October 2023

 

Effective State Changes

 

CALIFORNIA

Signed into law by Governor Gavin Newsom on October 7, 2023, AB 473 follows trends seen across the country establishing new motor vehicle dealer protections. The bill would require fair and reasonable compensation from manufacturers to motor vehicle dealers for warranty work or service repair. Additionally, it would prohibit manufacturers from conditioning dealer access to vehicles or incentive programs upon the sale of service contracts, debt cancellation agreements, or similar products, amongst other items. Effective January 1, 2024.

AB 1756 was enacted on October 8, 2023. The bill addresses many different items but has a significant section on the refunding of GAP waiver products. If the GAP waiver is terminated, the law requires the agent selling the waiver product to utilize a formula for properly calculating a refund on a pro-rata basis. Effective January 1, 2024.

On October 7, 2023, SB 33 was enacted. It eliminates the sunset provision applying to commercial financing disclosures which requires the cost of credit be expressed as an annualized rate. Effective January 1, 2024.

SB 296 requires vehicle manufacturers and vehicle dealers to disclose the existence of in-vehicle cameras to a consumer prior to purchase or lease. It also limits the use of any information or video obtained through these cameras for use by the manufacturer, dealer, or any third party. Effective January 1, 2024.

Approved by the Governor on October 10, 2023, SB 362 amends the data broker registry law. Among other items, it requires data brokers to disclose certain metrics and information on consumer data deletion requests the broker has received in the course of its business. It requires the California Privacy Protection Agency to establish an accessible mechanism for consumers to request deletion of their personal information by any or all data brokers. It also establishes requirements for data brokers around processing consumer deletion requests, and civil penalties and state-imposed fines for any violation. Effective January 1, 2024.

On October 7, 2023, SB 478 was enacted by the Governor. This bill will affect vehicle dealers in the State of California. It declares that advertising or displaying the price of a vehicle without listing all mandatory fees or charges to be unfair and deceptive. The bill also clarifies that a dealer is not in violation of this “deceptive practices” law when they exclude certain allowable fees, including taxes, registration fees, tire fees, and dealer document fees. Effective January 1, 2024.

SB 666 was signed into law by the Governor on October 13, 2023. This new law prohibits specific fees from being charged by lenders and finance brokers in a commercial financing transaction involving a small business. Effective January 1, 2024.

 

INDIANA

On June 30, 2023, the Consumer Credit Division of the Department of Financial Institutions released Advisory Letter 2023-01 regarding the fees associated with the newly implemented electronic lien system. Creditors using the new e-lien system must use BMV-approved third-party service providers. The implementing statutes do not limit how much the service providers may charge the creditor but allow that fee, along with a $3.00 fee, to be passed on to borrowers. The Department’s position is that these fees should be regarded as prepaid finance charges. Effective July 1, 2023.

 

NORTH CAROLINA

On October 3, 2023, SB 452 became law without the Governor’s signature. This new bill will allow a convenience fee to be charged by insurers for accepting premium payments via credit or debit card, not to exceed four percent of the payment. Effective October 1, 2023.

 

SOUTH CAROLINA

On October 16, 2023, the South Carolina Department of Insurance adopted Orders 2023-02, 2023-03, and 2023-04 confirming Prima Facie Credit A&H and Credit Property insurance rates for 2024.

Under 2023-03, the Credit A&H rates for insurance sold in conjunction with consumer credit transactions in 2024 will decrease from the rates in 2023. The 12-month rate per $100 of Initial Insured Indebtedness will be as follows:

• 14-day Retro: $1.24
• 30-day Retro: $1.17

Under Order 2023-02, the 3-day retroactive A&H rate for insurance sold in conjunction with loans will decrease to $0.23 per $5.00 of monthly indemnity.

Under Order 2023-04, credit property rates have decreased for Automobile Fire and Theft, Automobile Collision, and Household Goods – Dual Interest. The rate for Household Goods – Single Interest remains the same. Effective January 1, 2024.

 

WISCONSIN

The Wisconsin Office of the Commissioner of Insurance released the Revised Prima Facie Credit Life and Credit Accident and Sickness Insurance rates on September 28, 2023.

Prima Facie Credit Life Insurance Premium Rates Per $100 Per Annum
Single Premium Decreasing Life:	$0.43
Joint Premium Decreasing Life:	$0.72
Single Premium Level Life:	$0.80
Joint Premium Level Life:	$1.34

 

Prima Facie Credit Life Insurance Premium Rates Per $1,000 Per Month
Single Premium MOB Life:	$0.662
Joint Premium MOB Life:	$1.106

 

Prima Facie Credit Accident and Sickness Premium Rates Per $100 Per Annum
14 Retro:	$0.79
14 Elim:	$0.45
30 Retro:	$1.44
30 Elim:	$1.05

 

Effective January 1, 2024 – December 31, 2026.

 

Reminders

 

OKLAHOMA

As reported in Carleton's May 2023 Compliance Alert, Oklahoma Senate Bill 794 added the federal funds rate to the maximum allowed charge for loans. The change affects Supervised Loans under §3-508A of the Oklahoma Code. Effective November 1, 2023.