CO Code § 5-12-107 (2021)
2021 Colorado Code|Title 5 - Consumer Credit Code|Article 12 - Interest- General Provisions|§ 5-12-107. Commercial Credit Plans - Definitions

  Any creditor may offer and extend credit to the debtor under a commercial credit plan. Without limitation, credit may be extended under a commercial credit plan by the creditor's acquisition of obligations including, without limitation, obligations arising out of the honoring by a seller or another person of a credit device made available to the debtor under a commercial credit plan. A creditor may take such security in connection with a commercial credit plan as may be acceptable to the creditor and may, if the agreement governing the commercial credit plan allows, establish separate accounts for different types of purchases or loans, or both, and impose different terms for credit extended with respect to each account.      A creditor may charge and collect periodic interest under a commercial credit plan on the outstanding unpaid indebtedness at a periodic percentage rate or rates not exceeding forty-five percent per annum. If the applicable periodic percentage rate under the agreement governing the plan is other than daily, periodic interest may be calculated on an amount not in excess of the average outstanding unpaid indebtedness for the applicable billing period. If the applicable periodic percentage rate under the agreement governing the plan is daily, periodic interest may be calculated for each day in the billing period on an amount not in excess of either:   The outstanding unpaid indebtedness on that day; or    The average outstanding unpaid indebtedness for the applicable billing period. If the applicable periodic percentage rate under the agreement governing the plan is monthly, a billing period shall be deemed to be a month or monthly if the last day of each billing period is on the same day of each month or does not vary by more than four days therefrom.       The rate limitation established by this subsection (2) for periodic interest shall not apply to the additional interest charges authorized by subsection (3) of this section regardless of whether such additional interest charges are imposed in addition to or in lieu of periodic interest.         In addition to or in lieu of interest at a periodic rate or rates, a creditor may, if the agreement governing the commercial credit plan so provides, either initially or pursuant to a change in the terms of the agreement made in the manner prescribed by subsection (5) of this section, charge and collect, in such manner, form, percentages, or amounts as the agreement governing the plan may provide, one or more of the following fees or charges:   A fee for participation in the commercial credit plan, whether assessed on an annual or other periodic basis;    A transaction charge for each separate purchase or loan under the plan;    An automated teller machine charge or similar electronic or interchange fee or charge;    A minimum charge for each scheduled billing period under the commercial credit plan during any portion of which there is an outstanding unpaid indebtedness;    A late payment charge for each required payment not made on or before its scheduled due date;    Fees for services rendered or for reimbursement of expenses incurred by the creditor or other persons in connection with the commercial credit plan, or other fees incidental to the application, opening, administration, maintenance, or termination of a commercial credit plan;    Returned payment charges;    Documentary evidence charges including without limitation charges for furnishing copies of sales slips, invoices, monthly statements, or other documents; and    Any similar fees or charges provided for in the agreement governing the commercial credit plan, whether initially or pursuant to a change in the terms of the agreement made in the manner prescribed by subsection (5) of this section; except that in no event shall this authorization to charge and collect any similar fees or charges be construed to authorize the imposition of periodic interest on the outstanding unpaid indebtedness in addition to the periodic interest authorized by subsection (2) of this section.       Notwithstanding the fact that they are not subject to the rate limitation established by subsection (2) of this section for periodic interest, all of the fees and charges permitted by this subsection (3) are interest.       The agreement governing a commercial credit plan may provide for the payment by the debtor of reasonable attorney's fees of the creditor if the account of the debtor is referred for collection to an attorney not a salaried employee of the creditor. The agreement also may provide for the payment by the debtor of all court and other collection costs actually incurred by the debtor.      Upon written notice furnished at least fifteen days prior to the effective date of the change, a creditor may change the terms of the agreement governing the commercial credit plan including, without limitation, periodic interest and additional interest charges so long as the debtor does not, prior to the effective date of the change set forth in the notice, furnish written notice to the creditor that the debtor does not agree to abide by the change. The change may be made effective with respect to existing balances if so provided in the written notice.    