Senate advances bill letting repair shops retain vehicles after bounced checks amid lender, consumer questions

The Utah Senate on Feb. 6 advanced First Substitute Senate Bill 106 to the third-reading calendar after extended floor debate about whether and how repair shops may retain vehicles following a bounced check.

The bill’s sponsor said the proposal would allow a repair facility, after a period of notice and due process, to take possession of a vehicle when a repair customer pays with a check that does not clear. The sponsor described a $250 threshold in the bill’s language and said banks and credit unions had reviewed the measure and were “fine” with the proposed approach.

Supporters said the measure fills a gap for businesses that perform expensive repairs and face repeated nonpayment. “After a lengthy due process, this bill would allow a repair facility, if the check is over $250, to seek … the ability to take back that car to be paid,” the presenter said on the floor.

Opponents and cautious colleagues sought clarifications on several operational and consumer-protection points. Senators repeatedly asked whether the mechanic’s remedy would displace existing secured lenders, how the bill treats joint ownership, and whether a “dishonored check” would include stop-payment disputes where a customer alleges defective work.

Senator Hickman pressed whether a shop that takes possession could pay off an earlier bank lien and thereby move ahead of the lender; floor responses said the bill does not permit repair shops to displace prior-secured liens. The sponsor and other proponents said the intention is not to jump lenders in priority but to permit the repairer to retain the car and pursue remedies, including sheriff’s sale procedures, with lienholders notified.

Senator Hilliard and others asked whether the bill differentiates between a stop-payment made over a legitimate repair dispute and a check that bounces because it was knowingly written to fail; the sponsor and floor supporters said the measure addresses bounced checks only and that they would clarify definitions before third reading.

Lawmakers also discussed practical details — whether shops must preserve or reinstall replaced parts, whether the banks would be compelled to cover towing or storage costs, and how sheriff’s-sale proceeds would be apportioned if the bank’s lien takes priority. Sponsors said the bill includes notice and timing safeguards (45 days for owners to respond) and that the intent is to align the mechanic’s remedy with existing trade practices while leaving secured-party priority intact.

The Senate voted to place the first substitute of SB106 on the third-reading calendar; the roll call recorded 24 yeas, 2 nays and 3 absent. The sponsor pledged to meet with colleagues to refine definitions — including “dishonored check” and treatment of joint ownership — before the third reading.

Next steps: the bill is scheduled for third-reading action, where senators said they expected further technical amendments addressing definitions, lien-notice procedures and consumer safeguards.