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GAP/Debt Cancellation Agreements

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AB 2311 on GAP Protection has been approved by the California Governor, and sent to the Secretary of State for enrollment.  The bill is described as This bill would establish provisions to govern the offer, sale, provision, or administration, in connection with a conditional sale contract, of a guaranteed asset protection waiver (GAP waiver), defined to mean an optional contractual… Read More

In Garl v. Genesee Valley Auto Mall, 2018 WL 994318, at *1 (E.D.Mich., 2018), Judge Cox granted in part and denied partial summary judgment for a car dealer who was alleged to have violated TILA in connection with the disclosure of GAP and back-dating a contract.   Plaintiffs alleged that Defendant violated the Truth in Lending Act (TILA) during the transaction in… Read More

In Pettye v. Santander Consumer, USA, Inc., 2016 WL 704840, at *3-4 (N.D.Ill., 2016), Judge St. Eve dismissed a TILA claim filed against an auto finance company because the disclosures regarding GAP complied with TILA or any violations were not apparent on the face of the disclosure statement.   An assignee is liable only where the TILA violation appears on… Read More

In Decohen v. Capital One, N.A. --- F.3d ----, 2012 WL 6685767 (4th Cir. 2012), the Fourth Circuit Court of Appeals found no NBA/OCC pre-emption of Maryland's debt cancellation agreement laws as related to an automobile RISC where the National Bank was an assignee as opposed to the original lender.   But, the Court of Appeals went farther, too, find no… Read More

The OCC issued proposed disclosure regulations for national banks, here, regarding debt cancellation agreement.  The proposed regulation requires national banks to disclose information about a Debt Cancellation Contract (DCC) or Debt Suspension Agreement (DSA). The short form disclosure usually is made orally and is issued at the time the bank firsts solicits the purchase of a contract. The long form disclosure… Read More

In Grim v. Safe-Guard Products Intern., LLC, 2011 WL 1246675 (Cal. App. 2011), the California Court of Appeal held, in an unpublished decision, that an RV purchaser could not state a class action under the UCL arising out of the sale of a GAP product because of a lack of uniformity.  The facts were as follows:    Plaintiff and appellant… Read More

AB 125, the final enrolled version can be found here, was enrolled and presented to the Governor, and signed into law.  According to the Assembly Analysis, SB 125 does the following:   ANALYSIS  :    Existing law (1) defines guaranteed automobile protections insurance" to be insurance that covers a  vehicle purchaser or lessee for the difference between the actual cash value… Read More