AB 380: Electronic transactions: motor vehicle finance.
- Session Year: 2017-2018
- House: Assembly
- Latest Version Date: 2017-05-24
Existing law, the Uniform Electronic Transactions Act (UETA), generally allows parties to contract to conduct transactions by electronic means, imposes specified requirements on electronic transactions in order to comply with the act, and provides specified protections for electronic transactions conducted pursuant to the act. Existing law defines and regulates the form and content of conditional sale contracts and lease contracts for motor vehicles and excepts these contracts from the application of the UETA.
This bill would delete the exemption from the UETA for conditional sale and lease contracts for motor vehicles. The bill would authorize sellers and lessors to choose to offer buyers and lessees the option of signing their respective contracts and agreements electronically. The bill would require certain disclosures to be made in this regard and to be in a document separate from a conditional sale contract or lease contract. The bill would prohibit a seller or lessor from charging a buyer or lessee for a decision not to sign electronically and would prohibit charging more or less for vehicles based on the decision to sign electronically. The bill would require that the disclosures described here be signed at the sellers or lessors place of business.
This bill would require an exact copy of the executed contract to be furnished to the buyer or provided to the lessee at the time the contract is electronically signed, as specified.
Existing law, the Uniform Electronic Transactions Act (UETA), generally allows parties to contract to conduct transactions by electronic means, imposes specified requirements on electronic transactions in order to comply with the act, and provides specified protections for electronic transactions conducted pursuant to the act. Existing law defines and regulates the form and content of conditional sale contracts and lease contracts for motor vehicles and excepts these contracts from the application of the UETA.
This bill would delete the exemption from the UETA for conditional sale and lease contracts for motor vehicles. The bill would require authorize sellers and lessors to choose to offer buyers and lessees the option of signing their respective contracts and agreements electronically. The bill would require certain disclosures to be made in this regard and to be in a document separate from a conditional sale contract or lease contract. The bill would prohibit a seller or lessor from charging a buyer or lessee for a decision not to sign electronically and would prohibit charging more or less for vehicles based on the decision to sign electronically. The bill would require that the disclosures described here be signed at the sellers or lessors place of business.
This bill would require an exact copy of the executed contract to be furnished to the buyer or provided to the lessee at the time the contract is electronically signed, as specified.
Existing law, the Uniform Electronic Transactions Act (UETA), generally allows parties to contract to conduct transactions by electronic means, imposes specified requirements on electronic transactions in order to comply with the act, and provides specified protections for electronic transactions conducted pursuant to the act. Existing law defines and regulates the form and content of conditional sale contracts and lease contracts for motor vehicles and excepts these contracts from the application of the UETA.
This bill would delete the exemption from the UETA for conditional sale and lease contracts for motor vehicles. The bill would require sellers and lessors to offer buyers and lessees the option of signing their respective contracts and agreements electronically. The bill would require certain disclosures to be made in this regard and to be in a document separate from a conditional sale contract or lease contract. The bill would prohibit a seller or lessor from charging a buyer or lessee for a decision not to sign electronically and would prohibit charging more or less for vehicles based on the decision to sign electronically. The bill would require that the disclosures described here be signed at the sellers or lessors place of business.
This bill would require an exact copy of the executed contract to be furnished to the buyer or provided to the lessee at the time the contract is electronically signed, as specified.
(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 786 786, as it applies to individual and group disability policies, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)Notwithstanding subdivisions (b) and (c), this title shall apply to electronic records and electronic signatures relating to transactions conducted by a person licensed, certified, or registered pursuant to the Alarm Company Act (Chapter 11.6 (commencing with Section 7590) of Division 3 of the Business and Professions Code) for purposes of activities authorized by Section 7599.54 of the Business and Professions Code.
(h)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 2.Section 1633.3 of the Civil Code, as amended by Section 3 of Chapter 617 of the Statutes of 2016, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, paragraph (2) of subdivision (a) of Section 663, Section 664, 673, or 677, paragraph (2) of subdivision (a) of Section 678, Section 678.1 or 786, paragraph (2) of subdivision (a) of Section 10086, or Section 10113.7, 10127.7, 10127.9, 10127.10, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)Notwithstanding subdivisions (b) and (c), this title shall apply to electronic records and electronic signatures relating to transactions conducted by a person licensed, certified, or registered pursuant to the Alarm Company Act (Chapter 11.6 (commencing with Section 7590) of Division 3 of the Business and Professions Code) for purposes of activities authorized by Section 7599.54 of the Business and Professions Code.
(h)This section shall become operative on January 1, 2021.
SEC. 3.Section 2984.7 is added to the Civil Code, to read:2984.7.(a)(1)Prior to the execution of a conditional sale contract to which Section 1633.3 may apply, the seller may choose to offer the buyer the option of signing electronically the conditional sale contract and agreements as part of the transaction of the vehicle. A persons consent to opt in to signing electronically may be acquired in writing or electronically. The consent form for opting in shall disclose, in writing or electronically, all of the following:
(A)The buyers election to sign electronically the conditional sale contract and other agreements as part of the transaction of the vehicle is voluntary.
