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 debt
between the
principal and the finance charge pursuant to
which a payment is
applied, assuming no delinquency charges or other additional charges are
then due, first to the accumulated finance charge and then to the unpaid
principal
balance. When a
finance charge is calculated in accordance with the actuarial method, the
contract rate is applied to the unpaid principal balance for the number of days
the principal balance is unpaid. At the end of each computational period, or
fractional computational period, the unpaid principal balance is increased by
the amount of the finance charge earned during that period and is decreased by
the total payment, if any, made during the period after the deduction of any
delinquency charges or other additional charges due during the period.
(2) "Administrator" means the deputy commissioner of the consumer
and mortgage lending
division appointed by the bank commissioner pursuant to K.S.A.
75-3135, and
amendments thereto.
(3) "Agreement" means the bargain of the parties in fact as found in
their language or by implication from other circumstances including
course of dealing or usage of trade or course of performance.
(4) "Amount financed" means the
net amount of
credit provided to the consumer or on the consumer's behalf. The amount
financed shall be calculated as provided in rules and regulations adopted by
the administrator pursuant to K.S.A. 16a-6-117, and amendments thereto.
(5) "Annual percentage rate" means the finance charge expressed as a yearly
rate, as calculated in accordance with the actuarial method. The annual
percentage rate shall be calculated as provided in rules and regulations
adopted by the administrator pursuant to K.S.A. 16a-6-117, and amendments
thereto.
(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 most
recent records of the tax assessor of the county in which the real estate is
located;
(b) the fair market value of the real estate, as reflected in a written
appraisal of the real estate performed by a Kansas licensed or certified
appraiser within the past 12 months; or
(c) in the case of a nonpurchase money real estate transaction, the estimated
market value as determined through an automated valuation model acceptable to
the
administrator. As used in this paragraph (c), "automated
valuation model" means an automated system that is used to derive a property
value through the use of publicly available property records and various
analytic methodologies such as comparable sales prices, home characteristics
and historical home price appreciations. Automated valuation models must be
validated by an independent credit rating agency. An automated valuation model
provider shall not accept a property valuation assignment when the assignment
itself is contingent upon the automated valuation model provider reporting a
predetermined property valuation, or when the fee to be paid to the automated
valuation model provider is contingent upon the property valuation reached or
upon the consequences resulting from the property valuation assignment.
(7) "Billing cycle" means the time interval between
periodic billing
statement dates.
(8) "Cash price" of goods, services, or an interest in
land means
the price at which they are offered for sale by the seller to cash
buyers in the ordinary course of business and may include (a) the cash
price 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, or
interest in land. The cash price stated by the seller to the buyer in a
disclosure statement is presumed to be the cash price.
(9) "Closed end credit" means a consumer loan or a consumer credit sale
which is not incurred pursuant to open end credit.
(10) "Closing costs" with respect to a debt secured by an
interest in
land includes:
(a) The actual fees paid a public official or agency of the state or
federal government, for filing, recording or releasing any instrument relating
to the debt; and
(b) bona fide and reasonable expenses incurred by the lender in connection
with the
making, closing, disbursing, extending, readjusting or renewing the debt which
are payable to third parties not related to the lender, except that reasonable
fees for an appraisal made by the lender or related
party 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 loans
committed for delivery within 61 to 90 days accepted under the
federal home
loan mortgage corporation's or any successor's daily offerings for sale on the
last day on which commitments for such mortgages were received in the previous
month; and
(ii) 5%.
If the reference rate referred to in subparagraph (i) of paragraph (b) is
discontinued, becomes impractical to use, or is otherwise not readily
ascertainable for any reason, the administrator may designate a comparable
replacement reference rate and, upon publishing notice of the same, such
replacement reference rate shall become the reference rate referred to in
subparagraph (i) of paragraph (b). The secretary of state shall publish notice
of the code mortgage rate not later than the second issue of the Kansas
register published each month.
(12) "Conspicuous" means a term or clause
is conspicuous when it is so
written that a reasonable person against whom it is to operate ought to
have noticed it. Whether a term or clause is conspicuous or not is for
decision by the trier of fact.
(13) "Consumer" means the buyer, lessee, or debtor to whom
credit is
granted in a consumer credit transaction.
(14) "Consumer credit sale":
(a) Except as provided in paragraph (b), a "consumer credit sale" is
a sale of goods, services, or an interest in land in which:
(i) Credit is granted either by a seller who regularly engages as a
seller in credit transactions of the same kind or pursuant to a credit
card 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 purchased
primarily for a personal, family or household
purpose,
(iv) either the debt is by written agreement payable in more than four
installments
or a finance charge
is made, and
(v) with respect to a sale of goods or services, the amount financed
does 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 or
services pursuant to a lender credit card; or
(ii) a sale of an interest in land,
unless
the parties agree in writing to make the transaction subject to the uniform
consumer credit code.
(15) "Consumer credit transaction" means a consumer credit
sale, consumer lease, or consumer loan or a modification thereof including a
refinancing, consolidation, or deferral.
