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Subchapter 001: INTEREST GENERALLY
§ 41. Repealed. 1979, No. 173 (Adj. Sess.), § 19, eff. April 30, 1980.
§ 41a. Legal rates
(a) Except as specifically provided by law, the rate of interest or the sum allowed for
forbearance or use of money shall be 12 percent per annum computed by the actuarial
method.
(b) The rate of interest or the sum allowed:
(1) For single payment loans by lenders regulated by Title 8 and federal savings and loan
associations, the finance charge shall not exceed 18 percent per annum.
(2) For a retail installment contract the finance charge shall not exceed 18 percent per
annum of the first $500.00 of the balance subject to finance charges and 15 percent
per annum of the balance subject to finance charges in excess of $500.00.
(3) For a bank credit card account or revolving line of credit the rate shall be the rate
agreed upon by the lender and the borrower. However, except for cash advances, no
finance charge may be imposed for any monthly billing period in which there is no
previous balance, or during which the sum of the payments received and other credits
issued are equal to or exceed the amount of the previous balance.
(4) For a loan or extension of credit secured by motor vehicles, mobile homes, travel
trailers, aircraft, watercraft, and farm equipment, of the current and previous model
year, the interest rate shall not exceed 18 percent per annum. For a loan or extension
of credit secured by such collateral older than the current or previous model year,
the interest rate shall not exceed 20 percent per annum.
(5) For an installment loan not otherwise limited by subdivisions (1)-(4) of this subsection,
the interest rate shall not exceed 24 percent per annum on the first $1,000.00 of
the aggregate balance outstanding; and shall not exceed 12 percent per annum of the
aggregate balance outstanding in excess of $1,000.00; or 18 percent annual percentage
rate on the aggregate balance outstanding, whichever is higher.
(6) A lender may charge interest rates on loans secured by deposits in excess of the rates
otherwise allowed in this section only to the extent that such higher rate is required
to comply with Federal Deposit Insurance Corporation, Federal Home Loan Bank, and
Federal Reserve Board regulations.
(7) For a loan or extension of credit secured by a subordinate lien against real estate,
the interest rate shall not exceed 18 percent per annum. All such lien documents
shall include a power of sale pursuant to 12 V.S.A. chapter 172, subchapter 4.
(8) For a loan or extension of credit secured by a first lien against real estate, the
interest rate may be the same as may be charged by any financial institution or seller
of residential real estate under the provisions of the federal Depository Institutions
Deregulation and Monetary Control Act of 1980, as amended.
(9) For a retail charge agreement the finance charge shall be the rate or rates agreed
upon by the parties to such charge agreement but not to exceed 21 percent per annum.
However, no finance charge may be imposed for any monthly billing period in which
there is no previous balance, or during which the sum of the payments received and
other credits issued are equal to or exceed the amount of the previous balance. The
term “billing period” shall mean the time interval between periodic statement dates.
A billing period shall be considered a month or monthly if the last day of each billing
period is on the same day of each month or does not vary by more than four days therefrom.
For a retail charge agreement, the periodic billing can be no less than 1/48th of
the balance as of the last advance.
(c) For the purpose of this section, the term “lender” shall include natural persons,
partnerships, associations, and corporations or other entities whether organized under
the laws of Vermont, of the United States, or of any other state or country who make
or who have made a loan or loans subject to the laws of Vermont.
(d) Actuarial method
(1) Unless otherwise specifically provided by law, all interest on closed-end accounts,
loans, or extensions of credit charged under this or any section shall be computed
only on the outstanding balance subject to finance charge by the actuarial method
of calculation. On all closed-end accounts, loans, or extensions of credit, interest
shall be based on a 365-day year and on a 366-day year during a leap year, except
in the case of loans secured by residential properties or to finance income producing
business or activity where a 30-day month 360-day year interest calculation may be
used. Interest shall not be paid, deducted, or added to principal in advance, except
that the advance collection of interest for a period not to exceed 30 days shall be
permitted upon origination of a mortgage loan.
