RSA 361-A:19 · Balloon Payment Loans

361-A:19 Balloon Payment Loans. –

Copy link

I.

Notwithstanding the provisions of RSA 361-A:17, VII(c), a retail installment contract for a new motor vehicle may provide for a balloon payment.

Copy link

II.

(a) Balloon contracts shall contain a provision requiring the lienholder to accept return of the motor vehicle that secures the balloon loan, without penalty or additional cost, payment, or expense, to the retail buyer in satisfaction of the balloon payment due under the balloon contract.

Copy link

(b)

Collection of any amounts due under the terms of the balloon contract that have accrued during the period of the contract that precedes the balloon payment due date shall not violate the provision contained in subparagraph (a).

Copy link

(c)

If the balloon contract so provides, a disposition fee may be charged to the retail buyer, provided such fee does not exceed $250, or such greater or lesser amount announced by the commissioner to annually adjust the disposition fee based upon changes in the consumer price index for all urban consumers, all items category, of consumer prices compiled and reported by the U.S. Department of Labor, Bureau of Labor Statistics.

Copy link

(d)

Any cost to the retail buyer associated with the return of a motor vehicle under a balloon contract pursuant to this paragraph shall not exceed the total of the disposition fee, excess mileage fee, excess wear and tear fee, if any, and any accrued amounts due in accordance with subparagraph (b).

Copy link

III.

The commissioner is authorized to adopt rules, pursuant to RSA 541-A, to implement the purpose and requirements of this section, including, but not limited to, balloon contract disclosures and balloon payment refinancing disclosures. Any disclosures required by rules adopted by the commissioner pursuant to this paragraph shall be in addition to disclosures required by the federal Consumer Credit Protection Act, as amended, 15 U.S.C. 1601 et seq.

Copy link

IV.

Balloon retail installment contracts shall contain a provision that affords retail buyers the option to refinance the balloon payment at an annual percentage rate no greater than the annual percentage rate under the balloon contract. Creditors under this paragraph shall be entitled to deny a refinance request if the retail buyer would not have been eligible for the balloon contract, based on credit history or other credit underwriting standards established by written policy of the creditor. The creditor's credit underwriting standards for refinancing a balloon payment shall be substantially identical to the underwriting standards used by the creditor when the creditor issued a commitment to the borrower to fund the original balloon retail installment contract. Refinancing of balloon payments shall be subject to the requirements of this chapter. The contract evidencing such refinancing shall be deemed a retail installment contract. An estimate of the monthly payment amount for a refinanced balloon payment shall be provided in writing by the creditor to the retail buyer upon the buyer's request. Applications for balloon contracts shall include a notice in at least 10-point bold type that the balloon contract applicant is entitled, upon request, to receive a written estimate of the monthly payment amount for a balloon payment refinancing in accordance with the creditor's then existing refinance programs prior to entering into a balloon contract.

Copy link

V.

A sales finance company may charge an excess mileage fee associated with a motor vehicle that is returned to the lienholder pursuant to paragraph II of this section, provided that no such fee shall be charged when the odometer of the motor vehicle securing the balloon contract indicates the vehicle was driven less than the maximum mileage limit set forth in the balloon contract. Any excess mileage charges payable by the retail buyer shall be clearly set forth in the balloon contract.

Copy link

VI.

A lienholder may assess a fee for excess wear and tear associated with a motor vehicle returned pursuant to paragraph II of this section. Any charges for excess wear and tear payable by the retail buyer shall be clearly set forth in the balloon contract. Source. 2024, 330:1, eff. July 1, 2024.

Copy link