Compliance Alerts

October 2021


Effective State Changes



Signed into law on October 4, 2021, Assembly Bill 1221 specifies that a service contract may be offered on a month-to-month or other periodic basis and continue until canceled by the buyer The bill also gives service contractors numerous provisions regarding a conspicuous notice and ways to cancel the service contract. Vehicle service contracts are exempted from various provisions. Effective January 1, 2022.

On October 6, 2021, Governor Gavin Newsome signed Assembly Bill 424 into law enacting the Private Student Loan Collections Reform Act. The act would prohibit a private education lender or a private education loan collector from attempting to collect a private education loan unless certain information is provided to the debtor. Additionally, the Private Student Loan Collections Reform Act would require all settlement agreements between a private education lender or loan collector and a debtor to be documented in open court or memorialized in writing. Effective July 1, 2022.



Signed by the Governor on October 28, 2021, Senate Bill 425 makes changes to the current statutes governing Guaranteed Asset Protection Waivers. The new language specifies that a GAP waiver may be with or without a separate charge. The language also states that the cost of a GAP waiver shall be considered an authorized charged that may be financed and shall not be considered part of the finance charge or interest. The Act adds a new Article 48 concerning Vehicle Value Protection Agreements and specifies requirements for offering such an agreement, as well as disclosure requirements. Effective January 1, 2022.


Effective Federal Changes     



Specific dollar threshold adjustments were announced through the Consumer Protection Financial Bureau. The CPFB 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 Equity Protection Act (“HOEPA”), among others, were announced and become effective January 1, 2022.


HOEPA Annual Threshold Adjustments:

  • The adjusted total amount of the loan threshold will be $22,969, up from $22,052
  • The adjusted points and fees trigger will be $1,148, up from $1,103


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 $14,356
  • $1,148 for loans greater than or equal to $14,356 but less than $22,969
  • 5% of total loan amount for loans greater than or equal to $22,969 but less than $68,908
  • $3,445 for loans greater than or equal to $68,908 but less than $114,847
  • 3% of total loan amount for loans greater than or equal to $114,847