(2) “Actuarial method” means the method of allocating payments made on a debt between
the amount financed and the finance or other charges pursuant to which a payment is
applied first to the accumulated finance or other charges and any remainder is subtracted
from, or any deficiency is added to, the unpaid balance of the amount financed. The
Commissioner may adopt rules not inconsistent with the Federal Truth in Lending Act
further defining the term and prescribing its application. (Added 1979, No. 173 (Adj. Sess.), § 12, eff. April 30, 1980; amended 1981, No. 89, § 7, eff. May 13, 1981; 1981, No. 126 (Adj. Sess.), eff. March 9, 1982; 1983, No. 37; 1983, No. 214 (Adj. Sess.), §§ 1, 2; 1985, No. 36, §§ 1, 2; 1987, No. 32, § 2; 1995, No. 9, § 1; 1995, No. 162 (Adj. Sess.), § 41, eff. Jan. 1, 1997.)
§ 41b. Rent-to-own agreements; disclosure of terms
(a) Definitions. In this section:
(1) “Advertisement” means a commercial message that solicits a consumer to enter into
a rent-to-own agreement for a specific item of merchandise that is conveyed:
(A) at a merchant’s place of business;
(B) on a merchant’s website; or
(C) on television or radio.
(2) “Cash price” means the price of merchandise available under a rent-to-own agreement
that the consumer may pay in cash to the merchant at the inception of the agreement
to acquire ownership of the merchandise.
(3) “Clear and conspicuous” means that the statement or term being disclosed is of such
size, color, contrast, or audibility, as applicable, so that the nature, content,
and significance of the statement or term is reasonably apparent to the person to
whom it is disclosed.
(4) “Consumer” has the same meaning as in section 2451a of this title.
(5) “Merchandise” means an item of a merchant’s property that is available for use under
a rent-to-own agreement. The term does not include:
(A) real property;
(B) a mobile home, as defined in section 2601 of this title;
(C) a motor vehicle, as defined in 23 V.S.A. § 4;
(D) an assistive device, as defined in section 41c of this title; or
(E) a musical instrument intended to be used primarily in an elementary or secondary school.
(6) “Merchant” means a person who offers, or contracts for, the use of merchandise under
a rent-to-own agreement.
(7) “Merchant’s cost” means the documented actual cost, including actual freight charges,
of merchandise to the merchant from a wholesaler, distributor, supplier, or manufacturer
and net of any discounts, rebates, and incentives that are vested and calculable as
to a specific item of merchandise at the time the merchant accepts delivery of the
merchandise.
(8)(A) “Rent-to-own agreement” means a contract under which a consumer agrees to pay a merchant
for the right to use merchandise and acquire ownership, which is renewable with each
payment after the initial period, and which remains in effect until:
(i) the consumer returns the merchandise to the merchant;
(ii) the merchant retakes possession of the merchandise; or
(iii) the consumer pays the total cost and acquires ownership of the merchandise.
(B) A “rent-to-own agreement” as defined in subdivision (7)(A) of this subsection is not:
(i) a sale subject to 9A V.S.A. Article 2;
(ii) a lease subject to 9A V.S.A. Article 2A;
(iii) a security interest as defined in 9A V.S.A. § 1—201(a)(35); or
(iv) a retail installment contract or retail charge agreement as defined in chapter 61
of this title.
(9) “Rent-to-own charge” means the difference between the total cost and the cash price
of an item of merchandise.
(10) “Total cost” means the sum of all payments, charges, and fees that a consumer must
pay to acquire ownership of merchandise under a rent-to-own agreement. The term does
not include charges or fees for optional services or charges or fees due only upon
the occurrence of a contingency specified in the agreement.
(b) General requirements.
(1) Prior to execution, a merchant shall give a consumer the opportunity to review a written
copy of a rent-to-own agreement that includes all of the information required by this
section for each item of merchandise covered by the agreement and shall not refuse
a consumer’s request to review the agreement with a third party, either inside the
merchant’s place of business or at another location.
(2) A disclosure required by this section shall be clear and conspicuous.
(3) In a rent-to-own agreement, a merchant shall state a numerical amount or percentage
as a figure and shall print or legibly handwrite the figure in the equivalent of 12-point
type or greater.
(4) A merchant may supply information not required by this section with the disclosures
required by this section, but shall not state or place additional information in such
a way as to cause the required disclosures to be misleading or confusing, or to contradict,
obscure, or detract attention from the required disclosures.
(5) Except for price cards on site, a merchant shall preserve an advertisement, or a digital
copy of the advertisement, for not less than two years after the date the advertisement
appeared. In the case of a radio, television, or internet advertisement, a merchant
may preserve a copy of the script or storyboard.
