1.1                          A bill for an act 
  1.2             relating to commerce; regulating motor vehicle retail 
  1.3             installment sales; amending Minnesota Statutes 2002, 
  1.4             sections 168.66, subdivision 14; 168.71, subdivision 
  1.5             2; 168.75. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2002, section 168.66, 
  1.8   subdivision 14, is amended to read: 
  1.9      Subd. 14.  [CASH SALE PRICE.] "Cash sale price" means the 
  1.10  price at which the seller would in good faith sell to the buyer, 
  1.11  and the buyer would in good faith buy from the seller, the motor 
  1.12  vehicle which is the subject matter of the retail installment 
  1.13  contract, if such sale were a sale for cash, instead of a retail 
  1.14  installment sale.  The cash sale price may include any taxes, 
  1.15  charges for delivery, servicing, repairing or improving the 
  1.16  motor vehicle, including accessories and their installation, and 
  1.17  any other charges agreed upon between the parties.  The cash 
  1.18  price may not include a documentary fee or document 
  1.19  administration fee in excess of $25 $50 for services actually 
  1.20  rendered to, for, or on behalf of, the retail buyer in 
  1.21  preparing, handling, and processing documents relating to the 
  1.22  motor vehicle and the closing of the retail sale. 
  1.23     Sec. 2.  Minnesota Statutes 2002, section 168.71, 
  1.24  subdivision 2, is amended to read: 
  1.25     Subd. 2.  [CONTENTS.] The retail installment contract shall 
  2.1   contain the following items: 
  2.2      (1) the cash sale price of the motor vehicle which is the 
  2.3   subject matter of the retail installment contract; 
  2.4      (2) the total amount of the retail buyer's down payment, 
  2.5   whether made in money or goods, or partly in money or partly in 
  2.6   goods; 
  2.7      (3) the difference between clauses (1) and (2); 
  2.8      (4) the charge amount, if any, included in the transaction 
  2.9   but not included in clause (1) to pay the balance of an existing 
  2.10  purchase money motor vehicle lien which exceeds the value of the 
  2.11  trade-in amount, or to discharge an interest in an existing 
  2.12  motor vehicle lease, for any insurance and other benefits not 
  2.13  included in clause (1), specifying the types of coverage and, 
  2.14  taxes, fees, and charges that actually are or will be paid to 
  2.15  public officials or government agencies, including those for 
  2.16  perfecting, releasing, or satisfying a security interest if such 
  2.17  taxes, fees, or charges are not included in clause (1), and any 
  2.18  other amount to be financed that is related to the transaction 
  2.19  including, but not limited to, proceeds from a trade-in vehicle 
  2.20  that may be distributed to the retail buyer; 
  2.21     (5) principal balance, which is the sum of clauses (3) and 
  2.22  (4); 
  2.23     (6) the amount of the finance charge; 
  2.24     (7) the total of payments payable by the retail buyer to 
  2.25  the retail seller and the number of installment payments 
  2.26  required and the amount of each installment expressed in dollars 
  2.27  or percentages, and date of each payment necessary finally to 
  2.28  pay the total of payments which is the sum of clauses (5) and 
  2.29  (6). 
  2.30  Provided, however, that said clauses (1) to (7) inclusive need 
  2.31  not be stated in the terms, sequence, or order set forth above.  
  2.32  Provided further, that clauses (6) and (7) may be disclosed on 
  2.33  the assumption that all scheduled payments under the contract 
  2.34  will be made when due. 
  2.35  In lieu of the above clauses, the retail seller may give the 
  2.36  retail buyer disclosures which satisfy the requirements of the 
  3.1   Federal Truth-In-Lending Act in effect as of the time of the 
  3.2   contract, notwithstanding whether or not that act applies to the 
  3.3   transaction. 
  3.4      Sec. 3.  Minnesota Statutes 2002, section 168.75, is 
  3.5   amended to read: 
  3.6      168.75 [VEHICLE SALES FINANCE COMPANY VIOLATIONS; 
  3.7   REMEDIES.] 
  3.8      (a) Subdivision 1.  [CRIMINAL VIOLATIONS.] Any person 
  3.9   engaged in the business of a sales finance company in this state 
  3.10  without a license therefor as provided in sections 168.66 to 
  3.11  168.77 shall be guilty of a gross misdemeanor and punished by a 
  3.12  fine not exceeding $3,000, or by imprisonment for a period not 
  3.13  to exceed one year, or by both such fine and imprisonment in the 
  3.14  discretion of the court.  
