2015 -- H 5284

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LC000904

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO COMMERCIAL LAW--GENERAL REGULATORY PROVISIONS -- THE

RHODE ISLAND AUTOMOBILE REPOSSESSION ACT

     

     Introduced By: Representatives Diaz, Regunberg, Slater, Lancia, and Williams

     Date Introduced: February 04, 2015

     Referred To: House Judiciary

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 6-51-3 of the General Laws in Chapter 6-51 entitled "The Rhode

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Island Automobile Repossession Act" is hereby amended to read as follows:

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     6-51-3. Default, notice, right to cure, reinstatement. -- (a) The default provisions of a

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consumer automobile lease or automobile loan agreement are enforceable only to the extent that:

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      (1) The consumer does not make one or more payments required by the lease or loan

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agreement; or

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      (2) The lessor or secured party establishes that the prospect of payment, performance, or

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realization of the lessor's or secured party's interest in the automobile is significantly impaired.

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      (b) After a default under an automobile lease or loan agreement by the consumer, the

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lessor or secured party may not accelerate, take judicial action to collect, or repossess the

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automobile until the lessor or secured party gives the consumer the notice required by this section

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and the consumer does not cure the default in the time allowed under this section. A lessor or

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secured party may initiate a procedure to cure by sending to the consumer, at any time after the

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consumer has been in default for ten (10) days, a notice of the right to cure the default. Said

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notice shall be delivered via certified mail, return receipt requested, or via first-class mail, at the

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consumer's address last known to the lessor or secured party. The time when notice is given shall

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be deemed to be upon actual delivery of the notice to the consumer or three (3) business days

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following the mailing of the notice to the consumer at the consumer's address last known to the

 

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lessor or secured party.

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      (c) The notice shall be in writing and shall conspicuously state the rights of the consumer

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upon default in substantially the following form:

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      The heading shall read: "Rights of Defaulting consumer under Rhode Island General

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Laws." The body of the notice shall read: "You may cure your default in (describe automobile

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lease or loan agreement in a manner enabling the consumer to identify it) by paying to (name and

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address of lessor or secured party) (amount due) before (date that is at least twenty-one (21) days

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after notice is delivered). If you pay this amount within the time allowed you are no longer in

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default and may continue with the automobile (lease or loan) agreement as though no default has

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occurred.

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      If you do not cure your default by the date stated above, the lessor or secured party may

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sue you to obtain a judgment for the amount of the debt and may take possession of the

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automobile.

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      If the lessor or secured party takes possession of the automobile, you may get it back by

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paying the full amount of your debt plus any reasonable expenses incurred by the lessor or

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secured party if you make the required payment within twenty (20) days after the lessor or

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secured party takes possession.

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      If (the secured party) sells the vehicle repossessed from the consumer for an amount

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exceeding the amount outstanding on the automobile (loan) agreement including reasonable

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expenses related to judicial action and or repossession, the excess funds shall be returned

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promptly to the defaulting consumer.

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      You have the right to cure a default only once in any twelve-month (12) period during

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the period of the automobile (lease or loan) agreement. If you default again within the next twelve

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(12) months in making your payments, we may exercise our rights without sending you another

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right to cure notice. If you have questions, telephone (name of lessor or secured party) at (phone

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number)."

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      (d) Within the period for cure stated in the notice under this section, the consumer may

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cure the default by tendering the amount of all unpaid sums due at the time of tender, including

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any unpaid delinquency or default charges, but without additional security deposit or prepayment

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of period payments not yet due. Cure restores the rights of the lessor or secured party and

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consumer under the automobile loan or lease agreement as if the default had not occurred.

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      (e) A consumer has the right to cure only once in any twelve-month (12) period during

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the period of the automobile lease or loan agreement.

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     (f) Any violation of this section shall be punishable by a penalty of up to five hundred

 

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dollars ($500). Such penalty may be imposed upon a lessor or secured party after the filing of a

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complaint by the consumer protection division of the department of attorney general with the

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motor vehicle dealers' license and hearing board and after a hearing thereon and a finding of a

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violation pursuant to the provisions of ยงยง 31-5-2.1 and 31-5-14, and any other applicable

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provisions of chapter 5 of title 31 entitled "Dealers', Manufacturers,' and Rental Licenses."

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     (g) Upon a finding of any violation of this section pursuant to subsection (f) of this

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section, the consumer shall have twenty (20) days to pay any amount due as stated in the original

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notice sent to the consumer pursuant to the provisions of subsection (c) of this section.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO COMMERCIAL LAW--GENERAL REGULATORY PROVISIONS -- THE

RHODE ISLAND AUTOMOBILE REPOSSESSION ACT

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     This act would provide that any lessor or secured party of an automobile that fails to

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provide proper notice of: (1) default; and (2) opportunity to cure said default to a lessee or

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purchaser of an automobile, shall be assessed a penalty of up to five hundred dollars ($500).

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Upon a finding of violation by the dealer's license hearing board, the lessee/purchaser would be

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provided an additional twenty (20) days to cure the default.

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     This act would take effect upon passage.

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