HB 1033
Department of Legislative Services
Maryland General Assembly
2020 Session
FISCAL AND POLICY NOTE
Third Reader - Revised
House Bill 1033 (Delegates Stein and Lehman)
Environment and Transportation Finance
Vehicle Laws - Liens - Electronic Recording
This bill requires a lien release pertaining to a motor vehicle to be filed electronically with
the Motor Vehicle Administration (MVA) within five business days, as specified. The bill
also requires (rather than authorizes) MVA to develop and implement an electronic system
for recording and releasing security interests. The electronic system may provide for the
electronic transmission of publicly available electronic vehicle records. A motor vehicle
lienholder must file electronically with MVA (1) each of its liens and (2) when a lien is
paid in full, the lien release. However, these requirements do not apply to a lienholder that
is not regularly engaged in the business or practice of financing motor vehicles. The bill
takes effect January 1, 2021.
Fiscal Summary
State Effect: The bill is not anticipated to materially affect State finances or operations.
Local Effect: The bill is not anticipated to materially affect local finances or operations.
Small Business Effect: Minimal.
Analysis
Bill Summary: Subject to approval of MVA, a service provider (i.e., a dealer or title
service agent licensed under Title 15 of the Transportation Article or a qualified owner of
a fleet) may electronically submit a security interest filing with MVA on behalf of a
registered owner or lienholder. MVA must adopt regulations to govern the electronic
transmission of security interest information as authorized by the bill.
Current Law:
Retail Installment Sales – Cancellation of Contract and Release of Security
After the buyer has paid all sums due under an agreement, the holder (i.e., the seller) must
deliver (or mail) to the buyer within 15 days of receiving a written request from the buyer:
a signed statement that describes the goods and states that all payments due (or to
become due) under the agreement are paid in full;
good and sufficient instruments to release all security interests in the goods and
collateral security owned by the buyer; and
good and sufficient assignments and instruments necessary to vest the buyer with
complete evidence of the title.
Closed End Credit – Requirements upon Loan Repayment
Within a reasonable time after a loan to a consumer borrower has been repaid in full (and
all other obligations under the agreement, note, or other evidence of the loan have been
fulfilled), a credit grantor must:
indelibly mark with the word “paid” or “canceled” and return to the consumer
borrower each agreement, note, or other evidence of the loan; or
furnish the consumer borrower with a written statement that identifies the loan
transaction and states that the loan has been paid in full and release any recorded
mortgage, deed of trust, security agreement, or other lien securing the loan.
The release must be in writing and prepared at the expense of the credit grantor.
If the credit grantor does not record the lease, the credit grantor must furnish the consumer
borrower with the release in a recordable form. If the credit grantor records the release, the
credit grantor must furnish the consumer borrower with a copy of the release.
If a fee is collected by a credit grantor for the recording of a release, the release must be
recorded by the credit grantor and any portion of the fee not paid to a governmental entity
for recording the release must be refunded to the borrower. If a fee is not collected by the
credit grantor for the recording of a release, the credit grantor is not obligated to record the
release.
Electronic Issuance of Certificate of Title
MVA is authorized (but not required) to develop and implement an electronic system for
the issuance of certificates of title and the recording and releasing of security interests. The
electronic system may provide for:
HB 1033/ Page 2
recording titling and registration data without the issuance of a certificate of title;
and
recording and releasing liens without the issuance of a security interest filing.
The electronic system may provide for the electronic transmission of vehicle data to and
from service providers. MVA must adopt regulations to govern the electronic transmission
of titling and registration information.
Electronic Transmission of Titling and Registration Information
Subject to the approval of MVA, a service provider may (1) issue permanent registration
plates to the transferee or renew the registration of a vehicle if the service provider has
electronically transmitted the proper titling and registration information to MVA, or a
designated agent and (2) charge the transferee or the registered owner of the vehicle a fee
for the actual cost to the service provider of the electronic transmission service.
MVA must adopt regulations to (1) govern the electronic transmission of titling and
registration information and (2) determine the appropriate level of the fee that may be
charged by service providers for the electronic transmission service.
Background: MVA advises it currently has a process in place to record lien releases
electronically. However, the program is voluntary.
Additional Information
Prior Introductions: None.
Designated Cross File: SB 778 (Senator Ready) - Finance.
Information Source(s): Maryland Department of Labor; Maryland Department of
Transportation; Department of Legislative Services
Fiscal Note History: First Reader - February 17, 2020
rh/ljm Third Reader - March 15, 2020
Revised - Amendment(s) - March 15, 2020
Analysis by: Eric F. Pierce Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB 1033/ Page 3
Statutes affected: Text - First - Vehicle Laws - Liens - Electronic Recording: 12-622 Commercial Law, 12-1024 Commercial Law, 13-108.1 Transportation, 13-610 Transportation
Text - Third - Vehicle Laws - Liens - Electronic Recording: 12-622 Transportation, 12-1024 Transportation, 13-108.1 Transportation, 13-610 Transportation