FOR IMMEDIATE RELEASE   

For more information contact:

Carleton Sales Team

574.243.6040 option #3

sales@carletoninc.com

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. This change goes into effect November 1, 2023.

Provisions Impacting Computational Requirements:

• The revised maximum rate structure under §3-508A will be the greater of either:
  • 32% + Federal Funds Rate on the unpaid principal balance up to $7,000
  • 23% + Federal Funds Rate on the unpaid principal balance up to $11,000
  • 20% + Federal Funds Rate on the remaining unpaid principal balance

— OR —

• 25% + Federal Funds Rate

• The applicable Federal Funds Rate is defined as:

“[T]he rate published by the Board of Governors of the Federal Reserve System in its statistical release H.15 Selected Interest Rates and in effect as of the first day of each month immediately preceding the month during which the loan is consummated.”

Carleton has added the capability to download the Federal Funds Rates from the Federal Reserve System along with the ability to pull the correct Federal Funds Rate based on contract date and the lookback period rules established in this legislation within the CarletonCalcs® Platform.  This greatly lessens the burden on the end user.

Carleton has maintained regular communication with industry professionals and trade associations to ensure we are assisting our clients to implement these necessary updates. The information contained herein is for informational purposes only and shall not be construed as legal advice.

 

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

DELAWARE

Signed into law on September 11, 2023, HB 154 establishes the Delaware Personal Data Privacy Act. The Act describes a consumer’s personal data rights and provides that residents of Delaware will have the right to know, access, and correct any misinformation of their personal data. Also described in the Act are the thresholds regarding which businesses fall under the purview of the Personal Data Privacy Act. And finally, the Act enables the Delaware Department of Justice to enforce the new law and provide education and outreach to consumers and businesses affected by its provisions. Effective January 1, 2025.

NORTH CAROLINA

HB 447 was signed into law by Governor Roy Cooper on August 24, 2023, and changes many current statutes affecting motor vehicle dealers and manufacturers. Amongst other provisions, the new law prohibits manufacturers from interfering in vehicle dealer independence as it applies to corporate structure and website messaging, provides that manufacturers must make all makes and models available to all franchise dealers, and clarifies how dealers should be reimbursed by manufacturers for warranty labor. Similar laws have passed throughout the nation this year. Effective September 1, 2023.

Reminders

CONNECTICUT

SB 1033 was signed into law June 29, 2023, by Governor Ned Lamont. The law modifies the types of charges and fees included in the “Finance Charge” for the purposes of calculating a Military Lending Act Annual Percentage Rate and raises the maximum amount of a covered small loan from $15,000 to $50,000 and a Retail Installment Sales Contract for consumer goods—which includes motor vehicle sales—from $50,000 to $75,000. Effective in part July 1, 2023, and October 1, 2023.

NORTH CAROLINA

SB 329—Session Law 2023-60—was vetoed and then overridden by the legislature on June 27, 2023. This law modifies the finance charge brackets and changes the maximum finance charge rates for consumer credit installment sale contracts, including motor vehicles. Effective October 1, 2023.

SB 331 was vetoed and then overridden by the legislature on June 27, 2023. This bill 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.

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, 2024.

HOEPA Annual Threshold Adjustments:

• The adjusted total amount of the loan threshold will be $26,092, up from $24,866
• The adjusted points-and-fees dollar trigger will be $1,305, up from $1,243

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 $16,308
• $1,305 for loans greater than or equal to $16,308 but less than $26,092
• 5% of total loan amount for loans greater than or equal to $26,092 but less than $78,277
• $3,914 for loans greater than or equal to $78,277 but less than $130,461
• 3% of total loan amount for loans greater than or equal to $130,461

Effective State Changes

ILLINOIS

On July 28, 2023, Governor J. B. Pritzker signed HB 3236 into law. The bill amends the Sales Finance Agency Act to prohibit a Sales Finance Agency from purchasing retail installment contracts or loans for the purchase of a companion canine or feline. The bill also prohibits secured loans for the purchase of a companion animal and forbids retailers from entering into retail installment contracts for the purchase of a companion animal. Effective January 1, 2024.

On June 30, 2023, HB 2130 created the Insurance Data Security Law. This new law enacts provisions regarding information security programs, the investigation of cybersecurity events, and notifications when cybersecurity events occur. Additionally, the law empowers the Director of the Department of Insurance to investigate any entity found to be in violation of this act. Finally, the law creates carve-outs for Freedom of Information Act requests when private data is possessed by the Department during the course of an investigation. Effective January 1, 2024.

INDIANA

On July 25, 2023, new guidance from Indiana’s Secretary of State’s Auto Dealer Services Division raised the maximum documentation preparation fee to $237.51. Previous guidance allowed for Consumer Price Index fluctuations to be taken into account when calculating the previous maximum documentation preparation fee of $200. Effective July 25, 2023.

NEBRASKA

Governor Jim Pillen signed LB 92 into law on June 6, 2023, enacting new licensing requirements for small dollar lenders. The law amends the Nebraska Installment Loan Act to specifically require marketers, servicers, and any entity which might purchase the covered loans or any interest in the covered loans to obtain proper licensing from the state. Effective June 7, 2023.

