BILL ANALYSIS Ó
SENATE COMMITTEE ON
BANKING AND FINANCIAL INSTITUTIONS
Senator Marty Block, Chair
2015 - 2016 Regular
Bill No: AB 1113 Hearing Date: June 17,
2015
-----------------------------------------------------------------
|Author: |Chau |
|-----------+-----------------------------------------------------|
|Version: |February 27, 2015 Introduced |
-----------------------------------------------------------------
-----------------------------------------------------------------
|Urgency: |No |Fiscal: |Yes |
-----------------------------------------------------------------
-----------------------------------------------------------------
|Consultant:|Eileen Newhall |
| | |
-----------------------------------------------------------------
Subject: Check Sellers, Bill Payers and Proraters Law.
SUMMARY Specifies thirty days as the amount of time in which a
person wishing to contest a desist and refrain order issued
under the Check Sellers, Bill Payers, and Proraters Law has in
which to request a hearing on the order from the Commissioner of
Business Oversight (commissioner), as specified.
DESCRIPTION
1. Specifies thirty days as the amount of time in which a
person wishing to contest a desist and refrain order issued
under the Check Sellers, Bill Payers, and Proraters Law has
in which to request a hearing on the order from the
commissioner. Provides that the thirty day period begins
on the date the person to whom the order is directed is
served with that order.
2. Provides that a desist and refrain order issued under the
Check Sellers, Bill Payers, and Proraters Law is rescinded,
if a hearing requested to contest that order is not
commenced within 15 business days after the request for a
hearing is filed, unless the person to whom the order is
issued consents to a later date.
EXISTING LAW
3. Provides for the Check Sellers, Bill Payers, and Proraters
AB 1113 (Chau) Page 2
of ?
Law (Financial Code Section 12000 et seq.), administered by
the Department of Business Oversight (DBO; the Department).
Defines a check seller under that law as a person who, for
compensation, engages in the business of selling checks,
drafts, money orders, or other commercial paper serving the
same purpose, or receiving money as agent of an obligor for
the purpose of paying bills, invoices, or accounts of such
obligor, or who, without direct compensation and not as an
authorized agent for a utility company, accepts money for
the purpose of forwarding it to others in payment of utility
bills (Financial Code Section 12002). Defines a prorater
under that law as a person who, for compensation, engages in
whole or in part in the business of receiving money or
evidences thereof for the purpose of distributing the money
or evidences thereof among creditors in payment or partial
payment of the obligations of the debtor (Financial Code
Section 12002.1).
4. Provides that, whenever in the opinion of the commissioner,
any person is engaged in business as a check seller without
a license from the commissioner, or any person or licensee
is violating any provision of the Check Sellers, Bill
Payers, or Proraters Law, or any rule or order issued
pursuant to that law, the commissioner may order the person
or licensee to desist and refrain from engaging in such
business or further violating the law (Financial Code
Section 12103).
5. Provides that if, after a desist and refrain order is
issued, a request for a hearing is filed in writing by the
person receiving the order, and no hearing is held within 30
days thereafter, the order is deemed rescinded (Financial
Code Section 12103).
COMMENTS
1. Purpose: AB 1113 is intended to specify the time frame
within which a person served a desist and refrain order
under the Check Sellers, Bill Payers, and Proraters Law must
request a hearing to contest that order.
2. Background: Under the existing Check Sellers, Bill Payers,
and Proraters Law, the commissioner is authorized to issue a
desist and refrain order to an unlicensed person operating
AB 1113 (Chau) Page 3
of ?
without a needed license or to a licensee operating in
violation of the law. The person to whom the order is
issued may request an administrative hearing to contest the
order, but the law does not specify the time frame within
which that request must be submitted. This lack of
specificity creates uncertainty regarding whether and when
an order becomes final. Unless an order is final, the
commissioner cannot enforce it via a civil action. AB 1113
establishes a thirty day period as the amount of time in
which the person served with a desist and refrain order has
in which to request a hearing in writing on that order from
the commissioner. The bill further clarifies that, if a
hearing is not held within fifteen days following the
commissioner's receipt of a request for a hearing, the order
is deemed rescinded.
These time frames are different than those currently observed by
DBO, and more beneficial to persons served with desist and
refrain orders. At present, when the Department issues a
desist and refrain order under the Check Sellers, Bill
Payers, and Proraters Law, it sends a cover letter informing
the recipient of the order of the commissioner's authority
to issue orders and the recipient's right to an
administrative hearing, if they wish to challenge the order.
The letter notes that any request for a hearing must be
made within 15 days after service of the order.
3. Discussion: Although the provisions of AB 1113 are
important to DBO and will help that department enforce the
Check Sellers, Bill Payers, and Proraters Law, the impact of
the bill will be felt by very few licensees. According to
DBO, there are only six active licensees under that law.
4. Summary of Arguments in Support: None received.
5. Summary of Arguments in Opposition: None received.
AB 1113 (Chau) Page 4
of ?
LIST OF REGISTERED SUPPORT/OPPOSITION
Support
None received
Opposition
None received
-- END --