Kan. Stat. § 16a-1-301

Current through 2024 Session Acts Chapter 111 and 2024 Special Session Acts Chapter 4

Section 16a-1-301 - [Effective 1/1/2025] General definitions

As used in K.S.A. 16a-1-101 et seq., 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 late fees 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 late fees 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) "Agent" means a person authorized through express or implied authority to act on behalf of a licensee or applicant.

(4) "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.

(5) "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.

(6) "Annual percentage rate" means the same and shall be interpreted in the same manner and be calculated using the same methodology as prescribed in 15 U.S.C. § 1606.

(7) "Applicant" means a person who applies to become licensed pursuant to K.S.A. 16a-2-302, and amendments thereto.

(8) "Assignment" means the act by which one person transfers to another person or causes to vest in that other person, any kind of property or valuable interests and includes any temporary or permanent transfer of servicing rights in the property or valuable interest.

(9) "Balloon payment" means any scheduled payment that is more than twice as large as the average of earlier scheduled payments.

(10) "Billing cycle" means the same and shall be interpreted in the same manner as prescribed in 12 C.F.R. 1026.2(a)(4) .

(11) "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.

(12) "Closed-end credit" means the same and shall be interpreted in the same manner as prescribed in 12 C.F.R. 1026.2(a)(10) .

(13) "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.

(14) "Conspicuous" means a term or clause that is so written so 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.

(15) "Consumer" means the buyer, lessee or debtor to whom credit is offered or granted in a consumer credit transaction.

(16) "Consumer credit filer" means a person who is required to file a notice with the administrator pursuant to K.S.A. 16a-6-201 et seq., and amendments thereto.

(17) "Consumer credit insurance" means insurance, other than insurance on property, by which the satisfaction of debt in whole or in part is a benefit provided, but does not include insurance that:

(a) Is provided in relation to a consumer credit transaction in which a payment is scheduled more than 15 years after the extension of credit;

(b) is issued as an isolated transaction on the part of the insurer not related to an agreement or plan for insuring consumers of the creditor; or

(c) indemnifies the creditor against loss due to the consumer's default.

(18) "Consumer credit sale" means:

(a) Except as provided in paragraph (b), a sale of goods or services, 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 or services 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 the threshold amount.

(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.

(19) "Consumer credit transaction" means a consumer credit sale, consumer lease, or consumer loan or a modification thereof including a refinancing, consolidation or deferral.

(20) "Consumer lease" means a lease of goods:

(a) That 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 the threshold amount;

(c) that is for a term exceeding four months; and

(d) that is not made pursuant to a lender credit card.

(21) "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) the amount financed does not exceed the threshold amount.

(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 mortgage ; 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.

(22) "Credit" means the right granted by a creditor to a debtor to defer payment of debt or to incur debt and defer its payment.

(23) "Credit card" means any card 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.

(24) "Creditor" means a person who regularly engages, directly or indirectly in extending credit in a consumer credit transaction or, except as otherwise provided, an assignee of a creditor's right to payment. The term assignee does not in itself impose on an assignee any obligation of its assignor. 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.

(25) "Director" means a member of a licensee's or applicant's board of directors.

(26) "Earnings" means compensation payable to an individual 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.

(27) "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-6-104, and amendments thereto.

(28) "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.

(29) "Installment" means a periodic payment required or permitted by agreement in connection with a consumer credit transaction.

(30) "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.

(31) "Lender credit card" means a credit card issued by a supervised lender.

(32) "License" means the authorization allowing a person to make supervised loans pursuant to the provisions on authority to make supervised loans.

(33) "Licensee" means a person that is licensed by the administrator to engage in supervised loan activity.

(34) "Licensing" includes the administrator's process respecting the grant, denial, revocation, suspension, annulment, withdrawal or amendment of a license.

(35)

(a) "Loan": 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.

(36) "Member" means, for the following business organizations:

(a) A co-partnership, a limited or general partner;

(b) an association that is a corporation, an owner;

(c) an association that is a member-managed limited liability company, the named managing partner; and

(d) an association that is a limited liability company managed by elected or appointed managers, all elected or appointed managers.

(37) "Merchandise certificate" means a writing or electronic instrument issued by a seller not redeemable in cash and usable in its face amount in lieu of cash in exchange for goods or services.

(38) "Nationwide mortgage licensing system and registry" means a mortgage licensing system developed and maintained by the conference of state bank supervisors and the American association of residential mortgage regulators for the licensing and registration of licensed mortgage loan originators and other financial service providers.

(39) "Officer" means a person who participates or has the authority to participate, other than in the capacity of a director, in major policymaking functions of the licensee or applicant, whether or not the person has an official title, including the chief executive officer, chief financial officer, chief operations officer, chief legal officer, chief credit officer, chief compliance officer and every vice president.

(40) "Official fees" means:

(a) Taxes and fees prescribed by law that 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 transaction; 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.

(41) "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.

(42) "Organization" means a corporation, limited liability company, government or governmental subdivision or agency, trust, estate, partnership, cooperative , association or any other legally recognized business entity.

(43) "Person" includes a natural person or an individual, and an organization.

(44)

(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; or

(iv) any other relative, by blood, adoption or marriage, of the individual or such individual's spouse .

(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; or

(iv) a relative by blood, adoption or marriage of a person related to the organization .

(45) "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.

(46) "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.

(47) "Regularly engaged" means a person that extends credit directly or through assignment more than 25 times in any state during the preceding calendar year.

(48) "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.

(49) "Sale of services" means furnishing or agreeing to furnish services and includes making arrangements to have services furnished by another.

(50) "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.

(51) "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.

(52) "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.

(53) "Supervised lender" means a person authorized to make or take assignments of supervised loans, either under a license issued by the administrator or as a supervised financial organization .

(54) "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%.

(55) "Threshold amount" means an amount equal to at least $69,500 as of July 1, 2024, and adjusted effective January 1 of each subsequent year by any annual percentage increase in the consumer price index for urban wage earners and clerical workers that was in effect on June 1 of the preceding year. Any increase or decrease in the threshold amount shall be rounded up or down to the nearest increment of $100. If the consumer price index for urban wage earners and clerical workers in effect on June 1 does not increase from the consumer price index for urban wage earners and clerical workers in effect on June 1 of the preceding year, the threshold amount effective the following January 1 through December 31 shall not change from the preceding year.

(56) "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.

(57) "Written administrative interpretation" means any written official interpretation by the administrator regarding the uniform consumer credit code and rules and regulations pertaining thereto.

K.S.A. 16a-1-301

Amended by L. 2024, ch. 6,§ 37, eff. 1/1/2025.

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.

This section is set out more than once due to postponed, multiple, or conflicting amendments.