HB420 Summary

• Authorizes and regulates guaranteed asset protection (GAP) waivers for motor vehicle financing, allowing creditors to offer contracts that waive loan balances when vehicles are totaled or stolen and insurance payments fall short.

• Exempts GAP waivers from insurance regulation and licensing requirements when offered in compliance with the act, though persons marketing these waivers must follow specified disclosure and operational requirements.

• Requires creditors and retail sellers to provide borrowers with a minimum 30-day "Free Look Period" to cancel without penalty, with full refunds available during this period and pro rata refunds (less up to $50 cancellation fee) after cancellation.

• Mandates that GAP waivers disclose key terms including purchase price, coverage details, cancellation procedures, borrower contact information for claims, and notification that credit terms cannot be conditioned on purchasing the waiver.

• Grants the Superintendent of Banks enforcement authority to assess civil penalties up to $500 per violation (maximum $10,000 aggregate) and order cease-and-desist actions for non-compliance, effective January 1, 2018.