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Recent legislation is taking place in California regarding the proposed controlling of BHPH dealerships and laws, since Gov. Jerry Brown signed two of the three bills aimed at changing how the industry operates this past weekend, the BHPH & Subprime Auto lending industry will be faced with new regulations beginning Jan 1.
Because there are few alternatives and a great demand for reliable vehicles, the BHPH industry has flourished in recent years and with that will come scrutiny.
The pressure is rising in the western state as Brown vetoed law SB 956, which would have limited interest rates to 17% plus the federal funds rate, and provide buyers with a 15-day grace period before repossessing cars for a missed payment. That bill is by state Sen. Ted Lieu (D-Torrance); Brown balked at a provision requiring dealers to be regulated by the Department of Corporations under the California Finance Lender’s Law.
"I am not yet convinced the evidence merits the regulatory oversight of this bill,’’ Brown wrote in his veto message. "I signed two 'buy-here-pay-here’ consumer protection bills this session,'' he added. "If consumers need added protection once those bills are implemented, my administration will work with the Legislature to find appropriate, measured solutions.’’
Governor Jerry Brown was the final hurdle for three bills aimed at adding new rules governing the state’s buy-here, pay-here (BHPH) dealers. The bills, which passed out of the state Legislature last week, would add additional disclosures, but one would also set one of the nation’s lowest interest rate caps. Wieckowski’s bill, AB 1534, passed the state Assembly on Thursday by a 44-27 vote. The measure requires BHPH dealers place a window sticker on each used car that shows a vehicle’s suggested market value….. Which is an almost comical law, as new-vehicle dealer have been doing this since 1958 under the Automobile Information Act.
"It's more than a small victory; it's huge," IADAC executive director Larry Laskowski told SubPrime Auto Finance News just a couple of hours after Brown made his decisions on Saturday.
Peter Welch, president of the California New Car Dealers Assn., said he welcomed legislation that would help identify and regulate Buy Here Pay Here dealers. But he worried that the bill included provisions that would affect dealers and consumers in such a way that would only hinder all parties involved.
These bills were introduced after a series of Los Angeles Times articles exploring consumer concerns about the business model and alleged practices of the industry.
We plan to stay on top of the news with this legislation battle, please visit our social media sites for current news from Used Car News & Subprime Auto News, and check our blog site for current updates. Visit the LA Times for up to date information around the BHPH bills straight from the East Coast.