Relating to debt cancellation agreements offered in connection with motor vehicle retail installment contracts.
Impact
The proposed changes under HB 3338 will directly affect how debt cancellation products are integrated into retail installment contracts for motor vehicles. As many consumers rely on these financing options, the bill is designed to foster greater transparency in loan agreements and enhance the borrower’s autonomy. By restricting compulsory purchase of debt cancellation agreements, the bill may lead to a more equitable lending environment, allowing borrowers to make informed decisions without undue pressure from lenders or sellers.
Summary
House Bill 3338 seeks to amend the Texas Finance Code concerning debt cancellation agreements associated with retail installment contracts for motor vehicle purchases. The bill defines a 'Debt Cancellation Agreement' as a contractual term that allows the seller to cancel all or part of the buyer’s debt upon a specified event. Importantly, it stipulates that lenders cannot make the purchase of such agreements mandatory for a borrower to obtain a loan. This provision aims to increase consumer protection by ensuring buyers are not coerced into purchasing additional agreements that could impose unnecessary financial burden.
Contention
Notable points of contention surrounding HB 3338 may arise from stakeholders within the automotive retail and financing sectors. Some industry representatives may argue that the enforcement of mandatory debt cancellation agreements serves to protect both lenders and consumers by mitigating risks associated with loan defaults. Conversely, consumer advocacy groups are likely to support the bill, viewing it as a means to safeguard consumers from predatory lending practices and ensuring borrowers retain the freedom to assess their financial options without pressure from retail sellers.
Relating to the issuance of certain tags, permits, and license plates authorizing the movement of vehicles and the transfer and renewal of certain license plates.
Relating to the execution of a certificate of completion and to imposing certain requirements under a retail installment contract for the purchase of solar panels.
Relating to motor vehicle franchised dealers and the reimbursement of motor vehicle franchised dealers by manufacturers and distributors for warranty, recall, and preparation and delivery work.
Relating to motor vehicle franchised dealers and the reimbursement of motor vehicle franchised dealers by manufacturers and distributors for warranty, recall, and preparation and delivery work.