KANSAS COMMENT, 2010

The Kansas uniform consumer credit code (K.S.A. 16a-1-101 et seq.) is referred to in these comments as the U3C. The Kansas uniform commercial code (K.S.A. 84-1-101 et seq.) is referred to as the UCC. The Kansas consumer protection act (K.S.A. 50-623 et seq.) is referred to as the KCPA. The federal truth in lending act (15 U.S.C. § 1601 et seq.) is the TILA. "Regulation Z," when used in these comments, refers to the Federal Reserve Board's truth in lending regulations, 12 C.F.R. Part 226.

The scope and application of the U3C are determined by K.S.A. 16a-1-201 and by the various definitions in K.S.A. 16a-1-301.

These comments take into account all amendments through the 2009 Session Laws of Kansas. They should be read with caution, however, as future amendments are inevitable.

Additional guidance on the U3C may be found in Administrative Regulations, K.A.R. 75-6-1 et seq., and Administrative Interpretations, No. 1001 et seq. which can be found online at http://www.osbckansas.org. The U3C is administered by the Office of State Bank Commissioner —deputy commissioner of the division of consumer and mortgage lending. Recent Kansas legislative bills and supplemental notes can be accessed at http://www.kslegislature.org.

Some states' versions of the uniform act have been held not to be an unconstitutional burden on interstate commerce nor violative of the due process rights of the creditor. See Quik Payday, Inc. v. Stork, 509 F. Supp. 2d 974 (D. Kan. 2007), aff'd 549 F.3d 1302 (10th Cir. 2008), cert. denied 129 S. Ct. 2062; and Aldens, Inc. v. Miller, 466 F. Supp. 379 (S.D. Iowa 1979), aff'd 610 F.2d 538, cert. denied 446 U.S. 919; Aldens, Inc. v. Ryan, 571 F.2d 1159 (10th Cir. 1978), cert. denied 99 S. Ct. 180.

Law Review and Bar Journal References:

The uniform commercial code, the statute of frauds, and the farmer, 25 K.L.R. 318, 323 (1977).

"Contested Estate Matters After Court Unification." Calvin J. Karlin, 48 J.B.A.K. 97, 99 (1979).

"Commercial Transactions Under the New Bankruptcy Act," Paul B. Rasor, 48 J.B.A.K. 199, 211 (1979).

"Farmers and the Law: A Survey of Agricultural Exemptions and Exceptions in State and Federal Law," J. W. Looney, 50 J.K.B.A. 7, 16 (1981).

"To Be (Transformed) or Not to Be: The Transformation Versus Dual-Status Rules for Purchase-Money Security Interest Under Kansas' Former and Revised Article 9," Christopher Harry, 50 K.L.R. 1095 (2002).

"History & Overview of the Uniform Consumer Credit Code," Ryan E. Hodge, J.K.T.L.A. Vol. XXVI, No. 3, 8 (2003).

Attorney General's Opinions:

Finance charges; additional charges not included therein. 81-209.

Disclosure; discounts for cash purchases. 86-115.

Consumer credit insurance; property and liability insurance. 87-3.

CASE ANNOTATIONS

1. Public utilities are specifically excluded from application of this section. Jones v. Kansas Gas and Electric Co., 222 Kan. 390, 397, 565 P.2d 597 (1977).

2. Cited; intent of parties determinative when note ambiguous as to applicability of UCCC. Farmers State Bank v. Cooper, 227 Kan. 547, 548, 550, 608 P.2d 929 (1980).

3. Disclaimer of implied warranty of merchantability sufficiently conspicuous; factors to be considered discussed. J & W Equipment, Inc. v. Weingartner, 5 Kan. App. 2d 466, 470, 618 P.2d 862 (1980).

4. Where debtors and creditor did not enter into reaffirmation when debt discharged, creditor's lien did not survive discharge. In Re Williams, 9 B.R. 228, 229, 234 (1981).

5. When remedies are pursued under federal truth in lending act, questions concerning statute of limitations must be determined under the federal law. United Missouri Bank of Kansas City v. Robinson, 7 Kan. App. 2d 120, 122, 638 P.2d 372 (1982).

6. Nothing in Missouri law authorized attorney general to act on behalf of persons awarded judgments. In re Cannon, 31 B.R. 823 (1983).

7. FDIC not required to be licensed before undertaking collection of loans purchased in corporate capacity. Federal Deposit Ins. Corp. v. Soden, 603 F. Supp. 629, 633, 634 (1984).

8. Cited; creditor seeking deficiency judgment must prove collateral sold in "commercially reasonable manner" or judgment absolutely barred. Garden Nat'l Bank v. Cada, 11 Kan. App. 2d 562, 566, 729 P.2d 1252 (1986).

9. Federal constitution's supremacy clause prohibits state from requiring licensure of FDIC under UCCC. Thompson v. Federal Deposit Ins. Corp., 241 Kan. 328, 736 P.2d 914 (1987).

10. Unlicensed assignee of a supervised loan has no authority to collect loan or enforce its terms. Independent Financial, Inc. v. Wanna, 39 Kan. App. 2d 733, 736, 739, 186 P.3d 196 (2008).

11. Cited; Kansas regulation of payday loans over internet held not to violate dormant commerce clause. Quik Payday, Inc. v. Stork, 549 F.3d 1302, 1304 (2008).