Friday, January 20, 2012

California posts updates about mandatory ELT requirement

California has updated their website with details about the ELT program. Particularly, there have been questions about how the CA DMV will interpret the requirement for lienholders who must participate in ELT. From the page:

7 Q. When will the mandatory ELT requirement take effect?
A. We anticipate that the ELT program will begin mandatory participation in the Spring of 2012. DMV is currently accepting voluntary participation applications. All mandatory ELT participants must apply to be enrolled in the program between spring 2012 – December 31, 2012.

8 Q. Who is required to enroll in the mandatory ELT Program as a lender?
A. All licensed financial institutions that hold a security interest in a California titled vehicle are required to enroll in the mandatory ELT Program, excluding businesses licensed to engage in the sale of automobiles and/or vessels. Please note: there is no mandatory threshold of vehicles/vessels required for mandatory ELT participants.

10 Q. Do vehicle dealers need to be enrolled in the mandatory ELT Program?
A. No. However, dealers may become a voluntary participant.

11 Q. Can Financial Institutions (i.e., banks or credit unions) be exempt from the mandatory ELT Program if they finance only a few vehicles a year?
A. No. Financial Institutions are not exempt from participation in the mandatory ELT Program based on the number of vehicles financed in a given time period. If a lender offers the service of vehicle financing to customers, the lender must enroll in the mandatory ELT Program in order to be recorded as a lienholder on California title records.

12 Q. Are out–of–state lienholders required to participate in the mandatory ELT Program?
A. Out–of–state lienholders engaged in the business or practice of financing vehicles purchased by California residents, to be titled in California, must participate in the mandatory ELT Program. Out–of–state lienholders who finance vehicles to be titled only in other states by non–California residents are not required to participate. California will record existing lienholder information appearing on non–California titles when a new California resident applies to transfer a vehicle title. Those lienholders will be issued paper titles if they are not enrolled in the ELT program.

We are anticipating, based on the information above and from conversations with the DMV, that the final signup date for the program will be 9/11/2012 (not a joke). That means participants would be live on 12/31/2012. After that point, we expect that any non-participating lenders will be unable to place liens until their go live date. The published schedule for 2012 sign ups is:

Quarter Due date for applications Due date for contracts Implementation
1st December 13, 2011 December 27, 2011 March 30, 2012
2nd March 13, 2012 March 27, 2012 July 2, 2012
3rd June 12, 2012 June 26, 2012 October 1, 2012
4th September 11, 2012 September 25, 2012 December 31, 2012

Full instructions for signing up for the program are posted on our website at

Image above is Spring Beginnings by Ellie T. Freudenstein from an exhibition at the California Art Club.