In response to Jon Fleischman’s August 23rd column entitled “AB 1215 – Mandating That a Fee Cannot Be Called a Fee – Seriously”, I would like to offer a different opinion. Although I’m a four-term Congressman, in a prior life I owned and operated a number of new car dealerships in California and am very familiar with California’s “price control” on the amount a dealer can charge to perform a host of work required by the state.
AB 1215, a bill currently before the California Legislature, would for the first time in 5 years raise the statutory cap the Legislature imposes on private dealer businesses to perform state-mandated title and registration paperwork, in addition to a plethora of other state-mandated requirements (for example, providing consumers “free” credit scores, other credit disclosures, tire chain notices, license bracket notices, etc.). Even with the increase, California would still have the second lowest cap in the country – most states have no cap at all. California imposes no such cap on any other industry. For example, every California real estate transaction includes a “document processing charge”, but the state imposes no cap on those transitions. In my opinion, the market should dictate what a business can charge consumers to comply with these requirements – not the state.
Fleischman’s column also criticizes the bill because it includes a provision that prohibits the document processing charge to be labeled as a governmental fee. Well, it’s not a governmental fee, and current law already prohibits the charge to be pawned-off to consumers as a government fee – otherwise it would be deceptive.
On the positive side, there are a couple of really good things contained in AB 1215. First, it requires new car dealers to electronically register all new and used vehicles they sell. It’s about time DMV moved into the 21st century! New car dealers already order all of their vehicles and parts on-line and do just about everything else electronically. Electronic registration will speed up the registration process; ensuring that license plates and registration certificates will be delivered in days instead of weeks and result in fewer errors in DMV’s registration database. It will also save the state $10 million per year and shorten lines at DMV field offices.
Second, AB 1215 promotes the use by dealers of the National Motor Vehicle Title Information System (NMVTIS) to weed-out total loss and flood damaged vehicles. NMVTIS is administered by the U.S. Justice Department and, under federal law, all insurance companies, salvage and junkyards, salvage auctions and towing companies are required to report to NMVTIS. On both a state and national level, NMVTIS is a big deal because title-washing and vehicle identity theft (VIN-switching) is a growing crime and a gateway to more serious crimes. Including a NMVTIS database search in a vehicle history report used by dealers will enhance those reports and make them more valuable to anyone that purchases a used vehicle – whether it’s a dealer or consumer. That’s why AB 1215 is supported by a host of law enforcement official, consumer groups and car dealers. Complaints by a couple of vehicle history report providers that do not currently include a NMVTIS database search in their reports are disingenuous at best – the cost of obtaining NMVTIS information is as about 20 ¢ per inquiry.
Congressman John Campbell