BILL ANALYSIS �
AB 2503
Page 1
Date of Hearing: May 7, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2503 (Hagman) - As Amended: April 23, 2014
Policy Committee:
TransportationVote:15 - 0
Business and Professions 14 - 0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill makes a number of minor, non-controversial changes to
the Collateral Recovery Act related to repossessors to revise a
number of industry practices and provide licensees with certain
new protections.
FISCAL EFFECT
1)Minor costs to the Department of Consumer Affairs for
increased investigation and enforcement workload for the
Bureau of Security and Investigative Services (BSIS).
2)Likely minor revenue increase to the BSIS from the increased
fine amounts and new penalties established by this bill.
COMMENTS
1)Purpose . This bill, sponsored by the California Association of
Licensed Repossessors, makes several revisions to the laws
related to the repossession of motor vehicles under the
Collateral Recovery Act. The author's intent is to "provide
more clarity to current codes regarding repossessors while
addressing various issues pertaining to the activities of
licensed repossession agencies.
2)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
AB 2503
Page 2
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.
3)Previous legislation .
a) AB 791 (Hagman), Chapter 340, Statutes of 2013,
authorized a repossessor to wear certain identification,
prohibited a repossessor from selling repossessed
collateral or accepting payment from a debtor in lieu of
repossession, and prohibited a repossession agency from
disclosing personal employee information.
b) AB 515 (Hagman), Chapter 322, Statutes of 2009, revised
the Act and limited a licensed recovery act's liability for
damages to a vehicle, allowed the impound of any tow
vehicle used to violate the Act, narrowed the definition of
lawful experience for qualified managers of repossession
agencies, and required impound agencies to accept a valid
bank credit card or cash.
c) SB 821 (Committee on Business, Professions and Economic
Development), Chapter 307, Statutes of 2009, required that
if more than one vehicle is repossessed, each vehicle shall
be considered and reported separately for purposes of
meeting law enforcement notification requirements.
Analysis Prepared by : Jennifer Swenson / APPR. / (916)
319-2081