Effective State Changes

CALIFORNIA

SB 1096 requires the following language be disclosed in at least 16-point bold font on the front of an envelope containing physical mail soliciting consumer financial information: “THIS IS AN ADVERTISEMENT. YOU ARE NOT REQUIRED TO MAKE ANY PAYMENT OR TAKE ANY OTHER ACTION IN RESPONSE TO THIS OFFER.” Effective January 1, 2025.

FLORIDA

On June 28, 2024, Florida Governor Ron DeSantis signed House Bill 1347 into law changing provisions in the state’s Consumer Finance Act, specifically under § 516.031. The substantive changes include increasing the bracketed rate structures and tiers. The Consumer Finance Act still covers loans up to $25,000. The new rate structure is as follows:

• 36% per annum on the first $10,000 of the principal amount
• 30% per annum on the part of the principal exceeding $10,000 and up to $20,000
• 24% per annum on that part of the principal amount exceeding $20,000 and up to $25,000

Effective July 1, 2024.

INDIANA

On July 1, 2024, the Auto Dealer Services Division of the Indiana Secretary of State increased the allowable Documentation Preparation Fee to $245.28 (from $237.51), based on the federal Bureau of Labor Statistics’ Consumer Price Index. Effective July 1, 2024.

NEW JERSEY

On June 28, 2024, AB 4702 was signed into law. It phases out the sales and use tax exemption on zero-emission vehicles. Between October 1, 2024, and before July 1, 2025, sales of zero-emission vehicles will be subject to a tax rate of 3.3125%. Effective July 1, 2025, the rate will increase to the general sales and use tax rate (currently 6.625%). Effective immediately.

NORTH CAROLINA

HB 199 was signed by Governor Cooper on July 2, 2024. Among a host of other provisions recommended by the DMV, the new law changes the duration of a motor vehicle dealer’s license from one year to two years, effective for licenses issued on or after October 1, 2024. The law does not change the annual license fee for dealers.

PENNSYLVANIA

On June 28, 2024, HB 109—the Prohibition of Early Contract Termination Fees Upon Death Act—was signed into law. A provider may not impose a fee for early termination of a service contract if a party to the contract dies before complete performance of the contract and the executor or administrator of the decedent’s estate provides notice. These provisions extend to vehicle leases such that a lessee shall not be liable for charges for the early termination of a lease agreement if the lessee dies before the end of the lease. Effective August 27, 2024.

RHODE ISLAND

On June 28, 2024, SB 2500 became law without the signature of Governor McKee. Amending the Commercial Law General Regulatory Provisions, SB 2500 creates a new chapter entitled the Rhode Island Data Transparency and Privacy Protection Act. Amongst other provisions, the law includes restrictions on the collection and processing of personal data, requires data controllers to obtain consumer consent before processing sensitive personal data, and requires controllers to establish a process for consumers to appeal a controller’s refusal to take action on a request regarding personal data. The attorney general has exclusive rights to enforce these new provisions. Effective January 1, 2026.

TEXAS

On July 2, 2024, the Texas Office of Consumer Credit Commissioner (“OCCC”) released Bulletin B16-5 describing the requirements for motor vehicle documentary fee filings under Chapter 348 of the Texas Finance Code. Effective July 11, 2024, if an auto dealer charges $225 or less for the Documentary Fee, they do not have to provide a notification and cost analysis to the OCCC. If a dealer wants to charge more than $225 for the Documentary Fee, the dealer must first provide a notification and cost analysis to the OCCC. The Bulletin provides instructions on how to accomplish this submission. Effective July 11, 2024.

WEST VIRGINIA

The West Virginia Motor Vehicle Dealers’ Advisory Board approved an increase in the maximum Documentary Fee that can be charged by auto dealers from $499 to $575. Effective July 1, 2024.

FOR IMMEDIATE RELEASE   

For more information contact:

Carleton Sales Team

574.243.6040 option #3

sales@carletoninc.com

On June 28, 2024, Florida Governor Ron Desantis signed House Bill 1347 into law changing provisions in the state’s Consumer Finance Act, specifically under § 516.031. The substantive changes include increasing the bracketed rate structures and tiers. The Consumer Finance Act still covers loans up to $25,000.

New Rate Structure for Consumer Loans:

• 36% per annum on the first $10,000 of the principal amount
• 30% per annum on the part of the principal exceeding $10,000 and up to $20,000
• 24% per annum on that part of the principal amount exceeding $20,000 and up to $25,000

Effective July 1, 2024.

About Carleton, Inc.:

Carleton is the country’s leading provider of financial calculation software, loan origination compliance support, and document generation software. With over 50 years of experience, our ongoing expertise and industry knowledge reaffirms why we are a trusted partner.  Founded in conjunction with the Truth In Lending Act, Carleton provides expert compliance support with continuous accuracy in all our calculations and disclosures at a state and federal level. To learn more about Carleton’s lending solutions, contact our sales team at sales@carletoninc.com or 574-243-6040 option #3.

Effective State Changes

COLORADO

HB 1089 tasks the Department of Revenue to create an electronic communication system for vehicle owners to receive and reply to notifications for registration and license plates and for this system to be in place by March 31, 2026. Effective June 3, 2024.

HB 1380 adds new unfair deceptive acts and practices which debt collectors or collection agencies subject to the Colorado Fair Debt Collection Practices Act must avoid. Effective August 7, 2024.

SB 192 revamps Colorado’s Lemon Law for new vehicles. Manufacturers and dealers are required to make a consumer whole if a vehicle fails to perform and can deduct a reasonable allowance for the consumer’s previous use of the vehicle. Effective August 7, 2024.

CONNECTICUT

A new law implementing the Department of Motor Vehicles’ recommended changes to the Connecticut Statutes passed in the form of SB 183. The law concerns the use of the DMV’s electronic title and registration system and other minor revisions to the motor vehicle statutes. Effective May 21, 2024, in part, and October 1, 2024.

