Idaho Finance Charges
Title 28. Commercial Transactions
Chapter 42. Finance Charges and Related Provisions
PART 1. GENERAL PROVISIONS
PART 2. MAXIMUM FINANCE CHARGES
PART 3. OTHER CHANGES AND MODIFICATIONS
PART 4. MONEY OF ACCOUNT AND INTEREST
PART 1. GENERAL PROVISIONS
This chapter shall be known and may be cited as the Idaho Credit Code -- Finance Charges and Related Provisions.
PART 2. MAXIMUM FINANCE CHARGES
(1) With respect to a loan or credit sale, the rate of finance charge shall be that which is agreed upon between the parties to the transaction. In addition to the finance charge permitted herein, a creditor may contract for and receive any other charge, except to the extent expressly prohibited or limited by this act.
(2) This section does not limit or restrict the manner of calculating the finance charge, whether by way of add-on, discount, single annual percentage rate, or otherwise. If the credit transaction is precomputed:
(a) The finance charge may be calculated on the assumption that all scheduled payments will be made when due; and
(b) The effect of prepayment is governed by the provisions on rebate upon prepayment, section 28-42-307, Idaho Code.
(3) Except as provided in subsection (4) of this section, the term of a credit transaction for purposes of this section commences on the day the credit transaction is made. The administrator may adopt rules with respect to treating as regular minor irregularities in amount or time.
(4) With respect to an insurance premium loan, the term of the loan commences on the earliest inception date of a policy or contract of insurance, payment of the premium on which is financed by the loan.
PART 3. OTHER CHANGES AND MODIFICATIONS
(1) With respect to a precomputed regulated consumer credit transaction, the parties may contract for a delinquency charge on any installment not paid in full within ten (10) days after its due date, as originally scheduled or as deferred, in an amount which is not more than five percent (5%) of the unpaid amount of the installment, or twelve dollars and fifty cents ($12.50), whichever is greater.
(2) With respect to a regulated consumer loan secured by a security interest in real property which is used or expected to be used as the residence of the debtor which is not a precomputed regulated consumer loan, the parties may contract for a delinquency charge on any installment not paid in full within fifteen (15) days after its scheduled due date in an amount not exceeding five percent (5%) of the unpaid amount of the installment, or fifteen dollars ($15.00), whichever is greater.
(3) With respect to all other regulated consumer credit transactions, whether secured or unsecured, and whether such credit transactions are classified as open-end credit or closed-end credit, the parties may contract for a delinquency charge on any installment or scheduled payment not paid in full within ten (10) days after its scheduled due date in an amount not exceeding five percent (5%) of the unpaid amount of the installment or scheduled payment, or fifteen dollars ($15.00), whichever is greater.
(4) A delinquency charge under subsection (1), subsection (2) or subsection (3) of this section may be collected only once on an installment or scheduled payment, however long it remains in default. No delinquency charge may be collected if the installment or scheduled payment has been deferred and a deferral charge, section 28-42-302, Idaho Code, has been paid or incurred. A delinquency charge may be collected at the time it accrues or at any time thereafter.
(5) No delinquency charge may be collected on an installment or payment which is paid in full within ten (10) days after its scheduled due date even though an earlier maturing installment or scheduled payment or a delinquency charge on an earlier installment or scheduled payment may not have been paid in full. For purposes of this subsection, payments are applied first to current installments or scheduled payments and then to delinquent installments or scheduled payments.
(6) If two (2) installments or parts thereof of a precomputed regulated consumer credit transaction are in default for ten (10) days or more, the creditor may elect to convert the credit transaction from a precomputed regulated consumer credit transaction to one in which the finance charge is based on unpaid balances. In this event, he shall make a rebate pursuant to the provisions on rebate upon prepayment, section 28-42-307, Idaho Code, as of the maturity date of the first delinquent installment, and thereafter may make a finance charge as authorized by the provisions on finance charge for regulated consumer credit transactions. The amount of the rebate shall not be reduced by the amount of any permitted minimum charge, section 28-42-307, Idaho Code.
