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SACRAMENTO, Calif. — As California lawmakers near
finalization of their state budget, they're turning their attention back to bills
that could significantly regulate buy-here, pay-here dealers in the Golden
State.

With legislators ready to consider measures from the
opposite legislative chamber, Senate Bill 956 is scheduled to be discussed by
the Assembly's Banking and Finance Committee on Monday.

Specifically, Senate Bill 956 has three main goals:

—Impose first-ever regulations on dealers offering buy-here,
pay-here installment loans by requiring them to obtain a California Finance
Lender's license.

—Limit used-vehicle installment loans to an interest rate of
no more than 17.25 percent, which would give California the strongest cap in
the nation.

—Change the way BHPH dealers are able to repossess vehicles
to include grace periods and make it easier for buyers to reinstate a repossessed
unit.

"Senate Bill 956 seeks to regulate an industry that is
currently unregulated under state law," said Sen. Ted Lieu, the bill's sponsor
who had his measure sent to the Assembly on a 23-12 vote.

"These buy-here, pay-here used-car dealers take advantage of
our lack of laws to prey on desperate workers, low-income families and members
of the military by pushing unregulated loans to sell cars for far beyond market
value," Lieu proclaimed.

"As it now stands, used-car dealers offering these ‘buy
here, pay here' loans are exempt from many of the protections that apply to
other areas of finance," Lieu insisted. "Without these protections, consumers
are paying the price – often an exorbitant price."

Meanwhile, there are more measures percolating in California's
capital that could change how BHPH conduct business.

Some of the regulations AB 1447 would create include:

—Require BHPH dealers to provide a limited warranty that
covers most major components and lasts for at least 30 days or 1,000 miles.

—Prohibit BHPH dealers from requiring a buyer to make
regular payments in person.

—Require BHPH dealers receive written consent from the buyer
prior to selling a vehicle with an electronic tracking device.

—Require BHPH dealers to provide notice to the buyer of the
presence of ignition shutdown technology in the vehicle and that such technology
be set to provide advance warnings to the driver to help avoid stranding
drivers.

Furthermore, AB 1534 is in the works, too

This bill would require a BHPH dealer to display a label on
any used vehicle offered for retail sale that states the "reasonable market
value" of the unit. The bill would require the label to contain specified
information used to determine the vehicle's reasonable market value and the
date the value was determined.

Moreover, AB 1534 would require a BHPH dealer to provide to
a prospective buyer of the used vehicle a copy of any information obtained from
a nationally recognized pricing guide the dealer utilized to determine the
reasonable market value of the vehicle.