Relating to the sale of collateral in connection with certain extensions of consumer credit that a credit access business obtains for a consumer or assists a consumer in obtaining; providing a civil penalty.
The implications of HB 3599 are significant in the realm of consumer finance regulation. By enforcing the requirement that surplus proceeds be returned to consumers, the bill aims to enhance consumer protection and promote transparency in transactions involving credit access businesses. It will compel these businesses to conduct sales responsibly and may discourage predatory lending practices, thereby fostering a more equitable lending environment.
House Bill 3599 addresses the sale of collateral associated with certain extensions of consumer credit obtained through credit access businesses. The bill mandates that, if a credit access business sells property securing an extension of credit, they must pay any surplus proceeds back to the consumer within 14 days of the sale. This provision is aimed at ensuring that consumers are not left at a loss when the collateral value exceeds the outstanding debt owed to the credit access business, thus protecting consumer interests.
The bill may face opposition from credit access businesses that argue such regulations could limit their operational flexibility and profitability. Critics might contend that while the goal is to protect consumers, regulatory burdens might inadvertently push these businesses to offer less favorable terms or to increase fees to offset potential losses incurred from the mandated returns. Also, there may be concerns about the enforcement of civil penalties, which could create friction between credit access businesses and regulators.
The changes brought by HB 3599 will come into effect from September 1, 2015, applying to sales that occur after this date. Transactions that occurred prior to this effective date will be governed by pre-existing laws. This grandfathering provision is crucial to avoid retroactive penalties and confusion among consumers and businesses alike.