(B)The buyer may opt out at any time.
(2)The buyers signature, in writing or electronically, shall be set forth immediately below the opt-in consent disclosure.
(b)(1)The seller shall not charge a buyer for the decision not to sign a conditional sale contract electronically.
(2)The seller shall not charge more or less for the purchase of a vehicle to a buyer opting to sign a conditional sale contract electronically.
(c)Notwithstanding Section 2981.9, the disclosure of the option to sign electronically and the buyers consent to it, if applicable, as described in subdivision (a), shall be in a document separate from the conditional sale contract.
(d)An exact copy of the contract executed pursuant to Section 1633.3 shall be furnished to the buyer by the seller at the time that the buyer and the seller have electronically signed it as proscribed by Section 2981.9.
(e)The seller, as part of the execution of a conditional sale contract to which Section 1633.3 applies, shall not use an electronic system that enables a seller to change the terms of the contract or to add additional terms to the contract after it has been executed and furnished to the buyer pursuant to subdivision (d).
SEC. 4.Section 2984.8 is added to the Civil Code, to read:2984.8.A conditional sale contract to which Section 1633.3 applies shall be signed at the sellers place of business.
SEC. 5.Section 2986 is added to the Civil Code, to read:2986.(a)(1)Prior to the execution of a lease contract to which Section 1633.3 may apply, the lessor may choose to offer the lessee the option of signing electronically the lease contract and agreements as part of the transaction of the vehicle. A persons consent to opt in to signing electronically may be acquired in writing or electronically. The consent form for opting in shall disclose, in writing or electronically, all of the following:
(A)The lessees election to sign electronically the lease contract and other agreements as part of the transaction of the vehicle is voluntary.
(B)The lessee may opt out at any time.
(2)The lessees signature, in writing or electronically, shall be set forth immediately below the opt-in consent disclosure.
(b)(1)The lessor shall not charge a lessee for the decision not to sign a lease contract electronically.
(2)The lessor shall not charge more or less for the lease of a vehicle to a lessee opting to sign a lease contract electronically.
(c)Notwithstanding Section 2985.8, the disclosure of the option to sign electronically and the lessees consent to it, if applicable, as described in subdivision (a), shall be in a document separate from the lease contract.
(d)An exact copy of the lease contract executed pursuant to Section 1633.3 shall be provided to the lessee at the time of the electronic signing as proscribed by Section 2985.8.
(e)The lessor, as part of the execution of a lease contract to which Section 1633.3 applies, shall not use an electronic system that enables a lessor to change the terms of the contract or to add additional terms to the contract after it has been executed and furnished to the lessee pursuant to subdivision (d).
SEC. 6.Section 2986.1 is added to the Civil Code, to read:2986.1.A lease contract to which Section 1633.3 applies shall be signed at the lessors place of business.
(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 786 as it applies to individual and group disability policies, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)Notwithstanding subdivisions (b) and (c), this title shall apply to electronic records and electronic signatures relating to transactions conducted by a person licensed, certified, or registered pursuant to the Alarm Company Act (Chapter 11.6 (commencing with Section 7590) of Division 3 of the Business and Professions Code) for purposes of activities authorized by Section 7599.54 of the Business and Professions Code.
(h)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 2.Section 1633.3 of the Civil Code, as amended by Section 3 of Chapter 617 of the Statutes of 2016, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, paragraph (2) of subdivision (a) of Section 663, Section 664, 673, or 677, paragraph (2) of subdivision (a) of Section 678, Section 678.1 or 786, paragraph (2) of subdivision (a) of Section 10086, or Section 10113.7, 10127.7, 10127.9, 10127.10, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)Notwithstanding subdivisions (b) and (c), this title shall apply to electronic records and electronic signatures relating to transactions conducted by a person licensed, certified, or registered pursuant to the Alarm Company Act (Chapter 11.6 (commencing with Section 7590) of Division 3 of the Business and Professions Code) for purposes of activities authorized by Section 7599.54 of the Business and Professions Code.
(h)This section shall become operative on January 1, 2021.
SEC. 3.Section 2984.7 is added to the Civil Code, to read:2984.7.(a)(1)Prior to the execution of a conditional sale contract to which Section 1633.3 may apply, the seller shall may choose to offer the buyer the option of signing electronically the conditional sale contract and agreements as part of the transaction of the vehicle. A persons consent to opt in to signing electronically may be acquired in writing or electronically. The consent form for opting in shall disclose, in writing or electronically, all of the following:
(A)The buyers election to sign electronically the conditional sale contract and other agreements as part of the transaction of the vehicle is voluntary.
(B)The buyer may opt out at any time.
(2)The buyers signature, in writing or electronically, shall be set forth immediately below the opt-in consent disclosure.
(b)(1)The seller shall not charge a buyer for the decision not to sign a conditional sale contract electronically.
(2)The seller shall not charge more or less for the purchase of a vehicle to a buyer opting to sign a conditional sale contract electronically.
(c)Notwithstanding Section 2981.9, the disclosure of the option to sign electronically and the buyers consent to it, if applicable, as described in subdivision (a), shall be in a document separate from the conditional sale contract.
