SACRAMENTO, Calif. — A little more than a week remains for
Gov. Jerry Brown to possibly veto the California buy-here, pay-here dealer
regulation.

Should Brown choose neither to sign nor to veto the three
bills, the measures still would become law anyway on Jan. 1, significantly
changing how BHPH dealers operate in the Golden State.

Before the state legislature wrapped up its latest session
on Aug. 31, lawmakers resoundingly passed the three BHPH bills, a small segment
of the more than 900 measures they sent to Brown for his consideration.

Between the end of the session and now, most of Brown's
noteworthy decision announcements pertained to how California revamped its
workers' compensation and state pension structures. Now with those matters
decided, Brown could turn his attention to Senate Bill 956 and Assembly Bill
1447 and 1534.

To recap, SB 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, which lawmakers believe would provide consumers with an array of
protections.

—Limit used-vehicle installment loans to no more than
17-percent interest, plus the variable Federal funds interest rate, which today
is 0.25 percent. This 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.

AB 1534 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.

And finally, the main points of AB 1447 include:

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

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

—Requires BHPH dealers to receive written consent from the
buyer prior to selling a vehicle equipped with electronic tracking technology.

—Requires BHPH dealers to provide notice to the buyer of the
presence of "starter interrupt" technology in the vehicle, ensuring that
advance warnings are provided to the driver – prior to the vehicle being
disabled – in order to help avoid stranding a driver in dangerous
circumstances.

Editor's Note: Are you a BHPH dealer in California or a service provider to stores in that state? SubPrime
Auto Finance News wants to share your story about how you're going to prepare
if these bills become law. Please contact editor Nick Zulovich at
nzulovich@subprimenews.com.