Purpose of the Bill

The purpose of this bill is to update and clarify the language used in Minnesota's laws regarding retail installment contracts. Specifically, it aims to remove outdated provisions and streamline the existing statutes.

Main Provisions

• Written Agreements: All retail installment contracts must be in writing, include all terms agreed upon by both parties, and be signed by the retail buyer and seller. A copy of this signed contract must be provided to the buyer at the time of signing and again within seven days of delivering the vehicle purchased under the contract.

• Obsolete References: The bill removes obsolete references, such as provisions for contracts made before August 1, 1996, which are no longer relevant.

• Judgment and Attorney Provisions: It clarifies that no retail installment contract can legally include provisions for confession of judgment or powers of attorney related to that.

• Charges and Fees: The bill allows for specific charges if a retail installment contract payment is delinquent. If specified in the contract, the holder can collect a delinquency charge of up to five percent of the installment amount. Additionally, in cases referred to a non-salaried attorney for collection, attorneys' fees can go up to 15% of the amount due, plus court costs.

• Assignment Notification: It includes provisions for notifying the retail buyer about the assignment or reassignment of a contract, which ensures the payments made to the last known holder are binding on subsequent holders.

• Payment Statements: Upon request, the holder of the contract must provide the retail buyer with a written statement detailing payment dates, amounts, and the total unpaid balance.

Significant Changes

The bill removes outdated language and references that pertain to obsolete contract provisions, making the law more straightforward and aligned with current practices.

Relevant Terms

retail installment contract, confession of judgment, power of attorney, delinquency charge, attorneys' fees, assignment of contract, installment payments, obsolete provisions.