Amended in Senate August 13, 2013

Amended in Senate June 25, 2013

Amended in Assembly May 13, 2013

Amended in Assembly April 29, 2013

Amended in Assembly March 19, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 791

Introduced by Assembly Member Hagman

February 21, 2013

An act to amend Sections 7505.2, 7506.9, 7507.4, 7507.12, and 7508.2 of, and to add Sections 7508.7 and 7508.8 to, the Business and Professions Code, relating to repossessors.

LEGISLATIVE COUNSEL’S DIGEST

AB 791, as amended, Hagman. Collateral recovery: repossessors.

(1) Existing law, the Collateral Recovery Act, provides for the licensure and regulation of repossession agencies by the Bureau of Security and Investigative Services under the supervision and control of the Director of Consumer Affairs. Existing law requires an applicant for an initial registration or a reregistration to submit an application to the bureau and include certain personal information in the application that is confidential and is prohibited from being disclosed to the public, except for the registrant’s full name, the licensee’s name and address, and the registration number. A violation of the act is a crime.

This bill would prohibit, except as otherwise provided by law, a repossession agency from disclosing to the public, without a court order, the residence address, residence telephone number, cellular telephone number, driver’s license number, work schedule, past, present, or future location, or any other personal information of any licensee, registrant, begin insert qualified certificate holder, qualified manager, end insert employee, or independent contractor that it employs. By creating a new crime, the bill would impose a state-mandated local program.

(2) Existing law declares that nothing in the act prohibits the using or taking of personal effects that are connected, adjoined, or affixed to the collateral through an unbroken sequence, if that use or taking is reasonably necessary to effectuate the recovery in a safe manner or to protect the collateral or personal effects.

The bill would additionally declare that the act does not prohibit the removal of a locking mechanism or security device on the collateral, before, during, or after a repossession.

(3) Existing law allows a licensed repossession agency or its registrants to make demand for payment in lieu of repossession, if the demand is made pursuant to an assignment for repossession. Existing law permits the director to assess an administrative fine for specified violations of the act.

This bill would prohibit a licensed repossession agency or its registrants from making a demand for payment in lieu of repossession. The bill would also prohibit a repossession agency from selling collateral recovered under the provisions of the begin delete act and end delete begin insert act. The bill end insert would modify the director’s authority to assess administrative fines for specified violations of the begin delete act. end delete begin insert act and would increase those fines. end insert By creating a new crime, the bill would impose a state-mandated local program. The bill would make conforming changes.

The bill would also allow a person affiliated with a repossession agency to wear an oval, shield, round, square, or begin delete non-7 point end delete begin insert non-7-point end insert badge, cap insignia, or jacket patch if it bears on its face all or a substantial part of the repossession agency’s name, the repossession agency license number issued by the Director of Consumer Affairs to that individual or agency, and the word “repossessor.” The bill would require all badges, cap insignias, and jacket patches worn by a repossessor to be a standard design approved by the director and to be clearly visible. The bill would prohibit a repossessor from wearing a badge on his or her belt begin delete or a end delete hanging begin insert and from a end insert badge around his or her neck. The bill would make these provisions inapplicable to a holder of a temporary registration, as specified. The bill would authorize the director to assess a fine of $100 for the first violation, begin delete $100 end delete begin insert $175 end insert for the second violation, and $250 for each violation thereafter. By creating a new crime, the bill would impose a state-mandated local program.

(4) “Collateral” is defined, for purposes of the act, as any specific vehicle, trailer, boat, recreational vehicle, motor home, appliance, or other property that is subject to a security agreement. Existing law provides, with regard to collateral subject to registration under the Vehicle Code, that a repossession is complete when the repossessor gains entry to the collateral, or when the collateral becomes connected to a tow truck or the repossessor’s tow vehicle.

This bill additionally would declare that repossession is complete when the repossessor moves the entire collateral begin delete present, the repossessor pushes the collateral, end delete begin insert present end insert or the repossessor gains control of the collateral.

(5) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

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

The people of the State of California do enact as follows:

SECTION 1.  

Section 7505.2 of the Business and Professions
Code is amended to read:

7505.2.  