(6) Subject to availability, a merchant shall make merchandise that is advertised available
to all consumers on the terms and conditions that appear in the advertisement.
(7) A rent-to-own agreement that is substantially modified, including a change that increases
the consumer’s payments or other obligations or diminishes the consumer’s rights,
shall be considered a new agreement subject to the requirements of this chapter.
(8) For each rent-to-own agreement, a merchant shall keep the following information in
an electronic or hard copy for a period of four years following the date the agreement
ends:
(A) the rent-to-own agreement covering the item; and
(B) a record that establishes the merchant’s cost for the item.
(9) A rent-to-own agreement executed by a merchant doing business in Vermont and a resident
of Vermont shall be governed by Vermont law.
(c) Cash price; reduction for used merchandise; maximum limits.
(1) Except as otherwise provided in subdivision (2) of this subsection, the maximum cash
price for an item of merchandise shall not exceed:
(A) for an appliance, 1.75 times the merchant’s cost;
(B) for an item of electronics that has a merchant’s cost of less than $150.00, 1.75 times
the merchant’s cost;
(C) for an item of electronics that has a merchant’s cost of $150.00 or more, 2.00 times
the merchant’s cost;
(D) for an item of furniture or jewelry, 2.50 times the merchant’s cost; and
(E) for any other item, 2.00 times the merchant’s cost.
(2) The cash price for an item of merchandise that has been previously used by a consumer
shall be at least 10 percent less than the cash price calculated under subdivision
(1) of this subsection.
(3) The total cost for an item of merchandise shall not exceed 2.00 times the maximum
cash price for the item.
(d) Disclosures in advertising; prohibited disclosures.
(1) An advertisement that refers to or states the dollar amount of any payment for merchandise
shall state:
(A) the cash price of the item;
(B) that the merchandise is available under a rent-to-own agreement;
(C) the amount, frequency, and total number of payments required for ownership;
(D) the total cost for the item;
(E) the rent-to-own charge for the item; and
(F) that the consumer will not own the merchandise until the consumer pays the total cost
for ownership.
(2) A merchant shall not advertise that no credit check is required or performed, or that
all consumers are approved for transactions, if the merchant subjects the consumer
to a credit check.
(e) Disclosures on site. In addition to the information required in subsection (d) of this section, an advertisement
at a merchant’s place of business shall include:
(1) whether the item is new or used;
(2) when the merchant acquired the item; and
(3) the number of times a consumer has taken possession of the item under a rent-to-own
agreement.
(f) Disclosures in rent-to-own agreement.
(1) The first page of a rent-to-own agreement shall include:
(A) a heading and clause in boldface type that reads: “IMPORTANT INFORMATION ABOUT THIS
RENT-TO-OWN AGREEMENT. Do Not Sign this Agreement Before You Read it or if it Contains
any Blank Spaces. You have a Right to Review this Agreement or Compare Costs Away
from the Store Before You Sign.”; and
(B) the following information in the following order:
(i) the name, address, and contact information of the merchant;
(ii) the name, address, and contact information of the consumer;
(iii) the date of the transaction;
(iv) a description of the merchandise sufficient to identify the merchandise to the consumer
and the merchant, including any applicable model and identification numbers;
(v) a statement whether the merchandise is new or used, and in the case of used merchandise,
a statement that the merchandise is in good working order, is clean, and is free of
any infestation.