FLORIDA

SB 902 created the Florida Vehicle Value Protection Agreements Act. Florida now defines a “vehicle value protection agreement” as an agreement that provides for the reduction of some or all of a current loan balance, or towards the purchase or lease of a replacement vehicle when there is a total loss of a vehicle. While GAP is excluded from these provisions, the bill states that neither vehicle value protection agreements nor GAP products are insurance. Additionally, the definition of GAP has been changed and now requires a refund to the consumer for early termination of all unearned portions of the purchase price unless stated within the contract. Effective October 1, 2024.

GEORGIA

HB 1100 authorizes the use of electronic notifications by the Department of Revenue regarding motor vehicle insurance coverage and title status. Additionally, the law creates a new system for the electronic storage and transfer of certificates of vehicle title. Effective April 22, 2024.

ILLINOIS

HB 4951 establishes the Interchange Fee Prohibition Act which bars companies from charging an interchange fee on the tax amount or gratuity of an electronic payment transaction if the merchant informs the acquirer bank of the tax or as part of the authorization process for a given transaction. Effective July 1, 2024, in part, and July 1, 2025.

IOWA

HF 674 allows for any county treasurer to issue certificates of title, registrations, and perfect security interests outside of the county where a citizen resides. Additionally, this law increases various fees for County Retention—including Certificate of Title, Perfection of Security Interest, and New Registration fees—each by an additional $10. Effective January 1, 2025.

HF 2185 mandates that the certificate of title for a motor vehicle will no longer include the previous owner’s name and address. Instead, the county treasurer must maintain this information connected to the title certificate number in their records system. Effective July 1, 2024.

KANSAS

HB 2098 allows the purchaser of a new or used vehicle a sales tax deduction due to the previous sale of another vehicle (i.e., treat it like a trade-in), as long as it was sold within 120 days of the subsequent vehicle purchase. Additionally, if the amount of the sale exceeded the price of the vehicle being purchased, the purchaser would not owe any sales or use tax. The bill also provides the mechanics of how to claim the tax deduction. Effective July 1, 2024.

LOUISIANA

SB 372 eliminates the registration and renewal fees for providers of motor vehicle service contracts registering with the Secretary of State of Louisiana. Effective August 1, 2024.

SR 79 requires a study by several Louisiana state government entities of the collection of state and local taxes and registration fees for active-duty service members, veterans, and their spouses and to provide a report to the Senate no later than January 8, 2025. Effective August 1, 2024.

MAINE

HP 59 and LD 91 adopt the National 2022 Amendments to the Uniform Commercial Code. By and large, the changes modify the language to align with updated definitions and electronic means of transacting. Effective July 1, 2025.

LD 2072 requires the Maine Secretary of State to provide a printed paper certificate of title or salvage if the lienholder participates in the electronic lien titling system and requests the paper version. Additionally, the new law requires all dealers to pay all fines and fees to be licensed and requires dealers to post all document preparation fees on vehicles they are selling. Effective August 9, 2024.

MARYLAND

HB 352 and SB 362 raises annual registration fees across the board for all vehicles in Maryland on July 1, 2024, and then again on July 1, 2025. In addition, this bill creates a new surcharge effective July 1, 2024, of $125 for zero-emission vehicles and $100 for plug-in electric vehicles, besides defining these types of vehicles. Finally, the bill increases the maximum dealer processing charge (or doc fee) from $500 to $800 on July 1, 2024. Effective June 1, 2024.

HB 567 and SB 541 establish the Maryland Online Data Privacy Act of 2024. Under this new law, Maryland consumers may request the correction of personal data and a copy of the data in the possession of a controller. Consumers may also opt out of targeted advertising and the sale of their data. Effective October 1, 2025.

HB 1273—cross-filed with SB 1003—increases protections for motor vehicle dealers by requiring vehicle manufacturers, distributors, or their agents to deliver new motor vehicles within a reasonable timeframe after receiving electronic notice from dealers. Effective October 1, 2024.

MICHIGAN

HB 4343 and requires the Department of Insurance and Financial Services to submit an annual report to the Michigan state legislature regarding deferred presentment service transactions, including complaints and information on licensees. Effective 90 days after the legislature’s adjournment.

MISSISSIPPI

HB 1589 provides that a lienholder must electronically transmit to the Department of Revenue within 14 days of the satisfaction and release of the lien. Additionally, a used motor vehicle dealer or scrap metal processor must verify the absence of any lien using the states Automated Statewide Motor Vehicle Registration System before a motor vehicle may be purchased. Effective January 1, 2025.

SB 2543 increased the maximum amount to $5,100 for loans permitted under the Mississippi Consumer Alternative Installment Loan Act. The Mississippi Department of Banking and Consumer Finance will issue a memo authorizing the new maximum loan size every year which will be calculated by applying any increase or decrease in the United States’ Bureau of Labor Statistics Consumer Price Index for All Urban Consumers (CPI-U) for the previous calendar year to the previous maximum loan amount. Effective July 1, 2024.

NEBRASKA

LB 484 establishes a continuing education program for all licensed motor vehicle dealers—excluding franchise dealers—which permits an educational seminar for continuing education credit. Effective July 15, 2024.

Amongst a number of provisions, LB 1317 establishes a fee for registration of a vehicle powered by an alternative fuel of $150, except that for a motorcycle or plug-in hybrid electric vehicle the fee would be $75. The bill also establishes an excise tax of three cents per kilowatt hour on energy used to charge the battery of a motor vehicle at a commercial electric vehicle charging station starting January 1, 2028. Effective April 25, 2024.

OKLAHOMA

Following trends seen across the country, HB 3104 creates new protections for franchise motor vehicle dealers. Primarily focused on the termination, cancellation, or nonrenewal of a franchise, the new law also provides for certain actions when a dispute arises between a vehicle manufacturer and a franchise dealer regarding the valuation of the dealership. Effective November 1, 2024.

HB 3618 allows the transfer of a motor vehicle title with an active lien from a commercial lender to an individual’s business entity. Effective November 1, 2024.

SB 541 now requires debt waiver and vehicle value protection program administrators to register with the Oklahoma Insurance Department. Effective November 1, 2024.

SB 542 allows licensed vehicle service contract providers to register to sell motor vehicle ancillary protection products under both the Service Warranty Act and the Vehicle Protection Product Act. The law also allows the Insurance Department to require insurers to submit filings, payments or other fees electronically. Effective November 1, 2024.

