April 13, 2024

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Arizona Repeals “Repo Cop” Law

ARIZONA — If someone misses multiple car payments, should the car be considered stolen? Should police help repossess the vehicle?

Those were the central questions during a Senate Judiciary Committee meeting as lawmakers discussed legislation to repeal a decades-old law.

“What business wouldn’t like to have the police as their personal collection agency and nationwide repo service at taxpayer expense?” said Arizona Police Association’s executive director Joe Clure.

Police can be defacto repo men under state law if certain conditions are met.

The law states someone first must have missed payments for 90 days.

Then a dealership must send a certified letter. If the person fails to pay for 30 days after that, they are guilty of “unlawful failure to return a motor vehicle subject to a security interest.”

“That law contorts that into a stolen vehicle,” Clure said.

Clure said during a traffic stop, police will see the car reported as stolen. Notes tell the officer it has to do with payments, but sometimes those notes are missed.

“Those are always high-risk stops. Guns come out, people get put on the ground, and people get taken into custody,” said Clure.

Clure, multiple law enforcement agencies, and cities support an effort to repeal the law.

However, the law is supported by dealerships and lenders who worry about the message a repeal would send.

“It’s dangerous to Arizona to send the message– that paying your bills isn’t important to us,“ said Dave Warkentin with the Arizona independent Automobile Association.

He said after four months of missed payments; dealerships need help from law enforcement.

“We don’t want police to repo either, but we’ve spent four months trying to repo it, and at that point, we think it’s a stolen vehicle,” Warkentin said.

Warkentin told committee members that repealing the law may cause dealerships to raise prices on lower credit individuals because of increased risk.

Clure and other opponents to the law believe police should not be involved in repossession.

“What you have here is a civil matter, a breach of contract. There are remedies in law,” Clure said.

The Senate Judiciary Committee passed the bill 6-1.

Similar bills have made it to the Senate before but have been unable to pass.

Here is how the repealed law read:

13-1813. Unlawful failure to return a motor vehicle subject to a security interest; notice; classification

A. A person commits unlawful failure to return a motor vehicle subject to a security interest if all of the following apply:

1. The person fails to make a payment on the lien for more than ninety days.

2. The secured creditor notifies the owner in writing, by certified mail return receipt requested, that the owner is ninety days late in making a payment and is in default. The notice shall include the following:

(a) A statement stating:

“You are now in default on loan agreement #______________. If you fail to return the _____________________ (year of vehicle, make, model) within thirty days you will be subject to criminal prosecution.”

(b) The business address and hours of operation for return of the vehicle.

(c) The maximum penalties for unlawful failure to return a motor vehicle subject to a security interest.

3. The owner fails to cure the default within thirty days.

4. With the intent to hinder or prevent the enforcement of the secured creditor’s security interest, the owner knowingly fails to do either of the following:

(a) Return the motor vehicle to the secured creditor.

(b) Allow the secured creditor to take possession of the motor vehicle.

B. The original contract creating the security interest in the motor vehicle shall contain the following information:

1. A statement that it is unlawful to fail to return a motor vehicle subject to a security interest within thirty days after receiving notice of default.

2. A statement that notice of default will be mailed to the address on the loan agreement and that it is the responsibility of the owner to keep the listed address current.

3. The maximum penalty for unlawful failure to return a motor vehicle subject to a security interest.

C. It is a defense to prosecution under this section that:

1. The owner was physically incapacitated and unable to request or obtain permission of the secured creditor to retain the motor vehicle.

2. The motor vehicle itself was in a condition, through no intentional fault of the defendant, that it could not be returned to the secured creditor within the specified time.

3. The owner has a security interest pursuant to section 47-2711, subsection C.

D. If a law enforcement agency seizes the vehicle, the secured creditor shall be responsible for all towing, storage and related fees or charges.

E. A vehicle that is not returned pursuant to this section is a stolen vehicle for purposes of section 28-4845.

F. Unlawful failure to return a motor vehicle subject to a property interest is a class 6 felony.


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