Compliance Alerts

May 2022

 

Effective State Changes

 

COLORADO

On May 11, 2022, the Colorado Department of Regulatory Agencies, Division of Insurance amended credit insurance regulation 3 CCR 702 Reg. 4-9-2. The amendments renamed the regulation “Credit Insurance for Life, Accident and Health, and Property and Casualty”, altered refund policies, updated the filing requirements for rate submissions, and contains a new Appendix A that is a Summary of Component-Based Rates, among other provisions. The prima facie life and A&H rates do not apply to credit union accounts. Among the rate adjustments are:

Single Premium Gross Life Only rates:

  • Single Decreasing Life (SDL)                            $.49/$100/yr     
  • Single Level Life (SLL)                                        $.90/$100/yr
  • Joint Decreasing Life (JDL)                               $.809/$100/yr (165% of single rate)
  • Joint Level Life (JLL)                                          $1.485/$100/yr (165% of single rate)

Single Premium Net Payoff and MOB Life coverage Rates:

  • Single Life                                                             $.75/$1000/mo                
  • Joint Life                                                               $1.238/$1000/mo (165% of single rate)

Single Premium IUI Rates:   30 Retro 9 Month Benefit

  • Without Family Leave                                        $4.62/$100/yr

Effective July 15, 2022.

 

GEORGIA

House Bill 733 was signed into law on May 6, 2022. Among many provisions, the new bill changes the definition of property insurance and guaranteed asset protection waivers to provide for compensation or a reduction in financing charges in the event of an accident, total loss, or stolen motor vehicle. Effective July 1, 2022, in part, and January 1, 2023.

 

HAWAII

House Bill 153 was adopted on April 7, 2022, and urges Hawaii’s counties to allow for vehicle registration taxes and fees to be paid on a pro-rated semi-annual basis. Effective immediately.

 

NEBRASKA

On April 18, 2022, Governor Pete Ricketts signed Legislative Bill 750 into effect. The bill makes technical corrections, revises numerous provisions related to enforcement dates, and gives the Director of the Nebraska DMV the ability to register apportioned vehicles for monthly, quarterly, or yearly renewal periods. Effective immediately.

 

NEW YORK

Governor Kathy Hochul signed Senate Bill 4894 on May 5, 2022. The bill amends the law in New York regarding mail-loan checks to include any transaction fees and interest rates on the check, prohibits lending institutions from issuing these checks unless requested, and provides that failure to destroy or return a mail-loan check is not an acceptance of its terms. Effective September 2, 2022.

 

OKLAHOMA

The Department of Consumer Credit published the changes in dollar amounts which will become effective July 1, 2022. Included in the adjustments are the following:

Retail Installment Sales, §2-201:

The greater of: 

  • 30% of the amount financed up to $1,740; plus
  • 21% of the excess to $5,800; plus
  • 15% of the remainder to $61,000.

      OR 

  • 21% Simple Interest

The dollar amounts under §3-508A remain the same, except for the new loan closing fee permitted under §3-508A(4). The allowed closing fee changes from $28.85 originally specified under SB 796 and increases the allowable charge to $167.33.

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

Loan Amount

Acquisition Charge

Handling Charge

Up to $173.94

 

$5.80 per $29.00 of principal

 

$173.94-$203.00

1/10 of the amount of principal

$17.40 per month

 

$203.01-$406.00

1/10 of the amount of principal

$20.30 per month

 

$406.01-$580.00

1/10 of the amount of principal

$23.20 per month

 

$580.01-$870.00

1/10 of the amount of principal

$26.10 per month

 

$870.01-$1,160.00

1/10 of the amount of principal

$29.00 per month

 

$1,160.01-$1,450.00

1/10 of the amount of principal

$31.90 per month

 

$1,450.01-$1,740.00

1/10 of the amount of principal

$34.80 per month

 

The maximum delinquency charge for consumer credit sales and consumer loans will increase from $27.00 to $29.00. Effective July 1, 2021.

 

Senate Bill 1276 directs the Oklahoma Tax Commission to create a program to allow electronic filing, storage, and delivery of boat and vehicle certificates of title. The program will also allow lienholders to perfect, assign, and release a lien on a boat or vehicle in lieu of submission and maintenance of paper documents. Effective July 1, 2022.

 

Senate Bill 1687 specifically addresses 3-508B dollar bracket adjustments under the Uniform Consumer Credit Code and ties the Consumer Price Index to the December 2021 Index. The bill changes the upper threshold for Section 3-508B loans to $3,000. The bill also adds three new tiers for loans greater than $1,620 (the highest tier in effect as of November 1, 2021). We note that SB 1687 appears to use the dollar amounts in effect as of November 1, 2021, but doesn’t adjust for the dollar amounts effective as of July 1, 2022. The dollar amount adjustment effective July 1, 2022, as put forth by the Department of Consumer Credit, does not include the bottom three tiers. The dollar amounts, as stated in SB 1687 are:

Loan Amount

Acquisition Charge

Handling Charge

Up to $161.95

 

$5.40 per $27.00 of principal

$161.95-$189.00

1/10 of the amount of principal

$16.20 per month

$189.01-$378.00

1/10 of the amount of principal

$18.90 per month

$378.01-$540.00

1/10 of the amount of principal

$21.60 per month

$540.01-$810.00

1/10 of the amount of principal

$24.30 per month

$810.01-$1,080.00

1/10 of the amount of principal

$27.00 per month

$1,080.01-$1,350.00

1/10 of the amount of principal

$29.70 per month

$1,350.01-$1,620.00

1/10 of the amount of principal

$32.40 per month

$1,620.01-$2,000.00

1/10 of the amount of principal

$40.00 per month

$2,000.01-$2,500.00

1/10 of the amount of principal

$50.00 per month

$2,500.01-$3,000.00

1/10 of the amount of principal

$60.00 per month

 Effective November 1, 2022.

 

Senate Bill 1743 amends current law to allow financial protection products for motor vehicles to be offered, sold, or given to consumers. Furthermore, the bill defines these products as an agreement not to be considered insurance and directs the Insurance Commissioner to draft new rules to enforce of the act. Effective November 1, 2022.

 

TEXAS

Released in January 2022, 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 $2,400 plus,

$  8 per $100 per annum of the excess to $20,000

OR

(Simple Melded Rates)

30% per annum of the cash advance to $4,000 plus,

24% of the excess to $8,400 plus,

18% of the remainder to $20,000

 

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

$12 per $100 per annum of the principal balance to $4,000 plus,

$10 per $100 per annum of the excess to $8,000 plus,

$  8 per $100 per annum of the remainder.

Effective July 1, 2022.

 

VIRGINIA

House Bill 259 and Senate Bill 216 are identical bills that were passed following Governor Youngkin’s recommendations. This law alters the current law for motor vehicle franchisees which only provides compensation from manufacturers and distributors for recall and warranty parts and service. Now, those franchisees will receive compensation from maintenance parts and service and body-shop repairs. Effective July 1, 2022.