(1) With respect to a precomputed regulated consumer credit transaction, refinancing, or consolidation, the parties before or after default may agree in writing to a deferral of all or part of one or more unpaid installments, and the creditor may make and collect a charge not exceeding the rate previously stated to the debtor applied to the amount or amounts deferred for the period of deferral calculated without regard to differences in the lengths of months, but proportionally for a part of a month, counting each day as 1/30th of a month. A deferral charge may be collected at the time it is assessed or at any time thereafter.
(2) The parties may agree in writing at the time of a precomputed regulated consumer credit transaction, refinancing, or consolidation that if an installment is not paid within ten (10) days after its due date, the creditor may unilaterally grant a deferral and make charges as provided in this section. No deferral charge may be made for a period after the date that the creditor elects to accelerate the maturity of the agreement.
(3) A delinquency charge made by the creditor on an installment may not be retained if a deferral charge is made pursuant to this section with respect to the period of delinquency.
With respect to a regulated consumer credit transaction, the creditor may, by agreement with the debtor, refinance the unpaid balance and may contract for and receive a finance charge based on the amount financed resulting from the refinancing. The amount financed resulting from the refinancing comprises, if the transaction was not precomputed, the total of the unpaid balance and accrued charges on the date of refinancing, or, if the transaction was precomputed, the amount which the borrower or buyer would have been required to pay upon prepayment pursuant to the provisions on rebate upon prepayment, section 28-42-307, Idaho Code, on the date of refinancing, except that for the purpose of computing this amount, no minimum charge shall be allowed.
If a debtor owes an unpaid balance to a creditor with respect to a regulated consumer loan or regulated consumer credit sale, or a refinancing or consolidation thereof, and becomes obligated on another regulated consumer loan or regulated consumer credit sale, or a refinancing or consolidation thereof, with the same lender or seller, the parties may agree to a consolidation resulting in a single schedule of payments pursuant to either of the following subsections:
(1) The parties may agree to refinance the unpaid balance with respect to the previous loan or sale pursuant to the provisions on refinancing, section 28-42-303, Idaho Code, and to consolidate the amount financed resulting from the refinancing by adding it to the amount financed with respect to the subsequent loan or sale. The lender or seller may contract for and receive a finance charge based on the aggregate amount financed resulting from the consolidation.
(2) The parties may agree to consolidate the unpaid balance of a regulated consumer loan or regulated consumer credit sale with the unpaid balance of another regulated consumer loan or regulated consumer credit sale. The parties may agree in writing to refinance the previous unpaid balance pursuant to the provisions on refinancing, section 28-42-303, Idaho Code, and to consolidate the amount financed resulting from the refinancing or the principal resulting from the refinancing by adding to it the amount financed or the principal with respect to the subsequent loan or sale; the aggregate amount resulting from the consolidation shall be deemed principal and the creditor may contract for and receive a finance charge based upon the principal.
The parties may agree at or within ten (10) days before the time of conversion to add the unpaid balance of a regulated consumer credit transaction not made pursuant to open-end credit to the debtor's open-end credit account with the creditor. The unpaid balance so added is an amount equal to the amount financed, determined according to the provision on finance charge on refinancing, section 28-42-303, Idaho Code.
(1) Subject to the provisions on rebate upon prepayment, section 28-42-307, Idaho Code, and subject to the provisions of subsection (2) of this section, the debtor may prepay in full the unpaid balance of a regulated consumer credit transaction at any time without penalty.
(2) With respect to a regulated consumer credit transaction which is primarily secured by a mortgage or deed of trust on real property, the parties may agree upon a prepayment charge to be paid by the debtor to the creditor if the debt is repaid in full and prior to its due date, during the first three (3) years of the contract, which prepayment charge shall not exceed the following:
(a) For closed-end loans, the prepayment charge may not exceed an amount equal to six (6) months interest calculated on the average balance for the prior six (6) months at the rate of interest designated in the contract. If the prepayment occurs prior to the expiration of six (6) months from the date of the contract, the prepayment charge may be calculated in the same manner, except the number of months shall be the number of months the loan has existed;
(b) For open-end loans, the amount of the prepayment charge shall not exceed an amount equal to six (6) months finance charge at the annual percentage rate in effect at the time of prepayment, calculated on the average of the average daily balances on the account for the last six (6) billing periods prior to prepayment. If the account has been open for less than six (6) billing periods, the prepayment charge shall be calculated in the same manner, except the number of billing periods shall be the number of billing periods the account has been open.