(2) A rent-to-own agreement shall include the following cost disclosures, printed and
grouped as indicated below, immediately preceding the signature lines:
| |
(1) |
Cash Price: |
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$ _________________________________________ |
| |
(2) |
Payments required to become owner: |
|
|
| |
$ _______________ /(weekly)(biweekly)(monthly) x (# of payments) = |
$ _________________________________________ |
| |
(3) |
Mandatory charges and fees required to become owner (itemize): |
|
| |
|
_________________________________________ |
|
$ _________________________________________ |
| |
|
_________________________________________ |
|
$ _________________________________________ |
| |
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_________________________________________ |
|
$ _________________________________________ |
| |
|
Total required fees and charges: |
|
$ _________________________________________ |
| |
(4) |
Total cost: |
(2) + (3) = |
$ _________________________________________ |
| |
(5) |
Rent-to-Own Charge: |
(4) - (1) = |
$ _________________________________________ |
| |
(6) |
Tax: |
|
$ _________________________________________ |
| |
(7) |
Do not sign before reading this agreement carefully |
|
(g) Required provisions of rent-to-own agreement. A rent-to-own agreement shall provide:
(1) a statement of payment due dates;
(2) a line-item list of any other charges or fees the consumer could be charged or have
the option of paying in the course of acquiring ownership or during or after the term
of the agreement;
(3) that the consumer will not own the merchandise until he or she makes all of the required
payments for ownership;
(4) that the consumer has the right to receive a receipt for a payment and, upon reasonable
notice, a written statement of account;
(5) who is responsible for service, maintenance, and repair of an item of merchandise;
(6) that, except in the case of the consumer’s negligence or abuse, if the merchant, during
the term of the agreement, must retake possession of the merchandise for maintenance,
repair, or service, or the item cannot be repaired, the merchant is responsible for
providing the consumer with a replacement item of equal quality and comparable design;
(7) that the maximum amount of the consumer’s liability for damage or loss to the merchandise
is limited to an amount equal to the cash price multiplied by the ratio of:
(A) the number of payments remaining to acquire ownership under the agreement; to
(B) the total number of payments necessary to acquire ownership under the agreement;
(8) a statement that if any part of a manufacturer’s express warranty covers the merchandise
at the time the consumer acquires ownership the merchant shall transfer the warranty
to the consumer if allowed by the terms of the warranty;
(9) a description of any damage waiver or insurance purchased by the consumer, or a statement
that the consumer is not required to purchase any damage waiver or insurance;
(10) an explanation of the consumer’s options to purchase the merchandise;
(11) an explanation of the merchant’s right to repossess the merchandise; and
(12) an explanation of the parties’ respective rights to terminate the agreement, and to
reinstate the agreement.
(h) Warranties.
(1) Upon transfer of ownership of merchandise to a consumer, a merchant shall transfer
to the consumer any manufacturer’s or other warranty on the merchandise.
(2) A merchant creates an implied warranty to a consumer, which may not be waived, in
the following circumstances:
(A) an affirmation of fact or promise made by the merchant to the consumer which relates
to merchandise creates an implied warranty that the merchandise will substantially
conform to the affirmation or promise;
(B) a description of the merchandise by the merchant creates an implied warranty that
the merchandise will substantially conform to the description; and
(C) a sample or model exhibited to the consumer by the merchant creates an implied warranty
that the merchandise actually delivered to the consumer will substantially conform
to the sample or model.
(i) Maintenance and repairs.
(1) During the term of a rent-to-own agreement, the merchant shall maintain the merchandise
in good working condition.
(2) If a repair cannot be completed within three days, the merchant shall provide a replacement
to the consumer to use until the original merchandise is repaired. Replacement merchandise
shall be at least comparable in quality, age, condition, and warranty coverage to
the replaced original merchandise.
(3) A merchant is not required to repair or replace merchandise that has been damaged
as a result of negligence or an intentional act by the consumer.
(j) Prohibited provisions of rent-to-own agreement. A rent-to-own agreement shall not include any of the following provisions, which shall
be void and unenforceable:
(1) a provision requiring a confession of judgment;
(2) a provision requiring a garnishment of wages;
(3) a provision requiring arbitration or mediation of a claim that otherwise meets the
jurisdictional requirements of a small claims proceeding under 12 V.S.A. chapter 187;
(4) a provision authorizing a merchant or its agent to enter unlawfully upon the consumer’s
premises or to commit any breach of the peace in the repossession of property;
(5) a provision requiring the consumer to waive any defense, counterclaim, or right of
action against the merchant or its agent in collection of payment under the agreement
or in the repossession of property; or
(6) a provision requiring the consumer to purchase a damage waiver or insurance from the
merchant to cover the property.
(k) Option to purchase. Notwithstanding any other provision of this section, at any time after the first payment,
a consumer who is not in violation of a rent-to-own agreement may acquire ownership
of the merchandise covered by the agreement by paying an amount equal to the cash
price of the merchandise minus 50 percent of the value of the consumer’s previous
payments.
(l) Payment; notice of default. If a consumer fails to make a timely payment required in a rent-to-own agreement,
the merchant shall deliver to the consumer a notice of default and right to reinstate
the agreement at least 14 days before the merchant commences a civil action to collect
amounts the consumer owes under the agreement.
