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American Financial Services Association

CA Bill Sows Confusion

CA Bill Sows Confusion

AFSA’s state government affairs team this week sent a letter to the California Senate raising concerns with SB 1311. Among other provisions, the bill would void the security interest in a vehicle financed by a covered service member if the contract also funds credit insurance or a credit-related ancillary product. As written, the bill would cut off service members from accessing voluntary protection products, such as guaranteed asset protection waivers.

Voluntary protection products protect consumers from large and unexpected financial liability related to their motor vehicle financing commitment and would cause a significant disruption to California’s credit markets. The bill would also upend the regulatory structure established in the federal Military Lending Act (MLA) by instituting new provisions that do not exist under the MLA. Although the bill purports to close a loophole that would allow service members to waive their protections under the MLA,  such a loophole does not exist, as the MLA does not to apply to secured loans such as vehicle finance.

This letter, along with SGA’s other recent letters, can be found on the direct advocacy section of AFSA’s website.

June 23rd, 2022 by

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