OREGON

Signed into law by Governor Tina Kotek on July 27, 2023, HB 2052 addresses the collection of consumer data by data brokers. The new law requires all data brokers who collect, sell, or license personal data to register with the Department of Consumer and Business Services. The bill also provides for civil penalties for the failure to register with the Department. Effective July 27, 2023.

HB 2099 is a transportation bill that was signed into law on July 27, 2023. Among other items, the bill states that the inspection of vehicle dealers by the Department of Transportation should only occur during normal business hours—Monday through Friday—and modifies laws related to dealer certificates and the use of vehicles displaying dealer plates. Effective September 24, 2023.

HB 3080 provides for vehicle dealers or financial institutions to electronically submit title or security interest paperwork to the Department of Transportation. The bill establishes a deadline of January 1, 2027, for rulemaking surrounding this implementation. Effective January 1, 2024.

SB 256 makes it an unlawful trade practice to manufacture, import, distribute, sell, or install counterfeit supplemental restraint systems or airbags in Oregon. Any restraint system or airbag must conform with federal standards for the make, model, and year of the motor vehicle. Effective January 1, 2024.

Signed into law on July 18, 2023, SB 619 addresses the collection and processing of a consumer’s personal data. This new bill provides a definition of a “controller” of consumers’ personal data and establishes the duties a controller has towards that data and its associated consumer. The law also establishes what rights a consumer has to control, alter, or request a controller to delete said personal data. The bill empowers the Attorney General to investigate controllers of personal data for violations of this act and creates civil penalties for such violations. Effective July 1, 2024.

TEXAS

Governor Greg Abbott signed HB 4 into law on June 18, 2023. The new law creates the Texas Data Privacy and Security Act to address the collection, use, processing, and treatment of consumers’ personal data. This bill enumerates the rights of consumers, defines the responsibilities of “controllers” of consumer data, and empowers the Texas Office of Attorney General to enforce the provisions of this act. The law applies to persons who conduct business in Texas, or produce products or services consumed by Texas residents, or process or engage in the sale of personal data. The law includes a carve-out for small businesses and certain types of data. Effective July 1, 2024.

VERMONT

HB 494 was vetoed by Governor Phil Scott on May 27, 2023. On June 20, 2023, the Vermont legislature passed the transportation appropriations bill, thereby bypassing the Governor’s veto. Among other items, the bill updates fees imposed by the Vermont Department of Motor Vehicles. The annual registration fee for an electric vehicle was raised from $74 to $89. An application for registration as a dealer of either new or used cars or trucks is increasing from $503 to $603. The bill also increases the temporary plate fee from $5 to $6 and the motor vehicle warranty fee from $6 to $8. Other fees updated include title fees and lien fees. Effective January 1, 2024.

FOR IMMEDIATE RELEASE

For more information contact:

Carleton Sales Team

574.243.6040 option #3

sales@carletoninc.com

As reported in Carleton’s July 2023 Compliance Alert, North Carolina Senate Bills No. 329 and 331 modified provisions relating to small loans, retail installment sales, and motor vehicle sales. These changes go into effect October 1, 2023.

Provisions Impacting Computational Requirements:

• Loans
  • Senate Bill 331 made some definitional changes, specifically by adding a definition for “amount financed”. As defined, the term includes certain allowed charges, such as the loan closing or processing fee. As such, the definition differs from the Truth in Lending Act definition of the Amount Financed.
  • The bill adjusts the upper threshold of the Consumer Finance Act from $15,000 to $25,000.
  • The following new loan rates/tiers will apply:

Loans up to $12,000 (melded/blended rates):
$0 – $4,000		33%
>$4,000 – $8,000		24%
>$8,000 – $12,000		18%
Loans >$12,000 up to $25,000:
>$12,000 – $25,000		18%

• The closing or processing fee was also adjusted to a maximum of $30 for any loan up to $3,000 (an increase from $25 for loans up to $2,500), and for any loan exceeding $3,000, the maximum fee would continue to be 1% of the amount financed (excluding the processing fee), not to exceed $150 (up from $40).
• The bill also adjusted the maximum late fee from $15 to $18.

• Retail Installment Sales
  • Senate Bill 329 makes some significant changes to the thresholds and rates for retail installment sales. It also makes corresponding changes to motor vehicle sales.
  • Under the new language, the previous four tiers are reduced to two tiers for retail sales, as follows:
    • Less than $3,000 Amount Financed: 24% TILA APR
    • $3,000 or more Amount Financed: 21% TILA APR
  • The motor vehicle provisions are reduced from four classes to three classes as follows:
    • Class 1: Any Vehicle up to 3 model yrs – 20%;
    • Class 2: Any vehicle 4-5 model yrs – 26%;
    • Class 3: Any vehicle 6+ model yrs – 30%
  • Similar to loans, the late fees for retail sales are changed from $15 to $18.

Carleton maintains regular communication with industry professionals and trade associations to ensure we are assisting our clients to implement these necessary updates. The information contained herein is for informational purposes only and shall not be construed as legal advice.

 

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.

FOR IMMEDIATE RELEASE  

For more information contact:

Carleton Sales Team

574.243.6040 option #3

sales@carletoninc.com

As reported in Carleton’s July 2023 Compliance Alert, Connecticut Senate Bill No. 1033 (Public Act No. 23-126) modified provisions relating to small loans, retail installment sales, and guaranteed asset protection (GAP) waivers. These changes go into effect October 1, 2023.