(m) Collections; repossession of merchandise; prohibited acts. When attempting to collect a debt or enforce an obligation under a rent-to-own agreement,
a merchant shall not:
(1) call or visit a consumer’s workplace after a request by the consumer or his or her
employer not to do so;
(2) use profanity or any language to abuse, ridicule, or degrade a consumer;
(3) repeatedly call, leave messages, knock on doors, or ring doorbells;
(4) ask someone, other than a spouse, to make a payment on behalf of a consumer;
(5) obtain payment through a consumer’s bank, credit card, or other account without authorization;
(6) speak with a consumer more than six times per week to discuss an overdue account;
(7) engage in violence;
(8) trespass;
(9) call or visit a consumer at home or work after receiving legal notice that the consumer
has filed for bankruptcy;
(10) impersonate others;
(11) discuss a consumer’s account with anyone other than a spouse of the consumer;
(12) threaten unwarranted legal action; or
(13) leave a recorded message for a consumer that includes anything other than the caller’s
name, contact information, and a courteous request that the consumer return the call.
(n) Reinstatement of agreement.
(1) A consumer who fails to make a timely payment may reinstate a rent-to-own agreement
without losing any rights or options that exist under the agreement by paying all
past-due charges, the reasonable costs of pickup, redelivery, and any refurbishing,
and any applicable late fee:
(A) within five business days of the renewal date of the agreement if the consumer pays
monthly; or
(B) within three business days of the renewal date of the agreement if the consumer pays
more frequently than monthly.
(2) If a consumer promptly returns or voluntarily surrenders merchandise upon a merchant’s
request, the consumer may reinstate a rent-to-own agreement during a period of not
less than 180 days after the date the merchant retakes possession of the merchandise.
(3) In the case of a rent-to-own agreement that is reinstated pursuant to this subsection,
the merchant is not required to provide the consumer with the identical item of merchandise
and may provide the consumer with a replacement item of equal quality and comparable
design.
(o) Reasonable charges and fees; late fees.
(1) A charge or fee assessed under a rent-to-own agreement shall be reasonably related
to the actual cost to the merchant of the service or hardship for which it is charged.
(2) A merchant may assess only one late fee for each payment regardless of how long the
payment remains due.
(p) Prohibition on rent-to-own businesses and licensed lenders. A person engaged in the business of selling merchandise under a rent-to-own agreement
subject to this section shall not engage in any conduct or business at the same physical
location that would require a license under 8 V.S.A. chapter 73 (licensed lenders).
(q) Enforcement; remedies; damages. A person who violates this section commits an unfair and deceptive act in commerce
in violation of section 2453 of this title. (Added 1993, No. 221 (Adj. Sess.), § 15a; amended 2015, No. 55, § 1, eff. Sept. 1, 2015; 2021, No. 20, § 8.)
§ 41c. Rent-to-own; assistive devices
(a) As used in this section:
(1) “Assistive device” means any item, piece of equipment, or product system, whether
acquired commercially off-the-shelf, modified, or customized, that is used or designed
to be used to increase, maintain, or improve any functional capability of an individual
with disabilities. An assistive device system, that as a whole is within the definition
of this term, is itself an assistive device, and, in such cases, this term also applies
to each component product of the assistive device system that is itself ordinarily
an assistive device. This term includes:
(A) wheelchairs and scooters of any kind, and other aids that enhance the mobility or
positioning of an individual, such as motorization, motorized positioning features,
and the switches and controls for any motorized features;
(B) computer equipment with voice output, artificial larynges, voice amplification devices,
and other alternative and augmentative communication devices or any devices used for
the purpose of communication;
(C) computer equipment and reading devices with voice output, optical scanners, talking
software, braille printers, and other aids and devices that provide access to text;
(D) hearing aids, telephone communication devices for people who are deaf, and other assistive
listening devices;
(E) voice recognition computer equipment, software and hardware accommodations, switches,
and other forms of alternative access to computers;
(F) environmental control units;
(G) simple mechanical aids that enhance the functional capabilities of an individual with
disabilities; and
(H) durable medical equipment.
(2) “Assistive devise lessee” means an individual with a disability or a person renting
or leasing on behalf of an individual with a disability who is renting or leasing
an assistive device for the purpose of increasing, maintaining, or improving any functional
capability related to the individual’s disability.