(16) "Consumer lease" means a lease of goods:
(a) Which a lessor regularly engaged in the business of leasing
makes to a person, other than an organization, who takes under the lease
primarily for a personal, family or household
purpose;
(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 loan
made by a person regularly engaged in the business of making loans in
which:
(i) The debtor is a person other than an organization;
(ii) the debt is incurred primarily for a personal, family or household
purpose;
(iii) either the debt is payable by written agreement in more
than four installments or a finance charge
is made; and
(iv) either the amount financed does not exceed $25,000 or the debt is
secured by an interest in land.
(b) Unless the loan is made subject to the uniform consumer credit code by
written 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) of
K.S.A. 16a-3-308a and
amendments thereto, the annual
percentage rate of the loan exceeds the code mortgage rate; or
(ii) a loan made by a qualified plan, as defined in section 401 of the
internal revenue code, to an individual participant in such plan or to a
member of the family of such individual participant.
(18) "Credit" means the right granted by a creditor to a
debtor to
defer payment of debt or to incur debt and defer its payment.
(19) "Credit card" means
any card, plate or other single credit device that may be used from time to
time to obtain credit. Since this involves the possibility of repeated use of
a single device, checks and similar instruments that can be used only once to
obtain a single credit extension are not credit cards.
(20) "Creditor" means a person who regularly extends
credit in a consumer
credit transaction which is payable by a written agreement in more than
four installments or for which the payment of a finance charge is or may
be required and is the person to whom the debt arising from the consumer
credit transaction is initially payable on the face of the evidence of
indebtedness
or, if there is no such evidence of indebtedness, by written agreement.
In the case of credit extended pursuant to a credit card, the creditor is
the card issuer and not another person honoring the credit card.
(21) "Earnings" means compensation paid or payable to an
individual
or for such individual's account for personal services rendered or to be
rendered by such individual, whether denominated as wages, salary,
commission, bonus, or otherwise, and includes periodic payments pursuant
to a pension, retirement, or disability program.
(22) "Finance charge" means all charges payable
directly or indirectly by the consumer and imposed directly or indirectly by
the creditor as an incident to or as a condition of
the extension of credit. The finance charge shall be calculated as provided in
rules 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 real
property security interest.
(24) "Goods" includes goods not in existence at the time
the
transaction is entered into and merchandise certificates, but excludes
money, chattel paper, documents of title, and instruments.
(25) Except as otherwise provided, "lender" includes an
assignee of
the lender's right to payment but use of the term does not in itself
impose on an assignee any obligation of the lender with respect to
events occurring before the assignment.
(26) "Lender credit card" means a credit card issued by a
supervised
lender.
(27) "Loan":
(a) Except as provided in paragraph (b), a "loan" includes:
(i) The
creation of debt by the lender's payment of or agreement to pay money to
the debtor or to a third party for the account of the debtor;
(ii) the creation of debt either pursuant to a lender credit card or
by a cash advance to a debtor pursuant to a credit card other than a
lender credit card;
(iii) the creation of debt by a credit to an account with the lender
upon 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 money
to a third party for the account of a debtor if the debt of the debtor
arises from a sale or lease and results from use of either a credit card
issued by a person primarily in the business of selling or leasing goods
or services or any other credit card which may be used for the purchase
of goods or services and which is not a lender credit card.
(28) "Loan-to-value ratio", at any time for any loan secured by an
interest in real estate, means a fraction expressed as a percentage:
(a) The numerator of which is the aggregate unpaid principal balance of all
loans secured by a first mortgage or a second mortgage encumbering the real
estate 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 a
seller
not redeemable in cash and usable in its face amount in lieu of cash in
exchange for goods or services.
(30) "Official fees" means:
(a) Fees and charges prescribed by law which actually are or will be
paid to public officials for determining the existence of or for
perfecting, releasing, or satisfying a security interest related to a
consumer credit sale, consumer lease, or consumer loan; or
(b) premiums payable for insurance in lieu of perfecting a security
interest otherwise required by the creditor in connection with the sale,
lease, or loan, if the premium does not exceed the fees and charges
described in paragraph (a) which would otherwise be payable.
(31) "Open end credit" means an arrangement pursuant to
which:
(a) A creditor may permit a consumer, from time to time, to purchase
goods or services on credit from the creditor or pursuant to a credit
card, or to obtain loans from the creditor or pursuant to a credit card;
(b) the unpaid balance of amounts financed and the finance and other
appropriate charges are debited to an account;
(c) the finance charge, if made, is computed
on the outstanding unpaid balances of the consumer's account from time
to time; and
(d) the consumer has the privilege of paying the balances in
installments.
(32) "Organization" means a corporation, limited
liability company, government or governmental subdivision or agency, trust,
estate, partnership, cooperative or
association.
(33) "Person" includes a natural person or an individual,
and an organization.
(34) (a) "Person related to" with respect to an individual
means
(i) the
spouse of the individual, (ii) a brother, brother-in-law,
sister,
sister-in-law of the individual, (iii) an ancestor or lineal
descendant of
the individual or the individual's spouse, and (iv) any other
relative, by
blood,
adoption or marriage, of the individual or such individual's spouse who
shares the same home with the individual.
