BILL ANALYSIS �
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THIRD READING
Bill No: AB 2503
Author: Hagman (R)
Amended: 8/7/14 in Senate
Vote: 27 - Urgency
SENATE BUSINESS, PROF. & ECON. DEVELOP. COMM. : 8-0, 6/16/14
AYES: Lieu, Wyland, Berryhill, Block, Corbett, Galgiani, Hill,
Torres
NO VOTE RECORDED: Hernandez
SENATE TRANSPORTATION & HOUSING COMMITTEE : 10-0, 8/5/14
AYES: DeSaulnier, Beall, Cannella, Galgiani, Hueso, Lara, Liu,
Pavley, Roth, Wyland
NO VOTE RECORDED: Gaines
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 78-0, 5/15/14 (Consent) - See last page for
vote
SUBJECT : Repossessors
SOURCE : California Association of Licensed Repossessors
DIGEST : This bill makes various changes to state law
governing licensed repossessors, including clarifying that a
repossessed vehicle is not subject to registration.
ANALYSIS :
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Existing law, the Business and Professions Code:
1.Provides for the licensing and regulation of repossession
agencies, repossessors, and repossessor qualified managers by
the Bureau of Security and Investigative Services (BSIS) under
the Department of Consumer Affairs (DCA).
2.Establishes the Collateral Recovery Act (Act) governing
collateral repossessions by a legal owner, lienholder, lessor
or lessee, or the agent of any of them based on written
authorization and a security agreement.
3.Provides that a financial institution that knowingly engages a
nonexempt unlicensed person to repossess collateral on its
behalf is guilty of a misdemeanor, punishable by a $5,000
fine.
4.Defines the following terms:
A. "Repossession agency" to include any person who engages
in business or accepts employment to locate or recover
collateral, whether voluntarily or involuntarily, which is
subject to a security agreement;
B. "Repossessor's tow vehicle" to mean a tow vehicle which
is registered to a licensed repossessor that is used
exclusively in the course of the repossession business; and
C. "Security agreement" to mean an obligation, pledge,
mortgage, chattel mortgage, lease agreement, deposit, or
lien, given by a debtor as security for payment or
performance of his/her debt, by furnishing the creditor
with recourse to be used in case of failure in the
principal obligation.
1.Provides that in the death of a person licensed as an
individual repossessor, an immediate family member may
continue the business under the same license for 120 days,
provided that written notice is made to BSIS, as specified.
2.Requires a repossession agency to maintain records of all
transactions, including assignments forms, specified vehicle
reports, personal effects inventory, notice of seizure, and
records of all transactions pertaining to the sale of
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collateral, as specified, for not less than four years.
3.Specifies that vehicle repossession is complete when the
repossessor gains entry to the collateral or when the
collateral becomes connected to the repossessor's tow vehicle.
Prohibits any person other than the legal owner to direct a
repossessor to release a vehicle without the legal authority
to do so.
4.Authorizes BSIS to assess administrative fines for various
prohibited acts, including using any identification to
indicate registration as a repossessor, other than a
registration card issued by BSIS, or an employer
identification card approved by BSIS.
5.Authorizes an employee officer, director, or representative of
a repossession agency to wear a badge, cap insignia, or jacket
patch if it includes (a) a substantial part of the licensed
repossession agency's name; (b) the BSIS-issued license
number; and (c) a word referring to the individual as a
repossessor.
Existing law, the Vehicle Code:
6. Requires that when possession is taken of any vehicle on
behalf of the legal owner under the terms of a security or
lease agreement, the person taking possession shall notify
the local police department or other law enforcement agency
where the repossession occurred within one hour.
7. Defines a buy-here-pay-here dealer, as an automobile dealer
who enters into contracts to sell a vehicle and who assigns
less than 90% of the sales contracts to a third party for
financing.
8. Provides that a repossessed vehicle is exempt from
registration solely for the purpose of transporting the
vehicle, as specified, and 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.
9. Prohibits a person from driving, moving, or parking along a
road or in a public parking facility a motor vehicle or
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trailer unless the motor vehicle or trailer is registered.
To register a vehicle, the owner provides the Department of
Motor Vehicles (DMV) with specified information and pays DMV
a basic registration fee, plus various additional state and
local charges, including a vehicle license fee that is based
on the value of the vehicle.