Provisions Impacting Computational Requirements:

• Loans
  • For small loans, Connecticut already requires the annual percentage rate (APR) be calculated according to the provisions in the Military Lending Act. SB 1033 expands the types of charges and fees included in the definition of the Finance Charge for the purposes of calculating a Military APR to include:
    • a charge set forth in 32 CFR 232.4(c)(1), as amended from time to time,
    • a charge for any ancillary product, membership, or service sold in connection or concurrent with a small loan,
    • any amount offered or agreed to by a borrower in furtherance of obtaining credit or as compensation for the use of money, and
    • any fee, voluntarily or otherwise, charged, agreed to, or paid by a borrower in connection or concurrent with a small loan.
  • Threshold Adjustment:
    • If a loan is between $5,000 and $50,000 (previously $15,000), the maximum Military APR (as modified above), is 25%.
    • If a loan is under $5,000, the maximum Military APR (as modified above) is 36%.
  • The law modifies the definition of “Small Loan” from a maximum amount of $15,000 to $50,000. This would in turn extend to the special exclusion for closed-end loans secured by a motor vehicle.

• Retail Installment Sales
  • The bill expands the threshold for “consumer goods”, including motor vehicles, from $50,000 to $75,000, and for “equipment” from $16,000 to $25,000. The applicable maximum finance charge rates remain unchanged for retail installment sales. The applicable tiered rate structure for motor vehicles also remains unchanged.

• Guaranteed Asset Protection (GAP) Waivers
  • The bill includes a new section relating to GAP Waivers. Among other provisions, the new section:
    • Clarifies that GAP waivers are not insurance,
    • Requires GAP waivers be refunded using a pro rata method, and
    • Allows lenders to charge a cancellation fee not to exceed $50, to be deducted from a refund.

Carleton maintains regular communication with industry professionals and trade associations to ensure we are assisting our clients to implement these necessary updates. The information contained herein is for informational purposes only and shall not be construed as legal advice.

 

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

ARIZONA

In Arizona, HB 2292 was signed into law on June 19, 2023. This bill will allow for the electronic documentation of vehicles’ permanent records and vehicle sale contracts. The law also permits a dealer and buyer to cancel the sale if properly documented and submitted to the Department of Transportation. Effective January 1, 2024.

CONNECTICUT

On June 28, 2023, SB 1032 was signed into law and provides for new disclosure requirements in the context of commercial financing. The bill defines commercial financing as a sales-based financing transaction of $250,000 or less that is not intended to be used primarily for personal, household, or family purposes. Among the disclosures it requires: the financing amount, finance charges, total repayment, term, payments, and other potential fees. It also requires commercial financing lenders to register with the Department of Banking by October 1, 2024. Effective July 1, 2024.

SB 1033 was signed into law June 29, 2023, by Governor Ned Lamont. The new law modifies the types of charges and fees included in the “Finance Charge” for the purposes of performing a Military Lending Act Annual Percentage Rate (“MAPR”) calculation. The new language includes charges and fees “in connection or concurrent with a small loan.” SB 1033 also raises the maximum size of a covered small loan from $15,000 to $50,000. Additionally, this bill adds language regarding guaranteed asset protection (GAP) waivers. It clarifies that GAP waivers are not insurance and require a pro rata refund method upon cancellation. And finally, this bill changes the maximum amount covered for Retail Installment Sales Contracts for consumer goods—which includes motor vehicle sales—from $50,000 to $75,000. Effective in part July 1, 2023, and October 1, 2023.

FLORIDA

HB 1353 creates the Florida Commercial Disclosure Law and delegates the enforcement of the new law to the Attorney General. The bill establishes definitions and requirements for certain commercial financing transactions, including disclosure requirements. Additionally, the bill prohibits certain conduct from brokers engaged in arranging commercial financing transactions. Effective July 1, 2023.

GEORGIA

HB 55 amends and repeals certain laws in the state of Georgia regarding financing, banking, and international banking corporations. Among other provisions, one small amendment stood out as it affects Ga. Code Ann. § 7-3-11 (the Georgia Installment Loan Act). In the section discussing interest the lawmakers changed a shall, to a may: “On loan contracts repayable in 18 months or less, the interest may be discounted in advance; and, on contracts repayable over a greater period, the interest may be added to the principal amount of the loan. On all contracts, interest or discount shall be computed proportionately on equal calendar months.” Effective July 1, 2023.

HAWAII

SB 1534 changes the way that electric vehicles are registered in the state of Hawaii. The state currently charges a $50 registration fee for all electric vehicles. Beginning July 1, 2025, this will be replaced by a mileage-based usage charge of up to $50 annually for electric vehicles. Effective in part July 1, 2023, and July 1, 2025.

MISSOURI

Governor Mike Parson signed SB 398 into law on July 6, 2023. This bill revises the Motor Vehicle Franchise Practices Act to specifically exclude certain entities from selling vehicles in the state. Additionally, the bill changes how manufacturers compensate dealers for the cost of work related to warranties and other repairs. Effective August 28, 2023.