Upon receipt by the creditor of a timely written notice stating that the debtor does not agree to abide by the change, the debtor shall have the remainder of the time under the existing terms in which to pay all sums owed to the creditor as of the effective date of the change set forth in the notice. If there is an authorized charge to the account on or after the effective date of the change set forth in the notice, the debtor shall be deemed to have accepted the new terms even if the debtor previously submitted to the creditor a timely written notice stating that the debtor does not agree to abide by the change.       All terms, conditions, and other provisions of and relating to a commercial credit plan as contained in this section or in the agreement governing such plan, other than those fees and charges that are interest under this section, shall be and hereby are deemed to be material to the determination of interest applicable to a commercial credit plan under Colorado law, under the most favored lender doctrine, and under the “National Bank Act”, 12 U.S.C. sec. 85 or section 521, 522, or 523 of the “Depository Institutions Deregulation and Monetary Control Act of 1980”, 12 U.S.C. secs. 1463 (g), 1785 (g), and 1831d.    A commercial credit plan established by a creditor and the extensions of credit made pursuant thereto shall be governed by Colorado law. Unless the agreement governing the commercial credit plan expressly states that it is subject to another law of this state, a commercial credit plan shall be governed exclusively by this section and shall not be subject to any other law of this state that otherwise would apply to the commercial credit plan including, but not limited to, laws limiting the amount or duration of credit or the rate or amount of interest or other charges that may be charged, taken, collected, received, or reserved.    As used in this section:   “Average outstanding unpaid indebtedness” means the amount determined by dividing the total of the amounts of the outstanding unpaid indebtedness for each day in the applicable billing period by the number of days in the billing period.    “Commercial credit plan” or “plan” means a plan contemplating the extension of credit pursuant to an account governed by an agreement between a creditor and a debtor, whether or not providing for a security interest, pursuant to which:   A creditor permits the debtor and, if allowed by a creditor, persons acting on behalf of or with authorization from the debtor, from time to time to make purchases on credit or obtain loans, or both, whether or not by use of a credit device;    The purchases on credit are made or the loans are obtained primarily for business, commercial, investment, or agricultural purposes;    The indebtedness of the debtor arising from such purchases or loans, or both, and other charges provided for in this section are debited to the account; and    (A) The debtor undertakes an obligation to pay the outstanding unpaid indebtedness at one time; or       “Credit” means the right granted by a creditor to the debtor to defer payment of debt or to incur debt and defer its payment.    “Credit device” means any card, check, identification code, account number, or other means of identification contemplated by the agreement governing the plan.    “Creditor” means any seller or any lender located or maintaining a place of business in this state that enters into a commercial credit plan agreement with a debtor wherever located, including, without limitation, sellers of goods or services, small loan companies, licensed lenders, commercial banks and trust companies, savings and loan associations, and savings banks. The term “creditor” includes any transferee, whether such transferee acquires its interest by assignment or otherwise.    “Debtor” means any natural person or individual or any corporation, partnership, cooperative, association, government or governmental subdivision or agency, trust, estate, or other entity.    “Interest” includes both periodic interest authorized by subsection (2) of this section and additional interest charges authorized by subsection (3) of this section.    “Loans” means cash advances or loans to be paid to or for the account of the debtor.    “Outstanding unpaid indebtedness” means on any day an amount not in excess of the total amount of purchases, loans, and other debits charged to the debtor's account under the plan that is outstanding and unpaid at the end of the day, after adding the aggregate amount of any new purchases, loans, and other debits charged to the account as of that day, including, without limitation, the amount of any periodic interest, additional interest charges, and other charges permitted by this section that have accrued, or been charged, to the account as of that day, and deducting the aggregate amount of any payments and other credits applied to that indebtedness as of that day.    “Purchases” means payment obligations for property of whatever nature, real or personal, tangible or intangible, and payment obligations for services including, without limitation, insurance, licenses, taxes, official fees, fines, private or governmental obligations, or any other thing of value.        History. Source: L. 96: Entire section added, p. 407, § 13, effective July 1. L. 2013: (8)(e) amended,(SB 13-154), ch. 282, p. 1468, § 21, effective July 1.    ANNOTATION   Under federal law, a late payment fee is a form of “interest”. Copeland v. MBNA Am. Bank, N.A., 907 P.2d 87 (Colo. 1995); Richardson v. Citibank (S.D.), N.A., 908 P.2d 532 (Colo. 1995); Smiley v. Citibank (S.D.), 517 U.S. 735, 116 S. Ct. 1730, 135 L. Ed. 2d 25 (1996).