Court Opinion

ID: 6757566
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:28:26.69802+00
Date Added: 2024-06-11T16:02:29.650914
License: Public Domain

Celebrezze, C. J.,
concurring. Based upon the facts in this case, I concur in the judgment only. I would like to set forth several salient points not addressed by the majority opinion.
The majority concludes that the Ohio Retail Installment Sales Act does not provide a credit to a retail buyer upon acceleration of the maturity of the indebtedness. Although the statutes do not specifically state that upon acceleration, a rebate of the finance charge for the accelerated payments is required, there are provisions which can be construed to reach this result.
Initially, R. C. 1317.01(N) defines finance charge as:
“ ‘Finance charge’ means the amount which the retail buyer pays or contracts to pay the retail seller for the privilege of paying the principal balance in installments over a period of time. Any advancement in the cash price ordinarily charged by the retail seller is a finance charge when a retail installment sale is made.”
In essence, a buyer may be charged a fee or finance charge for the privilege of repaying the principal balance over a time period. In this case, the finance charge was based upon repayment over a 24-month term. According to the definition, the *532finance charge is predicated upon repayment over the entire specified period of time. Therefore, when the repayment is accelerated, there is no basis for a finance charge for those months not yet due, but called early. Otherwise, a buyer is paying a finance charge for a privilege not received and paying for time not yet expired.
Another provision which could require a rebate of the finance charge to the buyer upon acceleration is R. C. 1317.09. This section clearly mandates a refund of a portion of the finance charge. Although it has been used for voluntary prepayments, the language could easily be interpreted to include involuntary prepayments or accelerations. In this case, the contract provided a formula to rebate the finance charge on the installments paid before due.
The legislative purpose of the Retail Installment Sales Act also should be considered. In Teegardin v. Foley (1957), 166 Ohio St. 449, 453, this court stated that R. C. Chapter 1317 was enacted to correct certain abuses in the financing of new and used automobiles. The unregulated abuses amounted to “fraud on the general public in the nature of hidden and disguised profits * * * .” This is the situation presented in the case sub judice. The acceleration of the finance charge was hidden as it was not disclosed in the credit contract and results in a profit to the creditor.
Furthermore, this-lack of disclosure in the credit contract does not comply with the federal Truth in Lending Act.3 The act requires specific disclosure of the acceleration rebate policy when it differs from the custom with respect to voluntary prepayment. Ford Motor Credit Co. v. Milhollin (1980), 444 U. S. 555, 562. The purpose of the act is to assure a meaningful disclosure to the consumer of credit terms, so as to avoid uninformed use of financing charges. Flesher v. Household Finance (C. A. 6, 1981), 640 F. 2d 861, 863.

 Section 1601 et seq., Title 15, U. S. Code.