BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON
          BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
                              Senator Jerry Hill, Chair
                                2015 - 2016  Regular 

          Bill No:            AB 1859         Hearing Date:    June 27,  
          2016
           ----------------------------------------------------------------- 
          |Author:   |Gallagher                                             |
          |----------+------------------------------------------------------|
          |Version:  |June 21, 2016                                         |
           ----------------------------------------------------------------- 
           ---------------------------------------------------------------- 
          |Urgency:  |No                     |Fiscal:    |Yes              |
           ---------------------------------------------------------------- 
           ----------------------------------------------------------------- 
          |Consultant|Mark Mendoza                                          |
          |:         |                                                      |
           ----------------------------------------------------------------- 
          
                 Subject:  Collateral recovery:  release of vehicle


          SUMMARY:  Makes several substantive and clarifying changes to  
          repossession, inventory, and release procedures for collateral  
          recovery involving licensed repossessors, including consumer  
          waivers of inventory presentation, storage of personal effects,  
          collateral release procedures, inventory procedures, and  
          registration requirements.

          Existing law:
             


          1) Establishes the Bureau of Security and Investigative Services  
             (BSIS) within the Department of Consumer Affairs (DCA) to  
             license and regulate repossessors under the Collateral  
             Recovery Act (Act).  (Business and Professions (BPC)  7500  
             - 7511)





          2) Defines "assignment" as any written authorization by the  
             legal owner, lienholder, lessor, lessee, registered owner, or  
             the agent of any of them, to repossess any collateral,  
             including, but not limited to, collateral registered under  
             the Vehicle Code that is subject to a security agreement that  







          AB 1859 (Gallagher)                                     Page 2  
          of ?
          
          
             contains a repossession clause.  "Assignment" also means any  
             written authorization by an employer to recover any  
             collateral entrusted to an employee or former employee in  
             possession of the collateral.  (BPC  7500.1(a))



          3) Defines "collateral" as any specific vehicle, trailer, boat,  
             recreational vehicle, motor home, appliance, or other  
             property that is subject to a security agreement.  (BPC   
             7500.1(e))





          4) Defines "debtor" as any person obligated under a security  
             agreement.  (BPC  7500.1(i))





          5) Defines "legal owner" as a person holding a security interest  
             in any collateral that is subject to a security agreement, a  
             lien against any collateral, or an interest in any collateral  
             that is subject to a lease agreement.  (BPC  7500.1(n))





          6) Defines "licensee" as an individual, partnership, limited  
             liability company, or corporation licensed under this chapter  
             as a repossession agency.  (BPC  7500.1(o))





          7) Defines "repossession" as the locating or recovering of  
             collateral by means of an assignment.  (BPC  7500.1)










          AB 1859 (Gallagher)                                     Page 3  
          of ?
          
          



          8) Requires a licensed repossessor to remove and inventory  
             personal effects from the collateral after repossession.   
             Requires the inventory of the personal effects be complete  
             and accurate, and the personal effects be labeled and stored  
             by the licensee for a minimum of 60 days in a secure manner,  
             except those personal effects removed by or in the presence  
             of the debtor or the party in possession of the collateral at  
             the time of the repossession.  (BPC  7507.9)





          9) Authorizes a debtor, with the consent of the licensee, to  
             waive the preparation and presentation of an inventory if the  
             debtor redeems the personal effects or other personal  
             property not covered by a security interest within the time  
             period for the notices required by the Act and signs a  
             statement that the debtor has received all the property.   
             (BPC  7507.9(h))



          10)Requires a repossession agency to request written  
             authorization from the debtor before releasing personal  
             effects or other personal property not covered by a security  
             agreement.   (BPC  7507.9(i))





          11)Exempts a vehicle repossessed pursuant to the terms of a  
             security agreement from registration solely for the purpose  
             of transporting the vehicle from the point of repossession to  
             the storage facilities of the repossessor, and from the  
             storage facilities to the legal owner or a licensed motor  
             vehicle auction, provided that the repossessor transports  
             with the vehicle the appropriate documents authorizing the  
             repossession and makes them available to a law enforcement  
             officer on request.  (Vehicle Code (VEH)  4022)








          AB 1859 (Gallagher)                                     Page 4  
          of ?
          
