410-9848, andy.grosmaire@flofr.com
THE PRELIMINARY TEXT OF THE PROPOSED RULE DEVELOPMENT IS:
69V-60.003 Excessive Charges, Correction.
If the retail installment seller or sales finance company discovers that, as a result of an inadvertent clerical error or some other unintentional mistake the finance charge to a buyer is in excess of the amount permitted, or that any other charges in the contract are excessive, it shall immediately notify the buyer in writing of such overcharge. The overcharge, plus any finance charge that may have been assessed thereon, shall be credited to the account balance, and the buyer shall be notified in writing of any reduction of contractual payments. Contracts paid in full containing excessive charges that which were not previously given credit should be corrected by making a refund to the buyer.
Rulemaking Specific Authority 520.994(5) FS. Law Implemented 520.34 FS. History–New 6-20-64, Renumbered from 3-7.03 to 3D-60.03 on 8-26-75, Amended 1-10-79, Formerly 3D-60.03, Amended 7-10-96, Formerly 3D-60.003, Amended________.
69V-60.080 Computations of Interest for Simple Interest Retail Installment Contracts.
(1) Simple Interest as used Section 520.345, F.S., shall be defined as interest paid or earned on the principal only. The rate of interest for each day shall not be greater than 1/365th of the annual rate of interest. Compounding of interest (charging interest on interest) is strictly prohibited.
(2) The rate of interest for each day shall not be greater than 1/365th of the stated annual rate of interest on the Retail Installment Contract or 1/365th of the maximum allowable rate, whichever is less.
(3) A retail installment contract may not provide for the calculation of simple interest other than as identified in this rule.
Rulemaking Authority 520.994(5) FS. Law Implemented 520.345 FS. History–New________.
69V-60.090 Application of Payments for Retail Installment Contracts.
(1) If the retail installment contract provides for the accrual or calculation of simple interest:
(a) Any payment received must be applied first to the accumulated interest charges, then to authorized fees and the remainder of the payment applied to the unpaid principal balance. If the amount of the payment is insufficient to pay accumulated interest charge, the unpaid interest charge may continue to accumulate and the same may be paid from the proceeds of subsequent payments and shall not be added to the principal balance and shall not accrue interest. No payment shall be accepted on the principal balance unless interest is paid to date or is waived by the licensee, except such payment may be credited to the principal where the amount is not sufficient to pay the interest due for one day.
(b) The deduction of authorized and accrued fees from a payment received shall not cause the payment to be insufficient to satisfy the scheduled contractual payment provided the payment received by the licensee is equal to or greater than the contractual installment. In no case shall the deduction of a late charge from a payment received cause the payment to be insufficient and initiate the accrual of another late charge.
(c) All payments received will be applied to the account effective the date received by the licensee or the licensee’s representative.
(2) If the retail installment contract provides for the accrual or calculation of interest in any other manner:
(a) Any payment received shall be applied first to the authorized and accrued fees and the remainder of the payment applied to the unpaid balance according to the schedule of payments.
(b) The payment due date shall be advanced on period for each full contractual payment received as identified on the schedule of payments.
(c) The deduction of authorized and accrued fees from a payment received shall not cause the payment to be insufficient to satisfy the scheduled contractual payment. In no case shall the deduction of a late charge from a payment received cause the payment to be insufficient and initiate the accrual of another late charge.
Rulemaking Authority 520.994(5) FS. Law Implemented 520.34, 520.345 FS. History–New________.