SB 902 — Motor Vehicle Retail Financial Agreements

Florida Senate - 2024 CS for CS for SB 902 By the CommitteesCommittee on CommerceBanking and Tourism;Insurance;

and BankingSenator andBoyd Insurance;597-02163-24 2024902c1 A bill to be entitled An act relating to motor vehicle retail financial agreements;

and Senator Boyd 577-02656-24 2024902c2 A bill to be entitled An act relating to motor vehicle retail financial agreements;

requiring entities to refund the portions of the purchase price of the contract for a guaranteed asset protection product under certain circumstances;

authorizing providers to use an administrator or other Pagedesignee 1for administration of 13vehicle CODING:value protection agreements;

prohibiting vehicle value protection agreements from being sold under certain Page 1 of 12 CODING:

Florida Senate - 2024 CS for CS for SB 902 577-02656-24597-02163-24 2024902c22024902c1 designeecircumstances; for administration of vehicle value protection agreements;

prohibiting vehicle value protection agreements from being sold under certain circumstances;

requiring certain disclosures for a Pagelease 2agreement ofthat 13includes CODING:an excess wear and use waiver;

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for CS for SB 902 577-02656-24 2024902c2 lease agreement that includes an excess wear and use waiver;

BePage It2 Enacted by the Legislature of the12 StateCODING: of Florida:

Words stricken are deletions;

words underlined are additions.

Florida Senate - 2024 CS for SB 902 597-02163-24 2024902c1 Be It Enacted by the Legislature of the State of Florida:

520.07 Requirements and prohibitions as to retail installment contracts.— Page(11) 3In ofconjunction 13with CODING:entering into any new retail installment contract or contract for a loan, a motor vehicle retail installment seller as defined in s.

520.02, a sales Page 3 of 12 CODING:

Florida Senate - 2024 CS for CS for SB 902 577-02656-24597-02163-24 2024902c22024902c1 (11)finance Incompany conjunction with entering into any new retail installment contract or contract for a loan, a motor vehicle retail installment seller as defined in s.

520.02, a sales finance company as defined in s.

(g) If a contract for a guaranteed asset protection product is terminated, the entity shall refund to the buyer all any unearned portions of the purchase price of fees paid for the contract unless the contract provides otherwise.

Page520.152. 4 of 13 CODING:

(i) If the termination of the guaranteed asset protection product occurs because of a default under the retail installment Page 4 of 12 CODING:

Florida Senate - 2024 CS for CSSB 902 597-02163-24 2024902c1 contract or contract for SBa 902loan, 577-02656-24the 2024902c2repossession 520.152.of the motor vehicle associated with the retail installment contract or contract for a loan, or any other termination of the retail installment contract or contract for a loan, the entity may pay any refund due directly to the holder or administrator and apply the refund as a reduction of the amount owed under the retail installment contract or contract for a loan, unless the buyer can show that the retail installment contract has been paid in full.

(i) If the termination of the guaranteed asset protection product occurs because of a default under the retail installment contract or contract for a loan, the repossession of the motor vehicle associated with the retail installment contract or contract for a loan, or any other termination of the retail installment contract or contract for a loan, the entity may pay any refund due directly to the holder or administrator and apply the refund as a reduction of the amount owed under the retail installment contract or contract for a loan, unless the buyer can show that the retail installment contract has been paid in full.

(3) “Contract holder” means a person who is the purchaser Pageor 5holder of 13a CODING:vehicle value protection agreement.

(4) “Finance agreement” means a loan, retail installment sales contract, or lease for the purchase, refinancing, or lease Page 5 of 12 CODING:

Florida Senate - 2024 CS for CS for SB 902 577-02656-24597-02163-24 2024902c22024902c1 or holder of a vehiclemotor valuevehicle. protection agreement.

(4) “Finance agreement” means a loan, retail installment sales contract, or lease for the purchase, refinancing, or lease of a motor vehicle.

520.153 Requirements and prohibitions as to vehicle value protection agreements.— Page(1) 6Vehicle ofvalue 13protection CODING:agreements may be offered, sold, or given to consumers in this state in compliance with this act.

Page 6 of 12 CODING:

Florida Senate - 2024 CS for CS for SB 902 577-02656-24597-02163-24 2024902c22024902c1 (1)(2) VehicleNotwithstanding any other law, any amount charged or financed for a vehicle value protection agreementsagreement mayis benot offered,considered sold,a finance charge or giveninterest toand consumersmust be separately stated in thisthe statefinance agreement and in compliancethe withvehicle thisvalue act.protection agreement.

(2) Notwithstanding any other law, any amount charged or financed for a vehicle value protection agreement is not considered a finance charge or interest and must be separately stated in the finance agreement and in the vehicle value protection agreement.

(a) Insure all of its vehicle value protection agreements under a policy that pays or reimburses the contract holder in Pagethe 7event ofthe 13provider CODING:fails to perform its obligations under the vehicle value protection agreement.

The insurer must be licensed or otherwise authorized or eligible to do business in Page 7 of 12 CODING:

Florida Senate - 2024 CS for CS for SB 902 577-02656-24597-02163-24 2024902c22024902c1 thethis eventstate. the provider fails to perform its obligations under the vehicle value protection agreement.

The insurer must be licensed or otherwise authorized or eligible to do business in this state.

(c) Maintain, or together with its parent corporation maintain, a net worth or stockholders’ equity of $100 million and, upon request, provide the office with a copy of the provider’s or the provider’s parent company’s Form 10-K or Form 20-F filed with the Securities and Exchange Commission within the last calendar year, or if the company does not file with the Securities and Exchange Commission, a copy of the company’s Pageaudited 8financial statements, which must show a net worth of 13the CODING:provider or its parent company of at least $100 million.

If the provider’s parent company’s Form 10-K, Form 20-F, or financial Page 8 of 12 CODING:

Florida Senate - 2024 CS for CS for SB 902 577-02656-24597-02163-24 2024902c22024902c1 auditedstatements are filed to meet the provider’s financial statements,security whichrequirement, the parent company must showagree ato netguarantee worththe obligations of the provider orrelating itsto parentvehicle companyvalue ofprotection atagreements leastsold $100by million.the provider in this state.