Michigan Senate Bill SB0343

Michigan 2023-2024 Regular Session

• Introduced: 5/23/23
• Refer: 5/23/23

Caption

Consumer protection: other; guaranteed asset protection waiver act; modify and update to the motor vehicle financial protection products act. Amends title & secs. 1, 3, 5, 7, 9 & 11 of 2009 PA 229 (MCL 492.21 et seq.); adds secs. 3a, 4 & 9a & pts. 5 & 9; designates sec. 1 as pt. 1, sec. 3 as pt. 2, sec. 3a as pt. 3, secs. 4, 5, 7, 9 & 9a as pt. 4 & sec. 11 as pt. 6 & repeals sec. 13 of 2009 PA 229 (MCL 492.33). TIE BAR WITH: SB 0344'23, SB 0345'23, SB 0346'23, SB 0347'23

Impact

The bill's implementation will require credit providers offering GAP waivers to disclose detailed information regarding the terms and conditions of such waivers and to ensure that consumer rights are protected during purchase. Notably, it mandates a clear 'free look' period during which consumers can cancel the waiver without penalty and establishes requirements for reporting sales of these waivers. Additionally, it requires that the costs associated with these waivers are not classified as finance charges, providing consumers with greater transparency and control over their financial products.

Summary

Senate Bill 0343 proposes amendments to the existing Guaranteed Asset Protection Waiver Act (2009 PA 229) in Michigan, enhancing regulations surrounding financial protection products related to motor vehicles. The bill aims to clarify and strengthen provisions related to guaranteed asset protection (GAP) waivers, which are forms of financial protection that cancel or waive amounts due on a borrower’s finance agreement in the event of total loss or theft of a motor vehicle. The amendments involve designating new sections and updating existing definitions to refine the regulatory framework around these protection products.

Contention

Discussions surrounding this bill indicate concerns from various stakeholders regarding the balance between consumer protection and the operational needs of creditors. Proponents argue that the amendments are essential for safeguarding consumers by ensuring they understand what they are purchasing and enabling them to secure financial protection effectively. Conversely, some creditors express apprehension about the potential administrative burden and costs associated with implementing these new disclosure requirements, which they believe could lead to increased prices for consumers due to compliance costs.