16a-2-501.   (UCCC) Additional charges.(1) In addition to the finance charge permitted by the parts of this article onmaximum finance charges for consumer credit sales and consumer loans (parts 2and 4), a creditor may contract for and receive the following additionalcharges in connection with a consumer credit transaction:

      (a)   Official fees and taxes;

      (b)   charges for insurance as described in subsection (2);

      (c)   delinquency charges permitted under K.S.A. 16a-2-502, andamendments thereto, and service charges for insufficient checks permitted underparagraph (e);

      (d)   charges for other benefits, including insurance, conferred on theconsumer, if the benefits are of value to the consumer and if the charges arereasonable in relation to the benefits, are of a type which is not forcredit, and are excluded as permissible additional charges from the financecharge by rules and regulations adopted by the administrator;

      (e)   a service charge for an insufficient check as defined and authorized bythis subsection:

      (i)   For the purposes of this subsection, "insufficient check" means anycheck, order or draft drawn on any bank, credit union, savings and loanassociation, or other financial institution for the payment of money anddelivered in payment, in whole or in part, of preexisting indebtedness ofthe drawer or maker, which is refused payment by the drawee because thedrawer or maker does not have sufficient funds in or credits with thedrawee to pay the amount of the check, order or draft upon presentation,provided that any check, order or draft which is postdated or delivered toa payee who has knowledge at the time of delivery that the drawer or makerdid not have sufficient funds in or credits with the drawee topay the amount of the check, draft or order upon presentation shall not bedeemed an insufficient check.

      (ii)   "Written notice" shall be presumed to have been given a drawer or makerof an insufficient check when notice is sent by first class mail addressed tothe person to be given notice of such person's address as it appears on theinsufficient check or to such person's last known address or notice provided ona regular monthly statement provides clear notice of the insufficient checkcharge being assessed.

      (iii)   When an insufficient check has been given to a payee, the payee maycharge and collect a $10 insufficient check service charge from the drawer ormaker, subject to limitations contained in this subsection or, if a largeramount is provided within the contract, the larger amount, if the payee hasgiven the drawer or maker oral or written notice of demand that the amount ofthe insufficient check plus the insufficient check service charge be paid tothe payee within 14 days from the giving of notice. In no event shall theamount of such insufficient check service charge exceed $30.

      (iv)   If the drawer or maker of an insufficient check does not pay the amountof the insufficient check plus the insufficient check service charge providedfor in subsection (iii) to the payee within 14 days from the giving of noticeas provided in subsection (iii), the payee may add the insufficient checkservice charge to the outstanding balance of the preexisting indebtedness ofthe drawer or maker to draw interest at the contract rate applicable to thepreexisting indebtedness.

      (v)   Notwithstanding the provisions of subparagraph (iii), if aninsufficient check has been given to a creditor under a lender credit card, thecreditor may charge a service charge for the insufficient check in an amountnot to exceed the amount agreed to by the drawer or maker.

      (2)   An additional charge may be made for insurance written in connectionwith the transaction, including vendor's single interest insurance withrespect to which the insurer has no right of subrogation against theconsumer but excluding other insurance protecting the creditor against theconsumer's default or other credit loss:

      (a)   With respect to insurance against loss of or damage to property, oragainst liability, if the creditor furnishes a clear and specific statementin writing to the consumer setting forth the cost of the insurance ifobtained from or through the creditor and stating that the consumer maychoose the person through whom the insurance is to be obtained; and

      (b)   with respect to consumer credit insurance providing life, accidentand health, or loss of employment coverage, if the insurance coverage isnot a factor in the approval by the creditor of the extension of credit, andthis fact is clearly disclosed in writing to the consumer, and if, in order toobtain the insurance in connection with the extension of credit, the consumergives specific affirmative written indication of the consumer's desire to do soafter written disclosure to the consumer of the cost thereof.

      (3)   With respect to a consumer loan or a consumer credit sale in eithercase pursuant to open end credit, a creditor may charge the following fees inan amount not to exceed that agreed to by the consumer:

      (a)   Fees on a monthly or annual basis;

      (b)   over-limit fees; and

      (c)   cash advance fees. The fees permitted under this subsection are inaddition to any finance charges, additional charges or other charges permittedby the uniform consumer credit code.

      (4)   A charge not exceeding $5 per payment, if the borrower makes a singleinstallment payment by authorizing a creditor, verbally or in writing, towrite a check or process a payment through use of the automated clearing houseprocedures on the borrower's checking account, subject to the followinglimitations:

      (A)   No charge shall be assessed if the creditor also collects a delinquencyfee on the same installment; and

      (B)   no charge shall be assessed where the consumer has agreed in writingwith the creditor to make all scheduled payments through the use of theautomated clearing house procedures.

      History:   L. 1973, ch. 85, § 29;L. 1987, ch. 80, § 1;L. 1988, ch. 88, § 1;L. 1988, ch. 89, § 1;L. 1988, ch. 87, § 3;L. 1990, ch. 209, § 2;L. 1991, ch. 72, § 1;L. 1996, ch. 174, § 1;L. 1999, ch. 107, § 18;L. 2004, ch. 32, § 1; July 1.