Massachusetts 2023-2024 Regular Session

Massachusetts Senate Bill S2736 Compare Versions

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1	1	SENATE . . . . . . . . . . . . . . No. 2736
2	2	The Commonwealth of Massachusetts
3	3	_______________
4	4	In the One Hundred and Ninety-Third General Court
5	5	(2023-2024)
6	6	_______________
7	7	SENATE, April 22, 2024.
8	8	The committee on Senate Ways and Means to whom was referred the Senate Bill
9	9	modernizing protections for consumers in automobile transactions (Senate, No. 171), - reports,
10	10	recommending that the same ought to pass with an amendment substituting a new draft with the
11	11	same title (Senate, No. 2736).
12	12	For the committee,
13	13	Michael J. Rodrigues 1 of 7
14	14	FILED ON: 4/22/2024
15	15	SENATE . . . . . . . . . . . . . . No. 2736
16	16	The Commonwealth of Massachusetts
17	17	_______________
18	18	In the One Hundred and Ninety-Third General Court
19	19	(2023-2024)
20	20	_______________
21	21	An Act modernizing protections for consumers in automobile transactions.
22	22	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
23	23	of the same, as follows:
24	24	1 SECTION 1. Section 7N of chapter 90 of the General Laws, as appearing in the 2022
25	25	2Official Edition, is hereby amended by striking out, in line 3, the words “such sale” and inserting
26	26	3in place thereof the following word:- delivery.
27	27	4 SECTION 2. Said section 7N of said chapter 90, as so appearing, is hereby further
28	28	5amended by striking out, in lines 9 and 13, the word “sale” and inserting in place thereof, in each
29	29	6instance, the following word:- delivery.
30	30	7 SECTION 3. Paragraph (B) of subsection (2) of section 7N¼ of said chapter 90, as so
31	31	8appearing, is hereby amended by striking out clauses (i) to (iii), inclusive, and inserting in place
32	32	9thereof the following 3 clauses:-
33	33	10 (i) For a used motor vehicle which, at the time of sale, has been operated less than 50,000
34	34	11miles, 90 days or 3,750 miles, whichever occurs first; provided, however, that said 90-day or
35	35	123,750-mile warranty is in addition to any right the consumer may have under section 7N½. 2 of 7
36	36	13 (ii) For a used motor vehicle which, at the time of sale, has been operated not less than
37	37	1450,000 but less than 100,000 miles, 60 days or 2,500 miles, whichever occurs first.
38	38	15 (iii) For a used motor vehicle which, at the time of sale, has been operated not less than
39	39	16100,000 miles but less than150,000 miles, 30 days or 1,250 miles, whichever occurs first.
40	40	17 SECTION 4. Section 58 of chapter 140 of the General Laws, as so appearing, is hereby
41	41	18amended by striking out, in line 32, the figure “$25,000” and inserting in place thereof the
42	42	19following figure:- $50,000.
43	43	20 SECTION 5. Subsection (c) of said section 58 of said chapter 140, as so appearing, is
44	44	21hereby further amended by striking out paragraph (2) and inserting in place thereof the following
45	45	22paragraph:-
46	46	23 (2) Any person, or the attorney general, may make a claim for recovery against the bond
47	47	24for an act or omission on which the bond is conditioned if the act or omission occurred during
48	48	25the term of the bond; provided, however, that every bond shall provide that no claim shall be
49	49	26made against the bond unless the claimant provides the bondholder notice of the claim within 1
50	50	27year after the event giving rise to the claim.