(3) No prepayment charge may be charged or collected if the loan is refinanced or consolidated with the same lender.
(4) Disclosure of any prepayment charge authorized by this section shall be made by the creditor to the debtor in such manner and form as may be approved by the director.
(1) Except as provided in subsection (2) of this section, upon prepayment in full of the unpaid balance of a
precomputed regulated consumer loan or regulated consumer credit sale, refinancing, or consolidation, an amount not less than the unearned portion of the finance charge calculated according to this section shall be rebated to the debtor. If the rebate otherwise required is less than one dollar ($1.00), no rebate need be made.
(2) Upon prepayment in full of a regulated consumer loan or regulated consumer credit sale, other than one pursuant to open-end credit, a refinancing, or consolidation, whether or not precomputed, the creditor may collect or retain a minimum charge within the limits stated in this subsection if the finance charge earned at the time of prepayment is less than any minimum charge contracted for. The minimum charge may not exceed the amount of finance charge contracted for, or five dollars ($5.00) in a transaction which had a principal of seventy-five dollars ($75.00) or less, or seven dollars and fifty cents ($7.50) in a transaction which had a principal of more than seventy-five dollars ($75.00).
(3) (a) Except as otherwise provided in this section, the unearned finance charge shall be an amount which is a proportion of the precomputed interest at least as great as the sum of the remaining monthly balances of principal and interest combined scheduled to follow the installment date nearest the date of prepayment bears to the sum of all the monthly balances of principal and interest combined originally scheduled by the contract. If such prepayment occurs before the first installment date, an additional refund of 1/30th of the portion of precomputed interest which should be retained in the first installment period shall be made for each day from the date of prepayment in full to the first scheduled installment date. Any prepayment made on or before the 15th day following an installment date shall be deemed to have been made on the preceding installment date.
(b) With respect to a precomputed transaction entered into on or after July 1, 1978, and payable according to its original terms in more than sixty-one (61) installments, the unearned portion of the finance charge is, at the option of the creditor, either:
1. That portion which is applicable to all fully unexpired computational periods as originally scheduled, or, if deferred, as deferred, which follow the date of prepayment. For this purpose, the applicable charge is the total of that which would have been made for each such period, had the regulated consumer loan or regulated consumer credit sale not been precomputed, by applying to unpaid balances of principal, according to the actuarial method, the rate of finance charge previously stated to the debtor based upon the assumption that all payments were made as originally scheduled, or if deferred, as deferred. The creditor, at his option, may round the stated rate to the nearest one-quarter (1/4) of one percent (1%) if such procedure is not consistently used to obtain a greater yield than would otherwise be permitted; or
2. The total finance charge minus the earned finance charge. The earned finance charge shall be determined by applying the rate previously stated to the debtor according to the actuarial method to the actual unpaid balances for the actual time the balances were unpaid up to the date of prepayment. If a delinquency or deferral charge was collected, it shall be treated as a payment.
(4) In this section:
(a) "Periodic balance" means the amount scheduled to be outstanding on the last day of a computational period before deducting the payment, if any, scheduled to be made on that date;
(b) "Computational period" means one (1) month if one-half (1/2) or more of the intervals between scheduled payments under the agreement is one (1) month or more, and otherwise means one (1) week;
(c) The "interval" to the due date of the first scheduled installment or the final scheduled payment date is measured from the date of a loan or credit sale, refinancing, or consolidation, and includes either the first or last day of the interval;
(d) If the interval to the due date of the first scheduled installment does not exceed one (1) month by more than fifteen (15) days when the computational period is one (1) month, or eleven (11) days when the computational period is one (1) week, the interval shall be considered as one (1) computational period.
(5) This subsection applies only if the schedule of payments is not regular.
