An Act To Amend the Maine Consumer Credit Code Regarding Balloon Payments LR2481(02)
Maine Legislature, Session 121, LD 1638
Committee Amendment CA_A_S378 (Senate)

COMMITTEE AMENDMENT .. f\ .. to S.P. 602, L.D. 1638, Bill, "An 
Act To Amend the Maine Consumer Credit Code Regarding Balloon 
Payments" 
Amend the bill by striking out everything after the title 
and before the summary and inserting in its place the following: 
'Emergency preamble. Whereas, Acts of the Legislature do not 
become effective until 90 days after adjournment unless enacted 
as emergencies; and 
Whereas, 
current 
from offering consumers 
balloon payment unless 
period of 4 years; and 
Maine 
law prohibits 
automobile 
dealers 
a motor vehicle loan involving a final 
the term of the loan is for a 
minimum 
Whereas, this 
statutory 
prov~s~on puts 
Maine 
automobile 
dealers at a competitive disadvantage and limits the financing 
options that dealers can make available to consumers; and 
Whereas, this 
legislation 
would 
allow 
Maine 
automobile 
dealers to offer financing options with balloon payments for 
terms of less than 4 years if the contract contains adequate 
protections for Maine consumers, including the right to return 
the vehicle in lieu of the final payment; and 
Whereas, in the judgment of the Legislature, these facts 
create an emergency within the meaning of the Constitution of 
Maine 
and 
require 
the 
following 
legislation 
as 
immediately 
necessary for the preservation of the public peace, health and 
safety; now, therefore, 
Page l-LR248l(2) 
COMMITTEE AMENDMENT 
~.~ 
COMMITTEE AMENDMENT "~,, to S.P. 602, L.D. 1638 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 9·A MRSA §3·308, sub·§4, as amended by PL 1997, c. 94, 
§2, is further amended to read: 
4. 
A schedule of payments may require a final payment not 
substantially 
equal 
to 
all 
other 
periodic 
payments 
if 
the 
transaction is made for a term of not less than 4 years and if 
the contract evidencing the consumer credit transaction gives the 
consumer the right to refinance the amount of the final payment 
in order to fully amortize the obligation on terms then generally 
offered by the creditor, if the consumer satisfies reasonable 
credit standards and if the property satisfies reasonable ~eaB-~e 
va~Qe loan-to-value standards. 
The administrator shall examine 
the reasonableness of standards during regular examinations and 
upon consumer complaint. At least 60 days but not more than 180 
days prior to the maturity of the loan, the creditor must notify 
the consumer in writing of the maturity date and the amount due 
on the maturity date. 
The 4-year limitation does not apply to a 
consumer credit transaction secured by a motor vehicle if the 
contract evidencing the transaction otherwise conforms to the 
reguirements of this section and also permits the consumer to 
transfer the motor vehicle to the creditor in lieu of making the 
final payment without further liability, except that the contract 
may 
provide 
for 
the 
assessment 
against 
the 
consumer 
of -a 
reasonable 
disposition 
fee 
or 
reasonable 
charges 
for 
excess 
mileage, excess wear and tear or damage to the motor vehicle; and 
Emergency clause. 
In view of the emergency cited in the 
preamble, this Act takes effect when approved.' 
SUMMARY 
This amendment replaces the bill. The amendment clarifies 
that a motor vehicle lease or loan is not subject to the 4-year 
minimum 
term 
for 
consumer 
credit 
transactions 
with 
balloon 
payments if the lease or loan gives consumers the right to 
refinance the final payment or transfer the motor vehicle back to 
the creditor in lieu of the final payment. 
The amendment also adds an emergency preamble and emergency 
clause. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Fiscal Detail and Notes 
Approved: 01122/04 ;1!;?ac:.. 
Office-of Fiscal and Program Review 
LD 1638 
An Act To Amend the Maine Consumer Credit Code Regarding Balloon 
Payments 
LR2481(02) 
Fiscal Note for Bill as Amended by Committee Amendmen~ 
Committee: Insurance and Financial Services 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - Other Special Revenue Funds 
Any additional costs to the Department of Professional and Financial Regulation in implementing this bill can be 
absorbed by the Department utilizing existing resources. 
LR2481(2) - Fiscal Note - Page 1 of 1