Bill > H416

This bill introduces comprehensive regulations for motor vehicle debt waivers, which are contractual agreements that allow borrowers to cancel or reduce certain financial obligations related to vehicle purchases or leases. The legislation defines key terms like "Guaranteed Asset Protection Waiver" (GAP Waiver), which covers amounts owed if a vehicle is totally damaged or stolen, and "excess wear and use waiver," which addresses potential charges for excessive vehicle wear or mileage. The bill requires that debt waivers be clearly disclosed, including purchase price, terms, cancellation procedures, and refund policies. Creditors must separately state any debt waiver charges and cannot make credit or vehicle sale contingent on purchasing a waiver. Waivers must be insured by an insurance policy and remain valid even if the finance agreement is transferred. Borrowers have a mandatory 30-day "free look" period during which they can cancel the waiver for a full refund. The bill also empowers the commissioner to enforce these regulations, with the ability to issue cease and desist orders and impose penalties up to $500 per violation, not exceeding $10,000 for similar violations. State and federal banks and credit unions offering debt waivers under their existing regulations are exempt from these specific requirements.

Budget and Finance, Labor and Employment

https://malegislature.gov/Bills/194/H416