(d)An exact copy of the contract executed pursuant to Section 1633.3 shall be furnished to the buyer by the seller at the time that the buyer and the seller have electronically signed it as proscribed by Section 2981.9.
(e)The seller, as part of the execution of a conditional sale contract to which Section 1633.3 applies, shall not use an electronic system that enables a seller to change the terms of the contract or to add additional terms to the contract after it has been executed and furnished to the buyer pursuant to subdivision (d).
SEC. 4.Section 2984.8 is added to the Civil Code, to read:2984.8.A conditional sale contract to which Section 1633.3 applies shall be signed at the sellers place of business.
SEC. 5.Section 2986 is added to the Civil Code, to read:2986.(a)(1)Prior to the execution of a lease contract to which Section 1633.3 may apply, the lessor shall may choose to offer the lessee the option of signing electronically the lease contract and agreements as part of the transaction of the vehicle. A persons consent to opt in to signing electronically may be acquired in writing or electronically. The consent form for opting in shall disclose, in writing or electronically, all of the following:
(A)The lessees election to sign electronically the lease contract and other agreements as part of the transaction of the vehicle is voluntary.
(B)The lessee may opt out at any time.
(2)The lessees signature, in writing or electronically, shall be set forth immediately below the opt-in consent disclosure.
(b)(1)The lessor shall not charge a lessee for the decision not to sign a lease contract electronically.
(2)The lessor shall not charge more or less for the lease of a vehicle to a lessee opting to sign a lease contract electronically.
(c)Notwithstanding Section 2985.8, the disclosure of the option to sign electronically and the lessees consent to it, if applicable, as described in subdivision (a), shall be in a document separate from the lease contract.
(d)An exact copy of the lease contract executed pursuant to Section 1633.3 shall be provided to the lessee at the time of the electronic signing as proscribed by Section 2985.8.
(e)The lessor, as part of the execution of a lease contract to which Section 1633.3 applies, shall not use an electronic system that enables a lessor to change the terms of the contract or to add additional terms to the contract after it has been executed and furnished to the lessee pursuant to subdivision (d).
SEC. 6.Section 2986.1 is added to the Civil Code, to read:2986.1.A lease contract to which Section 1633.3 applies shall be signed at the lessors place of business.
(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 786 as it applies to individual and group disability policies, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)Notwithstanding subdivisions (b) and (c), this title shall apply to electronic records and electronic signatures relating to transactions conducted by a person licensed, certified, or registered pursuant to the Alarm Company Act (Chapter 11.6 (commencing with Section 7590) of Division 3 of the Business and Professions Code) for purposes of activities authorized by Section 7599.54 of the Business and Professions Code.
(h)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 2.Section 1633.3 of the Civil Code, as amended by Section 3 of Chapter 617 of the Statutes of 2016, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, paragraph (2) of subdivision (a) of Section 663, Section 664, 673, or 677, paragraph (2) of subdivision (a) of Section 678, Section 678.1 or 786, paragraph (2) of subdivision (a) of Section 10086, or Section 10113.7, 10127.7, 10127.9, 10127.10, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)Notwithstanding subdivisions (b) and (c), this title shall apply to electronic records and electronic signatures relating to transactions conducted by a person licensed, certified, or registered pursuant to the Alarm Company Act (Chapter 11.6 (commencing with Section 7590) of Division 3 of the Business and Professions Code) for purposes of activities authorized by Section 7599.54 of the Business and Professions Code.
(h)This section shall become operative on January 1, 2021.
SEC. 3.Section 2984.7 is added to the Civil Code, to read:2984.7.(a)(1)Prior to the execution of a conditional sale contract to which Section 1633.3 may apply, the seller shall offer the buyer the option of signing electronically the conditional sale contract and agreements as part of the transaction of the vehicle. A persons consent to opt in to signing electronically may be acquired in writing or electronically. The consent form for opting in shall disclose, in writing or electronically, all of the following:
(A)The election to sign electronically the conditional sale contract and other agreements as part of the transaction of the vehicle is voluntary.
(B)The buyer may opt out at any time.
(2)The buyers signature, in writing or electronically, shall be set forth immediately below the opt-in consent disclosure.
(b)(1)The seller shall not charge a buyer for the decision not to sign a conditional sale contract electronically.
(2)The seller shall not charge more or less for the purchase of a vehicle to a buyer opting to sign a conditional sale contract electronically.
(c)Notwithstanding Section 2981.9, the disclosure of the option to sign electronically and the buyers consent to it, if applicable, as described in subdivision (a), shall be in a document separate from the conditional sale contract.
(d)An exact copy of the contract executed pursuant to Section 1633.3 shall be furnished to the buyer by the seller at the time that the buyer and the seller have electronically signed it as proscribed by Section 2981.9.
SEC. 4.Section 2984.8 is added to the Civil Code, to read:2984.8.A conditional sale contract to which Section 1633.3 applies shall be signed at the sellers place of business.