SB 543 creates the Oklahoma Insurance Data Security Act. The bill establishes definitions, new data security requirements for all licensees—including establishing a modern information security program—and provides for the Commissioner to investigate and enforce these new requirements. Effective July 1, 2024.

SOUTH CAROLINA

SB 434 prohibits automatic service contract renewals unless the provider notifies the contract holder no less than 30 days and no more than 60 days from the contracted-for policy deadline. The notification must disclose the cost for renewal and information on how to contact and cancel the policy. Effective May 20, 2024.

TENNESSEE

HB 2075 and companion bill SB 1837 create a new statewide electronic lien and title system to be implemented by the Tennessee Department of Revenue by December 31, 2025. Effective May 1, 2024.

SB 1140 will allow motor vehicle dealers to retain 2% of the first $2,500 and 1.15% on anything above $2,500 of sales taxes due to the state—up to a maximum of $25 per report—in order to compensate for costs incurred in accounting for, reporting, and remitting such taxes. Effective May 28, 2024.

VERMONT

HB 546 allows a purchaser of an all-terrain vehicle (“ATV”) a sales tax deduction due to the previous sale of another ATV, as long as it was sold within three months of the purchase of the new ATV. Effective January 1, 2025.

VIRGINIA

SB 534 and identical bill HB 191 increases protections for vehicle dealers by expanding prohibitions for vehicle manufacturers. The new law changes the deadlines for vehicle manufacturers, factory branches, or distributors to reject the sale or transfer of a dealership. Additionally, the law provides that a franchisor’s consent to the relocation of a dealership cannot be unreasonably withheld. Effective July 1, 2024.

Reminders

MINNESOTA

Passed last year, HF 2887 increases the maximum Documentary fee to the lesser of $275 or an amount equal to ten percent of the value of the sale or lease. Effective July 1, 2024.

The Minnesota Commerce Department published the periodic adjustment in dollar amounts effective July 1, 2024, through June 30, 2026. Effective July 1, 2024.

OKLAHOMA

The Department of Consumer Credit published the changes in dollar brackets for Retail Installment Sales and Consumer Loans. Effective July 1, 2024.

SOUTH CAROLINA

The Department of Consumer Affairs released its biannual dollar bracket adjustment effective from July 1, 2024, through June 30, 2026. Effective July 1, 2024.

TEXAS

The Texas Office of Consumer Credit Commissioner published dollar amount brackets and ceilings subject to adjustment in the Texas Financial Code for Retail Installment Sales and Consumer Loans. Effective July 1, 2024.

Effective State Changes

ARIZONA

Signed into law on April 8^th, HB 2410 amends prohibitions surrounding vehicle manufacturer interactions with dealerships. Among other unlawful practices, manufacturers cannot withhold vehicles, parts, or incentives from specific dealerships, coerce dealers to install an electric vehicle charging station accessible to the general public, or use or threaten the exercise of the right of first refusal in bad faith upon the change of ownership of a dealership franchise. Effective ninety days after adjournment sine die.

IDAHO

Following trends seen throughout the country, HB 689 amends current laws regarding the relationship between vehicle manufacturers and vehicle dealers. Among other items, manufacturers are prohibited from demanding certain infrastructure on dealer lots, threatening to withhold the consent for a sales service agreement to a qualified buyer in order to release claims under a franchise agreement, and competing with franchised dealers in the sale, lease, or warranty services of new motor vehicles outside of fleet sales. Effective March 27, 2024.

IOWA

SF 2362 is a new law regarding service contracts in both the residential and motor vehicle spaces. The law prohibits the sale of service contracts in Iowa unless the service company files all service contract forms with the Commissioner and accepts the cancelation of a contract via phone, email, mail, or any other cost-effective manner. Effective July 1, 2024.

KANSAS

On March 29, 2024, Kansas Governor Laura Kelly signed House Bill 2247 into law changing provisions in the state’s Uniform Consumer Credit Code (“UCCC”) and the Kansas Mortgage Business Act (“KMBA”). There are nine amendments to the KMBA with many simply recodifying similar provisions from the UCCC. Among the various changes, the act requires mandatory disclosures for credit card surcharges, allows for extended repayment plans for consumers who borrowed from a payday lender, and clarifies language around “late fees” and their assessment. The Kansas UCCC covers loans and retail installment sales. HB 2247 changes the threshold amount covered by the UCCC from $25,000 to a “threshold amount” which is defined to align with the annual increase in the consumer price index (at least $69,500 as of July 1, 2024). In addition, the bill modifies the definition of “Annual Percentage Rate” and “Closed-End Credit” to tie these definitions explicitly to 15 USC § 1606 under the Truth in Lending Act. Changes to the law for Consumer Loans include: modifying the “threshold amount” based on the language above, altering the maximum finance charge for a consumer loan under a supervised lender from a blended rate to a flat 36% rate, increasing the allowed prepaid finance charge to an amount not to exceed the lesser of 2% or $300 (previously $100), and changing the maximum term to 25 months for loans of $1,000 or less (removing the 37 month restriction for other loans). Changes to Retail Installment Sales include: modifying the “threshold amount”, adding the definition of “installment”, increasing the allowed prepaid finance charge to an amount not to exceed the lesser of 2% or $300 (previously $100), and modifying the minimum charge to a flat $10 (previously based on a $75 threshold). Effective January 1, 2025.

SB 345 creates the Commercial Financing Disclosure Act requiring new disclosures of certain commercial financing transaction terms and authorizing the Attorney General of Kansas to enforce its provisions. Among items required to be disclosed are total funds provided and disbursed, total of payments, total dollar cost of financing, the manner, frequency and amount of each payment, and a statement regarding the prepayment of any financing. Effective July 1, 2024.

KENTUCKY

HB 8 is an appropriations bill signed into law on April 12, 2024. This bill removes the $60 ownership fee for hybrid vehicles that do not have plug-in charging capability in the state of Kentucky. Effective January 1, 2025.

