CHAPTER 234
S.P. 554 - L.D. 1576
An Act To Amend the Motor Vehicle Laws Relating to the Assignment of Security Interests
Emergency preamble. Whereas, acts of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and
Whereas, current Maine law requires assignees of motor vehicle liens to file new title applications with the Secretary of State within 30 days after the assignment of the lien; and
Whereas, this statutory provision has had an unintended adverse effect on finance companies that purchase Maine motor vehicle contracts and, as a result, on the financing options that dealers can make available to consumers; and
Whereas, this legislation exempts assignees from filing new title applications as long as the lienholder of record continues to accept payments from and service the contract for the consumer; and
Whereas, in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 29-A MRSA §704, sub-§1, as amended by PL 2001, c. 671, §15, is further amended to read:
1. Assignment. A lienholder may assign a security interest to a person other than the owner without affecting the interest of the owner or the validity of the security interest. A Except as provided in subsection 5, a lienholder who assigns a security interest to a person other than the owner must provide notice of the assignment to the Secretary of State within 30 days of the assignment. The notice must include the name, address and telephone number of the assignee, the name of the owner and the certificate of salvage, certificate of lien or certificate of title number. Failure to provide notice to the Secretary of State as required by this subsection is a civil violation for which the Secretary of State may assess a civil penalty of not more than $500 per violation.
Sec. 2. 29-A MRSA §704, sub-§4, as amended by PL 2001, c. 671, §15, is further amended to read:
4. Endorsement. Beginning August 1, 2002 Except as provided in subsection 5, the assignee must, in order to perfect the assignment, have a certificate of title, certificate of salvage or certificate of lien issued with the assignee named as lienholder, by delivering to the Secretary of State within 30 days of the assignment the certificate and an assignment by the lienholder named in the certificate in the form the Secretary of State prescribes, together with an application and the required fee.
Sec. 3. 29-A MRSA §704, sub-§5 is enacted to read:
5. Exceptions. The notice requirement described in subsection 1 and the filing requirement described in subsection 4 do not apply to an assignment of a security interest by a lienholder if the lienholder retains the obligation to perform servicing functions in connection with the security interest. As used in this subsection, "servicing functions" includes, without limitation, the obligations to release the lien or the obligation to obtain the release of lien upon satisfaction of the security interest as provided in section 705, to furnish information as provided in section 706, to respond to a request for information concerning the security interest from the Secretary of State and to retain possession of the certificate of title or certificate of salvage.
Emergency clause. In view of the emergency cited in the preamble, this Act takes effect when approved.
Effective May 25, 2005.
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