HB10 Alabama 2020 Session

Under existing law, consumer credit transactions are regulated by the Alabama Consumer Credit Act, commonly referred to as the Mini-Code, and pursuant to other state and federal laws

This bill would require a new or used motor vehicle dealer to disclose to a consumer purchaser of a new or used motor vehicle any portion of the finance charge received by the dealer from a financial institution in connection with providing financing for the purchase by the consumer

Relating to consumer purchases from a dealer of new and used motor vehicles financed by a financial institution; to require a new or used motor vehicle dealer to disclose to a consumer any portion of the finance charge received by the dealer for arranging financing with a financial institution for the purchase of a motor vehicle by the consumer.

Section 1

For the purposes of this act, the following words have the following meanings: (1) FINANCE CHARGE. In a consumer motor vehicle purchase, the finance charge required to be disclosed by law to the purchaser. (2) FINANCIAL INSTITUTION. Any institution or entity that provides financing for the purchase of a new or used motor vehicle purchased through a motor vehicle dealer. (3) INTEREST RATE ADD-ON. When a motor vehicle dealer acts as the agent of a financial institution, the amount of the finance charge or other compensation received by the motor vehicle dealer from the financial institution, which may be a percent of the total finance charge or other form of compensation. (4) MOTOR VEHICLE DEALER. A new or used motor vehicle dealer required to be licensed under Section 40-12-391 of the Code of Alabama 1975.

Section 2

Any motor vehicle dealer that offers or arranges financing as a part of the sale of a new or used motor vehicle to a consumer shall disclose to the consumer any interest rate add-on received by the dealer from a financial institution for arranging the financing by the financial institution as a part of the sale of the motor vehicle.

Section 3

This act is supplemental to any other laws relating to consumer finance.

Section 4

This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.