SEC. 5.Section 2986 is added to the Civil Code, to read:2986.(a)(1)Prior to the execution of a lease contract to which Section 1633.3 may apply, the lessor shall offer the lessee the option of signing electronically the lease contract and agreements as part of the transaction of the vehicle. A persons consent to opt in to signing electronically may be acquired in writing or electronically. The consent form for opting in shall disclose, in writing or electronically, all of the following:
(A)The election to sign electronically the lease contract and other agreements as part of the transaction of the vehicle is voluntary.
(B)The lessee may opt out at any time.
(2)The lessees signature, in writing or electronically, shall be set forth immediately below the opt-in consent disclosure.
(b)(1)The lessor shall not charge a lessee for the decision not to sign a lease contract electronically.
(2)The lessor shall not charge more or less for the lease of a vehicle to a lessee opting to sign a lease contract electronically.
(c)Notwithstanding Section 2985.8, the disclosure of the option to sign electronically and the lessees consent to it, if applicable, as described in subdivision (a), shall be in a document separate from the lease contract.
(d)An exact copy of the lease contract executed pursuant to Section 1633.3 shall be provided to the lessee at the time of the electronic signing as proscribed by Section 2985.8.
SEC. 6.Section 2986.1 is added to the Civil Code, to read:2986.1.A lease contract to which Section 1633.3 applies shall be signed at the lessors place of business.
|
Date
|
Status
|
|---|---|
| Jul 13, 2017 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| May 24, 2017 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on JUD. |
| May 10, 2017 | Referred to Com. on JUD. |
| May 1, 2017 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 1, 2017 | Read third time. Passed. Ordered to the Senate. (Ayes 74. Noes 0. Page 1300.) |
| Apr 6, 2017 | Read third time and amended. Ordered to third reading. (Ayes 80. Noes 0. Page 960.) |
| Mar 16, 2017 | Read second time. Ordered to third reading. |
| Mar 15, 2017 | From committee: Do pass. (Ayes 10. Noes 0.) (March 14). |
| Feb 21, 2017 | Referred to Com. on P. & C.P. |
| Feb 10, 2017 | From printer. May be heard in committee March 12. |
| Feb 9, 2017 | Read first time. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| May 1, 2017 | AB 380 DABABNEH Assembly Third Reading | Assembly Floor |
Passed |
|
| Apr 6, 2017 | AB 380 DABABNEH Assembly Third Reading Amend By DABABNEH Set #1 | Assembly Floor |
Passed |
|
| Mar 14, 2017 | Do pass. | Assembly Standing Committee on Privacy and Consumer Protection |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| California New Car Dealers Association | ** Support | Mar 10, 2017 |
| Consumer Federation Of California | ** Against | Mar 10, 2017 |
| Consumers For Auto Reliability & Safety | * Against | Mar 14, 2017 |
| Enterprise Holdings | ** Support | Mar 10, 2017 |
| Public Law Center | ** Against | Mar 10, 2017 |
ASSEMBLY THIRD READING
ATR Bill Id:AB 380
Author:(Dababneh)
As Amended Ver:April 6, 2017
Majority vote
Committee | Votes | Ayes | Noes |
Privacy | 10-0 | Chau, Kiley, Baker, Berman, Calderon, Dababneh, Irwin, Kalra, Obernolte, Reyes |
|
SUMMARY: Allows motor vehicle sales and lease transactions to be conducted electronically. Specifically, this bill:
- Removes the Automobile Sales Finance Act and California Vehicle Leasing Act from the exclusion clauses of the Uniform Electronic Transactions Act (Cal UETA).
- Applies all Cal UETA requirements to motor vehicle sales and lease transactions.
- Specifies that a car dealer may offer a buyer the choice to opt in to using an electronic sale or lease contract, instead of paper.
- Specifies that the opt-in form must be signed in writing or electronically.
- Specifies that the opt-in form must disclose that the buyer's choice to opt in to an electronic sales or lease contract is voluntary and that the buyer may stop and opt out of the electronic signing at any time during the process.
- Specifies that the buyer's signature must be placed directly below the disclosures described in 5) above.
- Specifies that the car dealer may not charge more or less for the purchase or lease of the car based on whether a buyer is opting to sign electronically.
- Specifies that the opt-in consent form must be on a separate document and not part of the vehicle sale or lease contract.
- Requires the car dealer to give the buyer an exact copy of the electronically signed contract at the time of sale or lease and before the vehicle is delivered to the buyer.
- Requires that an electronic sale or lease contract must be signed at the car dealer's place of business.
- Prohibits car dealers from using any electronic system that would allow a contract term to be changed after the contract has been signed electronically.
FISCAL EFFECT: None. This bill is keyed non-fiscal by the Legislative Counsel.
COMMENTS:
Purpose of this bill: This bill is intended to streamline the vehicle sales process for consumers and car dealerships by permitting consumers to choose to sign vehicle purchase and lease contracts electronically, if the car dealer offers this option. This measure is author-sponsored.