On April 4, 2024, HB 15 was signed into law creating Kentucky’s Consumer Data Protection Act. Now consumers’ personal data and information is protected under this statute by distinguishing data controllers from data processors. Under this new law, Kentucky residents can request corrections to wrong data, require controllers to delete certain data, and obtain a copy of personal data given to a controller, among various other rights. Effective January 1, 2026.

MINNESOTA

The Minnesota Commerce Department published the periodic adjustment in dollar amounts effective July 1, 2024, through June 30, 2026. The adjustments are based on a 10% increase. The dollar amount adjustments include:

§47.59 Subd. 3	Principal Subject to 33% Interest	$1,425.00
§47.59 Subd. 3	Minimum Refund	$9.50
§47.59 Subd. 6	Default Charges	$9.88
§47.59 Subd. 6	Loan Administration Fee Threshold	$ 8,208.00

Effective July 1, 2024.

NEW JERSEY

On March 26, 2024, AB 4011 was signed into law amending the New Jersey Transportation Trust Fund Authority Act. Amongst other provisions and appropriations, the law would impose a $250 fee for any zero-emission vehicle registered in the state. That amount would increase every year on July 1^st by $10 until 2028 resulting in a fee of $290. Effective July 1, 2024.

OKLAHOMA

The Department of Consumer Credit published the changes in dollar amounts which will become effective July 1, 2024. Included in the adjustments are the following:

Retail Installment Sales, §2-201:

The greater of:

30% of the amount financed up to $1,920; plus

21% of the excess to $6,400; plus

15% of the remainder to $66,400.

—OR—

21% Simple Interest

The dollar amounts under §3-508(A) remain the same. The allowable closing fee increases from $178.87 to $184.64.

For loans subject to §3-508B of the Oklahoma Code the maximum charge structure is:

Loan Amount	Acquisition Charge	Handling Charge
Up to $191.10		$6.37 per $31.86 of principal
$191.10-$223.02	1/10 of the amount of principal	$19.12 per month
$223.03-$446.04	1/10 of the amount of principal	$22.30 per month
$446.05-$637.20	1/10 of the amount of principal	$25.49 per month
$637.21-$955.80	1/10 of the amount of principal	$28.67 per month
$955.81-$1,274.40	1/10 of the amount of principal	$31.86 per month
$1,274.41-$1,593.00	1/10 of the amount of principal	$35.05 per month
$1,593.01-$1,911.60	1/10 of the amount of principal	$38.23 per month
$1,911.61-$2,360.00	1/10 of the amount of principal	$47.20 per month
$2,360.01-$2,950.00	1/10 of the amount of principal	$59.00 per month
$2,950.01-$3,540.00	1/10 of the amount of principal	$70.80 per month

The maximum delinquency charge for consumer credit sales and consumer loans will increase from $31.00 to $32.00. Effective July 1, 2024.

UTAH

HB 491 enacts the Government Data Privacy Act. This new law defines terms and imposes governmental duties related to personal data privacy, including data breach notifications, limits on data collection, and the ability to correct data. The law also establishes the Utah Privacy Governing Board and Office of Data Privacy in order to recommend changes to data privacy laws and implement those protections across governmental entities. Effective May 1, 2024.

Effective May 1, 2024, SB 98 changes the law around cybersecurity breaches and related notification requirements. Following a breach of computerized personal data, the data owner or licensee must notify affected Utah residents, the Attorney General’s office, and the Utah Cyber Center. Among items to be included in the notification are the date the breach occurred, when it was discovered, the number of people affected, the type of information breached, and the type of security that was breached in the compromise. Effective May 1, 2024.

VIRGINIA

On April 4, 2024, HB 330 was signed into law prohibiting the financing of a dog or cat, unless the financing conforms with state and federal consumer laws. Effective July 1, 2024.

HB 744 adds new consumer protections to Virginia law regarding the automatic renewal of service offers. The law requires a supplier of services to notify the consumer of an automatic renewal and provide the consumer an option to cancel the services no less than 30 days and no more than 60 days before the cancelation deadline or end of the contract term. Effective July 1, 2024.

HB 1106/SB 452 directs independent vehicle dealers to pass a DMV examination which costs $50 in order to renew a dealership license. Effective July 1, 2024.

HB 1419 allows online vehicle dealers to sell a vehicle electronically by obtaining a title in the dealer’s name for resale. Effective July 1, 2024.

SB 222 was signed into law on April 4, 2024, and relates to cybersecurity information accessible under the Virginia Freedom of Information Act and Government Data Collection and Dissemination Act while that data is in possession of the Virginia Information Technologies Agency (“VITA”). This law requires the data to remain confidential and not subject to those disclosure laws unless designated by the Virginia Commonwealth’s Chief Information Officer or their designee from VITA. Effective July 1, 2024.

WASHINGTON

On June 6, 2024, SB 6025 will go into effect. It prohibits certain acts by lenders which seek to evade current lending requirements by, for example, making loans that appear as personal property sales or leasebacks, disguising the loan proceeds as rebates, or charging a higher rate than currently allowed under the law. Effective June 6, 2024.

WISCONSIN

On April 4, 2024, SB 668 overhauled the Department of Financial Institutions’ (“DFI”) oversight of non-mortgage licensed financial service providers. While many changes were administrative in nature, including directing DFI to utilize the Nationwide Multistate Licensing System, the new law specifically focuses on amending provisions affecting licensed lenders, collection agencies, and sellers of checks. The Licensed Lenders Law applies to non-bank consumer loans of $25,000 or less with rates exceeding 18% per year and defines consumer loans and when the Law will apply to assignments and collections under its provisions. Additionally, the Law expressly authorizes a nonrefundable prepaid finance charge in connection with consumer loans and creates a sliding scale for such charges based on the loan amount. The Collection Agencies Law revises definitions and licensing requirements for debt collectors. Finally, the Seller of Checks Law was repealed and replaced by the Model Money Transmission Modernization Act which requires licensure with the DFI to engage in practices such as selling checks and transmitting money. Effective January 1, 2025.

