NRS: CHAPTER 97B - CONSUMER PROTECTION FROM PREDATORY INTEREST

[Rev. 6/29/2024 2:55:52 PM--2023]

CHAPTER 97B - CONSUMER PROTECTION FROM PREDATORY INTEREST

NRS 97B.010 Short title.

NRS 97B.020 Purpose of chapter; construction.

NRS 97B.030 Definitions.

NRS 97B.040 “Business” defined.

NRS 97B.050 “Consumer” defined.

NRS 97B.060 “Consumer debt” defined.

NRS 97B.070 “Consumer form contract” defined.

NRS 97B.080 Prohibition against use of consumer form contract; application of chapter to persons who seek to evade its provisions.

NRS 97B.090 Exemptions from chapter.

NRS 97B.100 Consumer form contracts: Enforceability of choice of law and forum selection provisions.

NRS 97B.110 Consumer form contracts: Requirement for signature of consumer.

NRS 97B.120 Consumer form contracts: Prohibition on the inclusion of certain provisions.

NRS 97B.130 Consumer form contracts: Provisions that violate chapter void; enforceability of other provisions.

NRS 97B.140 Consumer form contracts: Void if entered into with unlicensed person required to be licensed.

NRS 97B.150 Award of interest; prohibition against compounding interest; limitation on prejudgment interest; limitation on postjudgment interest.

NRS 97B.160 Award of attorney’s fees when plaintiff is prevailing party in action to collect consumer debt.

NRS 97B.170 Award of attorney’s fees when debtor is prevailing party in action to collect consumer debt.

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NRS 97B.010 Short title. This chapter may be cited as the Consumer Protection From the Accrual of Predatory Interest After Default Act.

(Added to NRS by 2019, 2307)

NRS 97B.020 Purpose of chapter; construction.

1. The purpose of this chapter is to protect consumers.

2. This chapter must be construed as a consumer protections statute for all purposes.

3. This chapter must be liberally construed to effectuate its purpose.

(Added to NRS by 2019, 2307)

NRS 97B.030 Definitions. As used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 97B.040 to 97B.070, inclusive, have the meanings ascribed to them in those sections.

(Added to NRS by 2019, 2307)

NRS 97B.040 “Business” defined. “Business” means a proprietorship, corporation, partnership, association, trust, unincorporated organization or other enterprise doing business in this State.

(Added to NRS by 2019, 2308)

NRS 97B.050 “Consumer” defined. “Consumer” means a natural person.

(Added to NRS by 2019, 2308)

NRS 97B.060 “Consumer debt” defined. “Consumer debt” means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family or household purposes, whether or not such obligation has been reduced to judgment.

(Added to NRS by 2019, 2308)

NRS 97B.070 “Consumer form contract” defined.

1. “Consumer form contract” means a retail charge agreement or a retail installment contract involving a retail installment transaction in writing between a retail seller and a consumer buyer, or a lease in writing between a lessor and a consumer lessee, involving the sale or lease of goods or services, including, without limitation, credit or financial services, primarily for personal, family or household purposes and which has either been drafted by the business or by a third party for use with more than one consumer, unless a second consumer is the spouse of the first consumer.

2. As used in this section:

(a) “Buyer” has the meaning ascribed to it in NRS 97.085.

(b) “Goods” has the meaning ascribed to it in NRS 97.035.

(d) “Retail installment contract” has the meaning ascribed to it in NRS 97.105.

(e) “Retail installment transaction” has the meaning ascribed to it in NRS 97.115.

(f) “Retail seller” has the meaning ascribed to it in NRS 97.125.

(g) “Services” has the meaning ascribed to it in NRS 97.135.

(Added to NRS by 2019, 2308)

NRS 97B.080 Prohibition against use of consumer form contract; application of chapter to persons who seek to evade its provisions.

1. A business, including, without limitation, any officer, agent, employee or representative, shall not individually or in cooperation with another, solicit the execution of, receive or rely upon a consumer form contract, including, without limitation, reliance upon the consumer form contract as a basis of a suit or claim, unless the business has complied with the provisions of this chapter.

2. The provisions of this chapter apply to any person who seeks to evade its application by any device, subterfuge or pretense.

(Added to NRS by 2019, 2308)

NRS 97B.090 Exemptions from chapter. The provisions of this chapter do not apply to:

1. A person doing business pursuant to the authority of any law of this State or of the United States relating to banks, national banking associations, savings banks, trust companies, savings and loan associations, credit unions, mortgage brokers, mortgage bankers, thrift companies or insurance companies, including, without limitation, any affiliate or subsidiary of such a person regardless of whether the affiliate or subsidiary is a bank.

2. Any business:

(a) Whose principal purpose or activity is lending money on real property which is secured by a mortgage;

(b) Approved by the Federal National Mortgage Association as a seller or servicer; and

3. A person who provides money for investment in loans secured by a lien on real property, on his or her own account.

4. A seller of real property who offers credit secured by a mortgage of the property sold.

5. A person who exclusively extends credit to any person who is not a resident of this State for any business, commercial or agricultural purpose that is located outside this State.

6. A person while performing any act authorized pursuant to chapter 604A of NRS.

7. A motor vehicle manufacturer or distributor, or an affiliate or captive financial entity of a motor vehicle manufacturer or distributor.