          


                                        


          12)Provides that a vehicle removed and seized by a peace officer  
             as specified be released to the legal owner of the vehicle or  
             the legal owner's agent prior to the end of 30 days'  
             impoundment if all of the following conditions are met:  (VEH  
              14602.6(f))





                  a)        The legal owner is a motor vehicle dealer,  
                    bank, credit union, acceptance corporation, or other  
                    licensed financial institution legally operating in  
                    this state or is another person, not the registered  
                    owner, holding a security interest in the vehicle.





                  b)        The following payment requirements are met:





                    i)          The legal owner or the legal owner's agent  
                      pays all towing and storage fees related to the  
                      seizure of the vehicle, as specified.





                    ii)         A person operating or in charge of a  
                      storage facility where vehicles are stored pursuant  
                      to this section shall accept a valid bank credit  
                      card or cash for payment of towing, storage, and  
                      related fees by a legal or registered owner or the  








          AB 1859 (Gallagher)                                     Page 5  
          of ?
          
          
                      owner's agent claiming the vehicle. A credit card  
                      shall be in the name of the person presenting the  
                      card.  "Credit card" means "credit card" as defined  
                      in Civil Code (CIV)  1747.02(a), except, for the  
                      purposes of this section, credit card does not  
                      include a credit card issued by a retail seller.





                    iii)        A person operating or in charge of a  
                      storage facility described above who violates the  
                      requirements shall be civilly liable to the owner of  
                      the vehicle or to the person who tendered the fees  
                      for four times the amount of the towing, storage,  
                      and related fees, but not to exceed five hundred  
                      dollars ($500).





                    iv)         A person operating or in charge of a  
                      storage facility described above shall have  
                      sufficient funds on the premises of the primary  
                      storage facility during normal business hours to  
                      accommodate, and make change in, a reasonable  
                      monetary transaction.





                    v)          Requires credit charges for towing and  
                      storage services comply with CIV  1748.1.  Law  
                      enforcement agencies may include the costs of  
                      providing for payment by credit when making  
                      agreements with towing companies on rates.













          AB 1859 (Gallagher)                                     Page 6  
          of ?
          
          
                  c)        The legal owner or the legal owner's agent  
                    presents a copy of the assignment, as defined in BPC   
                    7500.1(b); a release from the one responsible  
                    governmental agency, only if required by the agency; a  
                    government-issued photographic identification card;  
                    and any one of the following, as determined by the  
                    legal owner or the legal owner's agent: a certificate  
                    of repossession for the vehicle, a security agreement  
                    for the vehicle, or title, whether paper or  
                    electronic, showing proof of legal ownership for the  
                    vehicle. Any documents presented may be originals,  
                    photocopies, or facsimile copies, or may be  
                    transmitted electronically.  The law enforcement  
                    agency, impounding agency, or any other governmental  
                    agency, or any person acting on behalf of those  
                    agencies, shall not require any documents to be  
                    notarized.  The law enforcement agency, impounding  
                    agency, or any person acting on behalf of those  
                    agencies may require the agent of the legal owner to  
                    produce a photocopy or facsimile copy of its  
                    repossession agency license or registration issued  
                    pursuant to the Act, or to demonstrate, to the  
                    satisfaction of the law enforcement agency, impounding  
                    agency, or any person acting on behalf of those  
                    agencies, that the agent is exempt from licensure  
                    pursuant to BPC  7500.2 or 7500.3.





                  d)        No administrative costs authorized under VEH   
                    22850.5(a) shall be charged to the legal owner, who  
                    redeems the vehicle unless the legal owner voluntarily  
                    requests a poststorage hearing. No city, county, city  
                    and county, or state agency shall require a legal  
                    owner or a legal owner's agent to request a  
                    poststorage hearing as a requirement for release of  
                    the vehicle to the legal owner or the legal owner's  
                    agent. The law enforcement agency, impounding agency,  
                    or other governmental agency, or any person acting on  
                    behalf of those agencies, shall not require any  
                    documents other than those specified in this  
                    paragraph. The law enforcement agency, impounding  








          AB 1859 (Gallagher)                                     Page 7  
          of ?
          