FOR IMMEDIATE RELEASE 

For more information contact:

Carleton Sales Team

574.243.6040 option #3

sales@carletoninc.com

On March 29, 2024, Kansas Governor Laura Kelly signed House Bill 2247 into law changing provisions in the state’s Uniform Consumer Credit Code (“UCCC”) and the Kansas Mortgage Business Act (“KMBA”). There are nine amendments to the KMBA with many simply recodifying similar provisions from the UCCC. Among the various changes, the act modernizes language (such as adding the allowance for electronic signatures), removes references to precomputed transactions, amends licensing requirements, updates record keeping requirements, requires mandatory disclosures for credit card surcharges, allows for extended repayment plans for consumers who borrowed from a payday lender, and clarifies language around “late fees” and their assessment.

The KS UCCC covers loans and retail installment sales. HB 2247 changes the threshold amount covered by the UCCC from $25,000 to a “threshold amount” which is defined to align with the annual increase in the consumer price index (at least $69,500 as of July 1, 2024). In addition, the bill modifies the definition of “Annual percentage rate” and “Closed-End Credit” to tie these definitions explicitly to 15 USC § 1606 under the Truth in Lending Act.

Impact on Consumer Loans:

• Modifies the “threshold amount” based on the language above.
• Alters the maximum finance charge for a consumer loan under a supervised lender from a blended rate to a flat 36% rate.
• Increases the allowed prepaid finance charge to an amount not to exceed the lesser of 2% or $300 (previously $100).
• Changes the maximum term to 25 months for loans of $1,000 or less (removing the 37 month restriction for other loans).

Impact on Retail Installment Sales:

• Modifies the “threshold amount” based on the language above.
• Adds definition of “installment.”
• Increases the allowed prepaid finance charge to an amount not to exceed the lesser of 2% or $300 (previously $100).
• Modifies the minimum charge to a flat $10 (previously based on a $75 threshold).

Effective January 1, 2025.

 

About Carleton, Inc.:

Carleton is the country’s leading provider of financial calculation software, loan origination compliance support, and document generation software. With over 50 years of experience, our ongoing expertise and industry knowledge reaffirms why we are a trusted partner.  Founded in conjunction with the Truth In Lending Act, Carleton provides expert compliance support with continuous accuracy in all our calculations and disclosures at a state and federal level. To learn more about Carleton’s lending solutions, contact our sales team at sales@carletoninc.com or 574-243-6040 option #3.

Effective State Changes

INDIANA

SB 220 updates references to federal law made in the Indiana Uniform Consumer Credit Code, the First Lien Mortgage Lending Act, and the Indiana Code title governing financial institutions. Effective July 1, 2024.

On March 13, 2024, SB 222 was signed into law by Governor Eric Holcomb. This bill has many provisions aimed at vehicle dealers, such as requiring any item that is not a part of the advertised sale price of a vehicle to be a separate line item in the contract, obligating the consumer of a rebuilt or salvage vehicle to sign a written acknowledgement of its status, and directing dealers to submit records electronically within ten days of a request related to an investigation or audit by the Indiana Secretary of State. Effective July 1, 2024, in part and on July 1, 2025, in part.

NEW HAMPSHIRE

The Expectation of Privacy Act or SB 255 was signed into law on March 6, 2024. This law establishes requirements for data processors in control of private data or personal information of consumers by establishing rights and responsibilities of “consumers” and “controllers” of said data. Effective January 1, 2025.

SOUTH DAKOTA

HB 1063 will require county treasurers to collect evidence that a motor vehicle sales or other tax was paid to another state when an applicant applies to register their motor vehicle in the state. If no evidence exists, the applicant will be required to pay tax on the vehicle by using a national motor vehicle valuation service to establish the price of the vehicle when the applicant first brought it into South Dakota. Effective July 1, 2024.

SB 112 will now allow any owner without a South Dakota license or identification card to title a motor vehicle, off-road vehicle, snowmobile, or boat in South Dakota by paying a $100 fee in addition to the title application fee. Effective July 1, 2024.

TEXAS

Released in February 2024, the dollar amount brackets and ceilings subject to adjustment in the Texas Finance Code will increase as follows:

Consumer Loans – §342.201

(Add-On Rates)

$18 per $100 per annum of the cash advance to $2,640 plus,

$8 per $100 per annum of the excess to $22,000

OR

(Simple Melded Rates)

30% per annum of the cash advance to $4,400 plus,

24% of the excess to $9,240 plus,

18% of the remainder to $22,000

Alternate Consumer Loans Subchapter F – §342.251

Loan Amount	Acquisition Charge plus Installment Acct Handling Charge
Under $30	$1 for each $5 cash advanced
From $30 up to $35	10% cash advance plus $3 per month
From $35.01 up to $70	10% cash advance plus $3.50 per month
From $70.01 up to $100	10% cash advance plus $4 per month
From $100.01 up to $880	$10 plus $4 per month for each $100 of the cash advance
From $880.01 up to $1,760	$10 plus $4 per month for each $100 of the cash advance

Retail Installment Sales (“Other Goods”) – §345.055

(Add-On Rates)

$12 per $100 per annum of the principal balance to $4,400 plus,

$10 per $100 per annum of the excess to $8,800 plus,

$8 per $100 per annum of the remainder.

Effective July 1, 2024.

UTAH

HB 174 was adopted into law on March 13, 2024. The law requires a person who provides a product or service under a contract with an automatic renewal provision to provide notice at least 30 but not more than 60 days before the renewal date. The notice must contain certain disclosures regarding the renewal and cancelation of said contract. Utah’s Division of Consumer Protection is authorized to enforce this law with fines and penalties if any provisions are violated. Effective May 5, 2024, in part, and January 1, 2025, in part.

SB 25 requires a consumer lender to register with the Nationwide Multistate Licensing System and Registry and submit proof of registration to Utah’s commissioner of financial institutions. Effective May 1, 2024.

WEST VIRGINIA

Following trends seen throughout the country in 2023, West Virginia SB 173 was signed into law on March 13, 2024, and amends the laws governing motor vehicle dealers, distributors, manufacturers, and affiliated entities. The law clarifies terms and responsibilities around warranty and recall work and reimbursement, prohibits manufacturers from using incentive programs to amend dealer agreements, and prohibits manufacturers from altering dealer franchise agreements in case of a dealership sale, amongst other provisions. Effective June 5, 2024.