(b) "Person related to" with
respect to an organization means (i) a person directly or
indirectly
controlling, controlled by or under common control with the
organization, (ii) an officer or director of the organization
or a person
performing similar functions with respect to the organization or to a
person related to the organization, (iii) the spouse of a
person related
to the organization, and (iv) a relative by blood, adoption
or marriage
of a person related to the organization who shares the same home with
such person.
(35) "Prepaid finance charge" means any finance charge paid separately in
cash or by check before or at consummation of a transaction, or withheld from
the proceeds of the credit at any time. Prepaid finance charges shall be
calculated as provided in rules and regulations adopted by the administrator
pursuant to K.S.A. 16a-6-117, and amendments thereto.
(36) "Presumed" or "presumption" means that the trier of
fact must find the existence of the fact presumed unless and until evidence is
introduced which would support a finding of its nonexistence.
(37) "Principal" means the total of the amount financed
and the
prepaid
finance charges, except that prepaid finance charges are not added
to the amount financed to the extent such prepaid finance charges are paid
separately in cash or by check by the consumer. The administrator may adopt
rules and regulations regarding the determination or calculation of the
principal or the
principal balance pursuant to K.S.A. 16a-6-117,
and amendments thereto.
(38) "Sale of goods" includes any agreement in the form of
a bailment or lease of goods if the bailee or lessee agrees to pay as
compensation for use a sum substantially equivalent to or in excess of
the aggregate value of the goods involved and it is agreed that the
bailee or lessee will become, or for no other or a nominal consideration
has the option to become, the owner of the goods upon full compliance
with such bailee's or lessee's obligations under the agreements.
(39) "Sale of an interest in land" includes a lease in
which
the
lessee has an option to purchase the interest and all or a substantial
part of the rental or other payments previously made by the lessee are
applied to the purchase price.
(40) "Sale of services" means furnishing or agreeing to
furnish
services and includes making arrangements to have services furnished by
another.
(41) "Second mortgage" means a second or other subordinate priority
mortgage 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 does
not
in itself impose on an assignee any obligation of the seller with
respect to events occurring before the assignment.
(43) "Services" includes (a) work, labor, and other
personal
services, (b) privileges with respect to transportation, hotel and
restaurant accommodations, education, entertainment, recreation,
physical culture, hospital accommodations, funerals, cemetery
accommodations, and the like, and (c) insurance.
(44) "Supervised financial organization" means a person,
other
than
an insurance company or other organization primarily engaged in an
insurance business:
(a) Organized, chartered, or holding an authorization certificate
under the laws of any state or of the United States which
authorize the
person 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 or
of the United States.
(45) "Supervised lender" means a person authorized to make
or take assignments of supervised loans, either under a license issued by the
administrator (K.S.A. 16a-2-301 and amendments thereto) or as a supervised
financial organization (subsection (44) of K.S.A. 16a-1-301 and
amendments thereto).
(46) "Supervised loan" means a consumer loan, including a
loan made pursuant to open end credit, with respect to which the annual
percentage rate
exceeds 12%.
(47) "Written agreement" means an agreement such as a
promissory note,
contract or lease that is evidence of or relates to the indebtedness. A
letter that merely
confirms an oral agreement does not constitute a written agreement for purposes
of this subsection unless signed by the person against whom enforcement is
sought.
(48) "Written administrative interpretation" means any
written
communication from the consumer credit commissioner which is the official
interpretation as so stated in said written communication by the consumer
credit commissioner of the Kansas uniform consumer credit code and rules and
regulations 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.
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 debt
between the
principal and the finance charge pursuant to
which a payment is
applied, assuming no delinquency charges or other additional charges are
then due, first to the accumulated finance charge and then to the unpaid
principal
balance. When a
finance charge is calculated in accordance with the actuarial method, the
contract rate is applied to the unpaid principal balance for the number of days
the principal balance is unpaid. At the end of each computational period, or
fractional computational period, the unpaid principal balance is increased by
the amount of the finance charge earned during that period and is decreased by
the total payment, if any, made during the period after the deduction of any
delinquency charges or other additional charges due during the period.
(2) "Administrator" means the deputy commissioner of the consumer
and mortgage lending
division appointed by the bank commissioner pursuant to K.S.A.
75-3135, and
amendments thereto.
(3) "Agreement" means the bargain of the parties in fact as found in
their language or by implication from other circumstances including
course of dealing or usage of trade or course of performance.
(4) "Amount financed" means the
net amount of
credit provided to the consumer or on the consumer's behalf. The amount
financed shall be calculated as provided in rules and regulations adopted by
the administrator pursuant to K.S.A. 16a-6-117, and amendments thereto.
(5) "Annual percentage rate" means the finance charge expressed as a yearly
rate, as calculated in accordance with the actuarial method. The annual
percentage rate shall be calculated as provided in rules and regulations
adopted by the administrator pursuant to K.S.A. 16a-6-117, and amendments
thereto.