(Added to NRS by 2019, 2308)

NRS 97B.100 Consumer form contracts: Enforceability of choice of law and forum selection provisions. If a consumer form contract is signed by the consumer or otherwise formed while the consumer resides in this State with a person operating within this State:

1. A choice of law provision in a consumer form contract which provides that the consumer form contract is to be governed or interpreted pursuant to the laws of another state is void. Enforcement and interpretation of such a contract must be governed by the laws of this State if enforcement of the consumer form contract is sought in a court of this State.

2. A forum selection provision in a consumer form contract which provides that any claims or actions related to the consumer form contract must be litigated in a forum outside this State is void.

(Added to NRS by 2019, 2309)

NRS 97B.110 Consumer form contracts: Requirement for signature of consumer.

1. Any consumer form contract involving a loan, extension of credit, deposit account or other financial services must be signed by the consumer in writing or electronically in full compliance with Section 101(c) of the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001(c).

2. Any change of terms to a consumer form contract must be agreed to by the consumer by affirmative consent, signed in writing or electronically in full compliance with Section 101(c) of the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001(c).

(Added to NRS by 2019, 2309)

NRS 97B.120 Consumer form contracts: Prohibition on the inclusion of certain provisions. A consumer form contract must not contain:

1. A provision that the consumer will hold the other party harmless, or that otherwise relieves the other party of liability, for any harm or damage caused to the consumer arising from the consumer form contract.

2. A confession of judgment clause.

3. A waiver of the right to a jury trial, unless the consumer agrees to an alternative dispute resolution such as binding arbitration, in any action brought by or against the consumer.

4. Any assignment of or order for payment of wages or other compensation for services.

5. A provision in which the consumer agrees not to assert any claim or defense arising out of the consumer form contract or to seek any remedies pursuant to any consumer protection law.

6. A waiver of any provision of this chapter or any other consumer protection statute. Any such waiver shall be deemed null, void and of no effect.

7. A provision requiring or having the practical effect of requiring that any aspect of a resolution of a dispute between the parties to the agreement be kept confidential. This subsection does not affect the right of the parties to agree that certain specified information is a trade secret or otherwise confidential or to later agree, after the dispute arises, to keep a resolution confidential.

(Added to NRS by 2019, 2309)

NRS 97B.130 Consumer form contracts: Provisions that violate chapter void; enforceability of other provisions. A provision in a consumer form contract that violates this chapter shall be void and unenforceable. A court may refuse to enforce other provisions of the consumer form contract as equity may require.

(Added to NRS by 2019, 2310)

NRS 97B.140 Consumer form contracts: Void if entered into with unlicensed person required to be licensed. Any consumer form contract entered into by a consumer with a person who is required to be licensed pursuant to any provision of NRS or NAC in order to enter into the consumer transaction, but is not so licensed, is void. Neither the obligee nor any assignee of the obligation may collect, receive or retain any principal, finance charge or other fees in connection with the transaction.

(Added to NRS by 2019, 2310)

NRS 97B.150 Award of interest; prohibition against compounding interest; limitation on prejudgment interest; limitation on postjudgment interest. If the plaintiff is the prevailing party in any action to collect a consumer debt:

1. And a rate of interest is stated in the consumer form contract, interest may be awarded by the court only as set forth in this section.

2. Interest under the consumer form contract, prejudgment interest and postjudgment interest awarded by the court must not be compounded.

3. Any prejudgment interest the court awards the plaintiff must be limited to the lesser of:

(a) The accrued interest at the rate stated in the consumer form contract to the day the action to collect the debt is filed; or

(b) One hundred eighty days of interest at the rate stated in the consumer form contract.

4. Any postjudgment interest the court awards the plaintiff must be limited to the lesser of:

(a) The rate of interest in the consumer form contract; or

(b) A rate equal to the prime rate at the largest bank in Nevada as ascertained by the Commissioner of Financial Institutions on January 1 or July 1, as the case may be, immediately preceding the date of judgment, plus 2 percent. The rate must remain fixed at that rate until the judgment is satisfied.

(Added to NRS by 2019, 2310)

NRS 97B.160 Award of attorney’s fees when plaintiff is prevailing party in action to collect consumer debt.

1. If the plaintiff is the prevailing party in any action to collect a consumer debt, the plaintiff is entitled to collect attorney’s fees only if the consumer form contract or other document evidencing the indebtedness sets forth an obligation of the consumer to pay such attorney’s fees and subject to the following conditions:

(a) If a consumer form contract or other document evidencing indebtedness provides for attorney’s fees in some specific percentage, such provision and obligation is valid and enforceable for an amount not to exceed 15 percent of the amount of the debt, excluding attorney’s fees and collection costs.

(b) If a consumer form contract or other document evidencing indebtedness provides for the payment of reasonable attorney’s fees by the debtor, without specifying any specific percentage, such provision must be construed to mean the lesser of 15 percent of the amount of the debt, excluding attorney’s fees and collection costs, or the amount of attorney’s fees calculated by a reasonable rate for such cases multiplied by the amount of time reasonably expended to obtain the judgment.

2. The documentation setting forth a party’s obligation to pay attorney’s fees must be provided to the court before a court may enforce those provisions.

(Added to NRS by 2019, 2310)

NRS 97B.170 Award of attorney’s fees when debtor is prevailing party in action to collect consumer debt. If the debtor is the prevailing party in any action to collect a consumer debt, the debtor is entitled to an award of reasonable attorney’s fees. The amount of the debt that the creditor sought may not be a factor in determining the reasonableness of the award.

(Added to NRS by 2019, 2311)