Effective Federal Changes

CONSUMER FINANCIAL PROTECTION BUREAU

On March 5, 2024, the Consumer Financial Protection Bureau (“CFPB”) released a final rule amending Regulation Z, which implements the Truth in Lending Act, to decrease the late fee “safe harbor” amount for larger card issuers from $30 to $8. According to the CFPB’s notice, the final rule takes effect 60 days after its publication in the Federal Register. However, two days after the rule was issued, the Chamber of Commerce of the United States of America, Fort Worth Chamber of Commerce, Longview Chamber of Commerce, American Bankers Association, Consumer Bankers Association, and Texas Association of Business filed a lawsuit in the Fifth Circuit to invalidate the rule and requested a preliminary injunction from its application throughout trial. Effective May 5, 2024, absent any court-imposed postponement.

Effective State Changes

MICHIGAN

Bulletin 2024-05-CF stated that the loan processing fee amount will remain at $400 from January 1, 2024, through December 31, 2025. Effective January 1, 2024.

SB 533 amends the Michigan Code to allow the Secretary of State to issue an electronic vehicle title and establish an electronic system to facilitate transfers of vehicle ownership between private individuals instead of through the collection of paper documents. Effective February 13, 2024.

MISSOURI

The document preparation fee in the state of Missouri was increased through emergency rulemaking from $565.38 to be $587.43 for 2024. Effective February 23, 2024.

NEW JERSEY

AB 4723 will now require vehicle dealers who accept used vehicles in for trade or from lease to offer to delete the consumer’s personal information from the vehicle’s computer systems. The dealer may charge a fee for this service which must be disclosed to the consumer and relay to the consumer that they may try to delete this information themselves. Effective January 16, 2024.

Once effective, SB 4084 will require new procedures for the issuing of temporary license plates and registration certificates in New Jersey. Vehicle dealers will now need to maintain a physical or electronic record of all temporary license plates issued for three years. Effective August 1, 2024.

OHIO

Governor Mike DeWine enacted HB 201 on December 28, 2023. This new law prohibits the Ohio Environmental Protection Agency from adopting any vehicle emissions stricter than the Clean Air Act. In addition, it restrains any state agency, township, or other locality from restricting the sale of a vehicle based solely on the energy source used for power. Effective March 28, 2024.

SOUTH CAROLINA

The Department of Consumer Affairs released its biannual dollar bracket adjustment effective from July 1, 2024, through June 30, 2026. Among the dollar bracket adjustments are:

• The maximum amount for consumer credit sales, consumer leases, and consumer loans increases from $115,000 to $127,500. (§2.104(1)(e), §2.106(1)(b), and §3.104(d), respectively).
• The maximum delinquency charge for sales and loan transactions increases from $23.00 to $25.50. (§2.203(1) and §3.203(1), respectively).
• The minimum delinquency charge for sales and loan transactions increases from $9.20 to $10.20. (§ 2.203(2) and §3.203(2), respectively).

Effective July 1, 2024.

TEXAS

On June 11, 2023, HB 2746 amended the Texas Finance Code regarding refunds for the termination of a debt cancelation agreement upon prepayment of a retail installment sale. In response, the Finance Commission of Texas released Regulation 286331r governing motor vehicle retail installment contracts. This regulation updates recordkeeping requirements for retail sellers who assign these retail installment contracts in Texas. Additionally, the regulation clarifies that retail sellers and third-party administrators are responsible for providing refunds upon termination of a debt cancellation agreement, holders must either issue a refund or provide written notice to the retail seller and administrator to issue a refund, and administrators and retail sellers are responsible for maintaining records of all refunds. Effective January 4, 2024.

WISCONSIN

On November 16, 2023, SB 259 was signed into law by Governor Evers. The bill exempts from payday loan regulation any transaction with no finance charges—as defined by the Truth in Lending Act Regulation Z—or other charges or fees. Effective immediately.

Effective Federal Changes

FEDERAL TRADE COMMISSION

The Federal Trade Commission issued the Combating Auto Retail Scams Trade Regulation Final Rule (“CARS Rule”) on December 12, 2023, with an effective date of July 30, 2024. The CARS Rule is an attempt by FTC to enhance consumer protections by combatting dealer bait-and-switch tactics and hidden “junk fees”.

The CARS Rule:

• Prohibits dealers from making certain misrepresentations in the course of selling, leasing, or arranging financing for motor vehicles;
• Requires accurate pricing disclosures in dealers’ advertising and sales communications;
• Requires dealers to obtain consumers’ express, informed consent for charges;
• Prohibits the sale of any add-on product or service that confers no benefit to the consumer; and
• Requires dealers to keep records of certain advertisements and customer transactions.

Effective July 30, 2024, however, the CARS Rule is currently on hold due to pending litigation.

Review of State Changes Effective in 2023

CALIFORNIA

• AB 2311 creates new requirements for GAP waivers when canceled. Effective January 1, 2023.
• SB 1311 is the Military and Veteran Consumer Protection Act of 2022 and provides new and enhanced protections to servicemembers. Effective January 1, 2023.

CONNECTICUT

• SB 1033 clarifies the types of fees included in the “Finance Charge” for calculating a Military Lending Act APR. Effective in part July 1, 2023, and October 1, 2023.

GEORGIA

• HB 55 amends and repeals certain laws in the state of Georgia regarding financing, banking, and international banking corporations. Effective July 1, 2023.

HAWAII

• SB 1534 replaces the current $50 registration fee for electric vehicles with a mileage-based usage charge, beginning July 1, 2025.

ILLINOIS

• The document preparation fee in the State of Illinois increased to $347.26. Effective January 1, 2023.

INDIANA

• Indiana published Emergency Rule LSA Document #22-234(E) which implements certain bracket updates for sales and loans. Effective January 1, 2023.
• The Consumer Credit Division released Advisory Letter 2023-01 regarding the fees associated with the electronic lien system. Effective July 1, 2023.
• New guidance from the Secretary of State’s Auto Dealer Services Division raised the maximum documentation preparation fee to $237.51. Effective July 25, 2023.

