Just a reminder, the NC General Assembly passed a law last year changing the maximum late fee in NC to $15.00. The text of the new law follows. Unfortunately, any Retail Installment Sales contracts that you have used in the past that still state the maximum late fee is “$6.00 or 5% of the past due payment, whichever is less” must be honored, so you cannot charge those customers more than the contractual late fee. Make sure your software has been updated to show the new maximum late fee of $15.00, and if you buy contracts it is time to buy the updated version!


The General Assembly of North Carolina enacts:

SECTION 1. G.S. 25A‑29 reads as rewritten:
“§ 25A‑29. Default charges.
(a) If any installment is past due for 10 days or more according to the original terms of the consumer credit installment sale contract, a default charge may be made in an amount not to exceed five percent (5%) of the installment past due or six dollars ($6.00), whichever is the lesser. of fifteen dollars ($15.00). A default charge may be imposed only one time for each default.
(b) If a default charge is deducted from a payment made on the contract and such the deduction results in a subsequent default on a subsequent payment, no default charge may be imposed for such the default.
(c) If a default charge has been once imposed with respect to a particular default in payment, no default charge shall be imposed with respect to any future payments which would not have been in default except for the previous default.
(d) A default charge for any particular default shall be deemed to have been waived by the seller unless, within 45 days following the default, (i) the charge is collected or (ii) written notice of the charge is sent to the buyer.”

SECTION 2. This act is effective when it becomes law and applies to charges imposed on or after that date.
In the General Assembly read three times and ratified this the 12th day of June, 2017.

s/ Philip E. Berger
President Pro Tempore of the Senate

s/ Tim Moore
Speaker of the House of Representatives

This bill having been presented to the Governor for signature on the 13th day of June, 2017 and the Governor having failed to approve it within the time prescribed by law, the same is hereby declared to have become a law. This 26th day of June, 2017.

s/ Karen Jenkins
Enrolling Clerk


Fees for DMV Hearings Begin; State-Mandated Charges Now Required

The North Carolina Division of Motor Vehicles has started collecting the state-mandated fees for administrative hearings as of Jan. 1.
This legislation affects 19 administrative hearing types that review the revocation or suspension of vehicle license plates and licenses for drivers, inspection stations, automotive dealers and mechanics. There are no fees for medical hearings.
NCDMV will notify eligible customers by mail on how to request a hearing, applicable fees and deadlines for submitting a request. Most hearings will be scheduled when the request is submitted in writing and the fees are paid in full. A waiver of fees is available for applicants who meet certain household income criteria.
For more information on the administrative hearings process and a list of fees, visit the DMV website at


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North Carolina Dealers and Auto Finance Providers,


Many of you may be aware of the confusing bulletins being circulated in the industry regarding changes to the North Carolina Vehicle Service Contract Tax.  The bulletins and emails have led some to believe that the vehicle service contract tax is being repealed effective March 1, 2016.


Based on the NC Department of Revenue’s bulletin of Feburary 11 and latest clarification issued February 19, it is FNI’s opinion that for most used car dealer service contract programs, and especially those most common in the independent dealer market, the 2014 tax will continue, and no changes should be made to your tax collecting and remitting process.  


The legislation responsible for the confusion may act as a partial repeal of the 2014 tax, but only for vehicle service contracts that “COVER THE ENTIRE CAR” – and according to NC DOR, that means exclusionary coverage, rather than the kind of stated component contracts most common in the used car industry. The February 19 bulletin makes it clear that contracts that cover just “components” or “systems” but not the entire car are still subject to the tax. 


The national vehicle service contract industry association (SCIC) is still working with NC DOR for further clarification – under the current interpretation, dealers and finance companies will have to determine which contracts are subject to tax and which are not, and the very loose definition provided by DOR creates uncertainty for making those determinations, and creates a high risk of improperly assessing or neglecting the tax. The SCIC reports that new legislation is expected in NC this year to provide further clarification as well.