Electronic transactions: In 2000, E-SIGN was enacted to establish federal law governing electronic transactions. Generally speaking, Cal UETA (adopted in 1999) provides that the law should be construed to facilitate electronic transmissions and that any transaction not specifically exempted from Cal UETA may be conducted electronically, subject to specific rules including:
While Cal UETA prohibits the use of electronic contracts and signatures on automobile sales and lease contracts, federal law (E-SIGN) permits car sales to be conducted electronically. The author contends that all across the country the automotive financing industry and new car dealers have begun to move to electronic contracts as a way to modernize the car buying process, improve sales record retention, and help expedite the vehicle financing process.
Concerns about electronic transactions in car buying: Opponents contend that allowing car sales to be conducted and signed electronically puts the consumer at a disadvantage in the bargaining process, because if the consumer never receives paper in their hand until the sale is over – or perhaps never receives paper at all because they only receive an emailed copy of the final contract – then two bad things happen: 1) The consumer cannot leave the dealership with a written offer in hand that they can review on their own and perhaps even use to comparison shop at other car dealerships; and 2) The consumer does not have an opportunity to compare what they saw on a scrolling computer screen with a paper printout of the contract. In a literal sense, opponents contend, consumers do not have the ability to see on paper in "black and white" what they are agreeing to before they are bound by the contract. However, this bill allows a consumer to stop the e-sign process and receive a hard copy of the offer that they can use to shop and compare at other dealerships, and this bill ensures that consumers receive a full copy (paper or electronic) of the contract they sign.
Existing consumer protections, such as the right to cancel, would be left intact: Cal UETA requires that if notice of a right to cancel has to be provided or sent to a consumer, then doing so is only permissible electronically if the consumer is allowed to exercise his or her right to cancel by electronic means as well. Under current law, consumers are given certain rights to cancel car sales contracts, and this bill would not change or limit those rights. In fact, it would keep consumers on the same playing field as car dealers by allowing consumers to cancel by electronic means if the car dealer had provided them notice of their right to cancel electronically. This bill would also retain the other car purchase and lease consumer protections in current law, such as the right to a single contract document containing detailed and itemized costs for the purchase of the car and any additional products or services, and the federal law requirement to give the buyer the original Buyers Guide displayed on the vehicle or an accurate copy that contains all of the required disclosures and reflects the final warranty terms between the buyer and seller.
Analysis Prepared by: Jennie Bretschneider / P. & C.P. / (916) 319-2200 FN: 0000125
ASSEMBLY THIRD READING
ATR Bill Id:AB 380
Author:(Dababneh)
As Introduced Ver:February 9, 2017
Majority vote
Committee | Votes | Ayes | Noes |
Privacy | 10-0 | Chau, Kiley, Baker, Berman, Calderon, Dababneh, Irwin, Kalra, Obernolte, Reyes |
SUMMARY: Allows motor vehicle sales and lease transactions to be conducted electronically. Specifically, this bill:
- Removes the Automobile Sales Finance Act and California Vehicle Leasing Act from the exclusion clauses of the Uniform Electronic Transactions Act (Cal UETA).
- Applies all Cal UETA requirements to motor vehicle sales and lease transactions.
- Specifies that a car dealer must offer a buyer the choice to opt in to using an electronic sale or lease contract, instead of paper.
- Specifies that the opt-in form must be signed in writing or electronically.
- Specifies that the opt-in form must disclose that the buyer's choice to opt in to an electronic sales or lease contract is voluntary and that the buyer may stop and opt out of the electronic signing at any time during the process.
- Specifies that the buyer's signature must be placed directly below the disclosures described in 5) above.
- Specifies that the car dealer may not charge more or less for the purchase or lease of the car based on whether a buyer is opting to sign electronically.
- Specifies that the opt-in consent form must be on a separate document and not part of the vehicle sale or lease contract.
- Requires the car dealer to give the buyer an exact copy of the electronically signed contract at the time of sale or lease and before the vehicle is delivered to the buyer.
- Requires that an electronic sale or lease contract must be signed at the car dealer's place of business.
FISCAL EFFECT: None. This bill is keyed non-fiscal by the Legislative Counsel.
COMMENTS:
Purpose of this bill: This bill is intended to streamline the vehicle sales process for consumers and car dealerships by permitting consumers to choose to sign vehicle purchase and lease contracts electronically. This measure is author-sponsored.
Electronic transactions: In 2000, E-SIGN was enacted to establish federal law governing electronic transactions. Generally speaking, Cal UETA (adopted in 1999) provides that the law should be construed to facilitate electronic transmissions and that any transaction not specifically exempted from Cal UETA may be conducted electronically, subject to specific rules including:
While Cal UETA prohibits the use of electronic contracts and signatures on automobile sales and lease contracts, federal law (E-SIGN) permits car sales to be conducted electronically. The author contends that all across the country the automotive financing industry and new car dealers have begun to move to electronic contracts as a way to modernize the car buying process, improve sales record retention, and help expedite the vehicle financing process.
