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