16a-1-301.   General definitions.In addition to definitions appearing in subsequent articles, in K.S.A.16a-1-101 through 16a-9-102, and amendments thereto:

      (1)   "Actuarial method" means the method of allocating payments made on a debtbetween theprincipal and the finance charge pursuant towhich a payment isapplied, assuming no delinquency charges or other additional charges arethen due, first to the accumulated finance charge and then to the unpaidprincipalbalance. When afinance charge is calculated in accordance with the actuarial method, thecontract rate is applied to the unpaid principal balance for the number of daysthe principal balance is unpaid. At the end of each computational period, orfractional computational period, the unpaid principal balance is increased bythe amount of the finance charge earned during that period and is decreased bythe total payment, if any, made during the period after the deduction of anydelinquency charges or other additional charges due during the period.

      (2)   "Administrator" means the deputy commissioner of the consumerand mortgage lendingdivision appointed by the bank commissioner pursuant to K.S.A.75-3135, andamendments thereto.

      (3)   "Agreement" means the bargain of the parties in fact as found intheir language or by implication from other circumstances includingcourse of dealing or usage of trade or course of performance.

      (4)   "Amount financed" means thenet amount ofcredit provided to the consumer or on the consumer's behalf. The amountfinanced shall be calculated as provided in rules and regulations adopted bythe administrator pursuant to K.S.A. 16a-6-117, and amendments thereto.

      (5)   "Annual percentage rate" means the finance charge expressed as a yearlyrate, as calculated in accordance with the actuarial method. The annualpercentage rate shall be calculated as provided in rules and regulationsadopted by the administrator pursuant to K.S.A. 16a-6-117, and amendmentsthereto.

      (6)   "Appraised value" means, with respect to any real estate at any time:

      (a)   The total appraised value of the real estate, as reflected in the mostrecent records of the tax assessor of the county in which the real estate islocated;

      (b)   the fair market value of the real estate, as reflected in a writtenappraisal of the real estate performed by a Kansas licensed or certifiedappraiser within the past 12 months; or

      (c)   in the case of a nonpurchase money real estate transaction, the estimatedmarket value as determined through an automated valuation model acceptable totheadministrator. As used in this paragraph (c), "automatedvaluation model" means an automated system that is used to derive a propertyvalue through the use of publicly available property records and variousanalytic methodologies such as comparable sales prices, home characteristicsand historical home price appreciations. Automated valuation models must bevalidated by an independent credit rating agency. An automated valuation modelprovider shall not accept a property valuation assignment when the assignmentitself is contingent upon the automated valuation model provider reporting apredetermined property valuation, or when the fee to be paid to the automatedvaluation model provider is contingent upon the property valuation reached orupon the consequences resulting from the property valuation assignment.

      (7)   "Billing cycle" means the time interval betweenperiodic billingstatement dates.

      (8)   "Cash price" of goods, services, or an interest inland meansthe price at which they are offered for sale by the seller to cashbuyers in the ordinary course of business and may include (a) the cashprice of accessories or services related to the sale, such as delivery,installation, alterations, modifications, and improvements, and (b)taxes to the extent imposed on a cash sale of the goods, services, orinterest in land. The cash price stated by the seller to the buyer in adisclosure statement is presumed to be the cash price.

      (9)   "Closed end credit" means a consumer loan or a consumer credit salewhich is not incurred pursuant to open end credit.

      (10)   "Closing costs" with respect to a debt secured by aninterest inland includes:

      (a)   The actual fees paid a public official or agency of the state orfederal government, for filing, recording or releasing any instrument relatingto the debt; and

      (b)   bona fide and reasonable expenses incurred by the lender in connectionwith themaking, closing, disbursing, extending, readjusting or renewing the debt whichare payable to third parties not related to the lender, except that reasonablefees for an appraisal made by the lender or relatedparty are permissible.

      (11)   "Code mortgage rate" means the greater of:

      (a)   12%; or

      (b)   the sum of:

      (i)   The yield on 30-year fixed rate conventional home mortgage loanscommitted for delivery within 61 to 90 days accepted under thefederal homeloan mortgage corporation's or any successor's daily offerings for sale on thelast day on which commitments for such mortgages were received in the previousmonth; and

      (ii)   5%.

