BILL ANALYSIS
AB 1722
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Date of Hearing: April 20, 2010
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 1722 (Hagman) - As Introduced: February 3, 2010
PROPOSED CONSENT
SUBJECT : COLLATERAL RECOVERY
KEY ISSUE : SHOULD VARIOUS SUBSTANTIVE AND CLARIFYING CHANGES BE
MADE TO SECTIONS OF THE COLLATERAL RECOVERY ACT THAT REGULATE
THE REPOSSESSION, IMPOUNDMENT, AND RELEASE FROM IMPOUNDMENT OF
VEHICLES, AND THAT SPECIFY LICENSING AND QUALIFICATION
REQUIREMENTS FOR LICENSED REPOSSESSORS?
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
SYNOPSIS
This non-controversial bill, sponsored by the California
Association of Licensed Repossessors (CALR), seeks a number of
substantive and clarifying changes to sections of the Collateral
Recovery Act and Vehicle Code that regulate qualifications for
licensed repossessors and the repossession, impoundment, and
release from impoundment of vehicles, as provided. Among other
things, this bill would revise provisions relating to retention
of inventory documents, frequency of qualified manager
examinations, confidentiality of cell phone numbers, and the
ability of a registrant to work while waiting for mailing of a
registration card. This bill also corrects a drafting oversight
arising from last year's AB 515 by the same author and also
sponsored by CALR. This bill passed the Assembly Business,
Professions, and Consumer Protection Committee by an 11-0 vote
and has no known opposition.
SUMMARY : Makes various substantive and clarifying changes to
laws that regulate vehicle repossession, impoundment, and
release from impoundment, and that specify licensing and
qualification requirements for licensed repossessors.
Specifically, this bill :
1)Prohibits a repossession agency from publicly disclosing a
registrant's residential address, residential telephone
number, cell phone number, or driver's license.
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2)Modifies the qualified manager examination and reexamination
schedule from once every other month to once every three
months.
3)Authorizes a person to work as a registrant pending the
receipt of the registration card if he or she has been
approved by the Bureau of Security and Investigative Services
(Bureau) and carries on his or her person a printout of the
Bureau's approval from the Bureau's Internet Web site and
valid picture identification.
4)Requires the Bureau to issue a cardholder a certified
replacement card in the event of the loss or destruction of
the card, provided that the cardholder states the
circumstances surrounding the loss and pays a $10
certification fee.
5)Authorizes a repossession agency to keep assignment forms in
an e-mail, text message, or other electronic format.
6)Requires a repossessor to record the inventory, and the
adequate information as to how, when, and to whom the personal
effects were disposed of in their permanent records for a
minimum of four years.
7)Authorizes the repossessor to remove out-of-state license
plates from collateral and inventory them, as specified.
8)Provides that a licensee may not disclose the existence of an
inventory of personal effects, or any associated fees relating
to the inventory, except under certain circumstances, as
specified.
9)Specifies that repossession is complete, with regard to
collateral subject to registration, as specified, when the
repossessor moves, pushes, or gains control of the collateral.
10)Corrects a drafting error in a section of the Vehicle Code to
conform that section to other sections specifying procedures
for obtaining releases.
11)Provides that under certain circumstances, an impounded
vehicle may be released to a legal owner without proof of
current registration, as long as the vehicle is only
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transported to an auto auction for disposal.
EXISTING LAW :
1)Provides for the licensure and regulation of repossession
agencies by the Bureau, under the Collateral Recovery Act.
(Chapter 11 of Division 3 of the Business and Professions
Code, commencing with Section 7500. All sections refer to this
Code unless otherwise noted.)
2)Requires an applicant for a qualification certificate, or for
an initial registration or re-registration, to submit an
application to the Bureau and include certain personal
information in the application that is confidential and
prohibited from public disclosure. (Section 7504.)
3)Requires the Bureau to give examinations and reexaminations
for a qualification certificate every other month. (Section
7504.2.)
4)Prohibits a person from performing the duties of a registrant
for a licensed repossession agency unless he or she possesses
a valid repossessor registration card or evidence of a valid
temporary registration or registration renewal. (Section
7506.9(d).)
5)Permits an assignment form to be stored as a copy in email,
text message, or other electronic format. (Section 7507.3.)
6)Requires a repossession agency to inventory the personal
effects removed from recovered collateral and authorizes those
personal effects to be disposed of after being held for at
least 60 days. (Section 7507.9)
7)Requires the inventory to be filed in the permanent records of
the licensee and prohibits disclosure of inventory contents,
unless otherwise specified. (Section 7507.9.)
8)Provides a repossession of certain collateral that is subject
to vehicle registration is complete when the repossessor gains
entry to the collateral or when the collateral becomes
connected to a tow truck or the repossessors tow the vehicle.
(Section 7507.12.)
9)Authorizes the release of impounded vehicles to the legal
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owner, or person in control of the vehicle, if certain
conditions have been satisfied, as specified. (Vehicle Code
Section 22651.)
10)Contains provisions which, as a result of a drafting
oversight in AB 515 (2009), do not conform to the common
statutory scheme established in other sections of law by AB
515, specifying procedures for obtaining impound release.
(Vehicle Code Section 14602.8.)
