Vehicle Financial Protection Products Regulation
Summary
Kentucky SB158 establishes regulatory requirements for vehicle financial protection products under new sections of KRS Chapter 367. The law clarifies that these products are not insurance, requires separate disclosure of charges, and prohibits lenders and dealers from conditioning credit or vehicle sales on purchase of these products. The law takes effect January 1, 2027.
What changed
Kentucky Senate Bill 158 creates new regulatory requirements for vehicle financial protection products, establishing definitions, exemptions, and consumer protections under KRS Chapter 367. The legislation explicitly classifies vehicle financial protection products as non-insurance, authorizes separate disclosure of related charges, and prohibits conditioning credit extensions or vehicle sales/leases on purchase of these products. The bill amends KRS 190.100 and creates provisions within Subtitle 4 of KRS Chapter 286 to bring retail installment contracts and consumer loan companies into compliance. The bill passed 38-0 in the Senate and 92-0 in the House.
Financial institutions, vehicle dealers, and consumer loan companies must ensure compliance by January 1, 2027. These entities should review existing vehicle financial protection product offerings, update retail installment contracts and consumer loan agreements to comply with the new requirements, and implement separate disclosure procedures for authorized charges. Failure to comply with the new regulatory framework may result in enforcement actions under Kentucky consumer protection statutes.
What to do next
- Review vehicle financial protection product offerings for compliance with new KRS Chapter 367 requirements by January 1, 2027
- Update retail installment contracts and consumer loan agreements to separately state authorized charges for vehicle financial protection products
- Remove any provisions conditioning credit or vehicle sales/leasing on purchase of vehicle financial protection products
Source document (simplified)
ChangeBridge / Kentucky / SB158 Signed by Governor SB158 Senate Bill Signed by Governor 2026-04-03
AN ACT relating to products that offer benefits in connection with personal property.
Create new sections of KRS Chapter 367 to establish regulatory requirements for vehicle financial protection products; establish the purpose of the requirements; define terms; provide that vehicle financial protection products issued before, on, or after the effective date of the Act shall not be considered insurance; establish exemptions from the regulatory requirements; provide that amounts charged or financed for vehicle financial protection products are authorized charges to be stated separately and shall not be considered a finance charge or interest; prohibit conditioning the extension of credit, terms of a loan, or terms of a related vehicle sale or lease from being conditioned on the consumer's payment for a vehicle financial protection product; establish requirements for debt waivers; establish requirements for vehicle value protection agreements; amend KRS 190.100 and create a new section of Subtitle 4 of KRS Chapter 286 to require retail installment contracts and consumer loan companies to comply with the regulatory requirements for vehicle financial protection products; amend KRS 304.1-120 to conform; direct that the Act applies to vehicle financial protection products that become effective on or after January 1, 2027; EFFECTIVE January 1, 2027.
Bill Details
State Kentucky
Session 2026 Regular Session
Chamber Senate
Official Source apps.legislature.ky.gov/record/26RS/sb158....
LegiScan View on LegiScan
Sponsors
Jason Howell (Sen - R)
Action History
2026-04-03 S signed by Governor 2026-03-25 S delivered to Governor 2026-03-25 S enrolled, signed by Speaker of the House 2026-03-25 S enrolled, signed by President of the Senate 2026-03-25 S passed 38-0 2026-03-25 S Senate concurred in Committee Substitute (1) and Committee Amendment (1-title) 2026-03-25 S posted for passage for concurrence in House Committee Substitute (1) and Committee Amendment (1-title) 2026-03-25 S taken from Rules 2026-03-25 S to Rules (S) 2026-03-25 S received in Senate 2026-03-24 H 3rd reading, passed 92-0 with Committee Substitute (1) and Committee Amendment (1-title) 2026-03-20 H posted for passage in the Regular Orders of the Day for Tuesday, March 24 2026 2026-03-12 H 2nd reading, to Rules 2026-03-11 H reported favorably, 1st reading, to Calendar with Committee Substitute (1) and Committee Amendment (1-title) 2026-03-05 H to Banking & Insurance (H) 2026-02-13 H to Committee on Committees (H) 2026-02-13 H received in House 2026-02-12 S 3rd reading, passed 37-0 2026-02-11 S posted for passage in the Regular Orders of the Day for Thursday, February 12 2026 2026-02-11 S 2nd reading, to Rules 2026-02-10 S reported favorably, 1st reading, to Calendar 2026-02-06 S to Banking & Insurance (S) 2026-02-03 S to Committee on Committees (S) 2026-02-03 S introduced in Senate
Votes
2026-02-12 Senate: Third Reading RSN# 3816 Yea: 37 Nay: 0 2026-03-24 House: Veto Override RCS# 313 Yea: 92 Nay: 0 2026-03-25 Senate: Third Reading RSN# 3985 Yea: 38 Nay: 0
Committee Referrals
2026-02-03 S Committee on Committees 2026-02-06 S Banking and Insurance 2026-02-11 S Rules 2026-02-13 H Committee On Committees 2026-03-05 H Banking and Insurance 2026-03-12 H Rules 2026-03-25 S Rules
Amendments
0000-00-00 House Committee Substitute 0000-00-00 House Committee Amendment
Bill Text Versions
0000-00-00 Introduced 0000-00-00 Engrossed 0000-00-00 Enrolled
Subjects
Attorney General Boats and Boating Consumer Protection Contracts Effective Dates, Delayed Insurance Loans, Credit, Interest, And Usury Motor Vehicles Transportation Legislative data powered by LegiScan (CC BY 4.0)
Named provisions
Related changes
Source
Classification
Who this affects
Taxonomy
Browse Categories
Get Government General alerts
Weekly digest. AI-summarized, no noise.
Free. Unsubscribe anytime.
Get alerts for this source
We'll email you when Kentucky Legislative Events publishes new changes.