Purpose

The bill aims to update and simplify consumer protection laws concerning retail installment contracts in Minnesota by removing obsolete language and clarifying the terms and conditions for such contracts.

Main Provisions

• Written Contracts Requirement: Every retail installment contract must be in writing and must include all agreements between the buyer and seller. It must be signed by both parties, and a copy of the contract signed by the buyer must be given to them at the time of signing.
• Contract Delivery Timeframe: The buyer should receive a copy of the contract, signed by both parties, within seven days of vehicle delivery.
• Confession of Judgment: Any clause in a contract that allows for confession of judgment or a power of attorney is deemed invalid.
• Delinquency Charges: Contracts may include a provision for delinquency and collection charges if an installment is late by ten days or more. The charge cannot exceed 5% of the installment or $5, whichever is greater.
• Attorney Fees: Up to 15% of the unpaid contract amount can be charged as attorney fees for collections if the matter is referred to an external attorney.
• Assignment of Contract: Buyers should be notified of any assignment of their contract; payments made to the last known holder are binding on all future assignees.
• Payment Records: Upon request, the contract holder must provide a written statement to the buyer detailing payment dates and the remaining unpaid amount. Buyers must receive a receipt for cash payments.

Significant Changes

• The bill removes outdated language from the statutes concerning contracts executed before August 1, 1996, which is no longer relevant.

Relevant Terms

retail installment contract, confession of judgment, delinquency charge, assignment of contract, attorney fees, consumer protection, obsolete language.