NORTH CAROLINA

SB 329—Session Law 2023-60—was vetoed and then overridden by the legislature on June 27, 2023. This new law reduces the number of finance charge brackets from four to two and changes the maximum finance charge rates for consumer credit installment sale contracts to 24% for loans less than $3,000 and 21% for loans $3,000 or greater. The law also makes changes to the maximum finance charge rate for consumer credit installment sales contracts for motor vehicles that are repayable in at least six installments. The amended rates are:

• 20% for vehicles one to three model years old
• 26% for vehicles four to five model years old
• 30% for vehicles six model years old and older

The bill updates the applicable late fees for retail sales or motor vehicle sales transactions from $15 to $18. Effective October 1, 2023.

SB 331 was vetoed and then overridden by the legislature on June 27, 2023. This bill amends the North Carolina Consumer Finance Act and outlines the rate of interest that may be charged on consumer finance loans. The bill removes the definition for “amount of the loan” and instead adds a definition for “amount financed.” Notably, this definition includes allowed fees, such as the processing fee, and therefore departs from the traditional TILA amount financed. It also changes the language in the computation of interest section to apply to the “amount financed” as opposed to “principal.” The bill changes the upper threshold from $15,000 to $25,000. The rate of interest depends on the amount of the loan. The threshold and rate changes are as follows:

Before 10/1/23		After 10/1/23
Maximum Loan Amount: $15,000		Maximum Loan Amount: $25,000
Loans up to $10,000 (melded/blended rates):		Loans up to $12,000 (melded/blended rates):
$0 – $4,000	30%	$0 – $4,000	33%
> $4,000 – $8,000	24%	> $4,000 – $8,000	24%
> $8,000 – $10,000	18%	> $8,000 – $12,000	18%
Loans > $10,000 (up to $15,000):  18%		Loans > $12,000 (up to $25,000):  18%

Additionally, this bill changes the amount of processing fees a licensee could charge at closing. The processing fees under the bill cannot exceed $30 for any loan up to $3,000 (an increase from $25 for loans up to $2,500), and for any loan exceeding $3,000, the fee would continue to be 1% of the amount financed (excluding the processing fee), not to exceed $150 (up from $40). The bill increases the allowed late fee amount from $15 to $18. The bill also includes provisions related to licensing and record keeping. Effective October 1, 2023.

OREGON

HB 2100 is a transportation bill that updates fees for driver licenses, permits, identification cards, and the reinstatement of driving privileges. Additionally, this bill will increase the Document Preparation fees that motor vehicle dealers are allowed to charge. Dealers using an integrator may charge $250 (increased from $150) and must pay the integrator $35 (increased from $25). Dealers who do not use an integrator may charge $200 (increased from $115). Effective January 1, 2024.

RHODE ISLAND

HB 5537 and companion bill SB 830 were signed into law by Governor McKee on June 20, 2023. Both bills state that a licensed new motor vehicle dealer may now conduct inspections of vehicle identification numbers and submit them to the police department for clearance with the National Crime Information Center (NCIC). Dealers can charge $10 for this, but then must pass this on to the city or town whose police department conducts the NCIC check. Effective June 20, 2023.

SB 829 directs the administrator of the Rhode Island Division of Motor Vehicles to create a limited power of attorney form for vehicle registrations, as well as promulgate the rules and requirements for using this form to register a vehicle. Effective January 1, 2024.

Effective State Changes

ALABAMA

HB 128 was signed into law on May 11, 2023 and authorizes the Calhoun County license commissioner to return and void all motor vehicle license fees, interest, penalties, and sales tax when an individual, company, or other entity makes payment and the deposit is non-collectible. Effective immediately.

Governor Kay Ivey signed SB 15 into law on May 26, 2023. This new bill requires businesses selling motor vehicle value protection products to have insurance in place to cover any contractual obligations. Effective immediately.

SB 259 provides for the Cherokee County Commission to create and levy an additional vehicle license and registration fee on all vehicle registrations, transfers, and renewals. Effective September 1, 2023.

COLORADO

Signed on June 7^th, HB 1181 enacts guaranteed asset protection (“GAP”) product provisions into Colorado law. Among other matters, this law establishes the calculation for a deficiency balance, designates responsibility for refund assignment depending on the contractual terms and original creditor, and outlines how a refund is established if the GAP agreement is tied to insurance. HB 1181 does not apply to debt cancellation agreements or GAP agreements included in consumer leases. Effective January 1, 2024.

HB 1229 opts Colorado out of the federal Depository Institutions Deregulation and Monetary Control Act (“DIDMCA”). In addition, the bill amends the rate structure for consumer loans of $1,000 or less in lieu of the finance charges allowed under Colo. Rev. Stat. § 5-2-201.

The changes include decreasing the maximum allowed acquisition charge from 10 to 8 percent of the amount financed and decreasing the monthly installment account handling charge, not to exceed the following:

Amount Financed	Per Month Charge
$100-$300	$8.50 (previously $12.50)
$300.01-$500	$11.50 (previously $15.00)
$500.01-$700	$14.50 (previously $17.50)
$700.01-$1,000	$17.50 (previously $20.00)

Effective in part January 1, 2024 and July 1, 2024.

FLORIDA

HB 637 was enacted on June 13 and—following trends seen across the country—establishes new unfair practices for manufacturers and distributors, as well as prohibiting those entities from enforcing conditions for the sales of particular vehicles. Effective July 1, 2023.