          
                    agency, or other governmental agency, or any person  
                    acting on behalf of those agencies, shall not require  
                    any documents to be notarized. The legal owner or the  
                    legal owner's agent shall be given a copy of any  
                    documents he or she is required to sign, except for a  
                    vehicle evidentiary hold logbook. The law enforcement  
                    agency, impounding agency, or any person acting on  
                    behalf of those agencies, or any person in possession  
                    of the vehicle, may photocopy and retain the copies of  
                    any documents presented by the legal owner or legal  
                    owner's agent.





                  e)        A failure by a storage facility to comply with  
                    any applicable conditions set forth in this  
                    subdivision shall not affect the right of the legal  
                    owner or the legal owner's agent to retrieve the  
                    vehicle, provided all conditions required of the legal  
                    owner or legal owner's agent under this subdivision  
                    are satisfied.





          13)Provides that, when collateral is released to a licensed  
             repossessor, licensed repossession agency, or its officers or  
             employees, the following apply:





                  a)        The law enforcement agency and the impounding  
                    agency, including any storage facility acting on  
                    behalf of the law enforcement agency or impounding  
                    agency, shall comply with the release requirements of  
                    VEH  14602.6 and shall not be liable to the  
                    registered owner for the improper release of the  
                    vehicle to the legal owner or the legal owner's agent  
                    provided the release complies with the provisions of  








          AB 1859 (Gallagher)                                     Page 8  
          of ?
          
          
                    this section.  A law enforcement agency shall not  
                    refuse to issue a release to a legal owner or the  
                    agent of a legal owner on the grounds that it  
                    previously issued a release.





                  b)        The legal owner of collateral shall, by  
                    operation of law and without requiring further action,  
                    indemnify and hold harmless a law enforcement agency,  
                    city, county, city and county, the state, a tow yard,  
                    storage facility, or an impounding yard from a claim  
                    arising out of the release of the collateral to a  
                    licensed repossessor or licensed repossession agency,  
                    and from any damage to the collateral after its  
                    release, including reasonable attorney's fees and  
                    costs associated with defending a claim, if the  
                    collateral was released in compliance with this  
                    section.  (VEH  


                    14602.6(j))





          14)Provides that, pursuant to VEH  4022 and to VEH   
             22651(o)(3)(B), a vehicle obtained by a licensed repossessor  
             as a release of collateral is exempt from registration  
             pursuant for purposes of the repossessor removing the vehicle  
             to his or her storage facility or the facility of the legal  
             owner.  A law enforcement agency, impounding authority, tow  
             yard, storage facility, or any other person in possession of  
             the collateral shall release the vehicle without requiring  
             current registration and pursuant to VEH 14602.6(f).  (VEH   
             4000(g)(1))













          AB 1859 (Gallagher)                                     Page 9  
          of ?
          
          
          15)Provides that the legal owner of collateral shall, by  
             operation of law and without requiring further action,  
             indemnify and hold harmless a law enforcement agency, city,  
             county, city and county, the state, a tow yard, storage  
             facility, or an impounding yard from a claim arising out of  
             the release of the collateral to a licensee, and from any  
             damage to the collateral after its release, including  
             reasonable attorney's fees and costs associated with  
             defending a claim, if the collateral was released in  
             compliance with this subdivision.  (VEH  4000(g)(2))


          This bill:  

          1) Deletes and reinstates the definition of "assignment" as  
             "repossession order". Makes technical changes throughout the  
             bill to reflect this new terminology. 





