Section 2. Section 520.34, F.S., is amended by adding a new subsection (11) to read: 520.34 Retail installment contracts. (11) In a retail installment transaction involving the modernization, rehabilitation, repair, alteration, improvement or construction of real property: (a) The buyer may be charged for and there may be collected from him, or there may be added to the cash sale price, the reasonable fees and costs actually to be paid for construction authorizations and similar permits issued by public agencies and for title search, title insurance and services of an attorney relating to any real property mortgage, lien or other encumbrance taken, granted or reserved pursuant to the contract. (b) The seller shall not request or accept a certificate of competition signed by the buyer prior to the actual delivery of the goods and completion of the work to be performed under the contract. Section 3. This act shall take effect September 1, 1961, and shall not apply to contracts or accounts outstanding on September 1, 1961. Became a law without the Governor's approval. Filed in Office Secretary of State June 22, 1961. Hon. PAUL H. DOUGLAS, U.S. Senate, Washington, D.C. RACINE, WIS., August 10, 1961. DEAR SENATOR DOUGLAS: I wish to express my thanks and support in your determination to protect the public from unscrupulous, cleverly hidden interest rates and carrying charges. As a social worker, I have found that those least able to pay these exorbitant rates of interest are those who are the most frequently victimized. I realize you will be under great pressure from the vested interests who oppose any regulation requiring them to divulge the true interest rates charged for financing, carrying charges, and other installment purposes. I therefore urge you not to give up the battle for "the little guy." Pledging my complete support, I remain, Sincerely yours, Re S. 1740. JOSEPH J. DE ROSA. VANGUARD ADVERTISING DEAR SENATOR DOUGLAS: I would like to commend you for sponsoring this bill, and hope you will be able to have it enacted into law. I believe in the full truth in connection with any business transaction-in terms that can be understood. An annual rate of interest is understandable. Under the fast credit deals, with discounts of interest deducted in advance, in the case of loans, and of monthly repayments, in the case of merchandise, the truth is concealed-deliberately. Even "respectable" banks gloss over the facts, or try to sweep them under their thick rugs. Hon. PAUL H. DOUGLAS, J. M. RUSSAKOFF. REGISTER OF DEEDS, BUFFALO COUNTY, DEAR SENATOR DOUGLAS: I have today written my Congressman and Senator of my district to vote for your "truth in lending" bill. The American people are certainly entitled to know what they are paying for the use of the money they borrow. Many people still think they are protected by the usury law but it certainly doesn't mean a thing any more. For instance, I am sending you a rate which is sometimes used, and we have them recorded in our county office, as follows: "At the rate of 3 percent per month on that part of the unpaid principal balance not in excess of $150 and 22 percent per month on that part of the unpaid principal balance in excess of $150 and not in excess of $300, and three-fourths of 1 percent on any remainder of such unpaid principal balance, which aggregate amount shall be payable in installments as follows:"-Recorded in our office in mortgage book No. 166, page 441. I hope that the friends of the loan sharks in Congress don't try to water this bill down; we need it passed as is. Let's protect the working class of the American people from these moneylending sharks. While you are not my own Senator, I certainly wish you were. A person could be proud of such a Senator as you. Sincerely yours, Hon. PAUL H. DOUGLAS, U.S. Senate, Washington, D.C. SAM SPAHR. BEAVER, PA., July 26, 1961. MY DEAR SENATOR DOUGLAS: Your sponsoring the "truth in lending" bill deserves the support of all integrious legislators. And, you may be assured of unqualified allegiance by the legions of dupes, victims of the "great credit deceit." I spent several years in the operating end of one of the Big Four dealing with manufacturer-to-consumer in the auto, appliance, and small loan fields. Certainly the interest rate to manufacturer, distributor, and dealer is of the legalsimple type, but woe to the consumer. His rate ran from 4-percent discount (8 percent) to 12-percent discount (24 percent), depending to an extent on his attitude and knowledge of interest. These rates, of course, provided an ample dealer reserve (kickback) which varied with volume, insurance placement, etc. I do not claim expert status nor do I know what effect your bill may have on the Nation's economy, and yet if nothing else, said Senator Proxmire, "It's a simple matter of integrity." DEAR SENATOR: Local 183 by resolution adopted, heartily endorses your bill S. 1740. We feel that this measure is sorely needed and long overdue. We are writing to Congressman Westland and Senator Henry Jackson urging that they support this legislation. Sincerely, SENATOR