Nothing in this chapter prohibits the using or taking
of personal effects that are connected, adjoined, or affixed to the
collateral through an unbroken sequence, if that use or taking is
reasonably necessary to effectuate the recovery in a safe manner
or to protect the collateral or personal effects. Nothing in this
chapter prohibits the removal of a locking mechanism or security
device on the collateral, before, during, or after a repossession. No
storage fee shall be charged for the first week on any personal
effects used to effectuate a recovery pursuant to this section. Any
personal effects used or taken pursuant to this section shall be
processed in a reasonably expedient manner pursuant to Sections
7507.9 and 7507.10.

SEC. 2.  

Section 7506.9 of the Business and Professions Code
is amended to read:

7506.9.  

(a) Upon the issuance of the initial registration,
reregistration, or renewal, the chief shall issue to the registrant a
suitable pocket identification card. At the request of the registrant,
the identification card may include a photograph of the registrant.
The photograph shall be of a size prescribed by the bureau. The
card shall contain the name of the licensee with whom the registrant
is registered. The applicant may request to be issued an enhanced
pocket card that shall be composed of durable material and may
incorporate technologically advanced security features. The bureau
may charge a fee sufficient to reimburse the department for costs
for furnishing the enhanced pocket card. The fee charged may not
exceed the actual cost for system development, maintenance, and
processing necessary to provide the service, and may not exceed
six dollars ($6). If the applicant does not request an enhanced card,
the department shall issue a standard card at no cost to the
applicant.

(b) Until the registration certificate is issued or denied, a person
may be assigned to work with a temporary registration on a secure
form prescribed by the chief, and issued by the qualified certificate
holder, for a period not to exceed 120 days from the date the
employment or contract commenced, provided the person signs a
declaration under penalty of perjury that he or she has not been
convicted of a felony or committed any other act constituting
grounds for denial of a registration pursuant to Section 7506.8
(unless he or she declares that the conviction of a felony or the
commission of a specified act or acts occurred prior to the issuance
of a registration by the chief and the conduct was not the cause of
any subsequent suspension or termination of a registration), and
that he or she has read and understands the provisions of this
chapter.

(c) The chief shall issue an additional temporary registration
for not less than 60 days nor more than 120 days, if the chief
determines that the investigation of the applicant will take longer
to complete than the initial temporary registration time period.

(d) No person shall perform the duties of a registrant for a
licensee unless the person has in his or her possession a valid
repossessor registration card or evidence of a valid temporary
registration or registration renewal as described in subdivision (b)
or (e) of this section or subdivision (c) of Section 7506.10. Every
person, while engaged in any activity for which licensure is
required, shall display his or her valid pocket card as provided by
regulation.

(e) A person may work as a registrant pending receipt of the
registration card if he or she has been approved by the bureau and
carries on his or her person a hardcopy printout or electronic copy
of the bureau’s approval from the bureau’s Internet Web site and
a valid picture identification.

SEC. 3.  

Section 7507.4 of the Business and Professions Code
is amended to read:

7507.4.  

A licensed repossession agency or its registrants shall
not make demand for payment in lieu of repossession and shall
not sell collateral recovered under this chapter.

SEC. 4.  

Section 7507.12 of the Business and Professions Code
is amended to read:

7507.12.  

(a) With regard to collateral subject to registration
under the Vehicle Code, a repossession is complete if any of the
following occurs:

(1) The repossessor gains entry to the collateral.

(2) The collateral becomes connected to a tow truck or the
repossessor’s tow vehicle, as those terms are defined in Section
615 of the Vehicle Code.

(3) The repossessor moves the entire collateral present.

begin delete

(4) The repossessor pushes the collateral.

end delete begin delete

(5)

end delete

begin insert (4) end insert  The repossessor gains control of the collateral.

(b) No person other than the legal owner may direct a
repossessor to release a vehicle without legal authority to do so.

SEC. 5.  

Section 7508.2 of the Business and Professions Code
is amended to read:

7508.2.  