(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 most
recent records of the tax assessor of the county in which the real estate is
located;
(b) the fair market value of the real estate, as reflected in a written
appraisal of the real estate performed by a Kansas licensed or certified
appraiser within the past 12 months; or
(c) in the case of a nonpurchase money real estate transaction, the estimated
market value as determined through an automated valuation model acceptable to
the
administrator. As used in this paragraph (c), "automated
valuation model" means an automated system that is used to derive a property
value through the use of publicly available property records and various
analytic methodologies such as comparable sales prices, home characteristics
and historical home price appreciations. Automated valuation models must be
validated by an independent credit rating agency. An automated valuation model
provider shall not accept a property valuation assignment when the assignment
itself is contingent upon the automated valuation model provider reporting a
predetermined property valuation, or when the fee to be paid to the automated
valuation model provider is contingent upon the property valuation reached or
upon the consequences resulting from the property valuation assignment.
(7) "Billing cycle" means the time interval between
periodic billing
statement dates.
(8) "Cash price" of goods, services, or an interest in
land means
the price at which they are offered for sale by the seller to cash
buyers in the ordinary course of business and may include (a) the cash
price 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, or
interest in land. The cash price stated by the seller to the buyer in a
disclosure statement is presumed to be the cash price.
(9) "Closed end credit" means a consumer loan or a consumer credit sale
which is not incurred pursuant to open end credit.
(10) "Closing costs" with respect to a debt secured by an
interest in
land includes:
(a) The actual fees paid a public official or agency of the state or
federal government, for filing, recording or releasing any instrument relating
to the debt; and
(b) bona fide and reasonable expenses incurred by the lender in connection
with the
making, closing, disbursing, extending, readjusting or renewing the debt which
are payable to third parties not related to the lender, except that reasonable
fees for an appraisal made by the lender or related
party 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 loans
committed for delivery within 61 to 90 days accepted under the
federal home
loan mortgage corporation's or any successor's daily offerings for sale on the
last day on which commitments for such mortgages were received in the previous
month; and
(ii) 5%.
If the reference rate referred to in subparagraph (i) of paragraph (b) is
discontinued, becomes impractical to use, or is otherwise not readily
ascertainable for any reason, the administrator may designate a comparable
replacement reference rate and, upon publishing notice of the same, such
replacement reference rate shall become the reference rate referred to in
subparagraph (i) of paragraph (b). The secretary of state shall publish notice
of the code mortgage rate not later than the second issue of the Kansas
register published each month.
(12) "Conspicuous" means a term or clause
is conspicuous when it is so
written that a reasonable person against whom it is to operate ought to
have noticed it. Whether a term or clause is conspicuous or not is for
decision by the trier of fact.
(13) "Consumer" means the buyer, lessee, or debtor to whom
credit is
granted in a consumer credit transaction.
(14) "Consumer credit sale":
(a) Except as provided in paragraph (b), a "consumer credit sale" is
a sale of goods, services, or an interest in land in which:
(i) Credit is granted either by a seller who regularly engages as a
seller in credit transactions of the same kind or pursuant to a credit
card 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 purchased
primarily for a personal, family or household
purpose,
(iv) either the debt is by written agreement payable in more than four
installments
or a finance charge
is made, and
(v) with respect to a sale of goods or services, the amount financed
does 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 or
services pursuant to a lender credit card; or
(ii) a sale of an interest in land,
unless
the parties agree in writing to make the transaction subject to the uniform
consumer credit code.
(15) "Consumer credit transaction" means a consumer credit
sale, consumer lease, or consumer loan or a modification thereof including a
refinancing, consolidation, or deferral.
(16) "Consumer lease" means a lease of goods:
(a) Which a lessor regularly engaged in the business of leasing
makes to a person, other than an organization, who takes under the lease
primarily for a personal, family or household
purpose;
(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 loan
made by a person regularly engaged in the business of making loans in
which:
(i) The debtor is a person other than an organization;
(ii) the debt is incurred primarily for a personal, family or household
purpose;
(iii) either the debt is payable by written agreement in more
than four installments or a finance charge
is made; and
(iv) either the amount financed does not exceed $25,000 or the debt is
secured by an interest in land.
(b) Unless the loan is made subject to the uniform consumer credit code by
written 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) of
K.S.A. 16a-3-308a and
amendments thereto, the annual
percentage rate of the loan exceeds the code mortgage rate; or
(ii) a loan made by a qualified plan, as defined in section 401 of the
internal revenue code, to an individual participant in such plan or to a
member of the family of such individual participant.
(18) "Credit" means the right granted by a creditor to a
debtor to
defer payment of debt or to incur debt and defer its payment.
(19) "Credit card" means
any card, plate or other single credit device that may be used from time to
time to obtain credit. Since this involves the possibility of repeated use of
a single device, checks and similar instruments that can be used only once to
obtain a single credit extension are not credit cards.
(20) "Creditor" means a person who regularly extends
credit in a consumer
credit transaction which is payable by a written agreement in more than
four installments or for which the payment of a finance charge is or may
be required and is the person to whom the debt arising from the consumer
credit transaction is initially payable on the face of the evidence of
indebtedness
or, if there is no such evidence of indebtedness, by written agreement.
In the case of credit extended pursuant to a credit card, the creditor is
the card issuer and not another person honoring the credit card.
