Effective State Changes

TEXAS

The Texas Office of Consumer Credit Commissioner has released two new sets of regulations aimed at the motor vehicle finance space. TRD-202403782 and TRD-202405041 revise and create new responsibilities for Texas businesses involved with motor vehicle sales financing and motor vehicle installment sales, respectively. The new regulations involve licensing requirements, recordkeeping provisions, and examination procedures. Effective November 14, 2024.

WASHINGTON D.C.

D. C. Act 25-558 was signed into law on October 7, 2024. The bill enacts the New Student Loan Borrower Bill of Rights Amendment Act of 2024. Effective November 6, 2024, following a 30-day period for Congressional review.

Effective Federal Changes

CONSUMER FINANCIAL PROTECTION BUREAU

Specific dollar threshold adjustments were announced by the Consumer Financial Protection Bureau (“CFPB”). The CFPB is required to make adjustments to dollar thresholds based on annual changes in the Consumer Price Index. Updates to the Ability to Repay/ Qualified Mortgage Rule, (“ATR/QM”) and Home Ownership and Equity Protection Act (“HOEPA”), among others, were announced and become effective January 1, 2025.

HOEPA Annual Threshold Adjustments:

• The adjusted total amount of the loan threshold will be $26,968, up from $26,092
• The adjusted points-and-fees dollar trigger will be $1,348, up from $1,305

ATR/QM Threshold Adjustments – To meet qualified mortgage criteria, the combined points and fees cannot exceed the following:

• 8% of total loan amount for loans less than $16,855
• $1,348 for loans greater than or equal to $16,855 but less than $26,968
• 5% of total loan amount for loans greater than or equal to $26,968 but less than $80,905
• $4,045 for loans greater than or equal to $80,905 but less than $134,841
• 3% of total loan amount for loans greater than or equal to $134,841

Effective State Changes

CALIFORNIA

Amongst other provisions, AB 3281, would prohibit the contractual waiver of the protections afforded by the Educational Debt Collection Practices Act and the Automobile Sales Finance Act. Effective January 1, 2025.

Signed on September 29, 2024, AB 1755 seeks to streamline the civil process for lemon law disputes. Some reforms included in the bill are outlining clear formulas for restitution payments, adopting expedited settlement processes, and imposing financial penalties on manufacturers who fail to buy back a lemon vehicle. Effective January 1, 2025.

SB 1223 amends the definition of “sensitive personal information” in the California Consumer Privacy Act to include a consumer’s neural data. Effective January 1, 2025.

AB 1008 clarifies that the California Consumer Privacy Act applies to personal information regardless of media format. Effective January 1, 2025.

AB 1824 is another bill aimed at strengthening the California Consumer Privacy Act by requiring businesses that obtain consumer data through acquisition or merger must comply with a consumer’s previous opt-out request. Effective January 1, 2025.

SOUTH CAROLINA

On October 11, 2024, the South Carolina Department of Insurance adopted Orders 2024-04, 2024-05, and 2024-06 confirming Prima Facie Credit A&H and Credit Property insurance rates for 2025.

Under 2024-06, the Credit A&H rates for insurance sold in conjunction with consumer credit transactions in 2025 will decrease from the rates in 2024. The 12-month rate per $100 of Initial Insured Indebtedness will be as follows:

• 14-day Retro: $1.05
• 30-day Retro: $0.99

Under Order 2024-04, the 3-day retroactive A&H rate for insurance sold in conjunction with loans will decrease to $0.20 per $5.00 of monthly indemnity.

Under Order 2024-05, credit property rates will decrease from 2024 to 2025 for Automobile Fire and Theft, Automobile Collision, and Household Goods – Dual Interest. The rate for Household Goods – Single Interest remains at the 2024 level. Effective January 1, 2025.

VIRGINIA

On June 14, 2024, the Virginia State Corporation Commission issued the Order Adopting Adjusted Prima Facie Rates for the Triennium Commencing January 1, 2025, (Case No. INS-2024-00060), enacting new rates for a 3-year period. The new rates will be:

Credit Life Rates
Single Life Rate (discounted at 3.63% for interest and mortality)	$0.8094/$1,000/month
Joint Life Rate (165% of single life rate)	$1.3355/$1,000/month
Single Life Rate (per $100 @ 12 months)	$0.5167
Joint Life Rate (per $100 @ 12 months)	$0.8521
Single Level Life (per $100 @ 12 months)	$0.9452
Joint Level Life (per $100 @ 12 months)	$1.5597

*Level life rates are derived from the rates per $1,000 per month and discounted at 5.5% for interest and mortality.

Credit A&H Rates
14 Day Retro	$1.25/$100 @ 12 months
30 Day Retro	$0.90/$100 @ 12 months
14 Day Elim	$1.00/$100 @ 12 months
30 Day Elim	$0.63/$100 @ 12 months

This most recent change is a decrease in A&H prima facie rates.

Effective January 1, 2025.

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 2025, the exemption threshold amount for Regulation M and Z will increase from $69,500 to $71,900. The increase was based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (“CPI-W”) as of June 1, 2024, which experienced an annual increase of 3.4 percent. Effective January 1, 2025.

Effective State Changes

CALIFORNIA

On August 19, 2024, SB 1521 was signed into law regarding allowable fees for commercial financing. This bill allows a fee for monitoring a small business’s collateral if the commercial financing transaction is an asset-based loan or factoring, or the fee is expressed as a dollar amount or percentage and deemed a finance charge. Effective January 1, 2025.