(a) If the computational period is one (1) month and:
1. If the number of days in the interval to the due date of the first scheduled installment is less than one (1) month by more than five (5) days, or more than one (1) month by more than five (5) days but not more than fifteen (15) days, the unearned finance charge shall be increased by an adjustment for each day by which the interval is less than one (1) month and, at the option of the creditor, may be reduced by an adjustment for each day by which the interval is more than one (1) month; the adjustment for each day shall be 1/30th of that part of the finance charge earned in the computational period prior to the due date of the first scheduled installment assuming that period to be one (1) month; and
2. If the interval to the final scheduled payment date is a number of computational periods plus an additional number of days less than a full month, the additional number of days shall be considered a computational period only if sixteen (16) days or more. This subparagraph applies whether or not subsection 5(a)1. applies.
(b) Notwithstanding paragraph (a), if the computational period is one (1) month, the number of days in the interval to the due date of the first installment exceeds one (1) month by not more than fifteen (15) days, and the schedule of payments is otherwise regular, the creditor at his option may exclude the extra days and the charge for the extra days in computing the unearned finance charge; but if he does so and a rebate is required before the due date of the first scheduled installment, he shall compute the earned charge for each elapsed day as 1/30th of the amount the earned charge would have been if the first interval had been one (1) month.
(c) If the computational period is one (1) week and:
1. If the number of days in the interval to the due date of the first scheduled installment is less than five (5) days, or more than nine (9) days but not more than eleven (11) days, the unearned finance charge shall be increased by an adjustment for each day by which the interval is less than seven (7) days and, at the option of the creditor, may be reduced by an adjustment for each day by which the interval is more than seven (7) days; the adjustment for each day shall be 1/7th of that part of the finance charge earned in the computational period prior to the due date of the first scheduled installment assuming that period to be one (1) week; and
2. If the interval to the final scheduled payment date is a number of computational periods plus an additional number of days less than a full week, the additional number of days shall be considered a computational period only if four (4) days or more. This subparagraph applies whether or not subsection 5(c)1. applies.
(6) If a deferral, section 28-42-302, Idaho Code, has been agreed to, the unearned portion of the finance charge shall be computed with regard to the deferral. If the deferral charge earned is less than the deferral charge paid, the difference shall be added to the unearned portion of the finance charge. If any part of a deferral charge has been earned but has not been paid, that part shall be subtracted from the unearned portion of the finance charge or shall be added to the unpaid balance.
(7) This section does not preclude the collection or retention by the creditor of delinquency charges, section 28-42-301, Idaho Code.
(8) If the maturity is accelerated for any reason and judgment is obtained, the debtor is entitled to the same rebate as if the payment had been made on the date judgment is entered.
(9) Upon prepayment in full of a regulated consumer loan or regulated consumer credit sale by the proceeds of credit insurance, section 28-44-103, Idaho Code, the debtor or his estate is entitled to the same rebate as though the debtor had prepaid the agreement on the date the proceeds of the insurance are paid to the creditor, but no later than ten (10) business days after satisfactory proof of loss is furnished to the creditor.
With respect to a regulated credit transaction, a dishonored check fee in the amount allowed as a set collection fee under section 28-22-105, Idaho Code, may be charged and collected by a creditor, for the return by a depository institution of a dishonored check, negotiable order of withdrawal, or share draft, offered by a debtor in full or partial repayment of a regulated credit transaction, and, provided that the fee is contracted for between the parties.
PART 4. MONEY OF ACCOUNT AND INTEREST
The money of account in this state is the dollar, cent and mill, and all public accounts and the proceedings of all courts in relation to money must be kept and expressed in money of the above denomination.
The above provisions do not in any manner affect any demand expressed in money of another denomination, but such demand in any suit or proceeding affecting the same must be reduced to the above denominations.
In all judgments rendered by any court for any debt, damages or costs, and in all executions issued thereon, the amount must be computed, as near as may be, in dollars and cents, rejecting small fractions; and no judgment or other proceeding is erroneous for such omission.
Parties may agree in writing for the payment of compound interest.
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