(b) A person in the business of renting, or renting to own, an assistive device to assistive
device lessees who rents an assistive device for more than 60 days or who rents an
assistive device to own shall offer such assistive device lessees a purchase option
with reasonable terms and conditions. Such a purchase option may be exercised at any
time by the assistive device lessees, the reasonable terms and conditions of which
shall be included with the consumer’s periodic billing.
(1) A person in the business of renting products that may be assistive devices may include
the following question in its rental application:
(A) If an assistive device lessee answers “yes” to the question or requests additional
information, the business entity shall provide the following statement:
ASSISTIVE DEVICE PURCHASE OPTION RIGHTS
IF YOU ARE RENTING THIS PRODUCT AS AN ACCOMMODATION FOR A DISABILITY OR AS AN ASSISTIVE
DEVICE, THE DEALER IS REQUIRED TO OFFER YOU A RENTAL TRANSACTION THAT INCLUDES A PURCHASE
OPTION. UNDER THE PURCHASE OPTION YOU MAY ACQUIRE OWNERSHIP OF THE PRODUCT AT ANYTIME
BY TENDERING AN AMOUNT EQUAL TO THE CASH PRICE OF THE PRODUCT LESS 50% OF ALL PREVIOUS
RENTAL PAYMENTS YOU HAVE MADE. OR, ONCE YOU HAVE MADE RENTAL PAYMENTS EQUAL TO 200%
OF THE CASH PRICE YOU MAY ACQUIRE OWNERSHIP OF THE PRODUCT BY PAYING $1.00.
BEFORE YOU DETERMINE WHETHER TO ELECT A TRANSACTION WITH OR WITHOUT A PURCHASE OPTION,
THE PERSON IN THE BUSINESS OF RENTING OR RENTING TO OWN THE ASSISTIVE DEVICE MUST
FULLY DISCLOSE THE TERMS OF BOTH TRANSACTIONS.
THE VALUE OF A PURCHASE OPTION DEPENDS ON MANY FACTORS, WHICH MAY INCLUDE: (1) HOW
LONG YOU INTEND TO USE THE PRODUCT; (2) THE CASH PRICE OF THE PRODUCT; AND (3) THE
COST OF MAINTAINING THE PRODUCT.
ASSISTIVE DEVICE PURCHASE OPTION RIGHTS: IF YOU ELECT A RENTAL TRANSACTION WITHOUT
A PURCHASE OPTION AND YOU CHANGE YOUR MIND AT A LATER DATE AND DECIDE TO ENTER INTO
A PURCHASE OPTION TRANSACTION, PAYMENTS THAT YOU HAVE MADE WILL NOT BE APPLIED TO
THE NEW TRANSACTIONS.
(B) The rental dealer may add additional information or explanations to the information
required by subdivision (A) of this subdivision (1), as long as the additional information
is not stated, utilized, or placed in a manner that will confuse the assistive device
lessee or that will contradict, obscure, or distract attention from the required information.
The additional information or explanation shall not have the effect of circumventing,
evading, or complicating the information required by subdivision (A) of this subdivision
(1).
ARE YOU RENTING THIS PRODUCT AS AN ACCOMMODATION FOR A DISABILITY OR AS AN ASSISTIVE
DEVICE?
YES ________ NO ________
(2) Failure to comply with this section is not a violation if the assistive device lessee
fails to inform the rental dealer that the product is being rented as an assistive
device after the rental dealer makes the written inquiry in subdivision (1) of this
subsection.
(c)(1) When periodic payments made by an assistive device lessee, exclusive of payments for
service, total 200 percent of the bona fide cash price, the person in the business
of renting or renting to own the assistive device shall notify the individual with
a disability and the assistive device lessee that the individual with a disability
and the assistive device lessee have the option of acquiring ownership of the assistive
device upon payment of $1.00, at which time the rental or rent-to-own agreement shall
terminate.
(2) The term “bona fide cash price” means the price at which a merchant, in the ordinary
course of business, and taking into account the value of the merchandise and its retail
price in the trade area, would offer to sell the merchandise to consumers for cash.
(d) Under a rent-to-own program, at any time after the initial payment, the assistive
device lessee may acquire ownership of the property by tendering an amount equal to
the cash price of the merchandise minus 50 percent of all previous rental-purchase
payments made.
