HB420 Alabama 2017 Session

Updated Feb 26, 2026

Notable

Summary

Primary Sponsor: Jimmy Martin
Republican
Session: Regular Session 2017
Title: Motor vehicles, sales and loan transactions, guaranteed asset protection waivers authorized, coverage of loan balance if vehicle a total loss or stolen, Superintendent of Banks authorized to assess penalties, Secs. 8-37-1 to 8-37-9, inclusive, added
Summary: HB420 creates a framework to authorize and regulate guaranteed asset protection waivers (GAP waivers) for motor vehicle loans, with enforcement by the Alabama Superintendent of Banks.
What This Bill Does
The bill specifically authorizes GAP waivers for motor vehicle financing and sets rules for their sale and management. It creates Chapter 37 of Title 8 and gives the Superintendent of Banks power to enforce compliance and impose civil penalties. It requires clear borrower disclosures, a minimum 30-day free-look period with refunds, and that GAP costs be separately itemized and not treated as a finance charge, along with insurance requirements and recordkeeping obligations.

Who It Affects
Borrowers who finance motor vehicles and may purchase GAP waivers; they gain defined rights such as a free-look period, refunds, and clearer disclosures.
Creditors, retail sellers, and administrators who offer GAP waivers; they must follow defined rules, maintain records, obtain or arrange insurance, and could face penalties for violations.

Key Provisions
Authorization and regulation of GAP waivers for motor vehicle financing, including definitions, roles (creditor, administrator, insurer), and enforcement by the Superintendent of Banks with civil penalties.
Consumer protections and administrative requirements: at least a 30-day free-look period with refunds, clear disclosures and cancellation procedures, GAP costs that are separately itemized and not counted as a finance charge, and mandatory insurance coverage backing GAP waivers.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Motor Vehicles