Compliance Alerts

April 2022

 

 

Effective State Changes

 

ALABAMA

House Bill 91 will now allow county officials to contract with a third-party vendor for vehicle print-on-demand validation decals, emblems, and registration receipts. Effective April 5, 2022.

Governor Kay Ivey signed House Bill 335 into law on March 29, 2022. The amended law now allows a licensee making Small Loans under Ala. Code § 5-18, to collect a closing fee of $50 or 4% of the loan amount, whichever is less. This fee may be paid from the proceeds and financed. Upon full prepayment of any loan under Ala. Code § 5-18, any closing fee collected is subject to the refund provisions of the act, however the licensee may retain up to $25 of the closing fee. Effective immediately.

Senate Bill 48 provides that a guaranteed asset protection (“GAP”) waiver may offer provisions which waive a certain amount or provide credit towards a replacement vehicle. The bill also allows for an excess wear and use waiver for lease agreements. Effective January 1, 2023.

Signed by Governor Ivey on March 1, 2022, Senate Bill 52 revises the language surrounding Alabama’s warranty services for motor vehicle dealers. Additionally, it authorizes charges for pre-delivery services and compensation for services under those warranty contracts. Effective June 1, 2022.

 

INDIANA

House Bill 1167 pushes back certain deadlines required of the Indiana BMV to establish a state-wide electronic lien system. Effective in part July 1, 2022, and January 1, 2023.

Governor Eric Holcomb signed House Bill 1351 on March 19, 2022. This Trade Regulation affects all businesses in Indiana which own or use the personal information of an Indiana resident for commercial purposes and will now require notification of a data breach within 45-days of discovery. Effective July 1, 2022.

Among many other provisions, Senate Bill 383 corrects references to the UCCC effective date, amends the provisions in the UCCC governing authorized finance charges for consumer loans other than supervised loans, and establishes provisions concerning permitted additional charges for GAP agreements. The new law also states that the average retail value for a used motor vehicle should be established by a third-party valuation provider to determine GAP coverage instead of the National Automobile Dealers Association average retail value. Effective July 1, 2022.

 

KENTUCKY

House Bill 284 provides for the Kentucky Transportation Cabinet to establish an electronic title application and registration system for required forms and fees, allow certain entities to send title transfers and fleet registrations, and sets appropriate fees, charges, and policies for the new system. Effective date January 1, 2024.

House Bill 474 requires insurance licensees in Kentucky to investigate known and potential cybersecurity events. By establishing relevant definitions, requirements, and protocols, this new bill will also punish licensees who fail to follow obligations surrounding a cybersecurity event. Finally, this law authorizes the insurance commissioner to investigate, examine, and enforce all provisions for compliance. Effective January 1, 2023.

On April 7, 2022, House Bill 494 was signed into law establishing the Student Education Loan Servicing, Licensing, and Protection Act of 2022. The new bill establishes licensing, abusive practices, record requirements and other conditions to be a student loan servicer in Kentucky. Effective July 14, 2022.

Senate Bill 91 allows for established motor vehicle dealers to deliver vehicles purchased on the Internet to customers at their request. The bill also enables the Motor Vehicle Commission to establish fees for other licensee activities. Effective July 14, 2022.

 

MAINE

Legislative Document 1843 allows for the Maine Secretary of State to set up an electronic lien titling program following the evaluation of such a need and report back to the legislature by January 1, 2023. Effective July 19, 2022.

 

MASSACHUSETTS

On February 10, 2022, the Commonwealth of Massachusetts’ Office of Consumer Affairs and Business Regulation in the Division of Banks released a letter regarding the charging of fees when a Massachusetts’s consumer cancels a GAP Waiver product. The position of the Division is that a Massachusetts consumer may not be charged a cancellation fee.

 

MISSISSIPPI

Senate Bill 2831 establishes the Taxation of Remote and internet-based Computer Software Products and Services Study Committee to study and advise the State of Mississippi on taxing remote and internet software products and services. Effective March 28, 2022.

 

SOUTH CAROLINA

The Department of Consumer Affairs released its biannual dollar bracket adjustment effective from July 1, 2022, through June 30, 2024. Among the dollar bracket adjustments are:

  • The consumer credit sale, consumer lease, and consumer loans defined maximum amount changes from $105,000 to $115,000. (§2.104(1)(e), §2.106(1)(b), and §3.104(d), respectively).
  • The maximum delinquency charge for sales and loans transactions changes from $21.00 to $23.00. (§2.203(1) and §3.203(1), respectively).
  • The minimum delinquency charge changes from $8.40 to $9.20. (§ 2.203(2)).

Effective July 1, 2022.

 

SOUTH DAKOTA

House Bill 1082 extends the motor vehicle excise tax on vehicles leased for more than twenty-eight days to include certain off-road vehicles. Effective July 1, 2022.

 

VIRGINIA

Governor Glenn Youngkin enacted House Bill 1027 on April 11, 2022. This new bill mandates that certain commercial financing providers register with the Commonwealth of Virginia’s State Corporation Commission. Providers or brokers of sales-based financing products will now need to provide certain disclosures with any new offers for financing. The bill also has provisions regarding arbitration, arbitration proceedings, and contractual language allowed in these financing agreements. Finally, the bill expressly provides for its enforcement by the Office of the Attorney General. Effective July 1, 2022.

Senate Bill 215 allows the Virginia DMV to expand the electronic titling program for new motor vehicles to all applications. Additionally, the bill allows the Department to register all vehicles online and charge certain fees to fund these programs. Effective July 1, 2022.

On April 11, 2022, Senate Bill 383 was signed into law by Governor Youngkin. The new law eliminates a required hearing prior to the State Corporation Commission determining the actual loss ratio and adjusting the prima facie credit insurance rates. The new law provides notification of such ratio and rate changes and then an opportunity for a hearing. Effective July 1, 2022.

 

UTAH

Utah Governor Spencer Cox signed House Bill 186 raising the registration and renewal fees for plug-in hybrid vehicles and hybrid electric vehicles, as well as establishing the road usage rate and charge cap for the next several years. Effective January 1, 2023.

Senate Bill 183 was enacted on March 24, 2022. The new law creates the Commercial Financing Registration and Disclosure Act requiring certain financing entities register with the Department of Financial Institutions if they are providing accounts receivable purchase transactions, commercial loans, or commercial open-end credit. It also requires those entities to provide certain disclosures with their commercial financing products. Effective May 4, 2022.

 

WASHINGTON

House Bill 1736 creates the Washington Student Loan Program. Administered by the Washington Student Achievement Council, the program is required to consult with the Office of the State Treasurer and the State Investment Board on design and implementation. Effective June 9, 2022.

 

WEST VIRGINIA

Signed into law on March 12, 2022, by Governor Jim Justice, House Bill 4560 is mostly concerned with regulating interactions between motor vehicle dealers, distributors, wholesalers, and motor vehicle manufacturers. Among other provisions, the bill clarifies how distance is determined between dealerships, how manufacturers and distributors use dealership property, and how manufacturer performance standards are set. Effective June 10, 2022.

House Bill 4567 eliminates the municipal business and occupation or privilege tax for motor vehicle dealers over a three-year period by decreasing the tax on new automobiles that have never been registered. At the end of that three-year period the municipal business and occupation or privilege tax will be eliminated for new vehicles. Effective June 9, 2022.

 

WYOMING

On March 15, 2022, House Bill 64 was signed into effect. The bill defines theft protection programs, theft protection program warranties, and specifies that they are not insurance. Additionally, the bill amends the scope of service contracts to include repair or maintenance due to road hazards and the replacement of a vehicle key or key fob. Effective July 1, 2022.