51	51	28 SECTION 6. Said subsection (c) of said section 58 of said chapter 140, as so appearing,
52	52	29is hereby further amended by adding the following paragraph:-
53	53	30 (9) The attorney general may recover from the bond or its equivalent on behalf of a
54	54	31person or a class of persons who suffer loss under clauses (i) to (vi), inclusive, of paragraph (1). 3 of 7
55	55	32 SECTION 7. Section 1 of chapter 255B of the General Laws, as so appearing, is hereby
56	56	33amended by striking out the definition of “Holder” and inserting in place thereof the following 3
57	57	34definitions:-
58	58	35 “Holder”, the retail seller of the motor vehicle under or subject to a retail instalment
59	59	36contract, lease agreement or, if the contract is purchased by a financing agency or other assignee,
60	60	37the sales finance company or other assignee.
61	61	38 “Lease agreement” or “lease”, a contract, signed by the lessee in the commonwealth, that
62	62	39includes payment for the use of a motor vehicle for a period of time not less than 4 months.
63	63	40 “Lessee”, a person, who executes a lease agreement or lease on a motor vehicle for use
64	64	41primarily for personal, family or household purposes, or any legal successor in interest to such
65	65	42person.
66	66	43 SECTION 8. Said section 1 of said chapter 255B, as so appearing, is hereby further
67	67	44amended by striking out the definition of “retail instalment contract” or “contract” and inserting
68	68	45in place thereof the following definition:-
69	69	46 “Retail instalment contract” or “contract”, an agreement, signed by the buyer in the
70	70	47commonwealth, pursuant to which the title to, the property in or a lien upon a motor vehicle,
71	71	48which is the subject matter of a retail instalment sale, is retained or taken by a retail seller from a
72	72	49retail buyer as security, in whole or in part, for the buyer's obligation. The term shall include a
73	73	50chattel mortgage, a conditional sales contract and a contract for the bailment of a motor vehicle
74	74	51by which the bailee contracts to pay as compensation for its use a sum substantially equivalent to
75	75	52or in excess of its value and by which it is agreed that the bailee is bound to become, or has the 4 of 7
76	76	53option of becoming, the owner of the motor vehicle upon full compliance with the terms of the
77	77	54contract.
78	78	55 SECTION 9. Said section 1 of said chapter 255B, as so appearing, is hereby further
79	79	56amended by striking out the definition of “Retail seller” or “seller” and inserting in place thereof
80	80	57the following definition:-
81	81	58 “Retail seller” or “seller”, a person who sells or leases a motor vehicle to a retail buyer or
82	82	59lessee under or subject to a retail instalment contract or lease agreement.
83	83	60 SECTION 10. Said chapter 255B is hereby further amended by striking out section 20A,
84	84	61as so appearing, and inserting in place thereof the following section:-
85	85	62 Section 20A. (a) An agreement of the parties in a retail instalment contract or lease
86	86	63agreement defining default is enforceable only to the extent that the default is material and
87	87	64consists of the buyer’s or lessee’s failure to make at least 1 installment as required by the
88	88	65agreement or the occurrence of an event which substantially impairs the value of the collateral.
89	89	66 (b) After a default by a buyer or lessee under a consumer credit transaction or lease
90	90	67agreement, the secured creditor or lessor may not bring an action against the buyer or lessee or
91	91	68proceed against the collateral until the secured creditor or lessor gives the buyer or lessee the
92	92	69notice described in this section. The notice so required shall be deemed to be delivered when
93	93	70delivered to the debtor or when mailed to the debtor at the debtor’s address last known to the
94	94	71secured creditor or lessor. If a buyer or lessee cures a default after receiving notice and again
95	95	72defaults, the secured creditor or lessor shall give another notice before bringing an action or
96	96	73proceeding against the collateral with respect to the subsequent default, but no notice shall be
97	97	74required in connection with a subsequent default if, within the period commencing on the date of 5 of 7
98	98	75the consumer credit transaction or lease agreement subject to this section and the date of the
99	99	76subsequent default, the debtor has cured a default after notice not less than 3 times.
100	100	77 (c) The notice shall be in writing and shall be given to the buyer or lessee not less than 10
101	101	78days after the default. The notice shall conspicuously state the rights of the buyer or lessee upon
102	102	79default in substantially the following form:
103	103	80 The heading shall read:—“Rights of Defaulting Buyer or Lessee under the Massachusetts
104	104	81Motor Vehicle Installment Sales Act.”
