A BILL TO BE ENTITLED
AN ACT to increase the maximum finance charge rates for consumer credit installment sale contracts and to expand the definition of official fees as applied to those contracts.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 25A‑10 reads as rewritten:
"§ 25A‑10.  "Official fees" defined.
"Official fees" means either of the following:
(1)	Fees and charges prescribed by law that actually are or will be paid by the seller for determining the existence of or for perfecting, releasing, or satisfying a security interest related to a consumer credit sale.
(2)	Premiums payable for insurance in lieu of perfecting a security interest otherwise required by the seller in connection with a consumer credit sale if the premium does not exceed the fees or charges described in subdivision (1) of this section that would otherwise be payable."
SECTION 2.  G.S. 25A‑15 reads as rewritten:
"§ 25A‑15.  Finance charge rates for consumer credit installment sale contracts.
(a)	With respect to a consumer credit installment sale contract, a seller may contract for and receive a finance charge not exceeding that permitted by this section. All balances due under a consumer credit installment sale contract from any person as a buyer or as an endorser, guarantor, or surety for any buyer or otherwise jointly or severally shall be considered a part of the amount financed with regard to the contract for the purpose of computing interest or charges. For the purposes of this section, the finance charge rates are the rates that are required to be disclosed by the Consumer Credit Protection Act, except that official fees under G.S. 25A‑10 shall be included in the amount financed and excluded from the finance charge.
(b)	Except as provided in this section, the finance charge rate for a consumer credit installment sale contract shall not exceed the following rate except that a minimum finance charge of five dollars ($5.00) may be imposed:
(1)	Twenty‑four percent (24%) per annum where the amount financed is less than three thousand five hundred dollars ($3,500).
(2)	Twenty‑two percent (22%) per annum where the amount financed is three thousand five hundred dollars ($3,500) or greater, but less than five thousand dollars ($5,000).
(3)	Twenty percent (20%) where the amount financed is five thousand dollars ($5,000) or greater, but less than seven thousand five hundred dollars ($7,500).
(4)	Eighteen percent (18%) per annum where the amount financed is seven thousand five hundred dollars ($7,500) or greater.

(c)	A finance charge rate not to exceed the higher of the rate established in subsection (b) of this section or the rate set forth below may be imposed in a consumer credit installment sale contract repayable in not less than six installments for a self‑propelled motor vehicle:
(1)	Eighteen percent (18%) per annum for vehicles one and two model years old.
(2)	Twenty percent (20%) per annum for vehicles three model years old.
(3)	Twenty‑two percent (22%) per annum for vehicles four model years old.
(4)	Twenty‑nine percent (29%) per annum for vehicles five model years old and older.
A motor vehicle is one model year old on January 1 of the year following the designated year model of the vehicle.
(d)	Notwithstanding subsections (b) and (c) of this section, in the event that the amount financed in a consumer credit sale contract is secured in whole or in part by a security interest in real property, the finance charge rate shall not exceed sixteen percent (16%) per annum.
(e)	A seller shall not divide a single credit sale transaction into two or more sales to avoid the limitations as to maximum finance charges imposed by this section.
(f)	Notwithstanding subsections (b) and (d) of this section, the parties to a consumer credit installment sale contract for the sale of a residential manufactured home that is secured by a first lien on that home or on the land on which the home is located may contract in writing for the payment of a finance charge as agreed upon by the parties. This subsection only applies if the parties are entitled to so contract by the provisions of Section 501 of United States Public Law 96‑221, and have complied with the regulations adopted under it.
For the purposes of this subsection, a "residential manufactured home" means a manufactured home as defined in G.S. 143‑145(7) that is used as a dwelling."
SECTION 3.  This act becomes effective October 1, 2019, and applies to contracts entered into, renewed, or modified on or after that date.