An Act to provide for the regulation of finance charges for retail installment sales of motor vehicles in the District of Columbia, and for other purposes
PL 86-431 (H.R.10683), enacted 04/22/1960

74 S T A T . ] 
PUBLIC LAW 
8 6 - 4 3 1 - A P R . 22, 1960 
69 
Public Law 86-431 
^^ ^^'^ 
April 22, 1960 
To provide for the regulation of finance charges for retail installment sales 
[H. R. IO683] 
of motor vehicles in the District of Columbia, and for other purposes. 
Be it enacted hy the Senate and House of Beyresentatives 
of the 
United States of America in Congress assembled^ That for purposes charges ^
f o""ve-
of this Act, unless the context requires a different meaning— 
hides. 
(1) "Commissioners" means the Commissioners of the District of 
^^ 
(^olumbia, or their designated agent. 
(2) "District'' means the District of Columbia. 
(3) "Finance charge" means the total amount to be added to tlie 
principal balance to determine the balance of the buyer's indebtedness 
to be paid under a retail installment contract. 
(4) "Governmental charges" means the excise tax, personal property 
tax, inspection fee, registration fee, recording fee, and such other fees 
charged by any government, or otherwise authorized by law, incident 
to the transfer of title to a motor vehicle as the Commissioners may by 
regulation include within such term. 
(5) "Instrument of security" means any promissory note, retail 
installment contract, or other written promise to pay the unpaid bal-
ance of the total amount to be paid by a retail buyer of a motor vehicle. 
(6) "Motor vehicle" means any automobile, mobile home, motor-
cycle, truck, truck tractor, trailer, semitrailer, or bus, but shall not 
include any boat trailer or any vehicle propelled or drawn exclusively 
by muscular power or designed to run only on rails or tracks. 
(7) "Person" means an individual, firm, partnership, joint stock 
company, corporation, association, incorporated society, statutory or 
common law trust, estate, executor, administrator, receiver, trustee, 
conservator, liquidator, committee, assignee, officer, employee, princi-
pal, or agent. 
(8) "Principal balance" means the cash sale price of a motor vehicle, 
including accessories and equipment, plus the amounts^ if any, in-
cluded in the retail installment contract, if separate identified charges 
are stated therein, for insurance and governmental charges, less the 
amount of the purchaser's dow^npayment, if any, in money or goods or 
both. 
(9) "Retail installment contract" means a contract entered into 
in the District or entered into by a seller licensed or required to be 
licensed by the District evidencing a retail installment transaction 
pursuant to which the title to or a lien on or security in the motor ve-
hicle, which is the subject matter of such transaction, is retained or 
taken to secure the retail buyer's obligations. 
The term includes a 
chattel mortgage, conditional sale contract, and a contract in the form 
of a bailment or a lease if the bailee or lessee contracts to pay as com-
pensation for use a sum substantially equivalent to or in excess of the 
value of the motor vehicle sold and it is agreed that the bailee or 
lessee is bound to become, or, for no further or a merely nominal con-
sideration, has the option of becoming, the owner of the motor vehicle 
upon full compliance with the provisions of the bailment or lease. 
(10) "Retail installment transaction" means any transaction in 
which a retail buyer purchases a motor vehicle for a price in excess 
of the cash sale price and agrees to pay part or all of such price in 
one or more deferred installments. 
SEC. 2. (a) Notwithstanding the provisions of any instrument of fiJa^ce^ch^r^'iT"'" 
security, refinancing contract, or other instrument to the contrary, 
made or entered into on or after the effective date of this Act, no 
70 
PUBLIC LAW 86-431-APR. 22, 1960 
[74 
S T A T . 
Computation. 
Propert io n at e 
incr e a s e or de-
Investigation. 
Regulations. 
Enforcement. 
person shall charge, contract for, receive, or collect a finance charge 
if such charge exceeds the larger of $25 or an amount determined 
under the following schedule: 
Class 1. Any new domestic motor vehicle designated by the manu-
facturer by a year model not earlier than the year in which the sale 
is made and any new foreign motor vehicle—^$8 per $100 per year. 
Class 2. Any new domestic motor vehicle not in class 1 and any used 
domestic motor vehicle designated by the manufacturer by a year 
model of the same or not more than two years prior to the year in 
which the sale is made and any used foreign motor vehicle not more 
than two years old—$11 per $100 per year. 