(e) When an assistive device lessee has acquired ownership of an assistive device under
this section, the person in the business of renting or renting to own shall offer,
for a reasonable price and term, a contract to maintain and service the device.
(f) This section shall not apply to assistive devices provided pursuant to a Medicare
or Medicaid contract that either includes provisions for the acquisition of ownership
or prohibits purchase or the acquisition of ownership by an assistive device lessee.
(g) A violation of this section is deemed to be an unfair or deceptive act or practice
in commerce and a violation of chapter 63 of this title and all remedies and penalties
available to a consumer or the Attorney General under that chapter shall apply, and
the Attorney General shall have the same authority to make rules, conduct civil investigations,
and enter into assurances of discontinuance as provided under chapter 63, subchapter
1 of this title. (Added 1999, No. 104 (Adj. Sess.), § 2; amended 2013, No. 96 (Adj. Sess.), § 26.)
§ 42. Permitted charges
(a) Except for interest as provided in this chapter, a lender shall make no charges against
a borrower for the use or forbearance of money other than:
(1) the reasonable cost of credit investigation and appraisal fees;
(2) the reasonable cost of title evidence, including abstracts, legal opinions, or title
insurance;
(3) the reasonable cost of protection against insurable hazards;
(4) the reasonable cost of creditor life or disability insurance, or of a debt protection
agreement as set forth in 8 V.S.A. § 10405, if agreed to by the borrower;
(5) the filing and recording fees, and other official fees, including fees required by
Federal Housing Agencies, the Federal Home Loan Mortgage Corporation, and the Federal
National Mortgage Corporation;
(6) the reasonable value of services rendered in connection with the making of any loan
of $4,000.00 or less or any loan or loan commitment of any amount or manner of payment
to finance an income producing business or activity subject to such rules as the Commissioner
of Financial Regulation adopts;
(7) the reasonable cost of private mortgage guaranty insurance subject to such limitation
as the Commissioner of Financial Regulation has approved;
(8) the reasonable fees associated with a credit card, agreed upon by the lender and borrower,
including late charges and over-limit charges; and
(9) discount points, at the request of the borrower for the purpose of reducing, and which
in fact result in a bona fide reduction of, the interest rate or time-price differential
applicable to the loan.
(b) A borrower may procure an opinion and abstract of title from an attorney of the borrower’s
choice acceptable to the lender, or hazard insurance in a company or in companies
of the borrower’s choice acceptable to the lender, and in such cases the lender’s
acceptance shall not be unreasonably withheld. (Added 1967, No. 377 (Adj. Sess.), eff. March 26, 1968; amended 1969, No. 66, § 2, eff. April 17, 1969; 1973, No. 222 (Adj. Sess.), § 5, eff. April 3, 1974; 1975, No. 216 (Adj. Sess.), § 4, eff. March 27, 1976; 1979, No. 173 (Adj. Sess.), § 13, eff. April 30, 1980; 1985, No. 36, § 3; 1989, No. 225 (Adj. Sess.), § 25; 1995, No. 9, § 2; 1995, No. 180 (Adj. Sess.), § 38; 2005, No. 70, § 3; 2021, No. 20, § 9; 2025, No. 23, § 16, eff. July 1, 2025.)
§ 43. Deposit requirement prohibited; exception
A lender shall not, as a condition to granting or extending a loan, require a borrower
to keep or place any sum on deposit with the lender or nominee of the lender, except
for deposit arrangements directly related to secured credit cards in a manner consistent
with rules adopted by the Commissioner, rules that shall include disclosure requirements,
and specific types of alternative mortgages approved by the Commissioner as provided
in 8 V.S.A. § 1256. Any deposit arrangement permitted under this section shall not result in an effective
interest rate that exceeds legal rates established in 9 V.S.A. § 41a. (Added 1967, No. 377 (Adj. Sess.), eff. March 26, 1968; amended 1977, No. 184 (Adj. Sess.), § 2; 1995, No. 9, § 3; 2023, No. 32, § 5, eff. July 1, 2023.)
§ 44. Certain charges not usurious
Agreements to maintain with the lender non-interest bearing reserves or deposits with
which to pay when due taxes and insurance premiums, or agreements clearly set forth
in the loan contract for the payment of reasonable delinquency or deferral charges,
shall not be construed to be interest or a prohibited charge within the meaning of
this chapter. (Added 1967, No. 377 (Adj. Sess.), eff. March 26, 1968.)
