GUARANTEED ASSET PROTECTION WAIVERS                                                     S.B. 616:

                                                                                                      FLOOR SUMMARY

Senate Bill 616 (as reported without amendment)

Sponsor:  Senator Tonya Schuitmaker

Committee:  Regulatory Reform

CONTENT

The bill would amend the Guaranteed Asset Protection Waiver Act to include in the definition of "guaranteed asset protection waiver" a contractual agreement in which a creditor agrees to cancel or waive all or part of amounts due in the event of the borrower's death or disability.

The Act regulates the sale of guaranteed asset protection (GAP) waivers.  "Guaranteed asset protection waiver" means a contractual agreement in which a creditor agrees, for a separate charge, to cancel or waive all or part of amounts due on a borrower's finance agreement in the event of a total physical damage loss or unrecovered theft of a motor vehicle.  ("Creditor" means a person that extends credit to a borrower in connection with the purchase of a motor vehicle; an assignee of that person; a lessor of a motor vehicle; or an assignee of that lessor.)

Under the bill, a GAP waiver also would include a contractual agreement in which a creditor agrees, for a separate charge, to cancel or waive all or part of amounts due on a borrower's finance agreement in the event of the death or disability of the borrower.

MCL 492.23                                                            Legislative Analyst:  Patrick Affholter

FISCAL IMPACT

The bill would have no fiscal impact on State or local government.

Date Completed:  4-27-12                                                     Fiscal Analyst:  Josh Sefton

This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.