Bill
S 5213
Imposes caps on credit service charges in motor vehicle retail installment contracts to lower financing costs for buyers and require clearer disclosures.
Purpose and intent
- S 5213 seeks to limit the amount of specified credit service charges that can be imposed in motor vehicle retail installment contracts. By imposing caps on these charges, the bill aims to reduce financing costs for consumers purchasing motor vehicles through installment financing and strengthen consumer protections in auto lending.
Key provisions (as currently announced)
- Scope: Applies to motor vehicle retail installment contracts (financing agreements tied to the purchase of motor vehicles).
- Charge type: Focuses on “credit service charges” (the bill’s text would define which specific fees or charges fall under this category).
- Cap on charges: The bill would establish a maximum permissible amount for these credit service charges. The exact cap (dollar amount or percentage) and the calculation method would be specified in the enacted text.
- Disclosures: Likely requirements for clearer disclosures to borrowers about allowable charges, total cost of financing, and any caps, but the precise disclosure requirements would be defined in the bill’s text.
- Enforcement and penalties: The bill would include mechanisms to enforce the charge limits, along with associated penalties or remedies for violations. The specific enforcement framework would be detailed in the legislation.
- Effective date and phase-in: Any implementation timeline (effective date, transition rules) would be stated in the bill.
- Exemptions and special cases: The text may outline any exemptions (e.g., certain lenders, credit unions, or specific transaction types), though exact exemptions are not provided in the current summary.
- Administrative or regulatory roles: The bill may designate enforcement or oversight responsibilities to a state consumer protection or finance authority, as is typical for this type of measure.
Affected parties
- Consumers purchasing motor vehicles through retail installment contracts, who would be shielded from higher credit service charges due to the cap.
- Auto lenders, dealerships, and finance companies that originate or service motor vehicle loans, which may need to adjust pricing structures, disclosures, and compliance practices to comply with the cap.
- Potentially third-party service providers involved in the credit services component of financing.
Legislative status and actions
- Introduced: February 19, 2025.
- Status: Referred to the Consumer Protection committee (noting a repeated referral entry on the same date in the provided record).
- Legislative actions recorded: 2025-02-19 – REFERRED TO CONSUMER PROTECTION (duplicated in the record).
Sponsors
- James Sanders Jr. – Primary sponsor
- Robert Jackson – Co-sponsor
- Cordell Cleare – Co-sponsor
Related bills and companion
- Related/Senate bills from prior sessions: S 5947, S 3237, S 4774
- Companion bill: Assembly A 8423 (listed as a companion)
Notes on what is known and what isn’t
- The exact cap amounts, definitions of “credit service charges,” and specific enforcement provisions are not provided in the available summary. The full bill text will specify the precise terms, conditions, exemptions, and timelines.
- Readers should monitor committee hearings and the bill text for exact figures, effective dates, and practical impact analyses.
Next steps for readers
- Review the full bill text for exact definitions, charges covered, cap percentages or dollar amounts, and any exemptions.
- Track committee activity in the Consumer Protection committee for hearings, amendments, and votes.
- Compare with companion A 8423 for parallel provisions in the Assembly and assess cross-chamber consensus.
Compiled from official sources — confirm details with the bill’s official record.
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