PAUL DOUGLAS, Senate Office Building, Washington, D.C.: JOHN M. COLE, Secretary. SUNDSTRAND CREDIT UNION, DEAR SENATOR: As directors of a 3,000-member Illinois credit union, we would like to join our National and State organizations in endorsement of your S. 2755 "truth in credit" bill. Enactment of this bill will be a milestone toward elimination of usurious interest rates frequently charged today. This can only serve to increase the purchasing power of the American people and thereby better their standard of living. Respectfully, Lorraine Peterson, Thomas R. Laden, Dean O. Erickson, Don. Mag- Senator PAUL H. DOUGLAS, U.S. Senate, Washington, D.C. Q-W LABORATORIES, Plainfield, N.J., July 14, 1961. DEAR SENATOR DOUGLAS: Mrs. Franke and I listened to you with a great deal of interest this morning on the "Today" program. We would like to go on record as being very much for the bill that you are proposing which, as we understand it, would make it necessary that the buyer understand the seller's contract as far as interest is concerned. Frankly, we think that the installment buying today is scandalous but it would seem to us that you may be quite right in saying that it would not be a good time, when we are trying to get business to go forward rather than backward, to change the whole credit installment system. The matter of hidden interests, however, or misunderstood interests, we are sure could be overcome by such a bill as you state you are promoting. At this time we would like also to say that we have listened to you many times and although our leanings have been strictly Republican we have always enjoyed your clear thinking and your obvious interest in the welfare of the people of this country. Naturally there have been times when we did not agree with you all the way down to the dotting of an "i." Good luck to your bill. Yours cordially, A. L. FRANKE. CITIES SERVICE RESEARCH & DEVELOPMENT CO., INC., Senator PAUL H. DOUGLAS, DEAR SENATOR DOUGLAS: It has been my experience to find a great deal of confusion regarding stated interest rates. The interest rate is usually quoted in such a manner that the borrower has no conception of the actual rate of interest he is expected to pay. Please accept this brief note as my congratulations and wholehearted support of your interest bill. DEAR MR. DOUGLAS: The officers and executive delegates of this organization, representing approximately 25,000 employees of the Boeing Co., Seattle, Wash., were recently privileged to learn of your efforts to establish a so-called truth-inlending bill. This type of legislation, in our opinion, is of vital importance to our citizens and the future progress of our economy. We are pleased to advise that on July 11 our executive delegates unanimously concurred with the attached resolution. Our entire congressional delegation has been advised of this action. We sincerely hope that your efforts will be rewarded. If there is any further action we, as an organization, can take to assist you, please advise. Yours truly, WALTER E. BERG, District Secretary-Treasurer. Senator PAUL DOUGLAS, Senate Offices, Washington, D.C. BROOKLYN, N.Y., July 19, 1961. DEAR SENATOR DOUGLAS: As one of those fellows Congress and most legislatures forget all about (for why else are there usurious lending laws on the statute books of most States?), I would like to speak in favor of the bill which is called truth in lending. Congratulations that you sponsor it. It is an earnest hope it be passed this session. And I am glad that you, as an economist, stand behind it. It is surprising that there are those who oppose it, particularly retailers dealing directly with consumers. Personally, my experience with department stores and this sort of thing is that they will go to any length not to give you the true rate of interest. Yet, consider the situation The installment indebtedness of the United States runs somewhere around $56 billion. Roughly, even at a low 10 percent, this means a dilution of consumer's buying power of $5.6 billion per annum basis. It is probably more, for I have rarely found it to be as low as 10 percent. Certainly most small loans are much more. The familiar argument that someone else gets the money and spends it, therefore it does no harm to the consumers in the aggregate, is utter nonsense; for it is a commercial charge, and the losses as well as the gains made are all charged into the ultimate prices of all the consumer buys. There is strong ground for assuming this sort of commercial operation aims not a maximizing profits so much as maximizing revenues, and thus it is utilized to choke the consumer with ever more debt. Looking at it more rationally, it seems to me that the consumer should be subsidized to buy more-not penalized by excess financial costs which are superimposed on the production costs. Since all economic activity depends on the consumer (and all costs are charged to his account), anything adding to the deadweight of carrying more burdens from which he gets less rather than more of his production or wealth is uneconomic. So that all exhortations