BILL NUMBER: AB 2374	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 12, 2004

INTRODUCED BY   Assembly Member Bates

                        FEBRUARY 19, 2004

   An act to  amend Section 1785.26 of the Civil Code,
relating to credit   add Section 1788.19 to the Civil
Code, relating to debt collection  .


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2374, as amended, Bates.   Consumer credit reporting
agencies: creditor   Debt collection:   notices.
   Existing  state and federal law regulates the activities
of consumer credit reporting agencies.  Existing state  law
permits a creditor to submit negative credit information to a
consumer credit reporting agency only after providing the affected
consumer a written notice regarding this negative information.
Existing law  requires the notice to be delivered in-person
or mailed first-class, postage prepaid, to the party's last known
address, prior to, or within 30 days, after the transmission of the
negative credit information   regulates the activities
of debt collectors, as specified  .
   This bill would require a  creditor to make reasonable
efforts to locate a debtor whenever a notice is returned as
undeliverable   debt collector, when submitting negative
information to a consumer credit reporting agency, to verify that
the address to which the debt collector sends notice of the negative
information is substantially the same as the address associated with
the consumer's credit report.  If the address for notifying the
consumer is not substantially the same as the address associated with
consumer's credit report, the bill would require the debt collector
to send notice of the negative information to both addresses  .

   Vote:  majority.  Appropriation:  no.  Fiscal committee:  no.
State-mandated local program:  no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  
  SECTION 1.  Section 1785.26 of the Civil Code is amended 

  SECTION 1.  Section 1788.19 is added to the Civil Code, to read:
   1788.19.  When a debt collector submits negative information to a
consumer credit reporting agency pursuant to Section 1785.26, the
debt collector shall verify that the address to which the debt
collector sends notice of the negative information to the consumer is
substantially the same as the address associated with the consumer's
credit report.  If the address for notifying the consumer is not
substantially the same as the address associated with consumer's
credit report, the debt collector shall send notice of the negative
information to both addresses.   to read:
   1785.26.  (a) As used in this section:
   (1) "Creditor" includes an agent or assignee of a creditor,
including an agent engaged in administering or collecting the
creditor's accounts.
   (2) "Negative credit information" means information concerning the
credit history of a consumer that, because of the consumer's past
delinquencies, late or irregular payment history, insolvency, or any
form of default, would reasonably be expected to affect adversely the
consumer's ability to obtain or maintain credit.  "Negative credit
information" does not include information or credit histories arising
from a nonconsumer transaction or any other credit transaction
outside the scope of this title, nor does it include inquiries about
a consumer's credit record.
   (b) A creditor may submit negative credit information concerning a
consumer to a consumer credit reporting agency, only if the creditor
notifies the consumer affected.  After providing this notice, a
creditor may submit additional information to a credit reporting
agency respecting the same transaction or extension of credit that
gave rise to the original negative credit information without
providing additional notice.  A creditor shall make reasonable
efforts to locate a debtor whenever a notice is returned as
undeliverable.
   (c) The notice shall be in writing and shall be delivered in
person or mailed first class, postage prepaid, to the party's last
known address, prior to, or within 30 days after, the transmission of
the negative credit information.
   (1) The notice may be part of any notice of default, billing
statement, or other correspondence, and may be included as preprinted
or standard form language in any of these from the creditor to the
consumer.
   (2) The notice is sufficient if it is in substantially the
following form:
   "As required by law, you are hereby notified that a negative
credit report reflecting on your credit record may be submitted to a
credit reporting agency if you fail to fulfill the terms of your
credit obligations."
   (3) The notice may, in the creditor's discretion, be more specific
than the form given in paragraph (2).  The notice may include, but
shall not be limited to, particular information regarding an account
or information respecting the approximate date on which the creditor
submitted or intends to submit a negative credit report.
   (4) The giving of notice by a creditor as provided in this
subdivision does not create any requirement for the creditor to
actually submit negative credit information to a consumer credit
reporting agency.  However, this section shall not be construed to
authorize the use of notice as provided in this subdivision in
violation of the federal Fair Debt Collection Practices Act (15
U.S.C. Sec. 1592 et seq.).
   (d) A creditor is liable for failure to provide notice pursuant to
this section, unless the creditor establishes, by a preponderance of
the evidence, that at the time of that failure to give notice the
creditor maintained reasonable procedures to comply with this
section.