Governor Ron DeSantis enacted SB 262, also known as the “Florida Digital Bill of Rights”, as Florida’s answer to comprehensive privacy laws being enacted around the country. The law defines terms, establishes data relevant under its provisions, and limits businesses’ ability to use that data without consent from consumers. Effective in part July 1, 2023 and July 1, 2024.

GEORGIA

HB 222 was signed by Governor Kemp on May 3 and exempts service contracts or extended warranties for vehicles from insurance regulations and laws. Effective immediately.

ILLINOIS

SB 328 enacts new provisions for sellers of renewable subscriptions in the state of Illinois. The law establishes that the language surrounding such a renewal must be clear and conspicuous, must include information such as the automatic renewal offer terms and cancellation policy, and that a consumer must consent to any renewal. Effective January 1, 2024.

IOWA

HF 143 was signed by Governor Reynolds and creates new protections and penalties for ransomware incidents in the state of Iowa. Effective July 1, 2023.

KANSAS

Governor Kelly signed SB 44—the Kansas Financial Institutions Information Security Act—into law. The bill defines terms, provides requirements for ensuring information security, and establishes penalties for any financial institutions which do not abide by its provisions. Effective July 1, 2023.

LOUISIANA

Governor Edwards signed SB 152 which creates a cybersecurity commission to identify cyber risk, develop a strategy and propose protections for businesses in various industries, including communications, emergency services, and financial services. Effective August 1, 2023.

MINNESOTA

The State of Minnesota’s Transportation Appropriations bill—HF 2887—was signed into law on May 5, 2024 and raises the Doc Fee allowed to be charged by Minnesota motor vehicle dealers. For the period of July 1, 2023 through June 30, 2024 the Doc Fee is the lesser of $200 or an amount equal to 10% of the value for sale or lease. For the period of July 1, 2024 through June 30, 2025 the Doc Fee is the lesser of $275 or an amount equal to 10% of the value for sale or lease. For the period after July 1, 2025, the Doc Fee is the lesser of $350 or an amount equal to 10% of the value for sale or lease. Among other provisions, it raises the amount of registration and license fees, as well as creates a new retail delivery fee that can be passed on to the consumer at the businesses’ discretion. Effective July 1, 2023.

The state’s omnibus bill, SF 2744, was approved by the Governor on May 24, 2023. Within this larger bill, the language includes a rate cap of 36% that applies to payday lenders. Effective January 1, 2024.

MISSOURI 

SB 13 expands the role of the Division of Finance and increases licensing and registration fees for financial institutions in Missouri. Effective August 28, 2023.

MONTANA

Governor Gianforte signed HB 668 on May 18th. This law defines vehicle theft protection products and vehicle theft protection product warranties, establishes disclosures for those products, and institutes provisions surrounding reimbursement of said warranties. The law specifically excludes these products from insurance regulations, similar to how GAP waivers are excluded. Effective October 1, 2023.

SB 50 establishes new requirements and duties for state agencies and their third-party contractors in regard to security breaches, including when said breaches rise to the level of jeopardizing information systems. Effective October 1, 2023.

SB 384 creates the Consumer Data Privacy Act in the state of Montana. The new law defines personal data, requires consent from consumers for the sale or sharing of such information, and explicitly exempts certain businesses from its provisions. Effective October 1, 2024.

Montana’s governor signed SB 411 on May 2^nd. The new law establishes data privacy standards for motor vehicle dealers and manufacturers. The bill also applies to third-party providers who handle dealers’ data. Effective immediately.

NEVADA 

AB 290 allows for a motor vehicle dealer and a vehicle purchaser to enter into a written agreement to cancel a vehicle sale. Within 15 days of the agreement, the dealer must return to the purchaser all money, taxes, and fees collected at the time of sale. Effective October 1, 2023.

AB 356 prohibits debt collectors, dealers, or any other repossession entities from placing a tracking device on a vehicle without consent from the owner. Effective July 1, 2023.

Signed on June 9^th, SB 346 authorizes the Department of Motor Vehicles to conduct certain transactions electronically, such as titling, registration, driver’s license renewal, electronic signatures, industry licensure, and the issuance of credentials. Additionally, the new law opens up who may participate in this program. Effective in part June 9, 2023 and January 1, 2024.

OKLAHOMA

SB 836 now will allow the electronic submission of title, transfer, or ownership documentation in electronic form in the state of Oklahoma. Effective June 7, 2023.

SB 984 was signed into law on June 7, 2023 and establishes that for a motor vehicle sale, the gross receipts value of a trade-in shall be calculated based on the difference of the trade-in and the actual sales price of the vehicle being purchased. This applies to the Motor Vehicle Excise Tax and the Oklahoma Sales Tax. Effective November 1, 2023.

SOUTH CAROLINA

Governor McMaster enacted HB 3952 on May 16. This new law creates requirements for the disclosure of vehicle sales closing fees. Effective immediately.

TENNESSEE

HB 1181, passed on May 24, 2023, enacted the Tennessee Information Act. The act extends protections over consumer’s personal information. Effective July 1, 2025.

Governor Lee enacted HB 1310—also known as the Genetic Information Privacy Act. This new law defines terms, protected information, and creates new requirements for businesses that hold this information. In addition, the bill requires consent from consumers for said companies to use, share or distribute such information. And finally, this law mandates certain security programs for the companies which maintain this information. Effective July 1, 2023.

