Vetoed by Governor Jerry Brown, Jr.

Vote Smart's Synopsis:

Vote to pass a bill that regulates lending practices of "by-here-pay-here" automobile dealers.

Highlights:

• Prohibits “buy-here-pay-here automobile dealers” from doing business in California without a license from the Department of Corporations (Sec. 1).

• Defines a “buy-here-pay-here automobile dealer” as a seller who does the following (Sec. 1):
• Enters into conditional sale or lease contracts;
• Does not routinely assign the conditional sale or lease contracts to an unaffiliated finance or leasing source; and
• Provides or collects payments on conditional sale contracts or lease contracts.

• Requires buy-here-pay-here automobile dealers to obtain a California Finance Lenders Law license no later than 6 months after the dealer meets the requirements of a “buy-here-pay-here automobile dealer” (Sec. 1).

• Limits the annual percentage rate (APR) charged on a conditional sale or lease contract from a buy-here-pay-here dealer to no more than 17 percent above the federal funds rate in effect at the time the contract is signed (Sec. 1).

• Prohibits buy-here-pay-here automobile dealers from beginning the repossession process until the eleventh day after a missed payment (Sec. 1).

• Requires buy-here-pay-here automobile dealers to hire a licensed repossession agency in order to repossess vehicles (Sec. 1).

• Prohibits buy-here-pay-here automobile dealers from charging a buyer-borrower more than $500 in fees and charges as a result of the repossession process (Sec. 1).

Full Bill Text