House File 460 - Introduced



                                       HOUSE FILE       
                                       BY  TYMESON


    Passed House,  Date               Passed Senate, Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act concerning remedies for motor vehicle dealers for a
  2    buyer's nonpayment of fees.
  3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  4 TLSB 1996HH 83
  5 dea/nh/8

PAG LIN



  1  1    Section 1.  NEW SECTION.  322.22  DEALER PAYMENT OF FEES ==
  1  2 AGREEMENT FOR REMEDIES.
  1  3    Pursuant to a written agreement between a retail buyer and
  1  4 a motor vehicle dealer entered into at the time of the sales
  1  5 transaction, if the buyer of a motor vehicle has made payment
  1  6 by use of a check or electronic funds transfer for title fees,
  1  7 annual registration fees, the fee for new registration, or
  1  8 state or local use taxes and a financial institution refuses
  1  9 payment because of insufficient funds in the buyer's account,
  1 10 the buyer shall be considered in default of payment and the
  1 11 dealer may pursue any remedies available for repossession of
  1 12 collateral in the manner provided for default on a secured
  1 13 debt under the uniform commercial code, chapter 554, article
  1 14 9.
  1 15                           EXPLANATION
  1 16    Motor vehicle dealers are required to collect on behalf of
  1 17 the state the amount due for title fees, annual registration
  1 18 fees, the fee for new registration, and any applicable taxes
  1 19 due at the time of purchase of a motor vehicle.  Because those
  1 20 charges are not part of the retail installment contract, they
  1 21 are paid directly to the dealer and are not part of the
  1 22 secured debt covered under a retail installment contract.  If
  1 23 the buyer pays the charges by check or electronic funds
  1 24 transfer and the buyer's financial institution refuses payment
  1 25 due to insufficient funds in the buyer's account, the dealer
  1 26 does not currently have the right of a secured party to
  1 27 repossess the vehicle.  The bill provides that such a
  1 28 dishonored check or electronic funds transfer is considered
  1 29 default of payment and the dealer may pursue remedies
  1 30 available under law for repossession of the motor vehicle as
  1 31 if the default were a default on secured debt.  The bill
  1 32 specifies that there must be a prior written agreement between
  1 33 the dealer and the buyer that allows the dealer to pursue the
  1 34 remedy provided in the bill.
  1 35 LSB 1996HH 83
  2  1 dea/nh/8