COMMENTS : This bill, sponsored by the California Association of
Licensed Repossessors (CALR), seeks a number of substantive and
clarifying changes to sections of the Collateral Recovery Act
and Vehicle Code that regulate licensed repossessors. According
to the author, this bill "clarifies some ambiguous parts of
current repossession law, protects the privacy of repossessors,
and will result in safer repossession activity."
Background . A repossession agency is a business that recovers
property sold under a contract or security agreement. Typically
the property (called "collateral") is a car, boat, motorcycle,
or recreational vehicle. Since 1981, employees of repossession
agencies have been required to register with the Bureau of
Security and Investigative Services.
In most cases, a person must be registered with the Bureau and
have a Bureau identification card to legally recover collateral.
In some cases, a bank, auto dealership, financial lender, or
other legal owner will send employees to recover property.
Under California law, in-house employees who are on the regular
payroll of the legal owner are not considered repossession
employees and do not need to be licensed by the Bureau.
Confidentiality Provisions . Under existing law, applicants for
a qualification certificate provide certain personally
identifying information on their application, including their
residence address, residence telephone number and driver's
license number. The same is true of persons completing an
application for registration upon entering employment with a
licensed repossessor. This bill simply adds the cell phone
number of the applicant or registrant to the list of personal
information that the Bureau and repossession agencies may not
disclose to the public. According to the author, protecting the
confidentiality of this information will help protect the safety
of qualified managers and registrants.
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In addition, under existing law, the contents of the inventory
of a vehicle that has been repossessed are confidential, and may
not be disclosed except under specified circumstances. This
bill would provide that the repossessor may also not disclose
the very existence of an inventory, except under the same
specified circumstances.
Time Period Changes. Current law requires inventories and
disposition information to be retained by a repossession agency
in perpetuity. The inventory information is potentially useful
to help resolve any dispute over whether certain property items
were present in the car at the time of impound. According to
the sponsor, this is becoming a burden for many licensed
repossessors who currently maintain inventory records that are
now decades old, especially in light of that fact that the
statute of limitations to sue over whether items were improperly
removed from a vehicle is two years. This bill would instead
require the licensed agency to retain this information in its
records for four years-a reasonable time period that corresponds
to general business practice of retaining records for a similar
period.
In addition, at the request of the Bureau, which is responsible
for administering examinations for qualified managers, the
author proposes to require that these examinations be given
every three months, rather than every two months.
Ability to Work Pending Receipt of Registration Card. Current
law requires a field agent to possess a valid-issued
registration card. According to the author, because of
furloughs and personnel reductions, there is frequently a delay
of several weeks between the time a registrant is approved to
work by the state and the time when the registration card is
mailed. To avoid unnecessary delay, this bill would permit an
approved registrant to work if that person carries a hard-copy
printout of the Bureau's approval from the Bureau website and
government-issued photo identification, as provided. This bill
also authorizes a $10 fee to replace a lost or destroyed
registration card.
Electronic Assignments. An "assignment" is the written
authorization by the legal owner of collateral to skip trace,
locate, or repossess or to collect money payment in lieu of
repossession of any collateral, including, but not limited to,
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collateral registered under the Vehicle Code that is subject to
a security agreement that contains a repossession clause.
(Business and Professions Code Section 7500.1(b).) In short,
the assignment form, also known as a "pickup order," is the form
sent by the legal owner to the repossession agency directing the
agency to repossess the collateral. Under current law, the
assignment form may be an original, a photocopy, a fax copy, or
a copy stored in an electronic format. This bill would simply
clarify that the electronic format may include email or
electronic text messages.
Repossession of Special Vehicles. Under current law,
repossession of a vehicle is deemed to occur at the moment the
vehicle becomes connected to the tow vehicle, or when the
repossessor "gains entry" to the vehicle. For some vehicles,
like motorcycles or snowmobiles, a person cannot be said to
"gain entry" to the vehicle. This bill would clarify that
repossession also becomes complete when the repossessor "moves,
pushes, or gains control of the collateral."
Clarification of Impound Release Procedures. This bill corrects
an inadvertent drafting oversight in Vehicle Code Section
14602.8. In 2009, the sponsor of this bill also sponsored AB
515 (Hagman) which, among other things, attempted to make
uniform the procedures for obtaining impound releases among
several sections of the Vehicle Code. According to the sponsor,
due to a drafting oversight, the conforming revisions were
inadvertently omitted from Vehicle Code Section 14602.8, thus
defeating the purpose of promoting uniformity among these
procedures for obtaining impound release. This bill would
correct that error by enacting the provision from AB 515 that
should have been included but for the oversight.
In addition, this bill amends Vehicle Code Section 22651 to
provide that, under certain circumstances, an impounded vehicle
may be released to a legal owner without proof of current
registration, as long as the vehicle is only transported to an
auto auction for disposal.
Previous Legislation. AB 515 (Hagman), Ch. 322, Stats. of 2009,
enacted a number of substantive and clarifying changes to
sections of the Collateral Recovery Act governing licensed
repossessors.
REGISTERED SUPPORT / OPPOSITION :
AB 1722
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Support
California Association of Licensed Repossessors (sponsor)
Opposition
None on file
Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334