      If the reference rate referred to in subparagraph (i) of paragraph (b) isdiscontinued, becomes impractical to use, or is otherwise not readilyascertainable for any reason, the administrator may designate a comparablereplacement reference rate and, upon publishing notice of the same, suchreplacement reference rate shall become the reference rate referred to insubparagraph (i) of paragraph (b). The secretary of state shall publish noticeof the code mortgage rate not later than the second issue of the Kansasregister published each month.

      (12)   "Conspicuous" means a term or clauseis conspicuous when it is sowritten that a reasonable person against whom it is to operate ought tohave noticed it. Whether a term or clause is conspicuous or not is fordecision by the trier of fact.

      (13)   "Consumer" means the buyer, lessee, or debtor to whomcredit isgranted in a consumer credit transaction.

      (14)   "Consumer credit sale":

      (a)   Except as provided in paragraph (b), a "consumer credit sale" isa sale of goods, services, or an interest in land in which:

      (i)   Credit is granted either by a seller who regularly engages as aseller in credit transactions of the same kind or pursuant to a creditcard other than a lender credit card,

      (ii)   the buyer is a person other than an organization,

      (iii)   the goods, services, or interest in land are purchasedprimarily for a personal, family or householdpurpose,

      (iv)   either the debt is by written agreement payable in more than fourinstallmentsor a finance chargeis made, and

      (v)   with respect to a sale of goods or services, the amount financeddoes not exceed $25,000.

      (b)   A "consumer credit sale" does not include:

      (i)   A sale in which the seller allows the buyer to purchase goods orservices pursuant to a lender credit card; or

      (ii)   a sale of an interest in land,unlessthe parties agree in writing to make the transaction subject to the uniformconsumer credit code.

      (15)   "Consumer credit transaction" means a consumer creditsale, consumer lease, or consumer loan or a modification thereof including arefinancing, consolidation, or deferral.

      (16)   "Consumer lease" means a lease of goods:

      (a)   Which a lessor regularly engaged in the business of leasingmakes to a person, other than an organization, who takes under the leaseprimarily for a personal, family or householdpurpose;

      (b)   in which the amount payable under the lease does not exceed $25,000;

      (c)   which is for a term exceeding four months; and

      (d)   which is not made pursuant to a lender credit card.

      (17)   "Consumer loan":

      (a)   Except as provided in paragraph (b), a "consumer loan" is a loanmade by a person regularly engaged in the business of making loans inwhich:

      (i)   The debtor is a person other than an organization;

      (ii)   the debt is incurred primarily for a personal, family or householdpurpose;

      (iii)   either the debt is payable by written agreement in morethan four installments or a finance chargeis made; and

      (iv)   either the amount financed does not exceed $25,000 or the debt issecured by an interest in land.

      (b)   Unless the loan is made subject to the uniform consumer credit code bywritten agreement, a"consumer loan" does not include:

      (i)   A loan secured by a first mortgage unless:

      (A)   The loan-to-value ratio of the loan at the time when made exceeds 100%;or

      (B)   in the case of subsection (1) ofK.S.A. 16a-3-308a andamendments thereto, the annualpercentage rate of the loan exceeds the code mortgage rate; or

      (ii)   a loan made by a qualified plan, as defined in section 401 of theinternal revenue code, to an individual participant in such plan or to amember of the family of such individual participant.

      (18)   "Credit" means the right granted by a creditor to adebtor todefer payment of debt or to incur debt and defer its payment.

      (19)   "Credit card" meansany card, plate or other single credit device that may be used from time totime to obtain credit. Since this involves the possibility of repeated use ofa single device, checks and similar instruments that can be used only once toobtain a single credit extension are not credit cards.

      (20)   "Creditor" means a person who regularly extendscredit in a consumercredit transaction which is payable by a written agreement in more thanfour installments or for which the payment of a finance charge is or maybe required and is the person to whom the debt arising from the consumercredit transaction is initially payable on the face of the evidence ofindebtednessor, if there is no such evidence of indebtedness, by written agreement.In the case of credit extended pursuant to a credit card, the creditor isthe card issuer and not another person honoring the credit card.