(21) "Earnings" means compensation paid or payable to an
individual
or for such individual's account for personal services rendered or to be
rendered by such individual, whether denominated as wages, salary,
commission, bonus, or otherwise, and includes periodic payments pursuant
to a pension, retirement, or disability program.
(22) "Finance charge" means all charges payable
directly or indirectly by the consumer and imposed directly or indirectly by
the creditor as an incident to or as a condition of
the extension of credit. The finance charge shall be calculated as provided in
rules 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 real
property security interest.
(24) "Goods" includes goods not in existence at the time
the
transaction is entered into and merchandise certificates, but excludes
money, chattel paper, documents of title, and instruments.
(25) Except as otherwise provided, "lender" includes an
assignee of
the lender's right to payment but use of the term does not in itself
impose on an assignee any obligation of the lender with respect to
events occurring before the assignment.
(26) "Lender credit card" means a credit card issued by a
supervised
lender.
(27) "Loan":
(a) Except as provided in paragraph (b), a "loan" includes:
(i) The
creation of debt by the lender's payment of or agreement to pay money to
the debtor or to a third party for the account of the debtor;
(ii) the creation of debt either pursuant to a lender credit card or
by a cash advance to a debtor pursuant to a credit card other than a
lender credit card;
(iii) the creation of debt by a credit to an account with the lender
upon 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 money
to a third party for the account of a debtor if the debt of the debtor
arises from a sale or lease and results from use of either a credit card
issued by a person primarily in the business of selling or leasing goods
or services or any other credit card which may be used for the purchase
of goods or services and which is not a lender credit card.
(28) "Loan-to-value ratio", at any time for any loan secured by an
interest in real estate, means a fraction expressed as a percentage:
(a) The numerator of which is the aggregate unpaid principal balance of all
loans secured by a first mortgage or a second mortgage encumbering the real
estate 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 a
seller
not redeemable in cash and usable in its face amount in lieu of cash in
exchange for goods or services.
(30) "Official fees" means:
(a) Fees and charges prescribed by law which actually are or will be
paid to public officials for determining the existence of or for
perfecting, releasing, or satisfying a security interest related to a
consumer credit sale, consumer lease, or consumer loan; or
(b) premiums payable for insurance in lieu of perfecting a security
interest otherwise required by the creditor in connection with the sale,
lease, or loan, if the premium does not exceed the fees and charges
described in paragraph (a) which would otherwise be payable.
(31) "Open end credit" means an arrangement pursuant to
which:
(a) A creditor may permit a consumer, from time to time, to purchase
goods or services on credit from the creditor or pursuant to a credit
card, or to obtain loans from the creditor or pursuant to a credit card;
(b) the unpaid balance of amounts financed and the finance and other
appropriate charges are debited to an account;
(c) the finance charge, if made, is computed
on the outstanding unpaid balances of the consumer's account from time
to time; and
(d) the consumer has the privilege of paying the balances in
installments.
(32) "Organization" means a corporation, limited
liability company, government or governmental subdivision or agency, trust,
estate, partnership, cooperative or
association.
(33) "Person" includes a natural person or an individual,
and an organization.
(34) (a) "Person related to" with respect to an individual
means
(i) the
spouse of the individual, (ii) a brother, brother-in-law,
sister,
sister-in-law of the individual, (iii) an ancestor or lineal
descendant of
the individual or the individual's spouse, and (iv) any other
relative, by
blood,
adoption or marriage, of the individual or such individual's spouse who
shares the same home with the individual.
(b) "Person related to" with
respect to an organization means (i) a person directly or
indirectly
controlling, controlled by or under common control with the
organization, (ii) an officer or director of the organization
or a person
performing similar functions with respect to the organization or to a
person related to the organization, (iii) the spouse of a
person related
to the organization, and (iv) a relative by blood, adoption
or marriage
of a person related to the organization who shares the same home with
such person.
(35) "Prepaid finance charge" means any finance charge paid separately in
cash or by check before or at consummation of a transaction, or withheld from
the proceeds of the credit at any time. Prepaid finance charges shall be
calculated as provided in rules and regulations adopted by the administrator
pursuant to K.S.A. 16a-6-117, and amendments thereto.
(36) "Presumed" or "presumption" means that the trier of
fact must find the existence of the fact presumed unless and until evidence is
introduced which would support a finding of its nonexistence.
(37) "Principal" means the total of the amount financed
and the
prepaid
finance charges, except that prepaid finance charges are not added
to the amount financed to the extent such prepaid finance charges are paid
separately in cash or by check by the consumer. The administrator may adopt
rules and regulations regarding the determination or calculation of the
principal or the
principal balance pursuant to K.S.A. 16a-6-117,
and amendments thereto.
(38) "Sale of goods" includes any agreement in the form of
a bailment or lease of goods if the bailee or lessee agrees to pay as
compensation for use a sum substantially equivalent to or in excess of
the aggregate value of the goods involved and it is agreed that the
bailee or lessee will become, or for no other or a nominal consideration
has the option to become, the owner of the goods upon full compliance
with such bailee's or lessee's obligations under the agreements.
(39) "Sale of an interest in land" includes a lease in
which
the
lessee has an option to purchase the interest and all or a substantial
part of the rental or other payments previously made by the lessee are
applied to the purchase price.