          2) Defines "locate" or "locating" to mean searching visually, by  
             a licensee, for collateral without the use of an electronic  
             device, including, but not limited to, a camera, scanner, or  
             automated license plate reader. 





          3) Redefines "repossession" or "repossess" as the locating and  
             physical recovering of collateral by means of repossession  
             order. 





          4) Exempts employees of a licensee who are operating electronic  
             devises, including, but not limited to, cameras, scanners,  
             and automated license plate readers, for the purpose of  
             locating collateral or documenting the location of collateral  
             from complying with the Act.








          AB 1859 (Gallagher)                                     Page 10  
          of ?
          
          



          5) Requires, if the collateral is locked, the licensee inventory  
             the personal effects within 15 days, if possible. 



          6) Authorizes, with the consent of the licensee, the debtor to  
             waive the preparation and presentation of an inventory if the  
             debtor redeems the personal effects or other personal  
             property not covered by a security interest within the time  
             period for the notices required or prior to the completion of  
             the inventory, whichever is earlier, and signs a statement  
             that reads only as follows:



                  a)        "I, [insert debtor's name here], have received  
                    all personal effects that were in the vehicle at the  
                    time of the repossession."

                  b)        "Requires that no other signature or document  
                    be required to waive the preparation and presentation  
                    of an inventory. If the debtor claims there are  
                    personal effects or personal property missing, the  
                    licensee shall provide the debtor with the phone  
                    number of the licensed repossession agency. A licensee  
                    shall not require the person retrieving the personal  
                    effects to sign any other documents or waivers prior  
                    to the return of the personal effects. No other  
                    documents or signatures shall be required for the  
                    person to receive the personal effects. Any fees paid  
                    for clerical, handling, administering, inventorying,  
                    or storage of personal effects are confidential and  
                    shall only be disclosed by the licensed repossession  
                    agency as ordered by a court of competent  
                    jurisdiction."

          7) Prohibits a licensee from releasing or conspiring or agreeing  
             to release personal effects or other personal property not  
             covered by a security agreement to anyone other than the  
             debtor.









          AB 1859 (Gallagher)                                     Page 11  
          of ?
          
          




          8) Authorizes a licensee, who has been notified that collateral  
             will be retrieved, to store personal effects or personal  
             property inside the collateral until the collateral is no  
             longer in the possession of the licensee.  The collateral  
             shall not leave the possession of the licensee until all  
             personal effects or personal property has been removed.



          9) Clarifies that a licensed repossession agency is not liable  
             for the act or omission of a debt collector in making a  
             repossession order.



          10)Provides that, when collateral is released to a licensed  
             repossessor, as specified, the following apply:





                  a)        Pursuant to VEH  4022, a vehicle obtained by  
                    a licensed repossessor as a release of collateral is  
                    exempt from registration for purposes of the  
                    repossessor removing the vehicle to his or her storage  
                    facility or the facility of the legal owner.  A law  
                    enforcement agency, impounding authority, tow yard,  
                    storage facility, or any other person in possession of  
                    the collateral shall release the vehicle without  
                    requiring current registration and pursuant to this  
                    section.  The law enforcement agency shall be open to  
                    issue a release to the legal owner or a licensed  
                    repossessor whenever the agency is open to serve the  
                    public for nonemergency business.













          AB 1859 (Gallagher)                                     Page 12  
          of ?
          
          
                  b)        The law enforcement agency and the impounding  
                    agency, including any storage facility acting on  
                    behalf of the law enforcement agency or impounding  
                    agency, shall comply with the registration exemption  
                    and release requirements and shall not be liable to  
                    the registered owner for the improper release of the  
                    vehicle to the legal owner or a licensed repossessor  
                    provided the release complies with this section.  A  
                    law enforcement agency shall not refuse to issue a  
                    release to a legal owner or a licensed repossessor on  
                    the grounds that it previously issued a release.





                  c)        A vehicle removed and seized for any reason  
                    shall be released to the legal owner of the vehicle or  
                    to a licensed repossessor if all of the following  
                    conditions are met:





                    i)          The legal owner is a motor vehicle dealer,  
                      bank, credit union, acceptance corporation, or other  
                      licensed financial institution legally operating in  
                      this state or is another person, not the registered  
                      owner, holding a security interest in the vehicle.





                    ii)         The following payment requirements are  
                      met:





                       (1)            The legal owner or the licensed  
                         repossessor pays all towing and storage fees  








          AB 1859 (Gallagher)                                     Page 13  
          of ?
          
