California Automobile Sales Finance Act

Under the Automobile Sales Finance Act (Civ. Code, 2981 et seq.) (the Finance Act) -- a state truth in lending law -- any conditional sale contract governed by the statute must "contain the disclosures required by Regulation Z," as well as other specified disclosures, itemizations and subtotals. (Civ. Code, 2982.) The Finance Act governs vehicle financing by a commercial seller. (Civ. Code 2981, subd. (b).) As pertinent here, the Finance Act requires the seller to itemize components of the buyer's down payment "to show the following: . . . (D) The amount of any portion of the downpayment to be deferred until not later than the due date of the second regularly scheduled installment under the contract and that is not subject to a finance charge. . . . (F) The remaining amount paid or to be paid by the buyer as a downpayment. (G) The total downpayment which, if greater than zero shall be stated as the total downpayment." (Civ. Code 2982, subd. (a)(6).) The contract must contain an "itemization of the amount financed," calculated by computing the sum of the total cash price, taxes, and government fees, and then subtracting there from the total down payment. (Civ. Code 2982, subd. (a)(8).) The Finance Act contains three provisions governing enforcement of a conditional sale contract by an automobile seller's assignee. If the seller violates Civil Code section 2982, subdivision (a), the conditional sale contract is unenforceable, except by a bona fide assignee, until the violation is corrected. (Civ. Code, 2983.) A holder of a conditional sale contract may enforce the contract if the holder lacks actual knowledge of the seller's Civil Code section 2982, subdivision (a) violation; however, "the buyer is excused from payment of the unpaid finance charge" unless the violation is corrected. (Civ. Code, 2983.1.) An "assignee of the seller's right who is not a bona fide assignee is subject to all equities and defenses of the buyer against the seller." (Civ. Code, 2983.5.)