September 2024

Effective State Changes

CALIFORNIA

On August 19, 2024, SB 1521 was signed into law regarding allowable fees for commercial financing. This bill allows a fee for monitoring a small business’s collateral if the commercial financing transaction is an asset-based loan or factoring, or the fee is expressed as a dollar amount or percentage and deemed a finance charge. Effective January 1, 2025.

DELAWARE

Senate Bill 278 was replaced by Senate Substitute No. 2 for Senate Bill 278. This bill creates new protections for motor vehicle franchise dealers in the state of Delaware. Amongst other provisions, the Substitute Bill clarifies the definitions of “motor vehicle” and “new motor vehicle” to reflect changes in the motor vehicle industry. The bill requires fair compensation to vehicle dealers performing warranty work, maintenance program-work, and recall work. The bill also allows manufacturers to directly sell options and add-ons that are activated or installed through remote electronic transmission to consumers, as long as dealers are allowed the same opportunity. Finally, the bill grants statutory standing to a large association of dealers to bring legal actions. Effective immediately.

NEW YORK

On September 4, 2024, Governor Hochul signed AB 4066 into law. This bill establishes that vehicle manufacturers must pay reasonable compensation to franchise dealers for warranty work, extended warranty work, factory compensated repairs, or recalls. Reasonable compensation is defined as the reasonable labor time allowance utilized for non-warranty customer-paid labor. Effective immediately.

TEXAS

The Texas Office of Consumer Credit Commissioner updated the maximum documentary fees in a retail installment transaction for the purchase of a motorcycle, moped, all-terrain vehicle, boat, boat motor, boat trailer, or towable recreational vehicle. For a retail installment contract for the purchase of one or more of these “covered land vehicles,” the reasonable maximum amount of the documentary fee is $200 (up from $125). For a retail installment contract for the purchase of one or more covered watercraft, the reasonable maximum amount of the documentary fee is $200 (up from $125). For a retail installment contract for the purchase of one or more covered land vehicles and one or more covered watercraft, the reasonable maximum amount of the documentary fee is $250 (up from $175). Effective September 5, 2024.