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Regular Session, 2010
HOUSE BILL NO. 591
BY REPRESENTATIVE ARNOLD
MOTOR VEHICLES: Provides relative to the Motor Vehicle Sales Finance Act
AN ACT1
To enact R.S. 6:969.24.1 and 969.24.2, relative to the Motor Vehicle Sales Finance Act; to2
prohibit any act that lessens or eliminates competition; to provide for exceptions; to3
prohibit a lender in a motor vehicle retail purchase from requiring a dealer to sell any4
insurance coverage, service, or product in order to secure preferential financing rates;5
and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 6:969.24.1 and 969.24.2 are hereby enacted to read as follows: 8
§969.24.1. Acts to lessen or eliminate competition prohibited9
A. Any person or entity licensed under this Title shall be prohibited from10
making statements, threats, promises, acts, contracts, or offers of contracts that the11
intended or actual effect of which is to coerce or attempt to coerce any retail motor12
vehicle dealer to sell or offer to sell any extended service contract, extended13
maintenance plan, or GAP product offered by a particular entity, including but not14
limited to any manufacturer or distributor of motor vehicles or affiliates thereof, as15
defined in R.S. 32:1252, by setting limits for the amount financed in regard to the16
financing of premium or other charges for any insurance coverage, product, or17
service financed on the retail installment contract, when the discrimination in the18
amount financed limits is based, in whole or in part, upon whether or not the product,19
insurance, or service is provided by the licensee or an affiliate or to the extent any20 HLS 10RS-1419 ENGROSSED
HB NO. 591
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such statements, threats, promises, acts, contracts, or offers of contracts shall lessen1
or eliminate competition to sell the aforementioned products.2
B. Nothing contained in this Section shall prohibit a person or entity licensed3
under this Title from offering or providing incentive benefits or bonus programs to4
a retail motor vehicle dealer or prospective retail motor vehicle dealer who makes5
the voluntary decision to sell or offer to sell any extended service contract or6
extended maintenance plan offered, sold, backed, or sponsored by the manufacturer7
or distributor or to sell, assign, or transfer any retail installment sale or lease by him8
of motor vehicles manufactured or sold by the manufacturer or distributor to a9
specified finance company or leasing company.10
§969.24.2. Mandatory sales prohibited11
It shall be a violation of this Chapter for any entity or person licensed under12
this Chapter to require a retail motor vehicle dealer to sell any insurance coverage,13
product, or service, which is provided, administered, or sold by a licensee or an14
affiliate, in order to secure preferential financing rates for the dealership or its15
customers.16
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Arnold HB No. 591
Abstract: Prohibits any act that lessens or eliminates competition among motor vehicle
dealers or other providers of motor vehicle related products. Prohibits any entity or
person licensed as a lender of consumer credit in a motor vehicle retail purchase
from requiring a retail motor vehicle dealer to sell any insurance coverage, product,
or service in order to secure preferential financing rates.
Proposed law prohibits any person or entity licensed as a financial institution from making
statements, threats, promises, acts, contracts, or offers of contracts that the intended or actual
effect of which is to coerce or attempt to coerce any retail motor vehicle dealer to sell or
offer to sell any extended service contract, extended maintenance plan, or GAP product
offered by a particular entity, including but not limited to any manufacturer or distributor of
motor vehicles or affiliates thereof, by setting limits for the amount financed in regard to the
financing of premium or other charges for any insurance coverage, product, or service
financed on the retail installment contract, when the discrimination in the amount financed
limits is based, in whole or in part, upon whether or not the product, insurance, or service
is provided by the licensee or an affiliate or to the extent any such statements, threats, HLS 10RS-1419 ENGROSSED
HB NO. 591
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are additions.
promises, acts, contracts, or offers of contracts shall lessen or eliminate competition to sell
the aforementioned products.
Proposed law further provides that proposed law shall not prohibit a person or entity licensed
as a financial institution from offering or providing incentive benefits or bonus programs to
a retail motor vehicle dealer or prospective retail motor vehicle dealer who makes the
voluntary decision to sell or offer to sell any extended service contract or extended
maintenance plan offered, sold, backed, or sponsored by the manufacturer or distributor or
to sell, assign, or transfer any retail installment sale or lease by him of motor vehicles
manufactured or sold by the manufacturer or distributor to a specified finance company or
leasing company.
Proposed law prohibits any entity or person licensed as a lender of consumer credit in a
motor vehicle retail purchase from requiring a retail motor vehicle dealer to sell any
insurance coverage, product, or service, which is provided, administered, or sold by the
extender of credit or an affiliate, in order to secure preferential financing rates for the
dealership or its customers.
(Adds R.S. 6:969.24.1 and 969.24.2)
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Commerce to the original
bill.
1. Added the prohibition that any entity or person licensed as a lender of consumer
credit in a motor vehicle retail purchase shall not require a retail motor vehicle
dealer to sell any insurance coverage, product, or service in order to secure
preferential financing rates.