GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

H	1 

HOUSE BILL 449

Short Title:  Interest Refund.	(Public)
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Sponsors: Representatives Lemmond; Black, Burton, Church, DeVane, Dickson, Gardner, Hill, Joye, Justus, Kuczmarski, Luebke, McCombs, Morgan, Richardson, Russell, Smith, and Spears.
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Referred to:  Financial Institutions.
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A BILL TO BE ENTITLED
AN ACT TO INCLUDE INTEREST AND PENALTIES IN REFUNDS OF MONIES OVERCOLLECTED FROM CONSUMERS ON THE OVERCOLLECTED AMOUNT.
The General Assembly of North Carolina enacts:
Section 1.  Article 1 of Chapter 24 of the General Statutes is amended by adding the following new section to read:
"§ 24-10.2.  Repayments to consumers to include interest and other penalties.
(a)	In transactions by lenders subject to this Article whereby the lender refunds to a party to a loan or extension of credit agreement an amount overcollected from the party due to the lender's error, the refund shall include interest and other penalties, as follows:
(1)	If the amount overcollected includes interest or a late payment penalty lawfully charged and collected by the lender, then the lender shall include in the refund the full amount of the interest and late payment penalty that was part of the overcollected amount; and
(2)	If the lender charges late payment penalties under the loan or extension of credit agreement, then the lender shall include in the refund interest on the overcollected amount at the same rate or amount that the lender charges as late payment penalties under the loan or extension of credit agreement."
Sec. 2.  G.S. 24-9.1. reads as rewritten:
"§ 24-9.1.  Certain repayments to consumers by public utilities not subject to claim or defense of usury; repayments not ordered by Commission to include interest and other penalties.
(a)	Notwithstanding any other provision of this Chapter or any other provision of law, any public utility, as defined by G.S. 62-3, shall pay to its customers such rate of interest as may be required by order of the North Carolina Utilities Commission in transactions wherein the utility is refunding to its customers funds advanced by or overcollected from the customers. As to such transactions, the claim or defense of usury by such public utility and its successors or anyone else in its behalf is prohibited.
(b)	In transactions where the utility refunds to its customer funds collected in error from the customer, and the refund has not been reviewed or ordered by the North Carolina Utilities Commission, the refund shall include the full amount of interest and other penalties paid by the customer as part of or incident to the overcollected amount, and the utility shall include in the refund interest on the overcollected amount at the same rate or amount that the utility charges its customers for late payments of amounts due."
Sec. 3.  G.S. 24-11.1(b) reads as rewritten:
"(b)	Disclosures. – The following disclosures shall be clearly and conspicuously made in or with all documents described in subsection (a) of this section:
(1)	The annual percentage rate or, if the rate may vary, a statement that it may vary, the circumstances under which the rate may increase, any limitations on the increase, and the effects of the increase on the other terms of the agreement.
(2)	The date or occasion upon which the finance charge begins to accrue on a transaction and the duration of any grace period.
(3)	Whether an annual fee is charged and the amount of the fee.
(4)	Any delinquency charge, late charge, or collection charge which may be assessed for the late payment of any installment, including the terms and conditions for the imposition of such charge.
(5)	Notice to the consumer that refunds of amounts overcollected from the consumer due to the lender's error shall include delinquency charges, late charges, or collection charges that are part of the amount overcollected, and the refund shall include interest on the overcollected amount at the same rate or amount as the lender charges for delinquent or late payments under the installment agreement."
Sec. 4.  G.S. 24-11.2(b) reads as rewritten:
"(b)	Disclosures. – The following disclosures shall be clearly and conspicuously made in or with all documents described in subsection (a) of this section:
(1)	The annual fee and other charges, if any, applicable to the issuance or use of the charge card.
(2)	That charges incurred by the use of the charge card are due and payable upon receipt of a periodic statement of charges.
(3)	Any delinquency charge, late charge, or collection charge which may be assessed for late payment, including the terms and conditions for the imposition of such charge.
(4)	Notice to the consumer that refunds of amounts overcollected from the consumer due to the lender's error shall include delinquency charges, late charges, or collection charges that are part of the amount overcollected, and the refund shall include interest on the overcollected amount at the same rate or amount as the lender charges for delinquent or late payments under the installment agreement."
Sec. 5.  Chapter 25A of the General Statutes is amended by adding the following new section to read:
"§ 25A-44.1.  Repayment to consumers to include interest and penalties,
(a)	In consumer credit sales transactions subject to this Chapter whereby the seller refunds to a consumer an amount overcollected from the consumer due to the seller's error, the refund shall include interest and other penalties, as follows:
(1)	If the amount overcollected includes interest or late payment penalties lawfully charged and collected by the seller, then the seller shall include in the refund the full amount of interest and other penalties that were part of the overcollected amount; and
(2)	If the seller charges late payment penalties pursuant to the consumer credit sale, then the seller shall include in the refund interest on the overcollected amount at the same rate or amount that the seller charges as late payment penalties pursuant to the consumer credit sale."
Sec. 6. This act is effective upon ratification and applies to refund transactions conducted on or after that date.