§ 45. Prepayment of loans
A borrower may prepay a loan at any time, without prepayment premium or penalty. (Added 1967, No. 377 (Adj. Sess.), eff. March 26, 1968.)
§ 46. Exceptions
Section 43 of this title, relating to deposit requirements, and section 45 of this title, relating to prepayment penalties, shall not apply and the parties may contract for
a rate of interest in excess of the rate provided in section 41a of this title in the case of:
(1) obligations of corporations, including municipal and nonprofit corporations; or
(2) obligations incurred by any person, partnership, association, or other entity to finance
in whole or in part income-producing business or activity, but not including obligations
incurred to finance family dwellings of four units or fewer when used as a residence
by the borrower or to finance real estate that is devoted to agricultural purposes
as part of an operating farming unit when used as a residence by the borrower; or
(3) obligations to finance the purchase, construction, or improvement of property for
seasonal or part-time occupancy and not as a place of legal residence; or
(4) obligations guaranteed or insured by the United States of America or any agency thereof. (Added 1967, No. 377 (Adj. Sess.), eff. March 26, 1968; amended 1969, No. 66, § 3, eff. April 17, 1969; 1973, No. 222 (Adj. Sess.), § 6, eff. April 3, 1974; 1975, No. 216 (Adj. Sess.), § 5, eff. March 27, 1976; 2009, No. 134 (Adj. Sess.), § 24i.)
§ 47. Application of payments
(a) On a note, bill, or other similar obligation, payable on demand or at a specified
time, with interest, when a payment is made, the payment shall be applied: first,
to liquidate the interest accrued at the time of the payment; and second, to extinguish
the principal.
(b) Notwithstanding any other provision of this chapter to the contrary, payments shall
be applied to interest, principal, and escrow charges, if any, before any portion
of the payment is applied to late fees, delinquency charges, deferral charges, or
any similar fees or charges. (Added 1967, No. 377 (Adj. Sess.), eff. March 26, 1968; amended 2019, No. 20, § 104.)
§ 48. Excess insurance, proceeds
If a loan is paid before its due date as the result of the death of a borrower insured
under a creditor life insurance policy and the insurance proceeds exceed the amount
owing on the loan with interest, the excess shall be refunded to a beneficiary designated
by the borrower, or to the estate of the insured, or applied in reduction of the debt. (Added 1967, No. 377 (Adj. Sess.), eff. March 26, 1968.)
§ 49. Computation of interest
When a note, bill, or other similar obligation is payable on demand or at a specified
time, with interest annually, the annual interest that remains unpaid shall bear simple
interest from the time it becomes due to the time of final settlement; but if in a
year, reckoning from the time the annual interest began to accrue, payments are made,
the amount of those payments at the end of that year, with interest thereon from the
time of payment, shall be applied: first, to liquidate the simple interest accrued
from the unpaid annual interest; second, to liquidate the annual interest due; and
third, to extinguish the principal. (Added 1967, No. 377 (Adj. Sess.), eff. March 26, 1968.)
§ 50. Penalties
(a) When a greater rate of interest than is allowed by law is paid, the person paying
it may recover the amount so paid above the legal interest, with interest thereon
from the time of payment and all expenses of collection, including reasonable attorney’s
fees, in a civil action on this statute.
(b) Except as otherwise expressly authorized by law, a lender shall not knowingly or willfully
make any contract, express or implied, that directly or indirectly calls for the payment
of any interest or finance charge in excess of the legal rate as set forth in section 41a of this title. The section shall be enforceable only to the extent herein provided and the lender
shall have no right to collect any interest or charges whatsoever and shall have a
right to collect only one-half of the principal.
(c) Any person, partnership, association, or corporation and the several members, officers,
directors, agents, and employees thereof, who knowingly or willfully contracts for
or collects any sum in excess of legal interest for the loan, use, or forbearance
of money, unless expressly authorized by law to do so, shall, for the first offense,
be fined not more than $500.00 or imprisoned for not more than six months, or both.
Upon conviction for violating this section in any transaction entered into or consummated
after a first conviction hereunder, the offender shall be fined not more than $1,000.00
or imprisoned for not more than one year, or both. (Added 1967, No. 377 (Adj. Sess.), eff. March 26, 1968; amended 1979, No. 173 (Adj. Sess.), § 14, eff. April 30, 1980.)