  3.15     (b) In case of an intentional failure to comply with any 
  3.16  provision of sections 168.66 to 168.77, the buyer shall have a 
  3.17  right to recover from the person committing such violation, to 
  3.18  set off or counterclaim in any action by such person to enforce 
  3.19  such contract an amount as liquidated damages, the whole of the 
  3.20  contract due and payable, plus reasonable attorneys' fees.  
  3.21     (c) In case of a failure to comply with any provision of 
  3.22  sections 168.66 to 168.77, other than an intentional failure, 
  3.23  the buyer shall have a right to recover from the person 
  3.24  committing such violation, to set off or counterclaim in any 
  3.25  action by such person to enforce such contract an amount as 
  3.26  liquidated damages equal to three times the amount of any time 
  3.27  price differential charged in excess of the amount authorized by 
  3.28  sections 168.66 to 168.77 or $50, whichever is greater, plus 
  3.29  reasonable attorneys' fees.  
  3.30     Subd. 2.  [EXCESS CHARGES; RETAIL BUYER'S REMEDIES.] A 
  3.31  retail buyer is not obligated to pay a charge in excess of the 
  3.32  amounts allowed by sections 168.66 to 168.77 and has a right to 
  3.33  a refund of any excess charge paid.  A refund may not be made by 
  3.34  reducing the retail buyer's obligation by the amount of the 
  3.35  excess charge, unless the retail seller or assignee has notified 
  3.36  the retail buyer that the retail buyer may request a refund and 
  4.1   the retail buyer has not so requested within 30 days after 
  4.2   receiving the notice.  If a retail seller or assignee refuses to 
  4.3   make a refund of the excess charge within 30 days of the retail 
  4.4   buyer's written demand, the retail buyer shall also have the 
  4.5   right to recover a penalty in an amount determined by the court 
  4.6   but not less than $100 nor more than $1,000 together with 
  4.7   reasonable attorney fees as determined by the court. 
  4.8      Subd. 3.  [DISCLOSURE VIOLATIONS; RETAIL BUYER'S REMEDIES.] 
  4.9   (a) If a retail seller or assignee fails to comply with any 
  4.10  provision of sections 168.66 to 168.77 other than a section 
  4.11  establishing maximum charges, the retail buyer has a right to 
  4.12  recover any actual damages sustained as a result of the 
  4.13  violation and, in an action other than a class action, a penalty 
  4.14  in an amount determined by the court but not less than $100 nor 
  4.15  more than $1,000 together with reasonable attorney fees as 
  4.16  determined by the court. 
  4.17     (b) In the case of a class action brought pursuant to this 
  4.18  paragraph each retail buyer who is a member of the class has a 
  4.19  right to recover any actual damages sustained as a result of the 
  4.20  failure to comply.  The court may also award each class member a 
  4.21  penalty, except that as to each member of the class the $100 
  4.22  minimum penalty does not apply and the total penalty award in 
  4.23  any class action or series of class actions arising out of the 
  4.24  same failure to comply must not be more than the lesser of 
  4.25  $500,000 or one percent of the net worth of the person 
  4.26  committing the violation.  In determining whether to award a 
  4.27  penalty, and the amount of the penalty, the court shall 
  4.28  consider, among other relevant factors, the amount of any actual 
  4.29  damages awarded, the frequency and persistence of the failure to 
  4.30  comply, the resources of the person committing the violation, 
  4.31  the number of persons adversely affected, and the extent to 
  4.32  which the conduct was intentional. 
  4.33     Subd. 4.  [COMPLIANCE WITH FEDERAL LAW.] Notwithstanding 
  4.34  the provisions of subdivision 3, a retail buyer has no right of 
  4.35  recovery if the retail seller complied with the provisions of 
  4.36  the federal Truth-In-Lending Act, United States Code, title 15, 
  5.1   section 1601, et seq., in effect as of the time of the 
  5.2   contract.  A retail buyer also has no right to recover a penalty 
  5.3   under subdivision 3 if the failure to comply would also violate 
  5.4   the federal Truth-In-Lending Act in effect as of the time of the 
  5.5   contract and the Truth-In-Lending Act would not impose an award 
  5.6   of statutory damages for such violation. 