105	105	82 The body of the notice shall read:—“You may cure your default in (describe transaction
106	106	83in a manner enabling buyer or lessee to identify it) by paying to (name and address of secured
107	107	84creditor or lessor) (amount due) before (date which is at 21 days after notice is mailed). If you
108	108	85pay this amount within the time allowed, you are no longer in default and may continue on with
109	109	86the transaction as though no default had occurred.
110	110	87 If you do not cure your default by the date stated above, the creditor or lessor may sue
111	111	88you to obtain a judgment for the amount of the debt or, if applicable, may take possession of the
112	112	89collateral.
113	113	90 If the creditor or lessor takes possession of the collateral, if any, you may get it back by
114	114	91paying the full amount of your debt plus any reasonable expenses incurred by the creditor or
115	115	92lessor if you make the required payment within 20 days after the creditor or lessor takes
116	116	93possession.'' 6 of 7
117	117	94 (d) During the 21-day period after delivery of the notice required by this section, the
118	118	95secured creditor or lessor may not, because of that default, accelerate the unpaid balance of the
119	119	96obligation, bring action against the buyer or lessee or proceed against the collateral.
120	120	97 (e) Unless the secured creditor or lessor has first notified the buyer or lessee that the
121	121	98secured creditor or lessor has elected to accelerate the unpaid balance of the obligation because
122	122	99of default, brought action against the buyer or lessee or proceeded against the collateral, the
123	123	100buyer or lessee may cure a default consisting of a failure to pay money by tendering the amount
124	124	101of all unpaid sums due at the time of tender, without acceleration, plus any unpaid delinquency
125	125	102or deferral charges. Such a cure shall restore the buyer or lessee to the buyer’s or lessee’s rights
126	126	103under the agreement as though the default had not occurred subject to subsection (b).
127	127	104 SECTION 11. Section 20B of said chapter 255B, as so appearing, is hereby amended by
128	128	105striking out subsections (a) to (c), inclusive, and inserting in place thereof the following 3
129	129	106subsections:-
130	130	107 (a) Subject to this section and section 20A, a secured creditor or lessor under a consumer
131	131	108credit transaction or lease agreement may take possession of collateral. In taking possession, the
132	132	109secured creditor or lessor under a consumer credit transaction or lease agreement may proceed
133	133	110without a prior hearing only if: (i) the default is material and consists of the debtor’s failure to
134	134	111make at least 1 payment as required by the agreement or the occurrence of an event which
135	135	112substantially impairs the value of the collateral; and (ii) possession can be obtained without use
136	136	113of force, without breach of peace and, unless the debtor consents to an entry at the time of such
137	137	114entry, without entry on property owned by or rented to the debtor. 7 of 7
138	138	115 (b) Except as provided in subsection (a), a secured creditor or lessor under a consumer
139	139	116credit transaction or lease agreement may proceed against collateral only after a prior hearing. In
140	140	117any proceeding where possession of the collateral is part of the relief sought by a holder, no court
141	141	118shall allow a secured creditor or lessor to take possession of collateral until the right of the
142	142	119secured creditor or lessor to take possession has been determined at a hearing at which the buyer
143	143	120or lessee has an opportunity to be heard having been notified in writing of said hearing not less
144	144	121than 7 days in advance thereof.
145	145	122 (c) The buyer or lessee under a consumer credit transaction or lease agreement may
146	146	123redeem the collateral from the holder at any time within 20 days of the secured creditor’s or
147	147	124lessor’s taking possession of the collateral, or thereafter until the secured creditor or lessor has
148	148	125either disposed of the collateral, entered into a contract for its disposition or gained the right to
149	149	126retain the collateral in satisfaction of the buyer’s or lessee’s obligation.