(1) In this section and in the provisions on rebate upon prepayment (Section 37-3-210) the following defined terms apply with respect to a precomputed consumer loan:
(a) "Computational period" means (i) the interval between scheduled due dates of installments under the transaction if the intervals are substantially equal or, (ii) if the intervals are not substantially equal, one month if the smallest interval between the scheduled due dates of installments under the transaction is one month or more, and, otherwise, one week.
(b) "Deferral" means a postponement of the scheduled due date of an installment as originally scheduled or as previously deferred.
(c) "Deferral period" means a period in which no installment is scheduled to be paid by reason of a deferral.
(d) The "interval" between specified dates means the interval between them including one or the other but not both of them; if the interval between the date of a transaction and the due date of the first scheduled installment does not exceed one month by more than 15 days when the computational period is one month, or does not exceed 11 days when the computational period is one week, the interval may be considered by the creditor as one computational period.
(e) "Periodic balance" means the amount scheduled to be outstanding on the last day of a computational period before deducting the installment, if any, scheduled to be paid on that day.
(f) "Standard deferral" means a deferral with respect to a transaction made as of the due date of an installment as scheduled before the deferral by which the due dates of that installment and all subsequent installments as scheduled before the deferral are deferred for a period equal to the deferral period. A standard deferral may be for one or more full computational periods or a portion of one computational period or a combination of any of these.
(g) "Sum of the balances method," also known as the "Rule of 78," means a method employed with respect to a transaction to determine the portion of the loan finance charge attributable to a period of time before the scheduled due date of the final installment of the transaction. The amount so attributable is determined by multiplying the finance charge by a fraction the numerator of which is the sum of the periodic balances included within the period and the denominator of which is the sum of all periodic balances under the transaction. According to the sum of the balances method the portion of the finance charge attributable to a specified computational period is the difference between the portions of the finance charge attributable to the periods of time including and excluding, respectively, the computational period, both determined according to the sum of the balances method.
(h) "Transaction" means a precomputed consumer loan unless the context otherwise requires.
(2) Before or after default in payment of a scheduled installment of a transaction, the parties to the transaction may agree in writing to a deferral of all or part of one or more unpaid installments and the creditor may make at the time of deferral and receive at that time or at any time thereafter a deferral charge not exceeding that provided in this section.
(3) A standard deferral may be made with respect to a transaction as of the due date, as originally scheduled or as deferred pursuant to a standard deferral, of an installment with respect to which no delinquency charge (Section 37-3-203) has been made or, if made, is deducted from the deferral charge computed according to this subsection. The deferral charge for a standard deferral may equal but not exceed the portion of the loan finance charge attributable to the computational period immediately preceding the due date of the earliest maturing installment deferred as determined according to the sum of the balances method multiplied by the whole or fractional number of computational periods in the deferral period, counting each day as 1/30 th of a month without regard to differences in lengths of months when the computational period is one month or as 1/7 th of a week when the computational period is one week. A deferral charge computed according to this subsection is earned pro rata during the deferral period and is fully earned on the last day of the deferral period.
(4) With respect to a transaction as to which a creditor elects not to make and does not make a standard deferral or a deferral charge for a standard deferral, a deferral charge computed according to this subsection may be made as of the due date, as scheduled originally or as deferred pursuant to either subsection (3) or this subsection, of an installment with respect to which no delinquency charge (Section 37-3-203) has been made or, if made, is deducted from the deferral charge computed according to this subsection. A deferral charge pursuant to this subsection may equal but not exceed the rate of loan finance charge required to be disclosed to the debtor pursuant to law applied to each amount deferred for the period for which it is deferred computed without regard to differences in lengths of months, but proportionately for a part of a month, counting each day as 1/30 th of a month or as 1/7 th of a week. A deferral charge computed according to this subsection is earned pro rata with respect to each amount deferred during the period for which it is deferred.
(5) In addition to the deferral charge permitted by this section, a creditor may make and receive appropriate additional charges (Section 37-3-202), and any amount of these charges which is not paid may be added to the deferral charge computed according to subsection (3) or to the amount deferred for the purpose of computing the deferral charge computed according to subsection (4).
(6) The parties may agree in writing at the time of a transaction that, if an installment is not paid within ten days after its due date, the creditor may unilaterally grant a deferral and make charges as provided in this section. A deferral charge may not be made for a period after the date that the creditor elects to accelerate the maturity of the transaction.
HISTORY: 1976 Act No. 686 Section 1.