Class 3. Any used motor vehicle not in class 2, and, if a domestic 
motor vehicle, designated by the manufacturer by a year model not 
more than four years prior to the year in which the sale is made, and, 
if a foreign motor vehicle, not more than four years old—$14 per $100 
per year. 
Class 4. Any used motor vehicle not in class 2 or class 3—^$16 per 
$100 per year. 
(b) The finance charge authorized by the preceding subsection shall 
be computed on the principal balance payable for a motor vehicle 
from the date of the instrument or contract until the maturity of the 
final installment, notwithstanding that the balance thereof is required 
to be paid in installments. 
(c) For a period less or greater than twelve months or for amounts 
less or greater than $100, the amount of the maximum charge set forth 
in the foregoing schedule shall be decreased or increased propor-
tionately. 
(d) The Commissioners shall from time to time investigate the 
economic conditions and other factors relating to and affecting finance 
charges, and shall ascertain all pertinent facts necessary to determine 
what maximum charges should be permitted in such transactions. 
Upon the basis of such ascertained facts, the Commissioners, notwith-
standing the provisions of the preceding subsections, shall from time 
to time by regulation or order determine and fix the maximum finance 
charges sufficiently high to result in a fair return on investment to 
persons engaged in the business of financing retail installment trans-
actions, but not so high as to constitute an unreasonable economic 
burden on the purchasers of motor vehicles under retail installment 
contracts. The Commissioners may from time to time, upon the basis 
of changed conditions or facts, redetermine and refix any such maxi-
mum finance charge, but, before determining or redetermining any 
such maximum charge, the Commissioners shall give reasonable notice 
of their intention to consider doing so, and provide a reasonable oppor-
tunity to persons desiring to be heard with respect to any such 
proposed determination or redetermination. 
Notice of the action 
proposed by the Commissioners shall be published once a week for 
two consecutive weeks in one or more of the daily newspapers pub-
lished in the District. 
Any sucli changed maximum finance charge 
shall not affect any preexisting instrument of security lawfully entered 
into between the seller and the purchaser of any motor vehicle. 
(e)(1) The Commissioners are hereby authorized to make and 
enforce such regulations as they in their discretion deem appropriate 
to carry out the purposes of this section and to prevent unconscionable 
practices in connection with retail installment transactions, including, 
without limitation, provisions: 
(i) governing the form and substance of instruments of 
security; 
(ii) requiring that installment payments under instruments of 
security be made in substantially equal amounts and at regular 
74 S T A T . ] 
PUBLIC LAW 86-431-APR. 22, 1960 
71 
intervals except (1) that the interval for the first installment pay-
ment may be longer than the other intervals; (2) that the final 
installment payment may be less in amount than the preceding in-
stallment payments; (3) that where a buyer's livelihood is de-
pendent upon seasonal or intermittent income, one or more install-
ment payments in the schedule of payments included in any such 
instrument of security may be reduced or omitted; and (4) that 
any contract covering a new motor vehicle to be used primarily 
as a demonstrator sold to a bona fide motor-vehicle salesman 
employed by the seller shall be exempt from the requirement that 
installment payments be in substantially equal amounts; 
(iii) requiring that amounts due under instruments of security 
may be prepaid in full and that the unearned charges, whether 
for finance, insurance, or for other purposes, attributable to or 
resulting from such prepayments shall be refunded or credited; 
(iv) establishing maximum delinquency, collection, repossession 
and other charges; 
(v) specifying the types and maximum amounts of insurance 
which may be required, at the expense of the retail buyer, to 
E
rotect from loss the seller in a retail installment transaction or 
is assignee or any other person entitled to payments from a retail 
buyer under an instrument of security; 
(vi) respecting the manner and methods of the sale or dis-
position of repossessed motor vehicles under such conditions, 
mcluding, without limitation, rights of redemption, as the Com-
missioners deem advisable; 
(vii) requiring the books and records of persons engaged in the 
business of financing retail installment transactions to be subject 
to production for examination by the Commissioners. 