  5.7      Subd. 5.  [CORRECTION OF ERRORS.] A retail seller or 
  5.8   assignee may not be held liable for a penalty under subdivision 
  5.9   2 if within 45 days after discovering an error, and before 
  5.10  either the institution of an action by the retail buyer or 
  5.11  receipt of written notice of the error from the retail buyer, 
  5.12  the retail seller or assignee provides written notice of the 
  5.13  error to the retail buyer and corrects the error.  If the error 
  5.14  consists of an excess charge, correction may be made by 
  5.15  adjustment or refund.  If the violation consists of an improper 
  5.16  disclosure or improper retail installment contract, providing 
  5.17  the retail buyer a corrected copy of the writing is sufficient 
  5.18  notification and correction. 
  5.19     Subd. 6.  [UNINTENTIONAL VIOLATIONS; BONA FIDE ERRORS.] A 
  5.20  retail seller or assignee may not be held liable in an action 
  5.21  brought under this section if the retail seller or assignee 
  5.22  shows by a preponderance of evidence that the violation was not 
  5.23  intentional and resulted from a bona fide error notwithstanding 
  5.24  the maintenance of procedures reasonably adopted to avoid the 
  5.25  error. 
  5.26     Subd. 7.  [MULTIPLE OBLIGORS.] When there are multiple 
  5.27  obligors under a retail installment contract, there must be no 
  5.28  more than one recovery under this section. 
  5.29     Subd. 8.  [LIABILITY OF ASSIGNEES.] Unless the assignee is 
  5.30  the person committing the violation of sections 168.66 to 
  5.31  168.77, an action for a violation of sections 168.66 to 168.77 
  5.32  which may be brought against a retail seller may be maintained 
  5.33  against an assignee of the retail seller only if the violation 
  5.34  for which the action is brought is apparent on the face of the 
  5.35  retail installment contract, except where the assignment is 
  5.36  involuntary. 
  6.1      Subd. 9.  [RECOVERY FOR MULTIPLE VIOLATIONS.] Multiple 
  6.2   violations in connection with a single retail installment 
  6.3   contract entitle the retail buyer to a single penalty under this 
  6.4   section.  A retail seller or assignee may not be held liable for 
  6.5   a penalty under subdivision 2 if the failure to comply also 
  6.6   violates the federal Truth-In-Lending Act and the retail buyer 
  6.7   has recovered statutory damages under that act. 
  6.8      Subd. 10.  [OFFSET FROM AMOUNT OWED TO CREDITOR OR 
  6.9   ASSIGNEE; RIGHTS OF DEFAULTING RETAIL BUYER.] A violation of 
  6.10  sections 168.66 to 168.77 does not impair rights on a debt.  A 
  6.11  retail buyer may not offset any amount for which a retail seller 
  6.12  or assignee is potentially liable to the person against any 
  6.13  amount owed by the person under a retail installment contract, 
  6.14  unless the amount of the retail seller or assignee's liability 
  6.15  under this section has been determined by a final judgment of a 
  6.16  court of competent jurisdiction in an action of which the person 
  6.17  was a party. 
  6.18     Subd. 11.  [LIMITATION OF ACTIONS.] Any action under this 
  6.19  section may be brought within one year from the date of the 
  6.20  occurrence of the violation.  This subdivision does not bar a 
  6.21  retail buyer from asserting a violation of sections 168.66 to 
  6.22  168.77 in an action to collect the debt which was brought more 
  6.23  than one year from the date of the occurrence of the violation 
  6.24  as a matter of defense by recoupment or setoff in the action. 
  6.25     Subd. 12.  [ATTORNEY FEES; RETAIL SELLER AND ASSIGNEE 
  6.26  REMEDIES.] The court may award attorney fees and costs to the 
  6.27  retail seller or assignee if the party complaining of a 
  6.28  violation of sections 168.66 to 168.77 has brought an action 
  6.29  knowing it to be groundless. 
  6.30     Sec. 3.  [EFFECTIVE DATE.] 
  6.31     Sections 1 and 2 are effective the day following final 
  6.32  enactment.  Section 3 is effective the day following final 
  6.33  enactment and applies to all actions commenced on or after that 
  6.34  date.