(40) "Sale of services" means furnishing or agreeing to
furnish
services and includes making arrangements to have services furnished by
another.
(41) "Second mortgage" means a second or other subordinate priority
mortgage 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 does
not
in itself impose on an assignee any obligation of the seller with
respect to events occurring before the assignment.
(43) "Services" includes (a) work, labor, and other
personal
services, (b) privileges with respect to transportation, hotel and
restaurant accommodations, education, entertainment, recreation,
physical culture, hospital accommodations, funerals, cemetery
accommodations, and the like, and (c) insurance.
(44) "Supervised financial organization" means a person,
other
than
an insurance company or other organization primarily engaged in an
insurance business:
(a) Organized, chartered, or holding an authorization certificate
under the laws of any state or of the United States which
authorize the
person 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 or
of the United States.
(45) "Supervised lender" means a person authorized to make
or take assignments of supervised loans, either under a license issued by the
administrator (K.S.A. 16a-2-301 and amendments thereto) or as a supervised
financial organization (subsection (44) of K.S.A. 16a-1-301 and
amendments thereto).
(46) "Supervised loan" means a consumer loan, including a
loan made pursuant to open end credit, with respect to which the annual
percentage rate
exceeds 12%.
(47) "Written agreement" means an agreement such as a
promissory note,
contract or lease that is evidence of or relates to the indebtedness. A
letter that merely
confirms an oral agreement does not constitute a written agreement for purposes
of this subsection unless signed by the person against whom enforcement is
sought.
(48) "Written administrative interpretation" means any
written
communication from the consumer credit commissioner which is the official
interpretation as so stated in said written communication by the consumer
credit commissioner of the Kansas uniform consumer credit code and rules and
regulations 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.
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 debt
between the
principal and the finance charge pursuant to
which a payment is
applied, assuming no delinquency charges or other additional charges are
then due, first to the accumulated finance charge and then to the unpaid
principal
balance. When a
finance charge is calculated in accordance with the actuarial method, the
contract rate is applied to the unpaid principal balance for the number of days
the principal balance is unpaid. At the end of each computational period, or
fractional computational period, the unpaid principal balance is increased by
the amount of the finance charge earned during that period and is decreased by
the total payment, if any, made during the period after the deduction of any
delinquency charges or other additional charges due during the period.
(2) "Administrator" means the deputy commissioner of the consumer
and mortgage lending
division appointed by the bank commissioner pursuant to K.S.A.
75-3135, and
amendments thereto.
(3) "Agreement" means the bargain of the parties in fact as found in
their language or by implication from other circumstances including
course of dealing or usage of trade or course of performance.
(4) "Amount financed" means the
net amount of
credit provided to the consumer or on the consumer's behalf. The amount
financed shall be calculated as provided in rules and regulations adopted by
the administrator pursuant to K.S.A. 16a-6-117, and amendments thereto.
(5) "Annual percentage rate" means the finance charge expressed as a yearly
rate, as calculated in accordance with the actuarial method. The annual
percentage rate shall be calculated as provided in rules and regulations
adopted by the administrator pursuant to K.S.A. 16a-6-117, and amendments
thereto.
(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 most
recent records of the tax assessor of the county in which the real estate is
located;
(b) the fair market value of the real estate, as reflected in a written
appraisal of the real estate performed by a Kansas licensed or certified
appraiser within the past 12 months; or
(c) in the case of a nonpurchase money real estate transaction, the estimated
market value as determined through an automated valuation model acceptable to
the
administrator. As used in this paragraph (c), "automated
valuation model" means an automated system that is used to derive a property
value through the use of publicly available property records and various
analytic methodologies such as comparable sales prices, home characteristics
and historical home price appreciations. Automated valuation models must be
validated by an independent credit rating agency. An automated valuation model
provider shall not accept a property valuation assignment when the assignment
itself is contingent upon the automated valuation model provider reporting a
predetermined property valuation, or when the fee to be paid to the automated
valuation model provider is contingent upon the property valuation reached or
upon the consequences resulting from the property valuation assignment.
(7) "Billing cycle" means the time interval between
periodic billing
statement dates.
(8) "Cash price" of goods, services, or an interest in
land means
the price at which they are offered for sale by the seller to cash
buyers in the ordinary course of business and may include (a) the cash
price 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, or
interest in land. The cash price stated by the seller to the buyer in a
disclosure statement is presumed to be the cash price.
(9) "Closed end credit" means a consumer loan or a consumer credit sale
which is not incurred pursuant to open end credit.
(10) "Closing costs" with respect to a debt secured by an
interest in
land includes:
(a) The actual fees paid a public official or agency of the state or
federal government, for filing, recording or releasing any instrument relating
to the debt; and
(b) bona fide and reasonable expenses incurred by the lender in connection
with the
making, closing, disbursing, extending, readjusting or renewing the debt which
are payable to third parties not related to the lender, except that reasonable
fees for an appraisal made by the lender or related
party 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 loans
committed for delivery within 61 to 90 days accepted under the
federal home
loan mortgage corporation's or any successor's daily offerings for sale on the
last day on which commitments for such mortgages were received in the previous
month; and
(ii) 5%.