Concerns about electronic transactions in car buying: Opponents contend that allowing car sales to be conducted and signed electronically puts the consumer at a disadvantage in the bargaining process, because if the consumer never receives paper in their hand until the sale is over – or perhaps never receives paper at all because they only receive an emailed copy of the final contract – then two bad things happen: 1) The consumer cannot leave the dealership with a written offer in hand that they can review on their own and perhaps even use to comparison shop at other car dealerships; and 2) The consumer does not have an opportunity to compare what they saw on a scrolling computer screen with a paper printout of the contract. In a literal sense, opponents contend, consumers do not have the ability to see on paper in "black and white" what they are agreeing to before they are bound by the contract. However, this bill allows a consumer to stop the e-sign process and receive a hard copy of the offer that they can use to shop and compare at other dealerships, and this bill ensures that consumers receive a full copy (paper or electronic) of the contract they sign.
Existing consumer protections, such as the right to cancel, would be left intact: Cal UETA requires that if notice of a right to cancel has to be provided or sent to a consumer, then doing so is only permissible electronically if the consumer is allowed to exercise his or her right to cancel by electronic means as well. Under current law, consumers are given certain rights to cancel car sales contracts, and this bill would not change or limit those rights. In fact, it would keep consumers on the same playing field as car dealers by allowing consumers to cancel by electronic means if the car dealer had provided them notice of their right to cancel electronically.
This bill would also retain the other car purchase and lease consumer protections in current law, such as the right to a single contract document containing detailed and itemized costs for the purchase of the car and any additional products or services, and the federal law requirement to give the buyer the original Buyers Guide displayed on the vehicle or an accurate copy that contains all of the required disclosures and reflects the final warranty terms between the buyer and seller.
Analysis Prepared by: Jennie Bretschneider / P. & C.P. / (916) 319-2200 FN: 0000039
Date of Hearing: March 14, 2017
ASSEMBLY COMMITTEE ON PRIVACY AND CONSUMER PROTECTION
Ed Chau, Chair
ABPCA Bill Id:AB 380 (
Author:Dababneh) – As Introduced Ver:February 9, 2017
SUBJECT: Electronic transactions: motor vehicle finance
SUMMARY: Allows motor vehicle sales and lease transactions to be conducted electronically. Specifically, this bill:
- Removes the Automobile Sales Finance Act and California Vehicle Leasing Act from the exclusion clauses of the Uniform Electronic Transactions Act (Cal UETA).
- Applies all Cal UETA requirements to motor vehicle sales and lease transactions.
- Specifies that a car dealer must offer a buyer the choice to opt in to using an electronic sale or lease contract, instead of paper.
- Specifies that the opt-in form must be signed in writing or electronically.
- Specifies that the opt-in form must disclose that the buyer’s choice to opt in to an electronic sales or lease contract is voluntary and that the buyer may stop and opt out of the electronic signing at any time during the process.
- Specifies that the buyer’s signature must be placed directly below the disclosures described in 5) above.
- Specifies that the car dealer may not charge more or less for the purchase or lease of the car based on whether a buyer is opting to sign electronically.
- Specifies that the opt-in consent form must be on a separate document and not part of the vehicle sale or lease contract.
- Requires the car dealer to give the buyer an exact copy of the electronically signed contract at the time of sale or lease and before the vehicle is delivered to the buyer.
- Requires that an electronic sale or lease contract must be signed at the car dealer’s place of business.
EXISTING LAW:
- Provides, under the federal Electronic Signatures in Global and National Commerce Act (E-SIGN), for the transmission of electronic signatures, but does not apply to a contract or other record that is governed by: a statute, regulation, or other rule of law governing the creation and execution of wills, codicils, or testamentary trusts; a state statute, regulation, or other rule of law governing adoption, divorce, or other matters of family law; or the Uniform Commercial Code, as in effect in any state, as specified. (15 United States Code (U.S.C.). Secs. 7001, 7003(a))
- Excludes, under E-SIGN, the following specific transaction types from electronic transmission: court orders or notices, or official court documents for court proceedings; notices of cancellation or termination of utility services; notices of default, acceleration, repossession, foreclosure, or eviction, or the right to cure, under a credit agreement secured by, or a rental agreement for, a primary residence; cancellations or terminations of health insurance or benefits or life insurance benefits; recalls of a product, or material failure of a product, that risks health or safety; and documents required to accompany transportation or handling of hazardous materials, pesticides, or other toxic or dangerous materials. (15 U.S.C. Sec. 7003(b))
- Generally authorizes, under Cal UETA, the transaction of business, commerce and contracts by electronic means, except for transactions that are subject to certain laws, such as laws governing the creation and execution of wills, codicils, or testamentary trusts, and specific transactions described under various statutes, including conditional sale contracts for the sale of a motor vehicle between a buyer and a seller (Civil Code (CC) Section 1633.1, 1633.3)
- Sets forth principles that govern the legal effect of electronic transactions, including that: a record or signature may not be denied legal effect or enforceability solely because it is in electronic form; a contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation; if a law requires a record to be in writing, an electronic record satisfies the law; and if a law requires a signature, an electronic signature satisfies the law. (CC 1633.7)
- Provides that an electronic record or electronic signature is attributable to a person if it was the act of the person, which may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable. (CC 1633.9)
- Specifies that all parties must agree to conduct the transaction electronically; that an agreement in a standard form contract may not be conditioned on an agreement to conduct transactions by electronic means; and that a party that agrees to conduct a transaction electronically may refuse to conduct other transactions by electronic means. (CC 1633.5)
- Provides that if a law other than Cal UETA requires that a notice of the right to cancel be provided or sent, then an electronic record may not substitute for a writing under that other law unless, in addition to satisfying the requirements of that other law and Cal UETA, the notice of cancellation may be returned by electronic means. (CC 1633.16.)
