BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2476|
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CONSENT
Bill No: AB 2476
Author: Assembly Veterans Affairs Committee
Amended: As introduced
Vote: 21
SENATE JUDICIARY COMMITTEE : 5-0, 6/19/12
AYES: Evans, Harman, Blakeslee, Corbett, Leno
ASSEMBLY FLOOR : 76-0, 5/14/12 (Consent) - See last page
for vote
SUBJECT : Service member obligations or liabilities:
rate of interest
SOURCE : Author
DIGEST : This bill extends the period during which
mortgage interest rates are capped for military service
members.
ANALYSIS : Existing state law provides that no obligation
or liability bearing interest at a rate in excess of 6% per
year incurred by a service member before that person's
entry into service shall, during any part of the period of
military service, bear interest at a rate in excess of 6%
per year unless, in the opinion of the court, upon
application thereto by the obligee, the ability of the
service member to pay interest upon that obligation or
liability at a rate in excess of 6% per year is not
materially affected by reason of that service, in which
CONTINUED
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case the court may make that order as in its opinion may be
just. Existing law provides that "interest" includes
service charges, renewal charges, fees, or any other
charges, except bona fide insurance, in respect of any
obligation or liability. (Military and Veterans Code
Section 405(a))
Existing federal law, under the Servicemembers Civil Relief
Act (SCRA), provides an interest rate limitation of 6% for
the following obligations incurred before the service
member enters military service by a service member and/or
the service member's spouse:
during the period of military service and one year
thereafter, an obligation or liability consisting of a
mortgage, trust deed, or other security in the nature
of a mortgage charged; and
during the period of military service, any other
obligation or liability. (50 United States Code
Service Appendix, Section 527)
This bill conforms state law to the obligation interest
restrictions provided under the SCRA.
Prior Legislation
AB 713 (Block, Chapter 105, Statutes of 2011) provided that
dependents of a service member are entitled to the benefits
accorded to service members regarding obligations or
liabilities bearing an interest rate in excess of six
percent, unless, in the opinion of the court, the
dependent's ability to comply has not been materially
impaired by the military service of the person upon whom
the applicants are dependent.
AB 2365 (Lieu, Chapter 385, Statutes of 2010), among other
things, permitted service members, when enforcing their
rights and protections under existing law, to recover
reasonable attorney's fees and costs, removed filing fees
and court costs for specified actions, and permitted an
expedited review for certain cases.
AB 1433 (Horton, Chapter 60, Statutes of 2002) enacted many
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of the financial and consumer-related service member
protections as are provided under the SCRA. Those
provisions generally seek to provide protections against
various potential adverse effects of a deployment,
including financial protection with regards to court
proceedings, credit contract obligations, rental
agreements, taxes, health insurance, and eviction
protection.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/21/12)
American Legion - Department of California
AMVETS - Department of California
California Association of County Veterans Service Officers
California Bankers Association
California Mortgage Bankers Association
California State Commanders Veterans Council
Vietnam Veterans of America - California State Council
ARGUMENTS IN SUPPORT : The author writes, "The
Servicemembers Civil Relief Act (SCRA) was amended recently
to change the amount of time to which it applies to a
servicemember. Previously, with regard to an interest rate
cap of 6 �percent], a servicemember was covered during
his/her time in service. The federal law has amended the
act to cover the servicemember for a year after their time
in service. State law only covers the servicemember for
time in service, and this bill will amend state law so that
it is also extended to a year following his/her time
served."
ASSEMBLY FLOOR : 76-0, 5/14/12
AYES: Achadjian, Alejo, Allen, Ammiano, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fong, Fuentes, Furutani, Beth
Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell, Grove,
Hagman, Halderman, Hall, Harkey, Hayashi, Roger
Hern�ndez, Hill, Huber, Hueso, Huffman, Jeffries, Jones,
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Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor,
Mendoza, Miller, Mitchell, Monning, Morrell, Nestande,
Nielsen, Norby, Olsen, Pan, V. Manuel P�rez, Portantino,
Silva, Skinner, Smyth, Solorio, Swanson, Torres, Wagner,
Wieckowski, Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Atkins, Fletcher, Perea, Valadao
RJG:m 6/21/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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