Colorado Legislative Council Staff

NO FISCAL IMPACT

TITLE:            CONCERNING DEREGULATION OF TRANSACTIONS UNDER THE UNIFORM CONSUMER CREDIT CODE, AND, IN CONNECTION THEREWITH, DEREGULATING RATES, FEES, AND CHARGES PERMITTED FOR CREDIT SALES AND LOANS.

Summary of Assessment

            This bill revises statutes of the "Uniform Consumer Credit Code" governing credit sales, loans, and interest. The bill repeals certain specific fees and charges and allows the following fees and charges to be established by contract:

            •   cash advance transaction fees;

            •   returned check fees;

            •   credit in excess of a revolving charge account limit;

            •   delinquency charges;

            •   credit service charges for revolving charge accounts;

            •   penalties for pre-payment, refinancing, or consolidation on loans secured by land; and

            •   finance charges for supervised loans.

            The bill specifies the types of charges that are and are not included in the definition of "interest". The bill will become effective July 1, 1999.

            Under current law, the Office of the Attorney General is designated by statute to administer and enforce the Uniform Consumer Credit Code (UCCC). Any person engaged in Colorado in making consumer credit sales, consumer leases, or consumer loans is required to file notification with the Attorney General and to pay an annual notification fee of $20.

             Under the rate limitations of current law, the number of UCCC licenses has increased by approximately 243% since FY 1990-91 and by 91% since FY 1994-95. This bill deregulates interest rates and certain charges on consumer credit transactions, effective July 1, 1999, which may attract more lenders to Colorado. In that event, the Office of the Attorney General may realize an increase in annual UCCC filings which may increase administrative and enforcement expenditures, and fee revenue.

            However, recent information from other states indicates the number of UCCC licenses issued is more dependent upon the condition of the state's economy than the UCCC regulations. Therefore, the Office of the Attorney General anticipates no significant increase in workload due to the provisions of this bill. The bill is assessed as having no fiscal impact. If the Office of the Attorney General experiences an increase in workload, and if any associated costs cannot be absorbed within existing resources, those costs will be recognized during the annual operating budget development process.

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