If the reference rate referred to in subparagraph (i) of paragraph (b) is
discontinued, becomes impractical to use, or is otherwise not readily
ascertainable for any reason, the administrator may designate a comparable
replacement reference rate and, upon publishing notice of the same, such
replacement reference rate shall become the reference rate referred to in
subparagraph (i) of paragraph (b). The secretary of state shall publish notice
of the code mortgage rate not later than the second issue of the Kansas
register published each month.
(12) "Conspicuous" means a term or clause
is conspicuous when it is so
written that a reasonable person against whom it is to operate ought to
have noticed it. Whether a term or clause is conspicuous or not is for
decision by the trier of fact.
(13) "Consumer" means the buyer, lessee, or debtor to whom
credit is
granted in a consumer credit transaction.
(14) "Consumer credit sale":
(a) Except as provided in paragraph (b), a "consumer credit sale" is
a sale of goods, services, or an interest in land in which:
(i) Credit is granted either by a seller who regularly engages as a
seller in credit transactions of the same kind or pursuant to a credit
card 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 purchased
primarily for a personal, family or household
purpose,
(iv) either the debt is by written agreement payable in more than four
installments
or a finance charge
is made, and
(v) with respect to a sale of goods or services, the amount financed
does 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 or
services pursuant to a lender credit card; or
(ii) a sale of an interest in land,
unless
the parties agree in writing to make the transaction subject to the uniform
consumer credit code.
(15) "Consumer credit transaction" means a consumer credit
sale, consumer lease, or consumer loan or a modification thereof including a
refinancing, consolidation, or deferral.
(16) "Consumer lease" means a lease of goods:
(a) Which a lessor regularly engaged in the business of leasing
makes to a person, other than an organization, who takes under the lease
primarily for a personal, family or household
purpose;
(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 loan
made by a person regularly engaged in the business of making loans in
which:
(i) The debtor is a person other than an organization;
(ii) the debt is incurred primarily for a personal, family or household
purpose;
(iii) either the debt is payable by written agreement in more
than four installments or a finance charge
is made; and
(iv) either the amount financed does not exceed $25,000 or the debt is
secured by an interest in land.
(b) Unless the loan is made subject to the uniform consumer credit code by
written 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) of
K.S.A. 16a-3-308a and
amendments thereto, the annual
percentage rate of the loan exceeds the code mortgage rate; or
(ii) a loan made by a qualified plan, as defined in section 401 of the
internal revenue code, to an individual participant in such plan or to a
member of the family of such individual participant.
(18) "Credit" means the right granted by a creditor to a
debtor to
defer payment of debt or to incur debt and defer its payment.
(19) "Credit card" means
any card, plate or other single credit device that may be used from time to
time to obtain credit. Since this involves the possibility of repeated use of
a single device, checks and similar instruments that can be used only once to
obtain a single credit extension are not credit cards.
(20) "Creditor" means a person who regularly extends
credit in a consumer
credit transaction which is payable by a written agreement in more than
four installments or for which the payment of a finance charge is or may
be required and is the person to whom the debt arising from the consumer
credit transaction is initially payable on the face of the evidence of
indebtedness
or, if there is no such evidence of indebtedness, by written agreement.
In the case of credit extended pursuant to a credit card, the creditor is
the card issuer and not another person honoring the credit card.
(21) "Earnings" means compensation paid or payable to an
individual
or for such individual's account for personal services rendered or to be
rendered by such individual, whether denominated as wages, salary,
commission, bonus, or otherwise, and includes periodic payments pursuant
to a pension, retirement, or disability program.
(22) "Finance charge" means all charges payable
directly or indirectly by the consumer and imposed directly or indirectly by
the creditor as an incident to or as a condition of
the extension of credit. The finance charge shall be calculated as provided in
rules 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 real
property security interest.
(24) "Goods" includes goods not in existence at the time
the
transaction is entered into and merchandise certificates, but excludes
money, chattel paper, documents of title, and instruments.
(25) Except as otherwise provided, "lender" includes an
assignee of
the lender's right to payment but use of the term does not in itself
impose on an assignee any obligation of the lender with respect to
events occurring before the assignment.
(26) "Lender credit card" means a credit card issued by a
supervised
lender.
(27) "Loan":
(a) Except as provided in paragraph (b), a "loan" includes:
(i) The
creation of debt by the lender's payment of or agreement to pay money to
the debtor or to a third party for the account of the debtor;
(ii) the creation of debt either pursuant to a lender credit card or
by a cash advance to a debtor pursuant to a credit card other than a
lender credit card;
(iii) the creation of debt by a credit to an account with the lender
upon 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 money
to a third party for the account of a debtor if the debt of the debtor
arises from a sale or lease and results from use of either a credit card
issued by a person primarily in the business of selling or leasing goods
or services or any other credit card which may be used for the purchase
of goods or services and which is not a lender credit card.
(28) "Loan-to-value ratio", at any time for any loan secured by an
interest in real estate, means a fraction expressed as a percentage:
(a) The numerator of which is the aggregate unpaid principal balance of all
loans secured by a first mortgage or a second mortgage encumbering the real
estate 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 a
seller
not redeemable in cash and usable in its face amount in lieu of cash in
exchange for goods or services.