KENTUCKY

• HB 8 increases the county registration and renewal fees for electric vehicles to $120 and for hybrid vehicles to $60. Effective January 1, 2023.
• SB 165 makes changes to the brackets which consumer loan companies can charge for small loans. Effective June 28, 2023.

LOUISIANA

• HB 1031 imposes a road usage fee in the amount of $110 per year for electric vehicles and $60 per year on hybrid vehicles. Effective January 1, 2023.

MICHIGAN

• The document preparation fee in the State of Michigan has been adjusted to be $260 or 5% of the cash price for 2023 and 2024. Effective January 13, 2023.

MINNESOTA

• HF 2887 raises the Doc Fee allowed to be charged by Minnesota motor vehicle dealers. Effective July 1, 2023.

MISSOURI

• The document preparation fee was increased through emergency rulemaking from $523.50 to $565.38 for 2023. Effective February 14, 2023.

MONTANA

• HB 60 creates an additional annual registration fee for electric and hybrid vehicles. Effective July 1, 2023.

NEBRASKA

• LB 92 enacts new licensing requirements for small dollar lenders. Effective June 7, 2023.

NEW MEXICO

• HB 132 enacts a 36% TILA APR rate cap for small dollar loans in New Mexico. Effective January 1, 2023.
• The Director of the Financial Institution Division published regulations for calculating an New Mexico APR in accordance with House Bill 132. Effective March 29, 2023.

NORTH CAROLINA

• SB 452 allows a convenience fee to be charged when accepting premium payments via credit or debit card. Effective October 1, 2023.
• SB 329 changes the maximum finance charge rates for consumer credit installment sale contracts. Effective October 1, 2023.
• SB 331 amends the North Carolina Consumer Finance Act and outlines the rate of interest that may be charged on consumer finance loans. Effective October 1, 2023.

NORTH DAKOTA

• SB 2141 excludes the fees for auction services from the purchase price of a motor vehicle for excise tax purposes. Effective July 1, 2023.

OHIO

• HB 23 provides for a registrar or deputy registrar to collect additional fees for hybrid, plug-in hybrid and electric vehicles. Effective June 30, 2023.

OKLAHOMA

• HB 1543 ties the finance charge thresholds for §3-508B loans to the CPI Reference Base Index of December 2020. Effective April 28, 2023.
• SB 794 adds the federal funds rate to the allowable finance charge amount for §3-508A loans. Effective November 1, 2023.
• The Department of Consumer Credit published adjustments to allowable charges for retail installment contracts and small loans. Effective July 1, 2023.
• SB 984 establishes the motor vehicle excise tax sale shall be calculated based on the difference of the actual sales price and a trade-in. Effective November 1, 2023.

PENNSYLVANIA

• The document preparation fee in the State of Pennsylvania for 2023 increased to $449 for electronic filings and $374 for non-electronic. Effective January 1, 2023.

SOUTH CAROLINA

• South Carolina Department of Insurance adopted Orders confirming Prima Facie Credit A&H and Credit Property insurance rates for 2023. Effective January 1, 2023.
• HB 3952 creates new requirements for the disclosure of vehicle sales closing fees. Effective May 16, 2023.

TENNESSEE

• SB 130 requires a financing company to provide their telephone number in all communications with a consumer. Effective July 1, 2023.

TEXAS

• Released in February 2023, the dollar brackets and ceilings increased for consumer loans and retail installment contracts. Effective July 1, 2023.
• SB 505 creates an additional fee of $400 for new electric vehicles registering for a two-year period. Effective September 1, 2023.
• HB 2746 creates new requirements for the refund of a terminated GAP product. Effective September 1, 2023.

WEST VIRGINIA

• SB 205 creates new specialty plates in the state of West Virginia and establishes the fees for their purchase. Effective June 6, 2023.

Review of State Changes Effective in 2024 and Beyond

CALIFORNIA

• AB 1756 addresses the refunding of GAP waiver products. Effective January 1, 2024.
• SB 33 eliminates the sunset provision requiring the cost of commercial credit be expressed as an annualized rate. Effective January 1, 2024.
• SB 478 declares that advertising or displaying the price of a vehicle without listing all mandatory fees to be unfair and deceptive. Effective January 1, 2024.
• SB 666 prohibits specific fees from being charged by lenders and finance brokers in certain commercial financing transactions. Effective January 1, 2024.

COLORADO

• HB 1181 enacts guaranteed asset protection product provisions into Colorado law. Effective January 1, 2024.
• HB 1229 opts Colorado out of the Federal Depository Institutions Deregulation and Monetary Control Act and amends the rate structure for consumer loans of $1,000 or less. Effective in part January 1, 2024, and July 1, 2024.

CONNECTICUT

• SB 1032 provides for new disclosure requirements in the context of commercial financing. Effective July 1, 2024.

ILLINOIS

• The document preparation fee in the State of Illinois increased to $358.03. Effective January 1, 2024.

MINNESOTA

• SF 2744 includes a 50% rate cap for small and short term loans and requires an ability to repay analysis when charging over 36%. Effective January 1, 2024.

OREGON

• HB 2100 increases the document preparation fees that motor vehicle dealers are allowed to charge. Effective January 1, 2024.

SOUTH CAROLINA

• The South Carolina Department of Insurance adopted orders confirming Prima Facie Credit A&H and Credit Property insurance rates. Effective January 1, 2024.

VERMONT

• HB 494 passed the transportation appropriations bill affecting certain motor vehicle fees. Effective January 1, 2024.

WISCONSIN

• The Commissioner of Insurance released the Prima Facie Credit Life and Credit Accident and Sickness insurance rates. Effective January 1, 2024 – December 31, 2026.

Review of Federal Changes Effective in 2023

CONSUMER FINANCIAL PROTECTION BUREAU

• Dollar threshold adjustments were announced for the Ability to Repay/ Qualified Mortgage Rule and HOEPA. Effective January 1, 2023.
• The CFPB increased TILA threshold adjustments for Regulation M and Z from $61,000 to $66,400. Effective January 1, 2023.
• The CFPB published a proposed rule to require certain nonbanks to register and submit information in an online, publicly available database.

