Committee adopts amendment capping convenience fees for optional electronic car‑loan payments
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Summary
A committee approved HB959 as amended to allow limited convenience fees on optional electronic retail‑installment payments, imposing a cap equal to the lesser of $10 or 3% and requiring a no‑fee ACH option; the amendment was adopted and the bill was reported favorably.
Representative Johnson introduced House Bill 959 to clarify that limited convenience fees for optional electronic payments on retail installment contracts are permissible provided they are reasonably associated with actual processing costs. The sponsor explained the bill targets optional, last‑minute electronic payments (for example, credit‑card or third‑party processor transactions) while preserving a free ACH option customers can choose when setting up payments.
The committee adopted amendment barcode 32763, which sets a processing‑fee limit equal to the lesser of $10 or 3% of the transaction and explicitly requires that the holder of the contract maintain an option for the buyer to make an ACH payment without incurring a fee. Representative Johnson said the cap was intended as consumer protection to prevent third‑party processors from charging excessive percentages that would negate the advantage of avoiding a late fee.
Members asked whether a cap could become a de facto default fee and pressed for assurances that third‑party processors — not dealerships or manufacturers — typically collect such fees. The sponsor replied that ACH (direct bank debit) remains a no‑fee choice; credit‑card and other processor flows may incur third‑party charges, and the amendment’s ‘‘lesser of’’ language prevents an automatic jump to the $10 cap for small payments.
Andy Palmer of General Motors waved in support of the bill. After limited debate the committee adopted the amendment without objection and then voted to report the bill favorably; the clerk recorded the passage and the measure will move to the next stage.
