SB 327 Summary

• Authorizes and regulates guaranteed asset protection (GAP) waivers for motor vehicle financing, which protect borrowers for loan balance amounts when vehicles are totaled or stolen and insurance proceeds are insufficient.

• Exempts GAP waivers from insurance regulation and licensing requirements when offered in compliance with the law; does not apply to insurance policies or debt cancellation contracts offered by federally or state-regulated financial institutions.

• Requires GAP waivers to include a minimum 30-day free look period allowing borrowers to cancel without penalty, with full refunds if no benefits provided and pro rata refunds (less up to $50 fee) if cancelled after the free look period.

• Mandates clear written disclosures including purchase price, terms, coverage details, cancellation procedures, and notice that GAP purchase cannot be a condition of credit extension.

• Grants the Superintendent of Banks authority to enforce provisions and assess civil penalties up to $500 per violation with an aggregate cap of $10,000 for violations of similar nature; effective January 1, 2018.