DELAWARE

Senate Bill 278 was replaced by Senate Substitute No. 2 for Senate Bill 278. This bill creates new protections for motor vehicle franchise dealers in the state of Delaware. Amongst other provisions, the Substitute Bill clarifies the definitions of “motor vehicle” and “new motor vehicle” to reflect changes in the motor vehicle industry. The bill requires fair compensation to vehicle dealers performing warranty work, maintenance program-work, and recall work. The bill also allows manufacturers to directly sell options and add-ons that are activated or installed through remote electronic transmission to consumers, as long as dealers are allowed the same opportunity. Finally, the bill grants statutory standing to a large association of dealers to bring legal actions. Effective immediately.

NEW YORK

On September 4, 2024, Governor Hochul signed AB 4066 into law. This bill establishes that vehicle manufacturers must pay reasonable compensation to franchise dealers for warranty work, extended warranty work, factory compensated repairs, or recalls. Reasonable compensation is defined as the reasonable labor time allowance utilized for non-warranty customer-paid labor. Effective immediately.

TEXAS

The Texas Office of Consumer Credit Commissioner updated the maximum documentary fees in a retail installment transaction for the purchase of a motorcycle, moped, all-terrain vehicle, boat, boat motor, boat trailer, or towable recreational vehicle. For a retail installment contract for the purchase of one or more of these “covered land vehicles,” the reasonable maximum amount of the documentary fee is $200 (up from $125). For a retail installment contract for the purchase of one or more covered watercraft, the reasonable maximum amount of the documentary fee is $200 (up from $125). For a retail installment contract for the purchase of one or more covered land vehicles and one or more covered watercraft, the reasonable maximum amount of the documentary fee is $250 (up from $175). Effective September 5, 2024.

Effective State Changes

ALASKA

Signed into law on August 1, 2024, HB 233 makes changes to the auto warranty statute by adding time allowances to the schedule of compensation for warranty work. Auto manufacturers will now have to compensate dealers for warranty work using rates and time allowances that are closer to actual costs for dealership mechanics. Effective October 27, 2024.

CALIFORNIA

Assembly Bill 3286 was signed on July 15, 2024. This bill clarifies the process for CPI adjustments for the California Consumer Privacy Act (“CCPA”). The five thresholds and penalties subject to CPI adjustments every 2 years are: the revenue threshold for businesses covered by the CCPA, damages pursuant to a civil action in the event of a negligent data breach, administrative enforcement fines, civil penalties, and the Privacy Protection Agency Board members’ per diem. Effective July 15, 2024.

ILLINOIS

House Bill 4447 was signed into law on August 9, 2024. The bill creates the Motor Vehicle Dealer Protection Act, which makes it illegal to use the name, image, registered trademark, or intellectual property belonging to a vehicle dealer without permission. Effective January 1, 2025.

Senate Bill 86 amends the Know Before You Owe Private Education Loan Act and the Student Loan Servicing Rights Act to include new disclosures lenders must provide to cosigners. Effective August 2, 2024.

Senate Bill 3550 was signed into law by Governor Pritzker on August 9, 2024. The bill amends the Financial Institutions Code by broadening the definition of “financial institutions” and restructures oversight responsibilities between the Division of Financial Institutions and the Department of Financial and Professional Regulation. Additionally, the new law amends the Consumer Installment Loan Act and the Payday Loan Reform Act to allow for fines against entities not registered with the State. Effective August 9, 2024.

MICHIGAN

House Bill 5460 amends the Motor Vehicles Sales Finance Act to allow a retail installment sales contract for a new vehicle to provide for a series of monthly payments in unequal payment amounts if the amount of any payment does not increase more than 40% from the first scheduled payment. Also, each scheduled payment cannot exceed the buyer’s maximum payment threshold. Effective July 23, 2024.

NEW HAMPSHIRE

House Bill 1243 was signed into law on August 2, 2024, repealing and replacing the Retail Installment Sales of Motor Vehicles Chapter (“RISMV”). The new RISMV makes significant changes to existing law that affects motor vehicle financing, vehicle leases, direct loans, the licensing of servicers, and disclosure requirements for loans and retail installment sales. The bill changes and adds the definitions of many terms, including: retail installment contract, retail installment transaction, lender, direct loan and indirect loan. HB 1243 also makes changes to disclosure requirements and servicing practices. Since the signing of the law, the New Hampshire Banking Department issued FAQs related to these changes and their enforcement. The Department has also instructed dealers to contact them if they believe they will be out of compliance. Effective July 1, 2024, in part, and September 1, 2024.

OHIO

Amongst other items, Senate Bill 94 establishes processes for releasing electronic liens once a security interest is discharged. The bill also creates a new procedure for adjusting the documentary service charge allowed with the sale or lease of a motor vehicle. Effective October 24, 2024.

TEXAS

The Texas Office of Consumer Credit Commissioner’s released updates to the Texas Finance Code. For Small Loans—Subchapter F Loans—lenders can charge an Acquisition Charge of 12.5% (previously 10%) of the Amount Financed up to a maximum of $125 (previously $100). 7 Tex. Admin. Code § 83.605(a). For Large Loans—Subchapter E Loans—a lender can charge an Administrative Fee that does not exceed $125 (previously $100). 7 Tex. Admin. Code § 83.503(1). These fees are to be updated annually starting July 1, 2025. Effective July 11, 2024

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.