TEXAS

HB 2746 creates new requirements for the refund of a terminated GAP product. The new law creates different responsibilities for the holder of a GAP contract and the administrator or seller of the product, institutes new timelines for the refund of a GAP product, and establishes recording requirements for the refund itself. Effective September 1, 2023.

Governor Abbot signed SB 271 into law which changes terms, language, and responsibilities surrounding a cybersecurity breach and ransomware incident in the state of Texas. Effective September 1, 2023.

SB 768 amends the Texas Business and Commerce Code and creates new procedures for instances when a breach of security of computerized data involves at least 250 Texas residents’ information. It charges that a business must notify the Attorney General within 30 days of the breach and provides for forms and a publicly accessible website to report these incidents. Effective September 1, 2023.

WASHINGTON

SB 5518 is Washington State’s new cybersecurity law. Signed by Governor Inslee, the bill establishes terms, committees, and powers to improve cybersecurity and responses in the case of an attack on the state’s infrastructure. Effective July 23, 2023.

KENTUCKY

The rate adjustments under SB 165 become effective on June 28, 2023

OKLAHOMA

The Department of Consumer Credit published the changes in dollar brackets for Retail Installment Sales and Consumer Loans. Effective July 1, 2023.

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, 2023.

Effective State Changes

ARKANSAS

HB 1579 was signed by Governor Sarah Huckabee Sanders on April 10. This new law amends provisions of the Motor Vehicle Commission Act and requires manufacturers, distributors, or wholesalers to fairly compensate dealers for any repair work initiated remotely. Additionally, these providers must now ensure that vehicles are fairly distributed to dealers and provide consumer disclosures for all accessories and functions that may be maintained remotely and the charge to the consumer for such maintenance. Effective July 30, 2023.

COLORADO

On May 11, 2023, HB 1272 was signed into law by Governor Jared Polis. This bill extends the innovative motor vehicle tax credit for electric and hybrid vehicles to 2028 and extends the same credit for certain trucks until 2032. Effective immediately.

GEORGIA

Signed into law on May 3, 2023, HB 222 makes it clear that service contracts are not considered insurance in the state of Georgia. Effective immediately.

SB 90 now requires certain commercial financing disclosures be provided to businesses—including motor vehicle dealers—for certain commercial loans and other extensions of credit. Effective January 1, 2024.

IOWA

HF 592 was signed into law on April 28, 2023. This bill revises the provisions surrounding a remote vehicle sale by motor vehicle dealers and how they handle when a security interest is discharged on a vehicle. Effective July 1, 2023.

INDIANA

HB 1050 further defines alternative fuel and provides for its taxation for certain motor vehicle carriers, among other provisions. Effective in part on July 1, 2023, and in part on January 1, 2024.

Following a nationwide trend, HB 1236 enacts new protections for motor vehicle dealers in the state of Indiana. Among other protections, the bill establishes the amount a manufacturer must compensate a dealer for a part, prohibits manufacturers from requiring dealers to use certain services or providers, and defines and prohibits certain unfair practices manufacturers can engage in with franchise dealers. Effective in part on May 1, 2023, and in part on July 1, 2023.

SB 5 implements new consumer rights regarding personal data and responsibilities for protecting such data for businesses operating in the state of Indiana. Effective January 1, 2026.

KANSAS

HB 2147 establishes a process for abandoned or towed vehicles to be sold to the public and issued a title. Effective July 1, 2023.

SB 44 creates the Kansas Financial Institutions Information Security Act. Among other items, this bill requires financial institutions to develop and implement a cybersecurity system to protect consumers’ personal information. Effective July 1, 2023.

MARYLAND

HB 913 revises the laws surrounding student loan financing companies and requires them to register with the Commissioner of Financial Regulation. Effective October 1, 2023.

MONTANA

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

On May 2, 2023, Governor Greg Gianforte signed SB 411 into law. The bill establishes new responsibilities for motor vehicle dealers as to their storage and sharing of electronic data and generally revises the licensing and rights of franchise dealers in the state of Montana. Effective immediately.

OKLAHOMA

HB 1443 implements new disclosures in the Oklahoma Student Borrower’s Bill of Rights for student loan borrowers regarding loan forgiveness programs. Effective November 1, 2023.

HB 1543 amends the Oklahoma UCCC provisions. Specifically, the §3-508B loans will now be tied to the Reference Base Index of December 2020—not December 2021—for the Consumer Price Index published by the Bureau of Labor Statistics. These will affect the finance charge thresholds for loans carrying principals of $3,000 ($3,450 effective July 1) or less. The measure also eliminates the 3% cap on adjustments and continues to allow adjustments in increments of 1%. Finally, the bill eliminates the Consumer Credit Advisory Committee. Effective April 28, 2023.

Signed on April 19, 2023, SB 593 prohibits a vehicle manufacturer from denying a vehicle dealer’s claim or implementing a chargeback against a dealer if a consumer does not adequately comply with state title and registration laws. Effective November 1, 2023.

