Chapter
115
2008 -- S 2442 SUBSTITUTE B
Enacted 06/30/08
A N A C T
RELATING TO THE RHODE ISLAND
AUTOMOBILE REPOSSESSION ACT
Introduced By: Senator Michael J. McCaffrey
Date Introduced: February 13, 2008
It is
enacted by the General Assembly as follows:
SECTION
1. Section 6-51-1 and 6-51-3 of the General Laws in Chapter 6-51 entitled
"The
Rhode Island Automobile Repossession Act" are hereby amended to read as
follows:
6-51-1.
Legislative findings. -- The general assembly finds and declares that:
(a) Rhode Island consumers who have purchased, through an extension of credit,
or
leased
an automobile may fall behind on payments during difficult economic or
emotional times
and
should be allowed to cure a default on the loan or lease within the time
provided under this
chapter.
(b) If the consumer is unable to cure such a default and the lessor or secured
party
repossesses
the automobile, the repossession cannot take place on the property owned or rented
by the
consumer without their consent except as provided by this chapter or by
judicial action. In
the
event of repossession a consumer is allowed to redeem the automobile within the
time
provided
by this chapter.
(c) The lessor or secured party who holds title to the automobile shall be
allowed to
dispose
of the automobile after repossession in order to recover the fair market value
of the
vehicle
and expenses from the repossession according to the provisions of this chapter
and any
other
applicable laws of this state.
6-51-3.
Default, notice, right to cure, reinstatement. -- (a) The default
provisions of a
consumer
automobile lease or automobile loan agreement are enforceable only to the
extent that:
(1) The consumer does not make one or more payments required by the lease or
loan
agreement;
or
(2) The lessor or secured party establishes that the prospect of payment,
performance or
realization
of the lessor's or secured party's interest in the automobile is significantly
impaired.
(b) After a default under an automobile lease or loan agreement by the consumer
the
lessor
or secured party may not be accelerate, take judicial action to collect,
or repossess the
automobile
until the lessor or secured party gives the consumer the notice required by
this section
and the
consumer does not cure the default in the time allowed under this section. A
lessor or
secured
party may initiate a procedure for to cure by sending to the
consumer, at any time after
the
consumer has been in default for ten (10) days, a notice of the right to cure
the default. Said
notice
shall be delivered via certified mail, return receipt requested, or via
first class mail, at the
consumer's
address last known to the lessor or secured party. The time when notice is
given shall
be the
date the consumer signs the receipt or, if the notice is undeliverable, the
date the post office
last
attempts to deliver it. deemed to
be upon actual delivery of the notice to the consumer or
three
(3) business days following the mailing of the notice to the consumer at the
consumer's
address
last known to the lessor or secured party.
(c) The notice shall be in writing and shall conspicuously state the rights of
the consumer
upon
default in substantially the following form:
The heading shall read: "Rights of Defaulting consumer under Rhode Island
General
Laws."
The body of the notice shall read: "You may cure your default in (describe
automobile
lease or
loan agreement in a manner enabling the consumer to identify it) by paying to
(name and
address
of lessor or secured party) (amount due) before (date which is at least
twenty-one (21)
days
after notice is delivered). If you pay this amount within the time allowed you
are no longer
in default
and may continue with the automobile (lease or loan) agreement as though no
default
has
occurred.
If you do not cure your default by the date stated above, (the lessor or
secured party)
may sue
you to obtain a judgment for the amount of the debt or and may
take possession of the
automobile.
If (the lessor or secured party) takes possession of the automobile, you may
get it back
by
paying the full amount of your debt plus any reasonable expenses incurred by
(the lessor or
secured
party) if you make the required payment within twenty (20) days after (the
lessor or
secured
party) takes possession.
If
(secured party) sells the vehicle repossessed from the consumer for an amount
exceeding
the amount outstanding on the automobile (loan) agreement including reasonable
expenses
related to judicial action and or repossession, the excess funds shall be
returned
promptly
to the defaulting consumer.
You have the right to cure a default only once in any twelve (12) month period
during
the
period of the automobile (lease or loan) agreement. If you default again within
the next twelve
(12)
months in making your payments, we may exercise our rights without sending you
another
right to
cure notice. If you have questions, telephone (name of lessor or secured party)
at (phone
number).”
(d) Within the period for cure stated in the notice under this section, the
consumer may
cure the
default by tendering the amount of all unpaid sums due at the time of tender,
including
any
unpaid delinquency or default charges, but without additional security deposit
or prepayment
of
period payments not yet due. Cure restores the rights of the lessor or secured
party and
consumer
under the automobile loan or lease agreement as if the default had not
occurred.
(e) A consumer has the right to cure only once in any twelve (12) month period
during
the
period of the automobile lease or loan agreement.
SECTION
2. This act shall take effect upon passage.
=======
LC01646/SUB B
=======