BILL ANALYSIS Ó
AB 1113
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Date of Hearing: May 6, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
1113 (Chau) - As Introduced February 27, 2015
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|Policy |Banking and Finance |Vote:|12 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill specifies that a person subject to a desist and
refrain order from the Commissioner of the Department of
Business Oversight (DBO) for violating the Check Sellers, Bill
Payers, and Proraters Law (Proraters Law) has 30 days from the
date of service of the order to request a hearing to challenge
the order. Following a request for hearing, DBO will have 15
business days to commence the hearing, failing which the order
will be rescinded.
FISCAL EFFECT:
AB 1113
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Minor and absorbable costs to DBO.
COMMENTS:
1)Purpose. Existing law authorizes DBO to issue desist and
refrain orders to require persons to cease violations of the
Proraters Law. The law allows that person to request an
administrative hearing to contest the order, but does not
specify any time limitation for making the request. As a
result, there is uncertainty as to when an uncontested order
has become final, and without a finding of finality, DBO's
enforcement remedies may be limited. AB 1113 creates a 30-day
time limitation for requesting a hearing to challenge an
order, and establishes a 15-business-day time period for
commencing the hearing.
2)Proraters Law. There are four different types of businesses
licensed under the Proraters Law: (i) check sellers, which
sell checks, money orders, or drafts to be used by others for
the payment of obligations and the transfer of money; (ii)
bill payers, which receive money as an agent of an obligor for
the purpose of paying bills; (iii) general proraters, which
intermediate between delinquent debtors and creditors to
settle obligations on behalf of the debtors; and (iv) special
proraters, which pay customers' bills as part of the broader
management of their customers' affairs. Many of these
entities are debt settlement businesses that negotiate with
creditors on behalf of consumers to lower the consumers' debt.
Nonprofit credit counseling organizations are exempt from
licensing under the Proraters Law.
AB 1113
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Analysis Prepared by:Joel Tashjian / APPR. / (916)
319-2081