SB 794 was signed by Governor Kevin Stitt on April 24, 2023. This bill adds the federal funds rate to the amount a loan can be financed for on all §3-508A loans. Specifically, the maximum finance charge allowed will be the greater of:

• 32%, plus the federal funds rate, on the part of the balance which is $7,000 or less;
• 23%, plus the federal funds rate, on the part of the balance more than $7,000 up to and including $11,000;
• 20%, plus the federal funds rate, on the part of the balance more than $11,000;

OR

• 25%, plus the federal funds rate, on the balance of the principal.

Effective November 1, 2023.

The Department of Consumer Credit published the changes in dollar amounts which will become effective July 1, 2023. Included in the adjustments are the following:

Retail Installment Sales, §2-201:

The greater of:  30% of the amount financed up to $1,860; plus

21% of the excess to $6,200; 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 to $178.87. (Pursuant to SB 794, the federal funds rate will be added to these applicable rates beginning on November 1, 2023.)

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

Loan Amount	Acquisition Charge	Handling Charge
Up to $186.24		$6.21 per $31.05 of principal
$186.24-$217.35	1/10 of the amount of principal	$18.63 per month
$217.36-$434.70	1/10 of the amount of principal	$21.74 per month
$434.71-$621.00	1/10 of the amount of principal	$24.84 per month
$621.01-$931.50	1/10 of the amount of principal	$27.95 per month
$931.51-$1,242.00	1/10 of the amount of principal	$31.05 per month
$1,242.01-$1,552.50	1/10 of the amount of principal	$34.16 per month
$1,552.51-$1,863.00	1/10 of the amount of principal	$37.26 per month
$1,863.01-$2,300.00	1/10 of the amount of principal	$46.00 per month
$2,300.01-$2,875.00	1/10 of the amount of principal	$57.50 per month
$2,875.01-$3,450.00	1/10 of the amount of principal	$69.00 per month

The maximum delinquency charge for consumer credit sales and consumer loans will increase from $29.00 to $31.00. Effective July 1, 2023.

TENNESSEE

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

TEXAS

SB 505 creates a new additional registration fee for electric vehicles in the state of Texas. The additional fee is $400 for new vehicles registering for a two-year period. Effective September 1, 2023.

WASHINGTON

HB 1823 revises the Washington Student Loan Program as it applies to graduate students. Effective July 23, 2023.

SB 5282 allows motor vehicle dealers to file a report on behalf of a consumer with the state of Washington upon sale of a vehicle. Effective July 23, 2023.

Effective State Changes

CALIFORNIA

The California Privacy Protection Agency published its final rules which went into effect on March 29, 2023.

COLORADO

SB 15/Act 23-015 prohibits conditioning an extension of credit, terms of credit, or purchase price of the related vehicle on the purchase of a vehicle value protection agreement. In addition, the new law establishes that the service provider must notify a consumer of certain obligations and cancelation terms. Effective August 7, 2023.

Following the trend of states nationwide this legislative session, SB 78/Act 23-078 modifies the process of fulfilling and contesting labor rates motor and powersports vehicle manufacturers must pay their dealers. Effective August 7, 2023.

IDAHO

Signed into law on March 23, 2023, HB 128 seeks to update vehicle dealer franchise agreements to protect Idaho’s auto dealers from manufacturers, while also establishing dispute resolution mechanisms and franchise termination terms. Effective immediately.

INDIANA

Indiana published Emergency Rule LSA Document #22-234(E) which implements certain bracket updates, including:

• The graduated rate thresholds for sales and loans increase to $2,400/$4,800 respectively
• The minimum credit service charge increases to $57.00
• The delinquency charge for sales and loans increases to $20.50
• The minimum finance charge for loans increases to $57.00
• The maximum loan term is 37 months for loans with principals of $1,230 to $4,800

Effective January 1, 2023.

IOWA

Governor Kim Reynolds signed HF 133 which requires notice be provided within 30 days to a dealer regarding a refund for debt cancellation coverage by a financial institution holding the retail installment loan. Effective July 1, 2023.

Following the trend of various states, SF 262 enacts new consumer data protection requirements. Effective January 1, 2025.

KENTUCKY

SB 165 became law without the Governor’s signature on March 29, 2023. The statute makes changes to the brackets which consumer loan companies can charge for small loans, clarifies terminology, increases the nonrefundable amount of a loan processing fee from $50 to $75 and allows a $3 fee for providing funds in a manner other than a paper check. Under SB 165, loan companies are allowed to charge:

• 3% per month for loans under $5,000
• 2.42% per month for loans over $5,000 up to and including $10,000
• 2.25% per month for loans over $10,000 up to and including $15,000

This is a modification to each tier threshold and rate, with the third tier being added as a new tier. Effective June 28, 2023.

HB 150 establishes new provisions for franchise vehicle manufacturers and dealers in the Commonwealth of Kentucky. Among other requirements, the new law allows for manufacturers to audit dealers under certain circumstances, provides dealers more time to act upon notice of cancelation and prohibits franchises from requiring a dealer remodel within 10 years of a previous remodel. Effective June 28, 2023.

Governor Beshear signed HB 217 on March 16 which permits the use of an electronic form for vehicle salvage titles. Effective January 1, 2024 and January 1, 2025.

HB 264 establishes the General Regulatory Sandbox Program including a new Advisory Committee and establishes terms and conditions for offering innovative consumer financial products in the Commonwealth. Effective March 15, 2024.