- Sets forth in the Rees-Levering Motor Vehicle Sales Finance Act requirements with regard to disclosures required in a conditional sale contract for the sale of a motor vehicle, including specified disclosures regarding finance charges, and sets forth the permissible fees and charges in an automobile conditional sale contract for the sale of a motor vehicle. (CC 2982)
- Requires all car dealers to provide a document indicating the price of specified items purchased, (including, among other things, any service contract, insurance product, debt cancellation agreement, or theft deterrent device) and stating the cost of the monthly installment payments with and without the items listed. (CC 2982.2)
- Requires a car dealer selling a used vehicle for a purchase price under $40,000 to offer the buyer a two-day contract cancellation option agreement, priced as specified, and under which the buyer may return the vehicle without cause so long as certain conditions are met. (Vehicle Code (VC) Section 11713.21)
- Defines a "buy-here-pay-here" car dealer as one that enters into conditional sale or lease contracts and assigns less than 90% of such contracts to unaffiliated third-party finance or leasing sources within 45 days of consummation. (VC 241)
- Requires, pursuant to federal regulation, a car dealer, before offering a used vehicle for sale to a consumer, to display a window sticker called the “Buyers Guide” that must, among other things, disclose whether any warranty is offered and the basic terms of any warranty. If no express warranty is provided, then the Buyer’s Guide must indicate that the vehicle is being offered for sale “as is” (with no express or implied warranties), or with only the applicable “implied warranties” required by state law. (16 Code of Federal Regulations (C.F.R.) 455.3)
- Requires, pursuant to federal regulation, used car dealers, at the time of sale, to give the buyer the original Buyers Guide displayed on the vehicle or an accurate copy that contains all of the required disclosures and reflects the final warranty terms agreed on between the buyer and seller. (16 C.F.R. 455.3)
FISCAL EFFECT: None. This bill is keyed nonfiscal by the Legislative Counsel.
COMMENTS:
- Purpose of this bill: This bill is intended to streamline the vehicle sales process for consumers and car dealerships by permitting consumers to choose to sign vehicle purchase and lease contracts electronically. This measure is author-sponsored.
- Author’s statement: According to the author's office, “Assembly Bill 380 would remove restrictions within California’s Automobile Sales Finance Act & the California Vehicle Leasing Act that prohibit consumers from purchasing or leasing a vehicle with an electronic signature. For consumers who choose to sign these documents electronically, this bill will streamline and expedite the car buying process. All existing consumer protections afforded in existing law for both the automobile sales and lease contracts will be maintained under the bill. AB 380 simply brings California in line with federal law to allow consumers to have a better, more modernized and streamlined vehicle buying or leasing process, while still maintaining consumer protections afforded in existing law, by allowing consumers to purchase or lease a vehicle with an electronic signature.”
- Electronic transactions: In 2000, E-SIGN was enacted to establish federal law governing electronic transactions. Generally speaking, Cal UETA (adopted in 1999) provides that the law should be construed to facilitate electronic transmissions and that any transaction not specifically exempted from Cal UETA may be conducted electronically, subject to specific rules including:
- All parties must “opt in” and may “opt out” from conducting further transactions electronically at any time.
- A record or signature cannot be denied legal effect because it is in electronic form.
- If a law requires a person to provide information in writing to another, that requirement is satisfied if the information is provided in an electronic record that the recipient can preserve and access for future reference.
- If a sales transaction occurs electronically, then a consumer must be given the right to exercise his or her cancellation rights electronically.
- All parties must “opt in” and may “opt out” from conducting further transactions electronically at any time.
While Cal UETA prohibits the use of electronic contracts and signatures on automobile sales and lease contracts, federal law (E-SIGN) permits car sales to be conducted electronically. The author contends that all across the country the automotive financing industry and new car dealers have begun to move to electronic contracts as a way to modernize the car buying process, improve sales record retention, and help expedite the vehicle financing process.
Electronic transactions have a number of significant advantages including faster service and consumer choice. Many consumers prefer to conduct transactions small and large electronically, yet the law prohibits car purchase transactions from being completed electronically. The author contends the car buying experience would be a faster, more convenient experience for consumers if the transaction itself could be conducted using computers or tablets rather than stacks of paper.