to buy to keep up employment end in a fiasco as the finance chargers pick the bones of half-dead consumers and periodically choke off buying and bringing about recessions, etc. It may be that the objections of certain interests that if merchants cannot figure the true rate of interest, nor educate the consumers as to what he is being taken for, the merchants themselves do not know their business. Can it be, possibly, that there is a kind of concealed, under-the-table arrangement whereby the merchants themselves have surrendered this aspect of their business to the debt merchants, those malefactors of great stealth, and do not themselves know they are acting irrationally? And also in restraint of their own trade; perhaps also colluding to misrepresent to the consumer what goes on? For all these reasons, Senator Douglas, let's have that bill made into law, the restrictions of so-called credit experts who know more than merchant and consumer but dare not tell the truth about it to the contrary notwithstanding. Let's have teeth in it, too. Let's make it legal to educate the consumer, to disavow the ancient law of despoiling consumers based on the Roman law concept of stating: "Let the buyer beware," caveat emptor. This was congruent with the Roman concept, for it was based on conquest by spoliation and power. It is hardly a doctrine for the United States today. More than that, if these so-called merchants who are loath to tell the consumer what goes on, and who prate day and night about "free enterprise" or free markets, or other self-deluding tosh, can't see that a free market means a well-informed consumer, then as one consumer to another, I'd conclude they are acting suspiciously like a band of people who are bent on destroying their own stake in the market, their own market concepts, as they go on deluding the consumers with Madison Avenue nonsense and wordmongering—and bad economics. With all good wishes, and a successful attainment of what you are trying to do in the way of educating the consumers, I remain, Yours very truly, PAUL E. ANDERSON. Senator PAUL H. DOUGLAS, DICK WINKLER, INC., HON. SENATOR DOUGLAS: Please be advised that I am wholeheartedly in favor of your bill, "Truth in Lending," even though I am a member of the NADA. In my experiences of the last 30 years I have found that many of the undesirable conditions were created by unscrupulous dealers whose only means of competing against honest dealers were the use of hidden charges. Your bill may help to clean up this dirty situation and I feel sure give the biggest boost to honest dealings by legitimate dealers. Furthermore, I do not believe as others think that this "simple annual rate" in a transaction would effect enforcement of Federal price control mechanism. Please be free to call upon me for any support. Respectfully yours, DICK WINKLER, President. THE WINTERS STATE BANK, Senator PAUL DOUGLAS, DEAR SENATOR DOUGLAS: Your expressed thoughts on television this morning regarding monthly payments for financing automobiles and other things is almost exactly what I have said many times. People are buying furniture, mechanical refrigeration, automobiles, and many other things and they are only informed as to monthly payments without any reference to the total of the debt which they will finally absorb. On television I hear something like this: "No payment down. The first payment 60 days after the purchase and then so much a month," and in many instances they do not tell the number of months-just the monthly payments. Our bank is offering credit on a monthly basis but in every instance we tell them the amount and the rate of interest. I hope you are successful with your proposed legislation correcting surprising abuses, thus allowing the conservative institutions to have a better chance in financing purchases on a sane and equitable basis. Sincerely, Senator Douglas, JOHN Q. MCADAMS. TONAWANDA, N.Y., July 17, 1961. DEAR SIR: I am strongly in favor of your bill to show as a separate and distinct item interest charges on conditional sales contracts. In fact, I would go further and make these subject to the usury laws. Much of the problem centers around auto sales and most affected are women and young persons of little experience. Even though my mother owned her own home and could qualify creditwise for the most favorable type loan, a salesman that she trusted arranged financing for her when she purchased a used car. The loan was for $400 at the following rates: 21⁄2 percent per month on the first $100; 2 percent per month on the second $100; 11⁄2 percent per month on the third $100; 1 percent per month on the fourth $100. The fourth was to be paid first which meant that the first $100 had an interest rate of 21⁄2 percent per month for the life of the loan. As you can see the total interest was very large. Payment was monthly over a 2-year period. When I questioned her about this she was only aware that her payments were a specified amount per month and had no idea that the interest was so large. I hope you are successful in your effort. Sincerely, CAMPBELL E. WELLS. |