Weekly television digest (Jan-Dec 1963)

10-TELEVISION DIGEST NOVEMBER 2S, 1963 NEB, TIME-SALE MUDDLE •-CONT'D... Despite advice from state's legal leader that voided contracts can't be revived, Nebraska Legislature has rushed through 4 remedial bills to protect retailers & financing agencies from loss of some $1 billion in merchandise sold under instalment contracts since 1959 (Vol. 3:44 p7). They face staggering loss of product, interest & principal in wake of State Supreme Court's decision in Oct. which voided 1963 Instalment Sales Act, hastily written this summer to replace 1959 Instalment Sales Act declared unconstitutional by Court in July. New Acts also will get Court axe, in opinion of state Attorney General Clarance Meyer. "They' re also unconstitutional," he told us. "I'ye already told that to the Legislature, in writing." Markedly more optimistic is Marvin R. Werve, consumer credit vp for Omaha National Bank. "In 1958," he told us, "a previous Supreme Court upheld the principle in these remedial bills." In addition to passing the 4 remedial bills. Legislature was slated to convene in special session at 12:01 am Nov. 23 for final hearing and vote on LB11 bill that overhauls state's interest structure & on a constitutional amendment, to go on state ballot next Nov., which would empower Legislature to establish special interest rates for various product groups. Why the wee hour meeting? Werve explained: "Saturday is the big Nebraska-Oklahoma football game, and nobody wants to be stuck here Saturday afternoon debating bills." Remedial bills— 3 signed into law Nov. 15, one passed last week— relate to various aspects of the time -sales muddle, Meyer told us, and all are written along same lines. "They are designed to have a retroactive effect," he explained, & their key point is to reduce penalties. One Act, for example, provides that all instalment contracts written since 1959 come under state's 9% usury law. If such contracts are in violation of 9% simple interest ceiling, then they would be subject to penalty of usury law— "just the loss of interest." Another of the 4 Acts validates aU contracts voided by the Supreme Court decision if they were written in good faith, i.e., in accordance with requirements of the 1959 & 1963 Instalment Sales Acts. "I believe all 4 Acts will be tested in court promptly," Meyer emphasized. "In fact, these Acts already have beeli introduced as defense in several cases which went before the Supreme Court & District Courts this week." These are cases filed by consumers to retain products purchased under instalment contract & to recoup payments already made. We asked Meyer what would happen if courts rule new Acts unconstitutional, as he expects will happen. "In that event, the present situation in Nebraska would remain unchanged. The voided contracts would remain void, & consumers would be free to file suit to retain their purchases & regain payments made on their contracts. There is, of course, a one-year statute of limitation on these contracts." Under new law passed in July, purchasers must file within one year of date of law' s passage or within one year from date of final payment. "This state will be in a helluva shape" if courts knock down 4 remedial bills, in Werve' s opinion. "The big national financing agencies would pull out of Nebraska," he said. Should Supreme Court void new Acts, there still remains one avenue of hope: "One possible remedy is a declaratory judgment by the Court that it will not invalidate any future contract. However, this would not affect those contracts on which consumers already have obtained judgments." It's estimated that some 200 cases already have been filed by consumers. Some of the sums involved are staggering, and in some instances, Werve told us, the violations involved amount to as little as 24^^ overcharge above 9% usury limit. Nebraska sales have slowed markedly in wake of time sales muddle. "Sept, sales were down 27% despite fact that this is the big back-to-school month & that sales throughout the nation were up," Werve said. Meyer pointed out that "on straight instalment sales today, the only safe procedure is to keep total interest charges within the 9% usury limit." While Meyer is of opinion that contracts already pronounced dead will stay dead, he's convinced that upcoming LB11 bill, which overhauls state's interest structure, "can be successfully defended" as constitutional. Interest law bill would reduce number of loan categories from 8 to 3— standard loans, instalment sales, instalment or personal loans. It would retain 9% interest ceiling on standard loans, establish rate on instalment sales at up to 12% annual simple interest, revamp present instalment loan law by setting maximum loan at $1, 500 from $3,000, and pegging interest rates at 30% for first $300, 24% for next $200, 12% on final $1, 000. "Usury structure on instalment sales contracts would be 12% simple or $6 per $100 per year," Werve explained. "This would be down considerably from the previous rates under which retailers were allowed to charge as high as $15 per $100 per year. These hi^er rates were passed by heavy lobbying, and they didn't sit well with the public." Extended warranty controversy among home electronics & appliance manufacturers & retailers is explored by Nov. 19 "Wall St. Journal" which noted that GE, Magnavox, Admiral & others "in the past year or so have been strengthening guarantees and warranties on one or more of their products" in belief that manufacturer can "boost sales by broadening his promise to make good on defective products." However, "some manufacturers and , retailers contend that these companies are wasting their time and boosting the cost of their products. They claim that a consumer is primarily concerned with the price and features of an appliance." In latter group are RCA J and Zenith, "Journal" noted and quoted Zenith's Leonard C. Truesdell: "We haven't felt any pressure to do it, and an extended warranty has to be figured into the cost somewhere." RCA was quoted: "We prefer to let our dealers decide whether to extend warranties." Major bone of contention was cited by Sam Boyd, onetime NARDA pres., who, "Journal" noted, "Says many dealers feel that liberalized manufacturer's warranties on some products not only increase cost but also cut into a dealer's own repair business. He adds that manufacturers' allowances for labor involved in guaranteed repairs usually don't cover dealers' costs." New sets: New GE "Accent" radio line, especially designed for key retailers, has 10 models, including FM I stereo radios, listing at $14.95-$229.95. . .Andrea intro I t duces 2 tambour-door contemporary lowboy color sets at I 4 $975 (remote) & $875. I t