- Concerns about electronic transactions in car buying: Opponents contend that allowing car sales to be conducted and signed electronically puts the consumer at a disadvantage in the bargaining process because if the consumer never receives paper in their hand until the sale is over – or perhaps never receives paper at all because they only receive an emailed copy of the final contract – then two bad things happen: a) The consumer cannot leave the dealership with a written offer in hand that they can review on their own and perhaps even use to comparison shop at other car dealerships; and b) The consumer does not have an opportunity to compare what they saw on a scrolling computer screen with a paper printout of the contract – in a literal sense they do not have the ability to see on paper in “black and white” what they are agreeing to before they are bound by the contract.
Consumer advocates contend that it is not uncommon for consumers to be confused about certain elements of a car sale, including the cost of additional services, such as rust protection, or the trade-in value they are actually receiving for their old car. Opponents contend that next to the purchase of a home, a car purchase is by far the most expensive product most consumers buy and the purchase typically involves a financial commitment in the form of a loan that requires monthly payments over several years. Consumer advocates argue that, as with house purchases, car purchases should be completed on paper with wet signatures, so that consumers understand the weight of their decision to sign the contract.
- This bill incorporates new consumer and privacy protections from prior e-signature legislation: AB 1131 (Dababneh) of 2015, which was signed into law and went into effect in 2016, permits electronic signatures for life insurance and annuity product sales. In addition to removing the Cal UETA exclusion for life insurance and annuities, AB 1131 included additional consumer protections, such as requiring insurers to:
- Obtain opt-in consent from the consumer to transact business electronically and to gather that consent either on the initial application or in a separate document that is part of the insurance policy with the consent language bolded or otherwise made conspicuous.
- Allow consumers to opt out of using the electronic process at any time and create a process or system for the person to opt out.
- Not charge a person who declines to opt in to an electronic transaction and not provide a discount or incentive to any person to opt in to an electronic transaction. (Insurance Code Section 38.6, subdivisions (b)(1)-(3), (11))
At the request of this Committee, the author included these important consumer protections in this bill as well as his prior bill, AB 1743 (Dababneh), which was nearly identical to this bill and which passed this Committee on a unanimous roll call in 2016.
In addition, this bill clarifies that car sale transactions using electronic signatures, as permitted under this bill, must be completed and signed electronically at the car dealer’s established place of business.
- Existing consumer protections, such as a right to cancel, would be left intact: Cal UETA requires that if notice of a right to cancel has to be provided or sent to a consumer, then doing so is only permissible electronically if the consumer is allowed to exercise his or her right to cancel by electronic means as well. Under current law, consumers are given certain rights to cancel car sales contracts, and this bill would not change or limit those rights. In fact, it would keep consumers on the same playing field as car dealers by allowing consumers to cancel by electronic means if the car dealer had chosen to provide them notice of their right to cancel electronically.
This bill would also not change other consumer protections in current law, such as the right to a single contract document containing detailed and itemized costs for the purchase of the car an any additional products or services, and the federal law requirement to give the buyer the original Buyers Guide displayed on the vehicle or an accurate copy that contains all of the required disclosures and reflects the final warranty terms between the buyer and seller.
- Arguments in support: According to the California New Car Dealers Association, “AB 380 will allow car buyers to opt in to electronically sign a contract, and does not change any of the strong existing consumer protections available. Some of those who oppose AB 380 misunderstand the very nature of Cal UETA and electronic contracts. Cal UETA simply allows the electronic format of the existing law and protections relating to a contract. In the case of AB 380, this bill incorporates all the consumer protections, mandatory disclosures and process that currently exist under California law.”
- Arguments in opposition: The Consumers for Auto Reliability and Safety states in opposition that among other things “[u]nder AB 380, it would become prohibitively expensive for many victims of [fraudulent] practices, and for public law enforcement agencies that have had their budgets and staffing slashed, to prove what was disclosed to car buyers. Instead of a paper document, where there is a “wet” signature, there would be an electronic document solely in the possession of the dealer, which anyone could have signed by clicking on a computer screen or signing with an e-signature, making it difficult or impossible to prove forgery.”
- Prior legislation:
AB 1743 (Dababneh) of 2016 was identical to this bill. AB 1743 passed this Committee unanimously but was later held in the Senate Judiciary Committee.
AB 2591 (Dababneh), Chapter 617, Statutes of 2016, allows a consumer who opts-in to initiate changes to their automobile insurance policy online, receive non-renewal and cancellation notices for homeowner's and automobile policies electronically, and repeals the sunset dates on existing statutes permitting electronic notices and transactions for both property/casualty and life insurance policies.
AB 1131 (Dababneh), Chapter 638, Statutes of 2015, permits life insurance carriers, agents and brokers to send documents and conduct transactions related to life insurance and annuities electronically.
AB 1097 (Holden), Chapter 439, Statutes of 2015, authorizes contracts for alarm installation to be conducted electronically.
REGISTERED SUPPORT / OPPOSITION:
Support
California New Car Dealers Association
Enterprise Holdings
Opposition
Consumer Federation of California
Consumers for Auto Reliability and Safety
Public Law Center
Analysis Prepared by: Jennie Bretschneider / P. & C.P. /
Discussed in Hearing
2MIN
Assembly Floor
45MIN
Assembly Standing Committee on Privacy and Consumer Protection
Bill Author
Bill Co-Author(s):