(2) The Commissioners are further authorized, in their discretion, iatt(fns"^°"^^ '^^"" 
to make and enforce such additional regulations as they deem neces-
sary to insure that purchasers of motor vehicles under instruments 
of security are not bemg required, directly or indirectly, to ])ay finance, 
insurance, or other charges in excess of those authorized by this Act 
or by the Commissioners pursuant to the authority vested in them. 
(3) In exercising their powers and authority vmder this subsec-p^^^fg^^"|'=^*^°" 
tion (e), the Commissioners are authorized, in their discretion, to 
make reasonable classifications (i) according to the parties to retail 
installment transactions, or (ii) according to the parties to the in-
struments of security, or (iii) according to the parties involved in 
repossessions, or (iv) according to other bases, or (v) according to 
two or more of the foregoing clauses (i) through (iv), and to exercise 
such powers and authority under this subsection with respect to any 
one or more of any classifications so made or with respect to all of 
^said classifications. 
(f) No provision shall be inserted in any retail installment con- 
waiver re stric-
tract whereby the buyer waives or purports to waive any provision 
of this Act, and any such waiver or purported waiver shall be void 
and of no effect. 
The Commissioners are authorized in their dis-
cretion, by regulation (1) to prohibit the inclusion in any retail 
installment contract of any provision waiving or purporting to waive 
any provision of any regulation promulgated by the Commissioners 
relating to retail installment transactions, and (2) to provide that 
any such waiver or purported waiver, shall be void and of no effect. 
SEC. 3. (a) In connection with the licensing of persons under the 
Authorization for 
authority of section T of the Act entitled "An Act makiiig appropria- ^^""^^^-y-
tions to provide for the government of the District of Columbia for 
the fiscal year ending June 30,1903, and for other purposes", approved 
^^ stat. sso. 
July 1, 1902, as amended (title 47, ch. 23. D.C. Code 1951 ed.), the 2301 and note.'*^" 
72 
PUBLIC LAW 86-431-APR. 22, 1960 
[74 S T A T . 
Licenses. 
Corporate surety 
bonds. 
Limitation. 
Right to b r i n g 
suit. 
D.C. Code 1-244 
(b). 
S u s p e n sion or 
revocation 
of 
li-
censes. 
Commissioners are authorized to require either bonds or such other 
security as they may by regulation deem necessary, of persons licensed 
to engage in the business of buying or selling motor vehicles and of 
persons licensed to engage in the business of purchasing contracts for 
the retail installment sales of motor vehicles, and the Commissioners 
may, from time to time, and in their discretion, establish classes and 
subclasses of such persons and, subject to subsection (b) of this section, 
specify the amount and conditions of the bond to be deposited by 
each of the members of any such class or subclass. In connection with 
the licensing of said persons, and the bonding of the members of any 
class or subclass of the said persons, the Commissioners, in their dis-
cretion, may by regulation require applicants for licenses: 
(1) to furnish and keep in force a bond running to the District, 
or other security, to protect members of the public against finan-
cial loss by reason of the failure of the licensee or of any officer, 
agent, employee, or other person acting on behalf of said licensee, 
to observe any law or regulation in force in the District of 
(^olumbia applicable to the licensee's conduct of the licensed 
business; 
(2) to procure and keep in force public liability insurance or 
property damage insurance, or both; 
(3) to appoint the Commissioners as their true and lawful at-
torney upon whom all judicial and other process or legal notice 
directed to such person may be served. 
(b) The bonds authorized by this section shall be corporate surety 
bonds in amounts to be fixed by the Commissioners, but no bond shall 
exceed $25,000, and such bond shall be conditioned upon the observance 
by the licensee and any officer, agent, employee, or other person acting 
on behalf of said licensee, of all laws and regulations in force in the 
District applicable to the licensee's conduct of the licensed business, for 
the benefit of any person who may suffer damages resulting from the 
violation of any such law or regulation by or on the part of such 
licensee or any officer, agent, employee, or other person acting on be-
half of the licensee. 
(c) Any person aggrieved by the violation of any law or regulation 
applicable to the licensee's conduct of the licensed activity shall have, 
in addition to his right of action against such licensee, a right to bring 
suit against the surety on a bond authorized by this section, either 
alone or jointly with the principal thereon, and to recover in an 
amount not exceeding the penalty of the bond any damages sustained 
by reason of any act, transaction, or conduct of the licensee, or of any 
officer, agent, employee, or other person acting on behalf of said 
licensee, which is in violation of law or regulation in force in the Dis-
trict relating to the licensed activity. 