MISSISSIPPI

HB 1170 was signed by Governor Tate Reeves on March 13. This statute requires the Mississippi Department of Revenue to create an electronic title and lien program for motor vehicles. Effective July 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, among other provisions, for a registrar or deputy registrar to collect the following additional fees upon application or renewal of registration:

• $100 for a hybrid motor vehicle
• $150 for a plug-in hybrid electric motor vehicle
• $200 for a battery electric motor vehicle

Effective June 30, 2023.

SOUTH DAKOTA

SB 159 revises the laws regarding vehicle warranty claims. Among other provisions regarding compensation and auditing claims, the bill will require a manufacturer to fulfill any warranty agreement and pay a dealer for labor within 30 days of claim approval. Effective July 1, 2023.

TEXAS

Released in February 2023, the dollar amount brackets and ceilings subject to adjustment in the Texas Financial Code will increase as follows:

Consumer Loans – §342.201

(Add-On Rates)

$18 per $100 per annum of the cash advance to $2,550 plus,

$  8 per $100 per annum of the excess to $21,250

—OR—

(Simple Melded Rates)

30% per annum of the cash advance to $4,250 plus,

24% of the excess to $8,925 plus,

18% of the remainder to $21,250

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

$12 per $100 per annum of the principal balance to $4,250 plus,

$10 per $100 per annum of the excess to $8,500 plus,

$  8 per $100 per annum of the remainder.

Effective July 1, 2023.

UTAH

Governor Spencer Cox enacted SB 216 which establishes the Utah Consumer Protection Division and certain disclosures vehicle value protection agreements must include regarding cancelation and the terms of said products. In addition, the bill provides for civil penalties and fees for violations of the law. Effective December 31, 2023.

HB 194 prohibits a vehicle dealer from including certain additional fees or charges after negotiating the purchase price of a vehicle. Effective July 1, 2023.

SB 14 changes requirements for leased tangible personal property regarding temporary permits and sales and use tax. Effective July 1, 2023.

On March 14^th, SB 90 amended the New Automobile Franchise Act to provide written disclosures from vehicle manufacturers to consumers regarding new vehicle repairs while also addressing labor and parts charges. Effective May 3, 2023.

SB 225 enacts the Utah Commercial Email Act and directs the Division of Consumer Protection to enforce its provisions regarding commercially sent and unsolicited emails. Amongst other provisions, the new law makes it a crime for an advertiser to send to a Utah resident or entity an unauthorized or misleading commercial email. Effective in part on May 3, 2023, and fully on December 31, 2023.

Governor Cox signed SB 172 into law on March 17. This bill modernizes Utah’s vehicle dealer laws so that online purchasing, contracting, and payment no longer require an in-person meeting. Additionally, the statute expressly provides for the delivery of a vehicle to a purchaser’s location. Effective May 3, 2023.

VIRGINIA

HB 1469/Chapter 310 and identical bill SB 871/Chapter 311 modernize Virginia’s motor vehicle franchise laws to prohibit vehicle manufacturers from withholding incentive payments to force a vehicle dealer to enter into a franchise agreement. Among other items, the new law also prohibits a vehicle manufacturer from amending a franchise agreement unilaterally or requiring dealers to offer certain ancillary products. Effective July 1, 2023.

HB 1907/Chapter 287 was signed into law by Governor Youngkin on March 23. The statute mandates licensed consumer finance companies include a question on all loan applications asking potential borrowers if they have been approached to send money for future government or lottery money. Effective January 1, 2024.

HB 1517/Chapter 688 establishes that suppliers of service subscriptions notify consumers of their right to cancel a subscription during a 30-day free trial—and a failure to do so would be a violation of Virginia’s Consumer Protection Act. Effective July 1, 2023.

HB 1661/Chapter 364 will allow an insurance company or its agent to obtain a non-repairable certificate for a vehicle acquired through a claims process prior to obtaining the title or salvage certificate if certain information is submitted to the Department of Motor Vehicles. Effective July 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.

Effective State Changes

MASSACHUSETTS

On January 5, 2023, House Bill 5421 was signed into law by Governor Maura Healey. The short bill revised the Small Loan Act requirement for indirect purchasers of motor vehicle contracts to separately license with the state if negative equity was an element of the transaction. Effective April 5, 2023.

MISSISSIPPI

On March 13, 2023, House Bill 1170 was signed into law by Governor Tate Reeves. The bill authorizes the Department of Revenue to issue electronic liens and titles for motor vehicles and manufactured homes. Effective July 1, 2023.

MISSOURI

The document preparation fee in the State of Missouri was increased through emergency rulemaking from $523.50 to $565.38 for 2023. Effective February 14, 2023.

NEW MEXICO

The Director of the Financial Institution Division published regulations for calculating an NM-APR in accordance with House Bill 132 changing the rate cap for small loans in New Mexico to 36%. The regulations specify various types of charges that cannot reasonably be predicted as of the loan contract date and are therefore excluded from the NM-APR calculation. Effective March 29, 2023.

Effective Federal Changes 

CONSUMER FINANCIAL PROTECTION BUREAU

On January 30, 2023, the CFPB published a proposed rule to require certain nonbanks to register and submit information in an online, publicly available database. The public comment period is open on this rulemaking until March 31, 2023.