Compliance Alerts

December 2020 & JANUARY 2021

 

2020 Year in Review

 

Review of State Changes Effective in 2020

 

CALIFORNIA      

AB 539 limits a loan with a principal between $2,500 to $10,000 to receive charge at a rate not exceeding 36% plus the Federal Funds Rate. Effective January 1, 2020.

California’s governor signed a series of amendments to the California Consumer Privacy Act on October 11, 2019. Effective January 1, 2020.

On June 8, 2019, California published the fee adjustments to the Vehicle Code under 13 CA ADC § 423.00. Effective January 1, 2020.

 

GEORGIA 

SB 462 changes the Georgia Industrial Loan Act to the Georgia Installment Loan Act. Effective July 1, 2020.

The Georgia Department of Banking and Finance adopted Rules relating to installment lending on August 19, 2020. Effective September 8, 2020.

 

HAWAII

SB 409 establishes an annual registration surcharge of $50.00 for electric and alternative fuel vehicles. Effective January 1, 2020.

 

ILLINOIS

The State of Illinois has adjusted its document preparation fee for the year 2020 to $300.00. Effective January 1, 2020.

The Payday Loan Reform Act allows an Illinois lender to charge a $3 fee for verifying a borrower’s information. Effective July 1, 2020.

SB 1624 made changes to the Personal Information Protection Act by putting in place new reporting requirements. Effective January 1, 2020.

Illinois P. A. 101-0031 provides that for sales and purchases of motor vehicles, the “selling price” includes the value of or credit given for a traded-in first division motor vehicle up to $10,000. Effective January 1, 2020.

 

INDIANA 

Senate Act 395 revises the maximum charges allowed under the Indiana Code for both retail sales and consumer loans. Effective July 1, 2020.

 

MARYLAND

SB 192 increases the processing fee dealers may charge to $500. Effective July 1, 2020.

 

MASSACHUSETTS

Massachusetts Bulletin 2019-09 updates Credit Life and Credit A&H rates for motor vehicles. Effective from January 1, 2020 – December 31, 2022.

 

MICHIGAN

HB 4411 amends statutes regulating credit services organizations. Effective January 28, 2020.

 

MINNESOTA 

The Minnesota Commerce Department published their periodic adjustment in dollar brackets effective July 1, 2020 through June 30, 2022.

Minnesota raised the motor vehicle document preparation fee from $100 to $125. Effective July 1, 2020.

 

MISSOURI

SB 599 allows traditional installment loan lenders to charge a convenience fee for payments made by a debit/credit card. Effective August 28, 2020.

 

NEBRASKA

Initiative 428 limits payday lenders to charge a 36% APR. Effective December 8, 2020.

 

NEW JERSEY

AB 2669 expands coverage of Service Contracts to leased motor vehicle for excess wear and use protection. Effective September 14, 2020.

SB 2998 requires consumer lenders providing credit agreements with lender-placed insurance to disclose these policies. Effective April 12, 2020.

 

NEW MEXICO

Office of Superintendent of Insurance published Bulletin 2019-018 regarding the acceptable Credit Life and Credit A&H premium rates. Effective April 1, 2020.

 

NEW YORK

The SHIELD Act amends New York’s current data breach notification law. Effective March 21, 2020.

SB 3631 increased the number of covered items under service contracts. Effective December 23, 2019.

 

OHIO

The Ohio Department of Insurance issued a memorandum revising prima facie Credit Insurance rates effective January 1, 2020.

 

OKLAHOMA

SB 720 created the Oklahoma Small Lenders Act. The bill created a new license for “small lenders,” beginning on January 1, 2020.

The Department of Consumer Credit published the changes in dollar brackets for Retail Installment Sales and Consumer Loans. Effective July 1, 2020.

SB 1682 preempts any local government ordinances for businesses regulated by the Department of Consumer Credit. Effective November 1, 2020.

 

RHODE ISLAND

HB 5674 defines service contracts and clarifies that service contracts are not insurance and not subject to the insurance code. Effective January 1, 2020.

The maximum Documentary Preparation Fee for motor vehicle dealers increased from $200 to $400. Effective January 19, 2020.

 

SOUTH DAKOTA 

SB 14 defined which data must be included with the registration and plates for motorcycles, snowmobiles, passenger vehicles, and trailers. Effective July 1, 2020.

 

SOUTH CAROLINA

The South Carolina Dept. of Insurance published orders 2019-04, 2019-05, and 2019-06 confirming Prima Facie Credit A&H and Property rates. Effective January 1, 2020.

HB 4244 defines service contracts and warranties. Effective May 7, 2020.

The Department of Consumer Affairs released its biannual dollar adjustments for consumer credit sales, consumer leases, and consumer loans. Effective July 1, 2020.

 

TEXAS

Texas published the dollar amount brackets and ceilings adjustments for Retail Installment Sales and Consumer Loans. Effective July 1, 2020.