The provisions of the second, 
third, and the fifth subparagraphs of paragraph (b) of the first 
section of the Act entitled "An Act to grant additional powers to the 
Commissioners, and for other purposes"', approved December 20, 1944 
(58 Stat. 820; sec. l-244(b), D.C. Code, 1951 edition), shall be appli-
cable to each bond authorized by this section as if it were the bond 
authorized by the first subparagraph of such paragraph (b) of the 
fii-st section of said Act approved December 20, 1944: Provided, That 
nothing in this subsection shall be construed to impose upon the surety 
on any such bond a greater liability than the total amount thereof or 
the amount remaining unextinguished after any prior recovery or 
recoveries. 
SEC. 4. Subparagraph (a) of paragraph 46 of section 7 of the Act 
entitled "An Act making appropriations to provide for the govern-
ment of the District of Columbia for the fiscal year ending June 30, 
1902, and for other purposes'', approved July 1, 1902, as amended 
74 S T A T . ] 
PUBLIC LAW 86-432-APR. 22, 1960 
73 
(sec. 47-2345, D.C. Code, 1951 edition), is amended by striking the 
words "to revoke" and inserting in lieu thereof the words "to suspend 
or revoke". 
SEC. 5. With the exception of the function of making regulations to 
carry out the purposes of this Act, the Commissioners are authorized 
to delegate, with power to redelegate, any of the functions vested in 
them by this Act. 
SEC. 6. The Commissioners are authorized to promulgate regulations 
to carry out the purposes of this Act: Provided^ That no such regula-
tion shall become effective until after a public hearing has been held 
thereon. 
SEC. 7. No person shall make any statement required or authorized 
by this Act to be filed with the Commissioners, knowing that the in-
formation set forth in such statement is false. 
SEC. 8. Any person who shall violate any provision of this Act or of 
any regulation promulgated by the Commissioners under the authority 
of this Act, shall be guilty of a misdemeanor and shall be punished by 
a fine not exceeding $600 or by imprisonment for not more than six 
months, or both. 
SEC. 9. Prosecutions for violations of this Act, or of the regulations 
made pursuant thereto, shall be conducted in the name of the District 
by the Corporation Counsel or any of his assistants. As used in this 
Act the term "Corporation Counsel" means the attorney for the Dis-
trict, by whatever title such attorney may be known, designated by 
the Commissioners to perform the functions prescribed for the Cor-
poration Counsel in this Act. 
SEC. 10. The authority and power vested in the Commissioners 
by any provision of this Act shall be deemed to be additional and 
supplementary to authority and power now vested in them, and not 
as a limitation. 
SEC. 11. If any provision of this Act or the application thereof 
to any person or circumstance is held invalid, such invalidity shall 
not affect other provisions or the application of this Act which can 
be effected without the invalid provision or application, and to this 
end the provisions of this Act are severable. 
SEC. 12. This Act shall take effect on the thirtieth day after the 
date of enactment of this Act. 
Approved April 22, 1960. 
47 Stat. 563. 
Exception. 
Penalty. 
"C o rp o r at ion 
Counsel". 
Effective date. 
Public Law 86-432 
AN ACT 
To continue for a temporary period the existing suspensions of the tax on the 
first domestic processing of coconut oil, palm oil, palm-kernel oil, and fatty 
acids, salts, combinations, or mixtures thereof. 
April 22, 1960 
[H. R. 8649] 
Be it enacted hy the Senate amd House of Representatives 
of the 
United States of America in Congress assembled^ That— 
(1) Section 3 of Public Law 85-235 (71 Stat. 516), approved 
August 30, 1957 (relating to the temporary suspension of the 
tax on the first domestic processing of coconut oil) ; and 
(2) Public Law 86-37 (73 Stat. 64), approved May 29, 1959 
(relating to the temporary suspension of the tax on the first 
domestic processing of palm oil, palm-kernel oil, etc.), 
are each amended by striking out "June 30, 1960" and inserting in 
lieu thereof "June 30,1963". 
Approved April 22, 1960. 
Coco nut 
and 
palm oil, etc. 
Tax suspension. 
26 u s e 
45 11 
note.