May 2023

 

Effective State Changes

 

ARKANSAS

HB 1579 was signed by Governor Sarah Huckabee Sanders on April 10. This new law amends provisions of the Motor Vehicle Commission Act and requires manufacturers, distributors, or wholesalers to fairly compensate dealers for any repair work initiated remotely. Additionally, these providers must now ensure that vehicles are fairly distributed to dealers and provide consumer disclosures for all accessories and functions that may be maintained remotely and the charge to the consumer for such maintenance. Effective July 30, 2023.

 

COLORADO

On May 11, 2023, HB 1272 was signed into law by Governor Jared Polis. This bill extends the innovative motor vehicle tax credit for electric and hybrid vehicles to 2028 and extends the same credit for certain trucks until 2032. Effective immediately.

 

GEORGIA

Signed into law on May 3, 2023, HB 222 makes it clear that service contracts are not considered insurance in the state of Georgia. Effective immediately.

SB 90 now requires certain commercial financing disclosures be provided to businesses—including motor vehicle dealers—for certain commercial loans and other extensions of credit. Effective January 1, 2024.

 

IOWA

HF 592 was signed into law on April 28, 2023. This bill revises the provisions surrounding a remote vehicle sale by motor vehicle dealers and how they handle when a security interest is discharged on a vehicle. Effective July 1, 2023.

 

INDIANA

HB 1050 further defines alternative fuel and provides for its taxation for certain motor vehicle carriers, among other provisions. Effective in part on July 1, 2023, and in part on January 1, 2024.

Following a nationwide trend, HB 1236 enacts new protections for motor vehicle dealers in the state of Indiana. Among other protections, the bill establishes the amount a manufacturer must compensate a dealer for a part, prohibits manufacturers from requiring dealers to use certain services or providers, and defines and prohibits certain unfair practices manufacturers can engage in with franchise dealers. Effective in part on May 1, 2023, and in part on July 1, 2023.

SB 5 implements new consumer rights regarding personal data and responsibilities for protecting such data for businesses operating in the state of Indiana. Effective January 1, 2026.

 

KANSAS

HB 2147 establishes a process for abandoned or towed vehicles to be sold to the public and issued a title. Effective July 1, 2023.

SB 44 creates the Kansas Financial Institutions Information Security Act. Among other items, this bill requires financial institutions to develop and implement a cybersecurity system to protect consumers' personal information. Effective July 1, 2023.

 

MARYLAND

HB 913 revises the laws surrounding student loan financing companies and requires them to register with the Commissioner of Financial Regulation. Effective October 1, 2023.

 

MONTANA

HB 60 creates an additional annual registration fee for electric and hybrid vehicles. Effective July 1, 2023.

On May 2, 2023, Governor Greg Gianforte signed SB 411 into law. The bill establishes new responsibilities for motor vehicle dealers as to their storage and sharing of electronic data and generally revises the licensing and rights of franchise dealers in the state of Montana. Effective immediately.

 

OKLAHOMA

HB 1443 implements new disclosures in the Oklahoma Student Borrower's Bill of Rights for student loan borrowers regarding loan forgiveness programs. Effective November 1, 2023.

HB 1543 amends the Oklahoma UCCC provisions. Specifically, the §3-508B loans will now be tied to the Reference Base Index of December 2020—not December 2021—for the Consumer Price Index published by the Bureau of Labor Statistics. These will affect the finance charge thresholds for loans carrying principals of $3,000 ($3,450 effective July 1) or less. The measure also eliminates the 3% cap on adjustments and continues to allow adjustments in increments of 1%. Finally, the bill eliminates the Consumer Credit Advisory Committee. Effective April 28, 2023.

Signed on April 19, 2023, SB 593 prohibits a vehicle manufacturer from denying a vehicle dealer's claim or implementing a chargeback against a dealer if a consumer does not adequately comply with state title and registration laws. Effective November 1, 2023.

SB 794 was signed by Governor Kevin Stitt on April 24, 2023. This bill adds the federal funds rate to the amount a loan can be financed for on all §3-508A loans. Specifically, the maximum finance charge allowed will be the greater of:

• 32%, plus the federal funds rate, on the part of the balance which is $7,000 or less;
• 23%, plus the federal funds rate, on the part of the balance more than $7,000 up to and including $11,000;
• 20%, plus the federal funds rate, on the part of the balance more than $11,000;

OR

• 25%, plus the federal funds rate, on the balance of the principal.

Effective November 1, 2023.

The Department of Consumer Credit published the changes in dollar amounts which will become effective July 1, 2023. Included in the adjustments are the following:

Retail Installment Sales, §2-201:

The greater of:  30% of the amount financed up to $1,860; plus

21% of the excess to $6,200; plus

15% of the remainder to $66,400.

OR  21% Simple Interest

The dollar amounts under §3-508(A) remain the same. The allowable closing fee increases to $178.87. (Pursuant to SB 794, the federal funds rate will be added to these applicable rates beginning on November 1, 2023.)

 

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

Loan Amount	Acquisition Charge	Handling Charge
Up to $186.24		$6.21 per $31.05 of principal
$186.24-$217.35	1/10 of the amount of principal	$18.63 per month
$217.36-$434.70	1/10 of the amount of principal	$21.74 per month
$434.71-$621.00	1/10 of the amount of principal	$24.84 per month
$621.01-$931.50	1/10 of the amount of principal	$27.95 per month
$931.51-$1,242.00	1/10 of the amount of principal	$31.05 per month
$1,242.01-$1,552.50	1/10 of the amount of principal	$34.16 per month
$1,552.51-$1,863.00	1/10 of the amount of principal	$37.26 per month
$1,863.01-$2,300.00	1/10 of the amount of principal	$46.00 per month
$2,300.01-$2,875.00	1/10 of the amount of principal	$57.50 per month
$2,875.01-$3,450.00	1/10 of the amount of principal	$69.00 per month

 

The maximum delinquency charge for consumer credit sales and consumer loans will increase from $29.00 to $31.00. Effective July 1, 2023.

 

TENNESSEE

SB 130 requires a financing company to provide a prominent display of their telephone number in all communications with a consumer. Effective July 1, 2023.

 

TEXAS

SB 505 creates a new additional registration fee for electric vehicles in the state of Texas. The additional fee is $400 for new vehicles registering for a two-year period. Effective September 1, 2023.

 

WASHINGTON

HB 1823 revises the Washington Student Loan Program as it applies to graduate students. Effective July 23, 2023.

SB 5282 allows motor vehicle dealers to file a report on behalf of a consumer with the state of Washington upon sale of a vehicle. Effective July 23, 2023.