          
                         related to the seizure of the vehicle, as  
                         requested.





                       (2)            A person operating or in charge of a  
                         storage facility where vehicles are stored  
                         pursuant to this section shall accept a valid  
                         bank credit card or cash for payment of towing,  
                         storage, and related fees by a legal owner or a  
                         licensed repossessor claiming the vehicle. A  
                         credit card shall be in the name of the person  
                         presenting the card. "Credit card" means "credit  
                         card" as defined in CIV  1747.02(a), except, for  
                         the purposes of this section, credit card does  
                         not include a credit card issued by a retail  
                         seller.





                       (3)            A person operating or in charge of a  
                         storage facility described above who violates the  
                         requirements shall be civilly liable to the owner  
                         of the vehicle or to the person who tendered the  
                         fees for four times the amount of the towing,  
                         storage, and related fees, but not to exceed five  
                         hundred dollars ($500).





                       (4)            A person operating or in charge of a  
                         storage facility described above shall have  
                         sufficient funds on the premises of the primary  
                         storage facility during normal business hours to  
                         accommodate, and make change in, a reasonable  
                         monetary transaction.










          AB 1859 (Gallagher)                                     Page 14  
          of ?
          
          



                       (5)            Credit charges for towing and  
                         storage services shall comply with CIV  1748.1.   
                         Law enforcement agencies may include the costs of  
                         providing for payment by credit when making  
                         agreements with towing companies on rates.
                                                                  




                       (6)            The legal owner or licensed  
                         repossessor presents a copy of the assignment, as  
                         defined in subdivision (b) of Section 7500.1 of  
                         the Business and Professions Code; a release from  
                         the one responsible governmental agency, only if  
                         required by the agency; a government-issued  
                         photographic identification card; and any one of  
                         the following, as determined by the legal owner  
                         or the licensed repossessor: a certificate of  
                         repossession for the vehicle, a security  
                         agreement for the vehicle, or title, whether  
                         paper or electronic, showing proof of legal  
                         ownership for the vehicle. Any documents  
                         presented may be originals, photocopies, or  
                         facsimile copies, or may be transmitted  
                         electronically. The law enforcement agency,  
                         impounding agency, or any other governmental  
                         agency, or any person acting on behalf of those  
                         agencies, shall not require any documents to be  
                         notarized. The law enforcement agency, impounding  
                         agency, or any person acting on behalf of those  
                         agencies may require the licensed repossessor to  
                         produce a photocopy or facsimile copy of its  
                         repossession agency license or registration  
                         issued pursuant to Chapter 11 (commencing with  
                         Section 7500) of Division 3 of the Business and  
                         Professions Code.












          AB 1859 (Gallagher)                                     Page 15  
          of ?
          
          

                       (7)            No administrative costs authorized  
                         under subdivision VEH  22850.5(a) shall be  
                         charged to the legal owner, of the type specified  
                         above, who redeems the vehicle unless the legal  
                         owner voluntarily requests a poststorage hearing.  
                          No city, county, city and county, or state  
                         agency shall require a legal owner or a licensed  
                         repossessor to request a poststorage hearing as a  
                         requirement for release of the vehicle to the  
                         legal owner or the licensed repossessor.  The law  
                         enforcement agency, impounding agency, or other  
                         governmental agency, or any person acting on  
                         behalf of those agencies, shall not require any  
                         documents other than those specified in this  
                         paragraph.  The law enforcement agency,  
                         impounding agency, or other governmental agency,  
                         or any person acting on behalf of those agencies,  
                         shall not require any documents to be notarized.   
                         The legal owner or the licensed repossessor shall  
                         be given a copy of any documents he or she is  
                         required to sign, except for a vehicle  
                         evidentiary hold logbook.  The law enforcement  
                         agency, impounding agency, or any person acting  
                         on behalf of those agencies, or any person in  
                         possession of the vehicle may photocopy and  
                         retain the copies of any documents presented by  
                         the legal owner or licensed repossessor.





