The landscape of vehicle service contracts (VSCs) and consumer protection is constantly evolving, with states across the nation taking proactive steps to safeguard consumers. Maryland House Bill 1046 (HB1046) is a prime example of this trend. Signed into law by Governor Wes Moore on April 22, 2025, the effective date is October 1, 2025.
Maryland HB1046 Core Changes
At its heart, Maryland HB1046 aims to protect consumers with mechanical repair contracts for vehicles, and addresses a common point of contention: VSCs that exclude repairs or services that are included in technical service bulletins.
Effective October 1, 2025:
- Provisions in VSCs may no longer exclude services or repairs solely because they are listed in a technical service bulletin.
- VSC providers may no longer refuse to cover services or repairs solely because they have been listed in a technical repairs bulletin.
These changes represent a clear move towards greater transparency and accountability in the F&I product space. For consumers, it means increased confidence that their VSCs will cover common, known issues that manufacturers or service centers might address via technical service bulletins. It closes a potential loophole that could have left consumers bearing the cost of repairs they believed were covered.
For lenders, the bill generates additional work and cost to vet existing and future VSCs for these prohibited provisions.
How to Prepare for HB1046
The effective date of October 1, 2025, provides a clear timeline for the industry to adapt, and F&I Sentinel is already taking steps to ensure compliance for our lender partners. Through our proactive and ongoing processes, our team is ensuring that all relevant forms in the Managed Originations solutions platform, formerly known as CITADEL®, meet the new requirements.
For all other auto lenders, dealerships, and VSC providers operating in Maryland, HB1046 necessitates a thorough review and potential adjustment of current practices. The legislation underscores the importance of:
- Contractual Revisions: VSC forms, ancillary product bundles, and standalone ancillary service contract forms must be reviewed to determine whether an update is required to remove any exclusionary language related to technical service bulletins.
- Policy and Procedure Updates: Internal policies and claims handling procedures must be revised to ensure that coverage is not denied solely on the basis of a repair being listed in a technical service bulletin.
- Training and Education: Staff involved in the sale and administration of VSCs need to be fully aware of the new prohibitions to ensure compliant operations and accurate communication with consumers.
Lenders using F&I Sentinel’s Managed Originations solution are already ahead of the game and can rest easy knowing credentialed VSCs meet changing state regulations, mitigating the hidden costs and burden of reviewing mountains of forms.
We’ll continue to monitor the regulatory landscape and share insights to help lenders manage originations and cancellations with confidence. If you would like to discuss how to preempt the risks and costs associated with new legislation like Maryland HB1046, schedule a no-obligation meeting with a member of the Concierge Team today.
About F&I Sentinel
F&I Sentinel empowers auto-finance companies, auto dealers, and F&I product companies with dynamic, technology-driven compliance solutions that reduce friction, enhance transparency, and streamline aftermarket product management. Over 100 auto-finance companies, including six of the top 10, and over 600 F&I product administrators, count on F&I Sentinel to deliver scalable infrastructure and best-in-class regulatory expertise to efficiently manage the lifecycle of aftermarket products—from funding to cancellation—in a rapidly evolving regulatory landscape. Learn how our repository of more than 190,000 F&I product forms and our Concierge Team can support your F&I product management journey here. Schedule a no-obligation meeting with a member of our Concierge Team today.
The information provided in this post does not, and is not intended to, constitute legal advice; instead, all information, content, and materials referenced are for general informational purposes only. Readers should contact their attorney to obtain advice with respect to any particular legal matter.
