League-Brokered Deal on Towing Fee Increase Signed Into Law

LD 1876, An Act Regarding Abandoned Motor Vehicle Storage Fees, has been enacted by the Maine Legislature and signed into law by Governor Mills. This bill was brought forward by towing companies seeking to increase the monthly fee that can be charged for an abandoned vehicle. This fee is capped by Maine statute.

At the public hearing, the League testified in opposition to the fee increase, citing how the current process to notify lienholders was burdensomely slow. Credit unions have been required to pay excessive fees to towing companies to acquire abandoned vehicles when they had no knowledge of abandonment. The League proposed to the legislative committee that if lienholders could be notified more quickly, thereby reducing the impacts of higher fees to acquire an abandoned vehicle, then the League could support the proponents’ request. Ellen Parent from the Maine Credit Union League and Nichole Frazier from Casco FCU led the League’s negotiations.

Through discussions with bill proponents, a compromise was achieved. The towing industry got the increase it was seeking, increasing the monthly fee from $900 to $1,500. In exchange, a new notification requirement was placed in the statute that requires towing companies to notify lienholders within 14 days. Such notification was not previously required by law. The original process was very old and cumbersome, and required towing companies to contact the Secretary of State’s office, then the Secretary of State’s office to contact lienholders. The new process should be more streamlined and efficient.

“This bill gave us the opportunity to make a meaningful impact on a known problem area for credit unions,” said Robert Caverly, Vice President of Governmental Affairs. “However, we know our work in this area is not done. The League welcomes additional feedback on how we can continue to improve vehicle titling issues for our member credit unions. I want to thank Nicki Frazier and Ellen Parent for their outstanding work on this bill.”

The new law will go into effect 90 days after the final adjournment of the Second Regular Session of the 130th Maine Legislature. That date is still undetermined but is anticipated to be sometime between late July and Labor Day.