JEFFERSON CITY | Missouri lawmakers passed legislation Tuesday that allows car, boat and trailer dealers to charge customers less than $200 for paperwork tied to the sale.
Supporters said some automobile and boat sellers already charge administrative fees and the legislation is needed so they can continue to do so.
But at least one lawmaker called it a “consumer attack” that is designed to protect car dealers and could result in extra charges that aren’t included in a vehicle’s sticker price.
The legislation passed the House by a 128-28 vote Tuesday. It already had cleared the Senate and now goes to the governor.
The measure was triggered by a 2008 Missouri Supreme Court decision holding that a mortgage company illegally practiced law by charging customers a fee for preparing certain legal documents. Countrywide Home Loans faced a class-action lawsuit for charging borrowers a “document preparation fee.”
Only licensed attorneys can practice law in Missouri, and the mortgage documents were not completed by a lawyer.
In that ruling, the court wrote that it “has the inherent and ultimate authority to supervise the practice of law by licensed attorneys and to prevent the practice of law by unauthorized persons.” The high court said the Legislature can assist that determination by providing the penalties for violations.
Sponsoring Rep. Jay Wasson said it’s common for vehicle dealers to levy fees for clerical services and to keep a variety of documents, such as verification of the odometer reading. Wasson, a Nixa Republican, said some dealers currently charge more than $200 for such paperwork, so the legislation could help consumers by forcing dealers to lower their fees.
Rep. John Burnett, a Kansas City Democrat, disputed that and contended the bill would hurt consumers. Burnett, who is an attorney, argued the legislation is designed to eliminate one element in consumer lawsuits. He said many car and boat dealers no longer levy the document charge and that consumer complaint lawsuits over bum vehicles also often seek to recover the document fees.
Under the bill, dealers could levy an administrative charge as long as it applies to every customer and is listed as a separate itemized fee. The seller also would need to disclose that the charge is not legally required and could give the seller a profit.
The legislation also states that lawmakers do not believe the vehicle sale document fees qualify as the unauthorized practice of law. If the courts overrule that determination, the bill would bar customers who were wrongly charged from seeking to recover their costs.