                       (8)            A failure by a storage facility to  
                         comply with any applicable conditions set forth  
                         in this subdivision shall not affect the right of  
                         the legal owner or a licensed repossessor to  
                         retrieve the vehicle, provided all conditions  
                         required of the legal owner or licensed  
                         repossessor under this subdivision are satisfied.












          AB 1859 (Gallagher)                                     Page 16  
          of ?
          
          

                  d)        A legal owner or a licensed repossessor that  
                    obtains release of a vehicle shall not release the  
                    vehicle to the registered owner of the vehicle, the  
                    person who was listed as the registered owner when the  
                    vehicle was impounded, or any agents of the registered  
                    owner, unless the registered owner is a rental car  
                    agency.





                  e)        The legal owner or the licensed repossessor  
                    shall not relinquish the vehicle to the registered  
                    owner or the person who was listed as the registered  
                    owner when the vehicle was impounded until the  
                    registered owner or that owner's agent presents his or  
                    her valid driver's license or valid temporary driver's  
                    license to the legal owner or the licensed  
                    repossessor.  The legal owner, licensed repossessor,  
                    or person in possession of the vehicle shall make  
                    every reasonable effort to ensure that the license  
                    presented is valid and that possession of the vehicle  
                    will not be given to the driver who was involved in  
                    the original impoundment proceeding until the  
                    expiration of the impoundment period.





                  f)        The legal owner of collateral shall, by  
                    operation of law and without requiring further action,  
                    indemnify and hold harmless a law enforcement agency,  
                    city, county, city and county, the state, a tow yard,  
                    storage facility, or an impounding yard from a claim  
                    arising out of the release of the collateral to a  
                    licensed repossessor and from any damage to the  
                    collateral after its release, including reasonable  
                    attorney's fees and costs associated with defending a  
                    claim, if the collateral was released in compliance  
                    with this section.









          AB 1859 (Gallagher)                                     Page 17  
          of ?
          
          


          11)Makes other technical and clarifying changes.  


          FISCAL  
          EFFECT:  This bill has been keyed "fiscal" by Legislative  
          Counsel.  According to the Assembly Appropriations Committee  
          analysis dated on May 11, 2016, this bill will minor and  
          absorbable costs to DCA.

          COMMENTS:
          
          1. Purpose.   The California Association of Licensed Repossessors   
             is the sponsor of this bill.  According to the Author, this  
             bill "clarifies and updates the Collateral Recovery Act so  
             that 'repossession' includes 'repossess' and means the  
             'locating or physically recovering of collateral by means of  
             a repossession order' and so that the commonly-used and  
             understood term 'repossession order' is used rather than the  
             outdated term 'assignment.'

             The measure also adds consumer protection by addressing the  
             inventory process in situations where the collateral is  
             locked, so that the licensee will have 15 days to inventory  
             the personal effects if possible.  Additional consumer  
             protection is provided in instances when individuals decide  
             to waive the preparation and presentation of inventory.   
             These protections include a prohibition against additional  
             signatures or documents being required for them to receive  
             the personal effects.

             The bill also ensures that a licensee storing personal  
             effects inside the collateral must comply with the notice and  
             inventory provisions of the Act.  Lastly, the measure adds a  
             new section to the Vehicle Code setting forth the procedures  
             and liability provisions that are currently in separate  
             sections of that code and that apply when a vehicle is  
             released to a licensee."

