SACRAMENTO, Calif. — Though the National Alliance of Buy-Here Pay-Here Dealers has voiced its opposition and the legislation remains unpopular with great numbers of dealerships all over California, A.B. 1447 has taken another step forward, as a legislative committee passed the controversial bill this week by a vote of 12 to five.

The California Assembly’s appropriations committee passed thelegislation that would potentially “target” how BHPH dealers do business in the Sunshine State.

It would apparently directly affect sales and collections practices, focusing on tracking devices, as well as payment plans.

The date for a vote before the entire assembly has not been announced yet.

When Assemblyman Mike Feuer first introduced the legislation this past January, NABD president Kenneth Shilson sent a letter to the politician voicing the organization’s opposition to the bill.

In the letter, Shilson looked to assure Feuer that the organization was closely monitoring the practices in question: “Please be advised that during the last twelve months, NABD has conducted two national surveys on the use of payment assurance devices which cover both payment disabling devices and global positioning (GPS) technology. The surveys’ results clearly indicated that these devices, when used properly, provide a benefit to both the consumer and the financer. 

“NABD supports the use of these devices provided that the consumer is made aware of their installation via written disclosure and that the devices are properly used by the financer. Our survey results indicate that over 90 percent of the respondents disclose these devices to the consumer in writing. In addition, over 80 percent of the respondents believe that the devices benefit the consumer in many important ways and help them obtain better financing,” he continued, commenting on the nature of tracking devices and payment assurance plans.

Shilson concluded his letter by asserting the bill will, in fact, hurt businesses if passed: “New and used automotive dealerships are already highly regulated businesses who contribute significant revenues to state and federal treasuries.

“Currently, they are subject to the scrutiny of the Consumer Financial Protection Bureau (CFPB), the Internal Revenue Service, the Federal Trade Commission and other state and local agencies. The passage of A.B. 1447 will create an additional disincentive for dealerships to continue in business and will reduce the availability of capital to the millions of lower credit score 'un-bankable' consumers who rely on BHPH vehicles for transportation,” he concluded.

And this isn’t the only bill on the table that would change regulation practices of used-car dealerships in California.

A new California bill signed this past summer — Assembly Bill 1215 — which created changes for salvage vehicles that eventually make it onto a dealer's retail lot may soon be altered, that is, if the proposed Senate Bill 990 goes through.

This legislation would allow the use of reports from commercial data providers, such as Carfax and AutoCheck, instead of just from the National Motor Vehicle Title Information System to satisfy current consumer protection laws regarding the sale of used cars.

This would go against part of what was recently passed with A.B. 1215, which stated that any franchised or independent store in California that tries to retail a salvage unit must place a special sticker on the window and include the report from the NMVTIS.

For more information, see the SubPrime Auto Finance News story here.