 

VERMONT

HB 942 provides increased incentives for Vermont residents to purchase battery or plug-in electric vehicles. Effective July 1, 2020.

 

WASHINGTON

SB 6187 modifies data breach notification requirements for state and local agencies by adding to the definition of “personal information.” Effective June 11, 2020.

 

WEST VIRGINIA

HB 4149 more clearly defines motor vehicle warranties, service agreements, and maintenance agreements. Effective June 5, 2020.

HB 4621 enacted a Fintech Regulatory Sandbox program. Effective June 5, 2020.

 

WISCONSIN

SB 162 bill waived the title transfer fee for transfer of a title made to a surviving spouse or domestic partner. Effective March 3, 2020.

 

WYOMING

HB 57 created a Financial Technology Sandbox. Effective January 1, 2020.

 

 

Review of State Changes Effective in 2021 & Beyond

 

 

CALIFORNIA 

AB 85 requires used vehicle dealers to collect and remit to the Department of Motor Vehicles applicable sales tax. January 1, 2021.

AB 713 excludes from the CCPA deidentified information pursuant to a federal law, medical or other protected information. Effective January 1, 2021.

AB 1864 renamed the “Department of Business Oversight” the “Department of Financial Protection and Innovation” and enacted the California Consumer Financial Protection Law. Effective January 1, 2021.

AB 2196 extended the sunset date for the Pilot Program for Increased Access to Responsible Small Dollar Loans. Effective through January 1, 2028.

AB 3254 requires translation of contracts for persons engaged in a trade or business who negotiate primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean. Effective January 1, 2021.

SB 908 enacted the Debt Collection Act (“DCLA”). Effective January 1, 2022.

Californian’s voted to affirm Proposition 24 regarding expanded consumer privacy protections. Effective January 1, 2023.

 

GEORGIA 

HB 1039 provides for new written or electronic notifications to consumers who enter service contracts. Effective January 1, 2021.

 

ILLINOIS

The State of Illinois increased its document preparation fee to $303.60. Effective January 1, 2021.

 

INDIANA 

Indiana published dollar adjustments under the consumer credit code for sales, supervised loans, and small loans. Effective January 1, 2021 – December 31, 2023.

 

IOWA 

Iowa released new regulations increasing the special annual registration fees for electric vehicles. Effective January 1, 2021 and January 1, 2022.

 

MINNESOTA

HB 4556 modifies the motor vehicle registration tax, so that the formula is based on the MSRP. Effective January 1, 2021.

 

NEW MEXICO

SB 151 allows an electronic signature for the application of a vehicle’s registration and certificate of title. Effective January 1, 2021.

 

SOUTH CAROLINA

Orders 2020-03, 2020-04, and 2020-05 confirmed Prima Facie Credit A&H and Credit Property rates for 2021. Effective January 1, 2021 – December 31, 2021.

 

UTAH

HB 37 defines “Vehicle Service Contracts” for the repair or maintenance of a motor vehicle. Disclosure requirements are effective January 1, 2021. 

 

VIRGINIA 

HB 789 sets a maximum interest rate of 36% for Installment Loans (loans $300-$35,000), Open-End Credit Plans, Short Term Lenders (loans up to $2,500), and Motor Vehicle Title Loans. Effective January 1, 2021.

SB 77 requires the licensing of education loan servicers. Effective July 1, 2021.

 

WISCONSIN

Revised Prima Facie Credit Life and Credit Accident and Sickness Insurance rates were released on October 15, 2020.  Effective January 1, 2021 – December 31, 2024.

 

 

Review of Federal Changes Effective in 2020

 

 

CONSUMER FINANCIAL PROTECTION BUREAU

On February 26, 2020, the CFPB published a new Truth in Lending Act– Real Estate Settlement Procedures Act Integrated Disclosures FAQs.

The CFPB established a Pilot Advisory Opinion Program in response to commentary encouraging the Bureau to offer guidance in cases of regulatory uncertainty.

The CFPB released its final “Payday, Vehicle Title, and Certain High-Cost Installment Loans” rule on July 7, 2020.

 

DEPARTMENT OF DEFENSE

The Department of Defense amended the controversial Question #2 in its interpretation of the Military Lending Act. Effective February 28, 2020.

 

OFFICE OF THE COMPTROLLER OF THE CURRENCY

The OCC issued a final rule to determine when a national bank or Federal savings association considered the “true lender.” Effective 60 days after publication.

 

 

Review of Federal Changes Effective in 2021

 

 

CONSUMER FINANCIAL PROTECTION BUREAU

Dollar threshold adjustments were announced for the Ability to Repay/ Qualified Mortgage Rule, and Home Ownership Equity Protection Act. Effective January 1, 2021.

On October 30, 2020, the CFPB released the Final Rule for Debt Collection Practices—Regulation F. Effective November 30, 2021.

The CFPB published its annual TILA threshold adjustment, as required by the Dodd-Frank. Effective January 1, 2021.