Missouri Code of State Regulations
Title 20 - DEPARTMENT OF COMMERCE AND INSURANCE
Division 1140 - Division of Finance
Chapter 4 - Motor Vehicle Time Sales
Section 20 CSR 1140-4.040 - Extension Fees
Current through Register Vol. 49, No. 18, September 16, 2024
PURPOSE: This rule is designed to provide a simple extension fee formula which is equitable for both the financing institution and the dealer.
(1) Extensions on precomputed contracts made pursuant to the Motor Vehicle Time Sales Act shall be calculated according to the following formula:
UNIT CHARGE (UC) = Total Finance Change/ Sum of the Digits in the
Original term that is 1 + 2 + 3, etc.
Extension fee=UC times NUMBER OF
FULL REMAINING INSTALLMENTS.
Example: Consider a twenty-four (24)month contract of $1,925.25 with finance charges of $474.75, monthly payments of $100 and APR of 22.13%.
UC = 474.75/300 = 1.5825
If an extension is taken with twenty-two (22) installments remaining, the extension fee would be 22 times 1.5825 or $34.81. Considerations within the act necessitate the following limitations on extensions:
(A) No extension fee shall be collected more than one (1) month prior to the due date of the earliest installment being deferred:
(B) No extension shall be collected for any partial payment, however, two dollars ($2) or less shall not be considered a partial payment;
(C) A minimum extension fee of one dollar ($1) will be allowed;
(D) Any principal payment collected on the same day as an extension shall be applied before calculating the extension fee; and
(E) In the event of prepayment in full of the note or contract, the extensions shall be counted as months and the rule of seventy-eight's (78's) factor, based on this total, applied to all of the finance charges contracted for plus the extension fees collected.
*Original authority: 365.060, RSMo 1963, amended 1993, 1995.
