August 2024

 

Effective State Changes

 

ALASKA

Signed into law on August 1, 2024, HB 233 makes changes to the auto warranty statute by adding time allowances to the schedule of compensation for warranty work. Auto manufacturers will now have to compensate dealers for warranty work using rates and time allowances that are closer to actual costs for dealership mechanics. Effective October 27, 2024.

 

CALIFORNIA

Assembly Bill 3286 was signed on July 15, 2024. This bill clarifies the process for CPI adjustments for the California Consumer Privacy Act (“CCPA”). The five thresholds and penalties subject to CPI adjustments every 2 years are: the revenue threshold for businesses covered by the CCPA, damages pursuant to a civil action in the event of a negligent data breach, administrative enforcement fines, civil penalties, and the Privacy Protection Agency Board members’ per diem. Effective July 15, 2024.

 

ILLINOIS

House Bill 4447 was signed into law on August 9, 2024. The bill creates the Motor Vehicle Dealer Protection Act, which makes it illegal to use the name, image, registered trademark, or intellectual property belonging to a vehicle dealer without permission. Effective January 1, 2025.

Senate Bill 86 amends the Know Before You Owe Private Education Loan Act and the Student Loan Servicing Rights Act to include new disclosures lenders must provide to cosigners. Effective August 2, 2024.

Senate Bill 3550 was signed into law by Governor Pritzker on August 9, 2024. The bill amends the Financial Institutions Code by broadening the definition of “financial institutions” and restructures oversight responsibilities between the Division of Financial Institutions and the Department of Financial and Professional Regulation. Additionally, the new law amends the Consumer Installment Loan Act and the Payday Loan Reform Act to allow for fines against entities not registered with the State. Effective August 9, 2024.

 

MICHIGAN

House Bill 5460 amends the Motor Vehicles Sales Finance Act to allow a retail installment sales contract for a new vehicle to provide for a series of monthly payments in unequal payment amounts if the amount of any payment does not increase more than 40% from the first scheduled payment. Also, each scheduled payment cannot exceed the buyer's maximum payment threshold. Effective July 23, 2024.

 

NEW HAMPSHIRE

House Bill 1243 was signed into law on August 2, 2024, repealing and replacing the Retail Installment Sales of Motor Vehicles Chapter (“RISMV”). The new RISMV makes significant changes to existing law that affects motor vehicle financing, vehicle leases, direct loans, the licensing of servicers, and disclosure requirements for loans and retail installment sales. The bill changes and adds the definitions of many terms, including: retail installment contract, retail installment transaction, lender, direct loan and indirect loan. HB 1243 also makes changes to disclosure requirements and servicing practices. Since the signing of the law, the New Hampshire Banking Department issued FAQs related to these changes and their enforcement. The Department has also instructed dealers to contact them if they believe they will be out of compliance. Effective July 1, 2024, in part, and September 1, 2024.

 

OHIO

Amongst other items, Senate Bill 94 establishes processes for releasing electronic liens once a security interest is discharged. The bill also creates a new procedure for adjusting the documentary service charge allowed with the sale or lease of a motor vehicle. Effective October 24, 2024.

 

TEXAS

The Texas Office of Consumer Credit Commissioner’s released updates to the Texas Finance Code. For Small Loans—Subchapter F Loans—lenders can charge an Acquisition Charge of 12.5% (previously 10%) of the Amount Financed up to a maximum of $125 (previously $100). 7 Tex. Admin. Code § 83.605(a). For Large Loans—Subchapter E Loans—a lender can charge an Administrative Fee that does not exceed $125 (previously $100). 7 Tex. Admin. Code § 83.503(1). These fees are to be updated annually starting July 1, 2025. Effective July 11, 2024