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YOUR VOICE HEARD: A BLUEPRINT FOR SUCCESS Dealers were expected to be against the bills, but many local and county government officials, Chambers of Commerce and concerned consumers began to voice their opposition as well. We formed the “Coalition to Protect Our Freedom to Drive,” complete with a website and Facebook profile. As our opposition support grew, we began to ask legislators to look more closely at how the passage of the bills would impact state sales tax revenues. We called for a fiscal impact study. Based on our internal industry data and preliminary research, NIADA determined that losses in revenue for California could range anywhere from $220 million to $330 million dollars annually. That was corroborated by California’s Board of Equalization, which agreed that such revenue losses would have a devastating downstream effect for county and local governments that rely heavily on state funding for basic constituent services like police and fire protection. Additionally, we voiced our concern that the passage of the bills would in fact be a violation of the equal protection clauses of the constitutions of California and the United States – asking one segment of the auto industry to play by operational guidelines that do not apply to the entire industry. That was an argument we were preparing to make in the courts, if necessary, in opposition to SB 956. Concerned mostly with blocking the inherently overreaching restrictions on BHPH dealers proposed in SB 956, we focused less on AB 1447 and AB 1534. Though we fundamentally opposed all three bills, our BHPH coalition felt there were provisions in AB 1447 and AB 1534 that would make sense to protect consumers and would not unduly impede BHPH operations. Ultimately, all three bills passed the legislature by the end of August and

were sent to Gov. Jerry Brown for final passage or veto. Our focus then shifted to lobbying the governor, his chief legislative counsel and the state agencies charged with providing regulatory oversight to the industry on passage. On Saturday, Sept. 29, 2012, a day before his veto power was set to expire for this year’s legislative session, Gov. Brown vetoed SB 956 saying he was “not yet convinced the evidence merits the regulatory oversight of this bill.” NIADA couldn’t agree more! With one stroke of the pen, SB 956 was dead. For now, we all breathed a collective sigh of relief. As for the media and consumer advocates, they claimed victory for passing AB 1447 and 1534. NIADA is fine with that – we did not see those new laws unduly impeding BHPH operators. After the veto, the L.A. Times reporter who wrote the original series of articles wrote, “BHPH dealers congratulated one another on Sunday, and credited a lobbying effort that had little impact on lawmakers but apparently caught the governor’s ear.” Again, we couldn’t agree more. Clearly, our lobbying efforts were never given credence by California’s legislators because they were either unwilling or incapable of seeing what the governor saw. To provide common-sense consumer protection, you don’t have to do it at the expense of devastating small business. In the end, Gov. Brown’s veto gave everyone what they wanted. The consumer advocates received additional protection that NIADA in fact believes BHPH dealers should be offering their customers, and the industry was shielded from excessive, businessending rulemaking that would have ironically led to less access to affordable transportation for the very consumers the legislators and media were trying to protect. Should similar issues arise next year, NIADA will be prepared to enter the fray to protect our members again. Most importantly, let’s not forget this would not have happened without the combined efforts of the industry’s stakeholders working together nationally and in California, marshaling our resources and making our collective voice heard on behalf of our dealers and their customers.





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Here’s a look at the requirements of Senate Bill 956, Assembly Bill 1447 and Assembly Bill 1534: SB 956 Would have required BHPH dealers to: • Cap interest rates at 17 percent plus the fed rate (currently one-fourth of 1 percent). • Obtain a license under the California Finance Lenders Law and be regulated by the Department of Corporations. • Allow an account to become 16 days past due before initiating recovery or repossession of their asset. • Use a licensed repossession agency to physically repossess a vehicle. • Limit repossession and recovery fees to $500 on past due accounts. Those fees could not be collected within 45 days. AB 1447 Requires BHPH dealers to: • Provide customer disclosure of the use of GPS or starter-interrupt devices on vehicles sold. • Provide a 30-day/1000-mile limited warranty on every vehicle sold. AB 1534 Requires BHPH dealers to: • Affix a label on any used vehicle being offered for retail sale that states the reasonable market value of that vehicle. Definition of BHPH Dealer A “Buy Here-Pay Here” dealer is a dealer, as defined in Section 285, who is not otherwise expressly excluded by Section 241.1, and who does all of the following: (a) Enters into conditional sale contracts, within the meaning of subdivision (a) of Section 2981 of the Civil Code, and subject to the provisions of Chapter 2b (commencing with Section 2981) of Title 14 of Part 4 of Division 3 of the Civil Code, or lease contracts, within the meaning of Section 2985.7 of the Civil Code, and subject to the provisions of Chapter 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of the Civil Code. (b) Assigns less than 90 percent of all unrescinded conditional sale contracts and lease contracts to unaffiliated third-party finance or leasing sources within 45 days of the consummation of those contracts. (c) For purposes of this section, a conditional sale contract does not include a contract for the sale of a motor vehicle if all amounts owed under the contract are paid in full within 30 days. (d) The department may promulgate regulations as necessary to implement this section. The term “buy-here-pay-here” dealer does not include any of the following: (a) A lessor who primarily leases vehicles that are two model years old or newer. (b) A dealer that does both of the following: (1) Certifies 100 percent of used vehicle inventory offered for sale at retail price pursuant to Section 11713.18. (2) Maintains an onsite service and repair facility that is licensed by the Bureau of Automotive Repair and employs a minimum of five master automobile technicians that are certified by the National Institute for Automotive Service Excellence. w w w. t n i a d a . c o m

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TNIADA Dealer Connect Dec 2012  
TNIADA Dealer Connect Dec 2012  

Tennessee Dealer Connect for December 2012