      (21)   "Earnings" means compensation paid or payable to anindividualor for such individual's account for personal services rendered or to berendered by such individual, whether denominated as wages, salary,commission, bonus, or otherwise, and includes periodic payments pursuantto a pension, retirement, or disability program.

      (22)   "Finance charge" means all charges payabledirectly or indirectly by the consumer and imposed directly or indirectly bythe creditor as an incident to or as a condition ofthe extension of credit. The finance charge shall be calculated as provided inrules and regulations adopted by the administrator pursuant to K.S.A.16a-6-117, and amendments thereto.

      (23)   "First mortgage" means a first priority mortgage lien or similar realproperty security interest.

      (24)   "Goods" includes goods not in existence at the timethetransaction is entered into and merchandise certificates, but excludesmoney, chattel paper, documents of title, and instruments.

      (25)   Except as otherwise provided, "lender" includes anassignee ofthe lender's right to payment but use of the term does not in itselfimpose on an assignee any obligation of the lender with respect toevents occurring before the assignment.

      (26)   "Lender credit card" means a credit card issued by asupervisedlender.

      (27)   "Loan":

      (a)   Except as provided in paragraph (b), a "loan" includes:

      (i)   Thecreation of debt by the lender's payment of or agreement to pay money tothe debtor or to a third party for the account of the debtor;

      (ii)   the creation of debt either pursuant to a lender credit card orby a cash advance to a debtor pursuant to a credit card other than alender credit card;

      (iii)   the creation of debt by a credit to an account with the lenderupon which the debtor is entitled to draw immediately; and

      (iv)   the forbearance of debt arising from a loan.

      (b)   A "loan" does not include the payment or agreement to pay moneyto a third party for the account of a debtor if the debt of the debtorarises from a sale or lease and results from use of either a credit cardissued by a person primarily in the business of selling or leasing goodsor services or any other credit card which may be used for the purchaseof goods or services and which is not a lender credit card.

      (28)   "Loan-to-value ratio", at any time for any loan secured by aninterest in real estate, means a fraction expressed as a percentage:

      (a)   The numerator of which is the aggregate unpaid principal balance of allloans secured by a first mortgage or a second mortgage encumbering the realestate at such time; and

      (b)   the denominator of which is the appraised value of the real estate.

      (29)   "Merchandise certificate" means a writing issued by asellernot redeemable in cash and usable in its face amount in lieu of cash inexchange for goods or services.

      (30)   "Official fees" means:

      (a)   Fees and charges prescribed by law which actually are or will bepaid to public officials for determining the existence of or forperfecting, releasing, or satisfying a security interest related to aconsumer credit sale, consumer lease, or consumer loan; or

      (b)   premiums payable for insurance in lieu of perfecting a securityinterest otherwise required by the creditor in connection with the sale,lease, or loan, if the premium does not exceed the fees and chargesdescribed in paragraph (a) which would otherwise be payable.

      (31)   "Open end credit" means an arrangement pursuant towhich:

      (a)   A creditor may permit a consumer, from time to time, to purchasegoods or services on credit from the creditor or pursuant to a creditcard, or to obtain loans from the creditor or pursuant to a credit card;

      (b)   the unpaid balance of amounts financed and the finance and otherappropriate charges are debited to an account;

      (c)   the finance charge, if made, is computedon the outstanding unpaid balances of the consumer's account from timeto time; and

      (d)   the consumer has the privilege of paying the balances ininstallments.

      (32)   "Organization" means a corporation, limitedliability company, government or governmental subdivision or agency, trust,estate, partnership, cooperative orassociation.

      (33)   "Person" includes a natural person or an individual,and an organization.

      (34) (a)   "Person related to" with respect to an individualmeans(i) thespouse of the individual, (ii) a brother, brother-in-law,sister,sister-in-law of the individual, (iii) an ancestor or linealdescendant ofthe individual or the individual's spouse, and (iv) any otherrelative, byblood,adoption or marriage, of the individual or such individual's spouse whoshares the same home with the individual.

      (b)   "Person related to" withrespect to an organization means (i) a person directly orindirectlycontrolling, controlled by or under common control with theorganization, (ii) an officer or director of the organizationor a personperforming similar functions with respect to the organization or to aperson related to the organization, (iii) the spouse of aperson relatedto the organization, and (iv) a relative by blood, adoptionor marriageof a person related to the organization who shares the same home withsuch person.

