Chapter 217

2008 -- H 7497 SUBSTITUTE B

Enacted 07/05/08

A N A C T

RELATING TO THE RHODE ISLAND AUTOMOBILE REPOSSESSION ACT

Introduced By: Representative Robert B. Jacquard

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.

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LC01820/SUB B

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