(30) "Official fees" means:
(a) Fees and charges prescribed by law which actually are or will be
paid to public officials for determining the existence of or for
perfecting, releasing, or satisfying a security interest related to a
consumer credit sale, consumer lease, or consumer loan; or
(b) premiums payable for insurance in lieu of perfecting a security
interest otherwise required by the creditor in connection with the sale,
lease, or loan, if the premium does not exceed the fees and charges
described in paragraph (a) which would otherwise be payable.
(31) "Open end credit" means an arrangement pursuant to
which:
(a) A creditor may permit a consumer, from time to time, to purchase
goods or services on credit from the creditor or pursuant to a credit
card, or to obtain loans from the creditor or pursuant to a credit card;
(b) the unpaid balance of amounts financed and the finance and other
appropriate charges are debited to an account;
(c) the finance charge, if made, is computed
on the outstanding unpaid balances of the consumer's account from time
to time; and
(d) the consumer has the privilege of paying the balances in
installments.
(32) "Organization" means a corporation, limited
liability company, government or governmental subdivision or agency, trust,
estate, partnership, cooperative or
association.
(33) "Person" includes a natural person or an individual,
and an organization.
(34) (a) "Person related to" with respect to an individual
means
(i) the
spouse of the individual, (ii) a brother, brother-in-law,
sister,
sister-in-law of the individual, (iii) an ancestor or lineal
descendant of
the individual or the individual's spouse, and (iv) any other
relative, by
blood,
adoption or marriage, of the individual or such individual's spouse who
shares the same home with the individual.
(b) "Person related to" with
respect to an organization means (i) a person directly or
indirectly
controlling, controlled by or under common control with the
organization, (ii) an officer or director of the organization
or a person
performing similar functions with respect to the organization or to a
person related to the organization, (iii) the spouse of a
person related
to the organization, and (iv) a relative by blood, adoption
or marriage
of a person related to the organization who shares the same home with
such person.
(35) "Prepaid finance charge" means any finance charge paid separately in
cash or by check before or at consummation of a transaction, or withheld from
the proceeds of the credit at any time. Prepaid finance charges shall be
calculated as provided in rules and regulations adopted by the administrator
pursuant to K.S.A. 16a-6-117, and amendments thereto.
(36) "Presumed" or "presumption" means that the trier of
fact must find the existence of the fact presumed unless and until evidence is
introduced which would support a finding of its nonexistence.
(37) "Principal" means the total of the amount financed
and the
prepaid
finance charges, except that prepaid finance charges are not added
to the amount financed to the extent such prepaid finance charges are paid
separately in cash or by check by the consumer. The administrator may adopt
rules and regulations regarding the determination or calculation of the
principal or the
principal balance pursuant to K.S.A. 16a-6-117,
and amendments thereto.
(38) "Sale of goods" includes any agreement in the form of
a bailment or lease of goods if the bailee or lessee agrees to pay as
compensation for use a sum substantially equivalent to or in excess of
the aggregate value of the goods involved and it is agreed that the
bailee or lessee will become, or for no other or a nominal consideration
has the option to become, the owner of the goods upon full compliance
with such bailee's or lessee's obligations under the agreements.
(39) "Sale of an interest in land" includes a lease in
which
the
lessee has an option to purchase the interest and all or a substantial
part of the rental or other payments previously made by the lessee are
applied to the purchase price.
(40) "Sale of services" means furnishing or agreeing to
furnish
services and includes making arrangements to have services furnished by
another.
(41) "Second mortgage" means a second or other subordinate priority
mortgage 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 does
not
in itself impose on an assignee any obligation of the seller with
respect to events occurring before the assignment.
(43) "Services" includes (a) work, labor, and other
personal
services, (b) privileges with respect to transportation, hotel and
restaurant accommodations, education, entertainment, recreation,
physical culture, hospital accommodations, funerals, cemetery
accommodations, and the like, and (c) insurance.
(44) "Supervised financial organization" means a person,
other
than
an insurance company or other organization primarily engaged in an
insurance business:
(a) Organized, chartered, or holding an authorization certificate
under the laws of any state or of the United States which
authorize the
person 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 or
of the United States.
(45) "Supervised lender" means a person authorized to make
or take assignments of supervised loans, either under a license issued by the
administrator (K.S.A. 16a-2-301 and amendments thereto) or as a supervised
financial organization (subsection (44) of K.S.A. 16a-1-301 and
amendments thereto).
(46) "Supervised loan" means a consumer loan, including a
loan made pursuant to open end credit, with respect to which the annual
percentage rate
exceeds 12%.
(47) "Written agreement" means an agreement such as a
promissory note,
contract or lease that is evidence of or relates to the indebtedness. A
letter that merely
confirms an oral agreement does not constitute a written agreement for purposes
of this subsection unless signed by the person against whom enforcement is
sought.
(48) "Written administrative interpretation" means any
written
communication from the consumer credit commissioner which is the official
interpretation as so stated in said written communication by the consumer
credit commissioner of the Kansas uniform consumer credit code and rules and
regulations 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.