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The Proposed Pennsylvania Consumer Credit Code: The Goods and Services Installment Sales Act




The act of December 9, 2002 (P.L.1446, No.186) amended the act of July 28,

1947 (P.L.1110, No. 476), known as the Motor Vehicle Sales Finance Act (MVSFA).

Section 20 of the legislation provided the following:

Because many of the circumstances and events that led to the initial

adoption of the act in 1947 have substantially changed due to substantial

improvements in business practices and expanded Federal regulations, a

study of proposals to update and modernize the act shall be conducted by

the Joint State Government Commission and the recommendations of the

commission reported to the General Assembly. In addition to changes to

the act, the commission shall also consider the advisability of merging the

provisions of the act of October 28, 1966 (1st Sp.Sess., P.L.55, No.7),

known as the Goods and Services Installment Sales Act [GSISA], and

other consumer finance legislation into a consolidated Consumer Credit

Code which avoids duplication of Federal law and regulations and

promotes uniformity of law among the states.

Section 20 further provided for the creation of an eight-member legislative task

force consisting of four members of the Senate and four members of the House. In order

to assist the Task Force, the Joint State Government Commission was empowered to

appoint an advisory committee, which was to include a representative of the Department

of Banking, the Consumer Protection Division of the Office of Attorney General, the

Pennsylvania Automotive Association, the Pennsylvania Retailers' Association and the

Pennsylvania Bankers Association, along with other individuals having knowledge and

expertise regarding motor vehicle sales finance, installment sales and consumer

protection laws and regulations.

Representative Chris Ross was named Chair of the Task Force. On May 10,

2004, the Task Force held its organizational meeting.

Subsequently, an advisory committee was organized, consisting of the Secretary

of Banking, the Agent Supervisor of the Consumer Protection Division of the Office of

Attorney General, attorneys, a law professor and representatives of financial institutions,

business interests and consumer interests. On September 14, 2004, the Advisory

Committee held its organizational meeting, and Representative Chris Ross agreed to

assume the chairmanship of the Advisory Committee as well. For organizational

purposes, the Advisory Committee formed three subcommittees to facilitate the review of

consumer finance legislation and discuss the creation of a consolidated Consumer Credit

Code in Pennsylvania. and making legislative recommendations. As in the case of the FLNFT which will Several

The MVSFA Subcommittee was specifically charged with reviewing the 1947

Act as amended and making legislative recommendations. The members of the MVSFA

Subcommittee represented the interests of the Department of Banking, the Consumer

Protection Division of the Office of Attorney General, automobile dealers, and sellers of

manufactured housing and recreational vehicles. From March 2005 to January 2006, the

subcommittee met a total of nine times.

The Subcommittee on Federal Law and New Financial Transactions (FLNFT)

was specifically charged with reviewing the impact of Federal law on consumer finance

legislation and determining the extent to which legislation should be proposed for

unregulated financial transactions in Pennsylvania. The subcommittee also discussed

whether any existing unconsolidated statutes could be brought into consolidated form

within the Pennsylvania statutes. In addition, the subcommittee began a review of the

Uniform Debt Management Services Act, drafted by the National Conference of

Commissioners on Uniform State Laws, for inclusion in a proposed Consumer Credit

Code. Several consultants representing credit counseling service providers were invited

to participate in the review process to facilitate discussions regarding standard business

practices and accreditation. From March 2005 to May 2006, the subcommittee met a

total of eight times.

The GSISA Subcommittee was specifically charged with reviewing the 1966 Act

as amended

Subcommittee, several consultants were invited to participate in the review process.

From March to September 2005, the subcommittee met a total of five times.

The Advisory Committee met in February, March, May and September 2006 to

discuss the progress of the subcommittees and review the drafts of the proposed

legislation. The Advisory Committee also reviewed comments from outside advocacy

groups whose interests are affected by the work product of the Advisory Committee.

As a result of the Advisory Committee discussions, consensus was reached on the

proposed framework of a consolidated Consumer Credit Code (12 Pa.C.S.),

contain, along with other statutory provisions, general provisions (Chapter 41) and a

modernized, updated Goods and Services Installment Sales Act (Chapter 43).

GSISA provisions were eliminated from proposed 12 Pa.C.S. Chapter 43 because they

are covered by Federal law or because of the restructuring of the statutory provisions into

consolidated form. This report also


The Advisory Committee agreed that the practice of cross-collateralization


should be allowed to continue, acknowledging that without the ability to crosscollateralize

goods, a seller may not necessarily allow a buyer to refinance, and as a

result, the buyer may face multiple monthly payments.

On November 21, 2006, the Task Force met and authorized both the publication

of a report, which contains the recommendations of the Advisory Committee relating to

proposed 12 Pa.C.S. Chapters 41 and 43, and the introduction of the legislation contained

in the report.

This report contains the proposed legislation, notes and official comments. The

notes follow the sections and provide the basis for the statutory provisions or explain the

differences between the statutory provisions and the GSISA. The comments also follow

the sections and explain as necessary the statutory provisions. The official comments

may be used in determining the intent of the General Assembly.

provides a summary of the recommendations, a detailed table of contents for the

proposed legislation, conforming amendments, transitional language and source tables.

Inclusion of any recommendation in this report does not necessarily reflect the

endorsement of the Task Force. In addition, while this report represents the consensus of

the Advisory Committee, it does not necessarily reflect unanimity among the members on

each individual recommendation.