AB1143:v98#DOCUMENTBill Start
Amended
IN
Assembly
January 03, 2024
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CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Assembly Bill
No. 1143
Introduced by Assembly Member Chen
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February 15, 2023 |
An act to amend Section 408.1 of the Military and Veterans Code, relating to the military.
LEGISLATIVE COUNSEL'S DIGEST
AB 1143, as amended, Chen.
Military: lending protections.
Federal law provides various protections regarding credit extended to members of the Armed Forces armed forces called to active duty, including, among others, limitations on the interest charged and mandatory disclosures. Existing law makes a security interest in personal property, other than specified modes of transportation, void if it would cause a loan procured by a covered member in the course of purchasing the personal property to be exempt from the federal protections. Existing law also makes a security interest in a motor vehicle void if it would cause a loan procured by a covered member to be exempt from the federal protections and that loan also funds the purchase of a credit insurance
product or credit-related ancillary product.
This bill would exempt from those provisions loans that comply with specified provisions of those federal
protections.
This bill would instead require a loan to a covered member, as defined, for the purchase of personal property, other than specified modes of transportation, to comply with federal law. The bill would also require a loan to a covered member for the purchase of a motor vehicle to comply with federal law if the loan finances the purchase of a guaranteed asset protection waiver.
Digest Key
Vote:
MAJORITY
Appropriation:
NO
Fiscal Committee:
NO
Local Program:
NO
Bill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 408.1 of the Military and Veterans Code is amended to read:408.1.
(a) For purposes of this section, “covered member” has the same meaning as in the Military Lending Act pursuant to Section 987 of Title 10 of the United States Code.(b)A security interest in personal property other than a motor vehicle, off-highway vehicle, trailer, vessel, or aircraft is void, and cannot be perfected, if it would cause a loan procured by a covered member in the course of purchasing the personal property to be exempt from the requirements of Section 987 of Title 10 of the United States Code.
(c)A security interest in a motor vehicle is void, and cannot be perfected, if it would cause a loan procured by a covered member in the course of purchasing the motor vehicle to be exempt from
Section 987 of Title 10 of the United States Code, and the loan also funds the purchase of a credit insurance product or credit-related ancillary product.
(d)Subdivisions (b) and (c) shall not apply to a loan to a covered member that complies with subdivisions (a) through (d), and paragraphs (1), (2), (4), (5), (6) and (7) of subdivision (e) of Section 987 of Title 10 of the United States Code and the federal regulations implementing those provisions.
(b) A loan to a covered member for the purchase of personal property other than a motor vehicle, off-highway vehicle, trailer, vessel, or aircraft shall comply with Section
987 of Title 10 of the United States Code.
(c) A loan to a covered member for the purchase of a motor vehicle shall comply with Section 987 of Title 10 of the United States Code if it also finances the purchase of a guaranteed asset protection (GAP) waiver as described in paragraph (2) of subdivision (h) of Section 1758.992 of the Insurance Code or Section 2982.12 of the Civil Code.