BILL ANALYSIS Ó
AB 281
Page 1
Date of Hearing: May 6, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
281 (Gallagher) - As Amended April 22, 2015
-----------------------------------------------------------------
|Policy |Business and Professions |Vote:|14 - 0 |
|Committee: | | | |
| | | | |
| | | | |
|-------------+-------------------------------+-----+-------------|
| | | | |
| | | | |
| | | | |
|-------------+-------------------------------+-----+-------------|
| | | | |
| | | | |
| | | | |
-----------------------------------------------------------------
Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill establishes a Collateral Recovery Disciplinary Review
Committee (DRC) within the Bureau Security Investigative
Services (Bureau) to review a request of a licensee to contest
AB 281
Page 2
an administrative fine or to appeal the denial of a license;
prohibits licensed repossessors from performing repair work on
collateral; and authorizes licensed repossessors to display a
printout of their registration or a screenshot of their
registration from the Bureau's website.
FISCAL EFFECT:
Ongoing costs of approximately $47,000 annually (special funds)
to the Bureau for a half-time staff services analyst (SSA)
position and four hearings per year associated with the new DRC.
COMMENTS:
1)Purpose. According to the author, "[This bill] clarifies the
job description of repossessors, promotes flexibility, and
establishes a DRC - a proven mechanism to save time and
taxpayer dollars."
2)Background. When a debtor defaults on payments for a home,
vehicle or product, the creditor is authorized to collect and
resell the collateral to defray the delinquent amount owed by
the debtor. Under existing law, a creditor may use a
collections agency to recover loan payments in default from
customers, and if that is unsuccessful, a creditor may hire a
licensed repossession agency (LRA) to recover viable
collateral for resale, with the proceeds going towards the
outstanding loan amount.
The Act prohibits repossessors from performing those duties
unless he or she has in his or her possession a valid
repossessor registration card or evidence of a valid temporary
registration or registration renewal. The Act also requires
AB 281
Page 3
every person engaged in repossession activities to display his
or her valid pocket identification card issued by the Bureau.
However, the Act authorizes a person to perform repossession
activities pending receipt of a registration card if the
person 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 website and valid picture
identification.
According to the Bureau, during Fiscal Year 2013-14, there
were approximately 309 actively licensed LRAs, 891 actively
licensed repossessors and 330 actively licensed repossessor
qualified managers operating in California.
There are three DRCs within Bureau. The Private Security
Services Act establishes two DRCs, and the Alarm Company Act
establishes one DRC. The DRCs provide their respective
applicants and licensees an alternate path to appeal the
Bureau's decisions to deny, suspend, or revoke licenses, or
assessments of administrative fines.
3)Current Legislation. AB 921 (Jones), also before this
committee, would establish a DRC for private investigators.
4)Prior Legislation. AB 791 (Hagman), Chapter 340, Statutes of
2013, among other things, prohibited an LRA or its registrants
from making a demand for payment in lieu of repossession, and
prohibited an LRA from selling collateral recovered under the
Act.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
AB 281
Page 4
319-2081