          2. Background.  The Collateral Recovery Act provides for the  
             licensing and regulation of repossessors.  Among other  
             things, the Act specifies standards for education,  
             experience, and repossession procedures.  However, the  








          AB 1859 (Gallagher)                                     Page 18  
          of ?
          
          
             sponsor notes that the Act is out of date in some instances.   
             Therefore, this bill aims to clarify and update the Act.

          3. Requirements for Inventory of Personal Effects.  According to  
             the sponsor, the requirements pertaining to the inventory of  
             personal effects in repossessed collateral do not address the  
             situation where the collateral is locked and the personal  
             effects cannot be inventoried.  The Act currently requires a  
             licensed repossessor to remove all personal effects from the  
             collateral and make a "complete and accurate inventory of the  
             personal effects."  Further, all items must be labeled and  
             stored for at least 60 days. 

             The sponsor notes that "personal effects that are locked in  
             collateral cannot be inventoried. As a result, compiling a  
             complete and accurate inventory in compliance with the Act as  
             written cannot be accomplished."  Therefore, this bill allows  
             the licensee 15 days to complete the inventory of personal  
             effects, if possible.  Within this time, the licensee has the  
             opportunity to contact the legal owner, registered owner or  
             person in possession of the vehicle at the time or  
             repossession, to obtain a key to the vehicle. The licensee  
             will then be able to inventory the personal effects in  
             compliance with the Act.
              
           4. Presentation of Inventory.  After an inventory, licensees  
             must either hold onto personal effects for the statutorily  
             mandated period or present the inventory and provide the  
             personal effects to the debtor upon request.  However,  
             sometimes a debtor does not want the presentation or some of  
             the items.  Therefore, this bill clarifies the procedures  
             surrounding waiver of presentation and adds additional  
             requirements, including requiring the licensee to keep the  
             waiver confidential and prohibiting the release of personal  
             effects to others besides the debtor.  

           5. Release of Collateral.  The sponsors also state that  
             repossessors regularly face difficulty obtaining collateral  
             because of registration requirements.  Many storage  
             facilities and impounding agencies require proof of current  
             registration to release a vehicle.  However, repossessors (as  
             agents of the legal owner) are sometimes denied the  
             collateral because the DMV records do not list the legal  
             owner as the registrant.  This can occur when the debtor, who  








          AB 1859 (Gallagher)                                     Page 19  
          of ?
          
          
             is no longer the legal owner, is still listed as the  
             registered owner.  In those situations, the legal owner is  
             unable to obtain the vehicle.  In order to remedy those  
             situations, this bill combines relevant sections from VEH   
             4000 and 14602.6 into a new Vehicle Code section to clarify  
             that a licensed repossessor is exempt from registration  
             requirements when acting as the legal owner's agent.  
              
          6. Prior Related Legislation.   AB 281  (Gallagher, Chapter 740,  
             Statutes of 2015) allowed reposessors to show proof of their  
             license via various media, established a disciplinary review  
             committee to review the request of a licensee to contest the  
             assessment of an administrative fine or appeal a denial of a  
             license, and made other technical changes. 

              AB 2503  (Hagman, Chapter 390, Statutes of 2014) amended the  
             definition of a "repossession agency," updated law  
             enforcement notification requirements, updated condition  
             report requirements, exempted registration of a vehicle for  
             the purpose of removing the vehicle to their storage facility  
             or the facility of the owner, held storage facilities  
             harmless for any liability associated with the release of the  
             collateral, and made other technical changes.  

          7. Arguments in Support.   The California Association of Licensed  
             Repossessors  (Sponsor) underscores that "this legislation  
             would revise the Collateral Recovery Act and the Vehicle Code  
             to enhance the consumer protections set forth in current  
             laws, and update the laws where appropriate."
          
          SUPPORT AND OPPOSITION:
          
           Support:  

          The California Association of Licensed Repossessors (Sponsor)

           Opposition:  

          None on file as June 21, 2016.
                                      -- END --
          











          AB 1859 (Gallagher)                                     Page 20  
          of ?