Relating to extensions of consumer credit in the form of a motor vehicle title loan that a credit access business obtains for a consumer or assists a consumer in obtaining; providing a civil penalty.
Impact
The bill significantly impacts state laws governing consumer credit, introducing a number of consumer protections that include limits on the number of times loans can be refinanced—capped at six times—and requiring credit access businesses to offer extended payment plans for certain loans. Additionally, documentation requirements are established for credit access businesses to verify a consumer's income before issuing loans, thereby aiming to provide a safeguard against irresponsible lending. Ultimately, this legislation intends to create a more accountable lending environment for consumers seeking motor vehicle title loans.
Summary
House Bill 3812 is a legislative proposal aimed at regulating extensions of consumer credit in the form of motor vehicle title loans by credit access businesses. This bill amends existing laws to establish clear definitions and stipulations surrounding single-payment and multiple-payment motor vehicle title loans. The primary objective is to protect consumers from exploitative lending practices by enforcing strict guidelines on loan terms, including maximum financing amounts based on the consumer's gross annual income and the retail value of the vehicle used as collateral. The bill specifically states that loans must be at least 30 days but not longer than 60 days in term duration, ensuring consumers are not trapped in perpetual debt cycles.
Contention
While the bill aims to provide greater consumer protection, it has sparked discussions about its potential implications for credit access businesses. Critics argue that the restrictions on refinancing and other stipulations may limit access to credit for consumers in need, particularly those who rely on these loans during financial hardships. Conversely, proponents contend that these measures are essential to prevent predatory practices that disproportionately affect low-income individuals and families. The balance between consumer protection and access to credit remains a central point of contention in the evaluation of HB 3812.
Relating to credit services organizations and extensions of consumer credit facilitated by credit services organizations; increasing a criminal penalty.
Relating to a restriction on total charges charged for extensions of consumer credit that a credit services organization obtains for a consumer or assists a consumer in obtaining.
Relating to a restriction on total charges charged for certain extensions of consumer credit that are facilitated by credit access businesses and entered into by consumers residing in disaster areas.
Relating to the regulation of the collection, use, processing, and treatment of consumers' personal data by certain business entities; imposing a civil penalty.
Relating to the regulation of the collection, use, processing, and treatment of consumers' personal data by certain business entities; imposing a civil penalty.
Relating to the regulation of money services businesses; creating a criminal offense; creating administrative penalties; authorizing the imposition of a fee.
Relating to authorizing the placement of a security freeze on the consumer file or other record created or maintained by a consumer reporting agency regarding a person under 16 years of age.
Relating to authorizing the placement of a security freeze on the consumer file or other record created or maintained by a consumer reporting agency regarding a person under 16 years of age.
Relating to the regulation of the collection, use, processing, and treatment of consumers' personal data by certain business entities; imposing a civil penalty.
Relating to extensions of consumer credit in the form of a deferred presentment transaction that a credit access business obtains for a consumer or assists a consumer in obtaining; providing a civil penalty; adding a provision subject to a criminal penalty.