The director may assess administrative fines for any
of the following prohibited acts:

(a) Recovering collateral or making any money demand in lieu
thereof, including, but not limited to, collateral registered under
the Vehicle Code, that has been sold under a security agreement
before a signed or telegraphic authorization has been received from
the legal owner, debtor, lienholder, lessor, or repossession agency
acting on behalf of the legal owner, debtor, lienholder, or lessor
of the collateral. A telephonic assignment is acceptable if the legal
owner, debtor, lienholder, lessor, or repossession agency acting
on behalf of the legal owner, debtor, lienholder, or lessor is known
to the licensee and a written authorization from the legal owner,
debtor, lienholder, lessor, or repossession agency acting on behalf
of the legal owner, debtor, lienholder, or lessor is received by the
licensee within 10 working days or a request by the licensee for a
written authorization from the legal owner, debtor, lienholder,
lessor, or repossession agency acting on behalf of the legal owner,
debtor, lienholder, or lessor is made in writing within 10 working
days. Referrals of assignments from one licensee to another
licensee are acceptable. The referral of an assignment shall be
made under the same terms and conditions as in the original
assignment. The fine shall be twenty-five dollars ($25) for each
of the first five violations and one hundred dollars ($100) for each
violation thereafter, per audit.

(b) Using collateral or personal effects, which have been
recovered, for the personal benefit of a licensee, or officer, partner,
manager, registrant, or employee of a licensee. The fine shall be
twenty-five dollars ($25) for the first violation and one hundred
dollars ($100) for each violation thereafter. This subdivision does
not apply to personal effects disposed of pursuant to subdivision
(c) of Section 7507.9. Nothing in this subdivision prohibits the
using or taking of personal property connected, adjoined, or affixed
to the collateral through an unbroken sequence if that use or taking
is reasonably necessary to effectuate the recovery in a safe manner
or to protect the collateral or personal effects.

(c) Selling collateral recovered under this begin delete chapter. end delete begin insert chapter, or
making a demand for payment in lieu of repossession. end insert The fine
shall be begin delete one hundred dollars ($100) end delete begin insert two hundred fifty dollars ($250) end insert
for the first begin delete violation, one hundred dollars ($100) for the second
violation, and five hundred dollars ($500) end delete begin insert violation and one
thousand dollars ($1,000) end insert for each begin insert subsequent end insert violation begin delete thereafter end delete .

(d) Unlawfully entering any private building or secured area
without the consent of the owner, or of the person in legal
possession thereof, at the time of repossession. The fine shall be
five hundred dollars ($500) for each violation.

(e) Committing unlawful assault or battery on another person.
The fine shall be five hundred dollars ($500) for each violation.

(f) Falsification or alteration of an inventory. The fine shall be
twenty-five dollars ($25) for each violation.

(g) Soliciting from the legal owner the recovery of specific
collateral registered under the Vehicle Code or under the motor
vehicle licensing laws of other states after the collateral has been
seen or located on a public street or on public or private property
without divulging the location of the vehicle. The fine shall be one
hundred dollars ($100) for the first violation and two hundred fifty
dollars ($250) for each violation thereafter.

SEC. 6.  

Section 7508.7 is added to the Business and Professions
Code, to read:

7508.7.  

Except as otherwise provided by law, a repossession
agency shall not disclose to the public, without a court order, the
residence address, residence telephone number, cellular telephone
number, driver’s license number, work schedule, past, present, or
future location, or any other personal information of any licensee,
registrant, begin insert qualified certificate holder, qualified manager, end insert
employee, or independent contractor that it employs.

SEC. 7.  

Section 7508.8 is added to the Business and Professions
Code, to read:

7508.8.  

(a) Notwithstanding Section 7508.3, an oval, shield,
round, square, or begin delete non-seven point end delete begin insert non-seven-point end insert badge, cap
insignia, or jacket patch may be worn by a licensee, officer,
director, partner, manager, independent contractor, qualified
certificate holder, qualified manager, or employee of a repossession
agency. If a badge, cap insignia, or jacket patch is worn, it shall
bear on its face all of the following:

(1) All or a substantial part of the repossession agency’s name.

(2) The repossession agency license number issued by the
director to that individual or agency.

(3) The word “repossessor.”

(b) A repossessor shall not wear a badge on his or her belt or begin delete a
hanging end delete begin insert hang a end insert badge around his or her neck.

(c) All badges, cap insignias, and jacket patches worn by a
repossessor shall be a standard design approved by the director
and shall be clearly visible.

(d) This section shall not apply to a holder of a temporary
registration pursuant to Section 7506.9.

(e) The director may assess a fine of one hundred dollars ($100)
for the first violation, one hundred begin insert seventy-five end insert dollars begin delete ($100) end delete
begin insert ($175) end insert for the second violation, and two hundred begin delete and end delete fifty dollars
($250) for each begin insert subsequent end insert violation begin delete thereafter end delete .

SEC. 8.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.