Impactful New Consumer Laws Having an Effect on 2024 Cases

California has more than 20 new consumer laws that have gone into effect or will be going into effect this year. Some of the key consumer-related law changes recently enacted earlier this year as well as those to be enacted later this year are listed below.

Truth in Lending Act Exemption: On January 1, 2024, the TILA threshold exempting from the statute certain credit with an amount financed over a specific dollar amount increased from $66,400 to $69,500. This exemption does not apply to home-secured credit or student loans.

Truth in Lending Act HOEPA Loans: On January 1, 2024, the adjusted total loan amount threshold for high-cost mortgages increased from $24,866 to $26,092, and the adjusted points and fees dollar trigger for high-cost mortgages increases from $1,243 to $1,305.

Truth in Lending Act Appraisal Requirements: Effective January 1, 2024, the exemption threshold for special appraisal requirements for “higher-risk mortgages” increased from $31,000 to $32,400.

Truth in Lending Exemption for Mortgage Loans: The CFPB announced that effective January 1, 2024, creditors with assets under $2.640 billion (formerly $2.537 billion) do not have to establish escrow accounts and do not have to comply with the prohibition on balloon payments for certain higher-priced mortgage loans. For certain insured depository institutions and insured credit unions meeting certain conditions, the exemption threshold is adjusted to increase to $11.835 billion from $11.374 billion.

FHA Loan Limits: FHA announced new loan limits for 2024. The single-family, low-cost-area floor increased to $498,257 and the high-cost-area ceiling increases to $1,149,825.

Minimum Wage and Wage Garnishment in 21 States: In addition to federal wage garnishment protections that utilize the federal minimum wage in calculating protected earnings, many states set limits on wage garnishment utilizing the state’s own regulation of the minimum wage. At least 21 states, including California, raised the minimum wage in 2024.

California Consumer Protection Re-Arbitration: The U.S. Supreme Court has ruled that cases in federal court must be stayed pending a business’ appeal of the court’s denial of a motion to compel arbitration. Effective January 1, 2024, California S.B. 365 gives its state courts discretion on whether to stay the case pending such an appeal.

California Right-to-Repair Law: Effective January 1, 2024, California S.B. 244 requires manufacturers of electronic or appliance products, including cell phones, laptops, tablets and various home appliances that were manufactured and sold or used for the first time in California on or after July 1, 2021, to make available to product owners, service and repair facilities and service dealers, the means to effect the diagnosis, maintenance or repair of the product.

California Ambulance Prices: California A.B. 716 requires the state Emergency Medical Services Authority to annually report the allowable maximum rates for ground ambulance transportation services. The bill also requires health insurance renewed on or after January 1, 2024, to require an insured who receives services from a non-contracting ground ambulance provider to pay no more than the same cost-sharing amount that the insured would pay for the same services received from a contracting ground ambulance provider.

California Elimination of Common Counts: Effective January 1, 2024, “common counts” (such as money had and received) have been eliminated in collection actions. California Limits on Use of Images from Vehicle Cameras: California S.B. 296, effective January 1, 2024, requires both manufacturers and dealers of new motor vehicles equipped with one or more in-vehicle cameras to provide certain information to the consumer, and limits the use of images from such cameras.

Opportunity for Federal Student Loans to Earn More Credit Toward Loan Forgiveness: On July 1, 2024, the Department of Education adjusted borrowers’ qualifying payment counts toward forgiveness of their federal student loans under the Income-Driven Repayment (IDR) program to provide credit for additional time that was not previously counted. This will put millions of borrowers closer to having their loans forgiven through either IDR or Public Service Loan Forgiveness (PSLF). The adjustment will automatically be applied to all loans held by the Department. Borrowers with federal student loans not currently held by the Department, such as those with commercially held FFEL or Perkins loans, can get the benefit of the adjustment by applying to consolidate into a Direct Consolidation Loan by April 30, 2024. Additionally, borrowers who have loans with different lengths of time in repayment may benefit by consolidating by April 30, 2024, as the resulting Consolidation Loan will then be credited with the longer amount of time in repayment.

Bankruptcy Code Chapter 13: Congress had amended Bankruptcy Code § 109(e) to temporarily provide that to be a chapter 13 debtor, the debtor must owe liquidated, noncontingent debts of less than $2,750,000, but this provision is due to expire on June 21, 2024. If Congress does not extend or make the debt limit increases permanent, § 109(e) will revert to the former dollar amounts (subject to inflation adjustment): the debtor must owe less than $465,275 in non-contingent, liquidated unsecured debts and less than $1,395,875 in non-contingent, liquidated, secured debts.

New Department of Education Administrative Capability Oversight: Effective July 1, 2024, a new Department of Education rule adds further requirements for institutions to show that they are capable of administering Title IV programs, strengthening protections for students.

California Security Deposits on Rental Property: Effective July 1, 2024, California A.B. 12 prohibits a landlord from demanding security for a residential property rental agreement for more than one month’s rent. Unless the tenant is a servicemember, two months’ rent as security can be demanded if the landlord is a natural person or a limited liability corporation in which all members are natural persons and the landlord owns no more than two residential rental properties that collectively include no more than four dwelling units offered for rent.

California Junk Fees: California S.B. 478, effective July 1, 2024, prohibits advertising, displaying or offering a price for a good or service that does not include all mandatory fees or charges other than taxes or fees imposed by a government on the transaction. The law contains a few exceptions and safe harbors.

California Limits on Charges in Short-Term Lodging: Effective July 1, 2024, California A.B. 537 prohibits a place of short-term lodging from advertising or offering a room rate that does not include all required fees or charges except taxes and fees imposed by the government. Government taxes and fees must be included in the total price to be paid, before the consumer reserves a stay.

California Short-Term Rentals: California S.B. 644 requires hotels, third-party booking services, hosting platforms or short-term rentals to allow a reservation to be canceled without penalty for at least 24 hours after the reservation is confirmed if the reservation is made 72 hours or more before the time of check-in. If a consumer thus cancels a reservation, a full refund must be issued within 30 days of the cancellation. The bill applies to any confirmed reservation after July 1, 2024.

FCC Order on Robocalls and Telephone Consumer Protection Act (TCPA): One part of an FCC order issued on December 18, 2023, became effective 180 days after its publication in the Federal Register (most likely early July 2024). The order is titled “Targeting and Eliminating Unlawful Text Messages; Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991; Advanced Methods to Target and Eliminate Unlawful Robocalls.” The part of the order that goes into effect 180 days after the Federal Register notice protects consumers from illegal texts by adopting blocking requirements for providers. Significant other parts of the order that affect TCPA litigation go into effect a year after publication in the Federal Register and are described infra.

FHA Mortgage Modifications: HUD Mortgagee letter 2023-03 (Feb. 13, 2023) requires servicers to evaluate FHA mortgage borrowers for COVID-19 loss mitigation options regardless of whether the borrower’s hardship resulted from the pandemic. This policy extends until October 30, 2024.

Minimum Service Standards for Lifeline Devices: Effective December 1, 2024, telecommunications carriers must ensure under the lifeline program that at least 75% of the devices under that program are capable of being used as a hotspot (up from 60%).