Concerning rights related to the transfer of a motor vehicle.
HB 26-1261 would create new consumer protections for certain motor vehicle transactions involving a debtor’s only registered vehicle, defined in the bill as a “qualified motor vehicle.” For defaults on payment obligations, the bill extends the pre-repossession notice-and-cure period from 20 days to 60 days, limits repossession until that period expires, and allows the consumer to cure by paying overdue amounts plus delinquency or deferral charges. It also prohibits a secured party from disabling a vehicle to enforce payment obligations.
The bill further creates a 48-day post-repossession right to cure for qualified motor vehicles. If the consumer cures within that period, the creditor must return the vehicle and restore the parties’ rights and obligations as though the default had not occurred; if not, the creditor may dispose of the vehicle. The bill also requires prompt notice after repossession and specifies the contents of that notice. Separately, it creates a 3-business-day right to return a qualified motor vehicle purchased from a dealer, with procedures for refunding payments, unwinding financing or leasing arrangements, and handling trade-ins, restocking fees, mileage, and repair costs.
The bill would add a new article to title 5 governing consumer protections for motor vehicle liens and add a new section in title 44 governing dealer return rights. It also amends the Colorado Consumer Protection Act to make violations of these new provisions unfair or deceptive trade practices, exposing violators to existing CCPA remedies. The bill expressly voids contractual waivers of the new rights and gives the new article priority over conflicting provisions in the Uniform Commercial Code and related law for qualified motor vehicles.
The general sentiment reflected by the bill text is strongly consumer-protective, with the legislation designed to preserve transportation access and give buyers and borrowers more time and leverage before losing a primary vehicle. At the same time, the House Committee on Business Affairs & Labor postponed the bill indefinitely, indicating that it did not advance out of committee. No recorded votes or committee transcript excerpts were provided, so there is no detailed public debate in the supplied materials.
The main points of contention likely concern the bill’s impact on secured creditors and dealers, including longer cure periods, limits on repossession remedies, a mandatory return window, and restrictions on fees and waiver provisions. Dealers and lenders may view the bill as increasing compliance burdens and financial risk, while consumer advocates would likely support it as a safeguard against losing essential transportation and as a way to curb abusive repossession or sales practices.
The bill would add new statutory protections in title 5 for secured transactions involving a consumer’s only registered motor vehicle and new dealer return rights in title 44. It would also expand the Colorado Consumer Protection Act to treat violations of these provisions as deceptive trade practices, creating private enforcement exposure including damages, attorney fees, costs, and treble damages for willful or knowing violations. Contract terms waiving these rights would be void, and the new provisions would control over conflicting repossession rules in the UCC and related statutes for covered vehicles.
The bill is framed as a consumer-protection measure and appears intended to help borrowers and buyers keep or return an essential vehicle, suggesting favorable sentiment among consumer advocates. However, the absence of recorded debate or votes in the supplied materials limits the ability to identify specific support or opposition. The committee outcome—postponed indefinitely in House Business Affairs & Labor—indicates the bill did not advance, which may reflect concerns about its scope or its effects on lenders and dealers.
Likely points of contention include the extended 60-day pre-repossession cure period, the 48-day post-repossession cure right, the prohibition on disabling vehicles, and the 3-business-day dealer return right. Lenders and dealers may object to the added operational burden, delayed recovery of collateral, mandatory refunds, limits on fees, and the voiding of waiver provisions. Consumer advocates would likely support these provisions as necessary protections for people who rely on a single vehicle for work, family, and daily transportation.