FEDERAL TRADE COMMISSION

• The FTC announced on November 15, 2022, that it was extending the compliance deadline for the revised Safeguards Rule by six months. Effective June 9, 2023.

Review of Federal Changes Effective in 2024

CONSUMER FINANCIAL PROTECTION BUREAU

• The CFPB increased TILA threshold adjustments for Regulation M and Z from $66,400 to $69,500. Effective January 1, 2024.

Effective State Changes

NEW YORK

On October 25, 2023, AB 7376 was signed into law by Governor Kathy Hochul. This bill allows the use of electronic notices and documents in the course of a premium finance transaction. Effective immediately.

Effective Federal Changes

CFPB ANNUAL REGULATION M & Z ADJUSTMENTS

The Consumer Financial Protection Bureau (“CFPB”) published its annual Truth in Lending Act threshold adjustment, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. For 2024, the exemption threshold amount for Regulation M and Z will increase from $66,400 to $69,500. Effective January 1, 2024.

Effective State Changes

CALIFORNIA

Signed into law by Governor Gavin Newsom on October 7, 2023, AB 473 follows trends seen across the country establishing new motor vehicle dealer protections. The bill would require fair and reasonable compensation from manufacturers to motor vehicle dealers for warranty work or service repair. Additionally, it would prohibit manufacturers from conditioning dealer access to vehicles or incentive programs upon the sale of service contracts, debt cancellation agreements, or similar products, amongst other items. Effective January 1, 2024.

AB 1756 was enacted on October 8, 2023. The bill addresses many different items but has a significant section on the refunding of GAP waiver products. If the GAP waiver is terminated, the law requires the agent selling the waiver product to utilize a formula for properly calculating a refund on a pro-rata basis. Effective January 1, 2024.

On October 7, 2023, SB 33 was enacted. It eliminates the sunset provision applying to commercial financing disclosures which requires the cost of credit be expressed as an annualized rate. Effective January 1, 2024.

SB 296 requires vehicle manufacturers and vehicle dealers to disclose the existence of in-vehicle cameras to a consumer prior to purchase or lease. It also limits the use of any information or video obtained through these cameras for use by the manufacturer, dealer, or any third party. Effective January 1, 2024.

Approved by the Governor on October 10, 2023, SB 362 amends the data broker registry law. Among other items, it requires data brokers to disclose certain metrics and information on consumer data deletion requests the broker has received in the course of its business. It requires the California Privacy Protection Agency to establish an accessible mechanism for consumers to request deletion of their personal information by any or all data brokers. It also establishes requirements for data brokers around processing consumer deletion requests, and civil penalties and state-imposed fines for any violation. Effective January 1, 2024.

On October 7, 2023, SB 478 was enacted by the Governor. This bill will affect vehicle dealers in the State of California. It declares that advertising or displaying the price of a vehicle without listing all mandatory fees or charges to be unfair and deceptive. The bill also clarifies that a dealer is not in violation of this “deceptive practices” law when they exclude certain allowable fees, including taxes, registration fees, tire fees, and dealer document fees. Effective January 1, 2024.

SB 666 was signed into law by the Governor on October 13, 2023. This new law prohibits specific fees from being charged by lenders and finance brokers in a commercial financing transaction involving a small business. Effective January 1, 2024.

INDIANA

On June 30, 2023, the Consumer Credit Division of the Department of Financial Institutions released Advisory Letter 2023-01 regarding the fees associated with the newly implemented electronic lien system. Creditors using the new e-lien system must use BMV-approved third-party service providers. The implementing statutes do not limit how much the service providers may charge the creditor but allow that fee, along with a $3.00 fee, to be passed on to borrowers. The Department’s position is that these fees should be regarded as prepaid finance charges. Effective July 1, 2023.

NORTH CAROLINA

On October 3, 2023, SB 452 became law without the Governor’s signature. This new bill will allow a convenience fee to be charged by insurers for accepting premium payments via credit or debit card, not to exceed four percent of the payment. Effective October 1, 2023.

SOUTH CAROLINA

On October 16, 2023, the South Carolina Department of Insurance adopted Orders 2023-02, 2023-03, and 2023-04 confirming Prima Facie Credit A&H and Credit Property insurance rates for 2024.

Under 2023-03, the Credit A&H rates for insurance sold in conjunction with consumer credit transactions in 2024 will decrease from the rates in 2023. The 12-month rate per $100 of Initial Insured Indebtedness will be as follows:

• 14-day Retro: $1.24
• 30-day Retro: $1.17

Under Order 2023-02, the 3-day retroactive A&H rate for insurance sold in conjunction with loans will decrease to $0.23 per $5.00 of monthly indemnity.

Under Order 2023-04, credit property rates have decreased for Automobile Fire and Theft, Automobile Collision, and Household Goods – Dual Interest. The rate for Household Goods – Single Interest remains the same. Effective January 1, 2024.

WISCONSIN

The Wisconsin Office of the Commissioner of Insurance released the Revised Prima Facie Credit Life and Credit Accident and Sickness Insurance rates on September 28, 2023.

Prima Facie Credit Life Insurance Premium Rates Per $100 Per Annum
Single Premium Decreasing Life:	$0.43
Joint Premium Decreasing Life:	$0.72
Single Premium Level Life:	$0.80
Joint Premium Level Life:	$1.34

Prima Facie Credit Life Insurance Premium Rates Per $1,000 Per Month
Single Premium MOB Life:	$0.662
Joint Premium MOB Life:	$1.106

Prima Facie Credit Accident and Sickness Premium Rates Per $100 Per Annum
14 Retro:	$0.79
14 Elim:	$0.45
30 Retro:	$1.44
30 Elim:	$1.05

Effective January 1, 2024 – December 31, 2026.

Reminders

OKLAHOMA

As reported in Carleton’s May 2023 Compliance Alert, Oklahoma Senate Bill 794 added the federal funds rate to the maximum allowed charge for loans. The change affects Supervised Loans under §3-508A of the Oklahoma Code. Effective November 1, 2023.