      (35)   "Prepaid finance charge" means any finance charge paid separately incash or by check before or at consummation of a transaction, or withheld fromthe proceeds of the credit at any time. Prepaid finance charges shall becalculated as provided in rules and regulations adopted by the administratorpursuant to K.S.A. 16a-6-117, and amendments thereto.

      (36)   "Presumed" or "presumption" means that the trier offact must find the existence of the fact presumed unless and until evidence isintroduced which would support a finding of its nonexistence.

      (37)   "Principal" means the total of the amount financedand theprepaidfinance charges, except that prepaid finance charges are not addedto the amount financed to the extent such prepaid finance charges are paidseparately in cash or by check by the consumer. The administrator may adoptrules and regulations regarding the determination or calculation of theprincipal or theprincipal balance pursuant to K.S.A. 16a-6-117,and amendments thereto.

      (38)   "Sale of goods" includes any agreement in the form ofa bailment or lease of goods if the bailee or lessee agrees to pay ascompensation for use a sum substantially equivalent to or in excess ofthe aggregate value of the goods involved and it is agreed that thebailee or lessee will become, or for no other or a nominal considerationhas the option to become, the owner of the goods upon full compliancewith such bailee's or lessee's obligations under the agreements.

      (39)   "Sale of an interest in land" includes a lease inwhichthelessee has an option to purchase the interest and all or a substantialpart of the rental or other payments previously made by the lessee areapplied to the purchase price.

      (40)   "Sale of services" means furnishing or agreeing tofurnishservices and includes making arrangements to have services furnished byanother.

      (41)   "Second mortgage" means a second or other subordinate prioritymortgage lien or similar real property security interest.

      (42)   "Seller": Except as otherwise provided, "seller"includes an assignee of the seller's right to payment but use of the term doesnotin itself impose on an assignee any obligation of the seller withrespect to events occurring before the assignment.

      (43)   "Services" includes (a) work, labor, and otherpersonalservices, (b) privileges with respect to transportation, hotel andrestaurant accommodations, education, entertainment, recreation,physical culture, hospital accommodations, funerals, cemeteryaccommodations, and the like, and (c) insurance.

      (44)   "Supervised financial organization" means a person,otherthanan insurance company or other organization primarily engaged in aninsurance business:

      (a)   Organized, chartered, or holding an authorization certificateunder the laws of any state or of the United States whichauthorize theperson to make loans and to receive deposits, including a savings,share, certificate or deposit account; and

      (b)   subject to supervision by an official or agency of such state orof the United States.

      (45)   "Supervised lender" means a person authorized to makeor take assignments of supervised loans, either under a license issued by theadministrator (K.S.A. 16a-2-301 and amendments thereto) or as a supervisedfinancial organization (subsection (44) of K.S.A. 16a-1-301 andamendments thereto).

      (46)   "Supervised loan" means a consumer loan, including aloan made pursuant to open end credit, with respect to which the annualpercentage rateexceeds 12%.

      (47)   "Written agreement" means an agreement such as apromissory note,contract or lease that is evidence of or relates to the indebtedness. Aletter that merelyconfirms an oral agreement does not constitute a written agreement for purposesof this subsection unless signed by the person against whom enforcement issought.

      (48)   "Written administrative interpretation" means anywrittencommunication from the consumer credit commissioner which is the officialinterpretation as so stated in said written communication by the consumercredit commissioner of the Kansas uniform consumer credit code and rules andregulations pertaining thereto.

      History:   L. 1973, ch. 85, § 11;L. 1980, ch. 75, § 4;L. 1980, ch. 76, § 5;L. 1981, ch. 93, § 5;L. 1982, ch. 89, § 2;L. 1984, ch. 83, § 1;L. 1988, ch. 85, § 2;L. 1992, ch. 80, § 1;L. 1993, ch. 200, § 4;L. 1993, ch. 200, § 5;L. 1996, ch. 166, § 2;L. 1998, ch. 106, § 1;L. 1999, ch. 107, § 8;L. 1999, ch. 166, § 8;L. 2000, ch. 27, § 1;L. 2006, ch. 97, § 1; July 1.