This bill:
1.Requires a repossession agency to only transact business and
prohibits a repossession agency from allowing a person or
entity, other than the qualified certificate holder, to manage
the day to day operations, operate, control, or transact
business covered by this bill.
2.Adds buy-here-pay-here dealers to the financial institutions
that are subject to a misdemeanor for knowingly engaging an
unlicensed person to repossess collateral on its behalf and
also specifies that DMV may take disciplinary action against a
buy-here-pay-here dealer who hires an unlicensed repossessor.
3.Requires a repossessor to contact the local police or sheriff
within one hour of taking possession of a vehicle, but if,
after an attempt to notify, law enforcement is unable to
receive and record the required notification, then the
repossessor shall continue to attempt notification until
he/she can provide notification. Specifies that the
notification shall include all of the following information
provided in this order:
The approximate location from which the vehicle was
taken;
The date and approximate time when the vehicle was
taken;
The vehicle year, make, and model;
The last six digits of the vehicle identification
number;
The registered owner as provided on the repossession
assignment;
The legal owner requesting the repossession as provided
on the repossession assignment; and
The name and telephone number of the repossession
agency.
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1.Requires a legal owner of a vehicle (typically a bank or other
financing entity) to indemnify and hold harmless a law
enforcement agency, local or state government, an impound or
tow yard, or any other storage facility from any claim arising
out of that entity releasing a vehicle to a repossessor and
from any damage occurring to the vehicle after its release.
2.Exempts from the registration requirement a vehicle obtained
by a licensed repossessor as a release of collateral for the
purpose of removing the vehicle to the storage facility or the
facility of the legal owner. Requires a law enforcement
agency, impounding authority, tow yard, storage facility, or
any other person in possession of the collateral to release
the vehicle without requiring current registration.
3.Makes it illegal to interfere with an employee of a
repossession agency's transport of a vehicle to a storage
facility, auction, or dealer. This does not apply to a peace
officer while acting in an official capacity.
4.Makes it illegal for any tow yard, impounding agency, or
government agency to refuse to release a vehicle or other
collateral to anyone that is legally entitled to that vehicle
or other collateral. This does not apply to vehcicles being
held for evidence by law enforcement or a prosecuting
attorney.
5.Provides that a repossession agency (a) may operate for 180
days, rather than 120 days, after the death of the licensee,
provided an immediate family member is in charge of running
the day-to-day operations of the business and it provides
written notice to the state identifying that person; and (b)
need not maintain records of all transactions pertaining to
the sale of collateral that has been repossessed.
6.Prohibits a licensed repossessor from appraising or
determining the value of any collateral, whether damaged or
not, as specified.
7.Makes other clarifying and minor changes to the Collateral
Recovery Act, including exempting a badge, cap insignia, or
jacket patch from the prohibition on using any identification
to indicate registration as a repossessor.
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Background
BSIS protects consumers by licensing and regulating the
following industries: alarm company operator and alarm company
employees, locksmith companies and locksmith company employees,
private investigators, private patrol operators and security
guards, proprietary private security officers and employees, and
repossessor agencies and repossessor agency employees. BSIS
also has jurisdiction over firearm and baton training facilities
and their instructors.
As part of its mission, BSIS actively investigates complaints
against its licensees and works to punish unlicensed business
operations. This includes the suspension and revocation of
licenses and seeking administrative, criminal, and civil
sanctions against violators. According to the BSIS Internet Web
site, undercover sting and sweep operations are conducted on an
ongoing basis throughout all of California.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/12/14)
California Association of Licensed Repossessors (source)
ARGUMENTS IN SUPPORT : The author introduced this bill at the
request of the California Association of Licensed Repossessors
to clarify the process a repossessor follows when notifying law
enforcement that he/she has picked up a vehicle; to ensure that
impound yards do not require repossessors to renew a vehicle's
registration when repossessing it; and to ensure that
repossessors are able to complete repossessions without undue
interference. Specifically, the proponents note that
repossessors have experienced difficulty due to varying
interpretations of the Vehicle Code, which this bill attempts to
clarify.
ASSEMBLY FLOOR : 78-0, 5/15/14
AYES: Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
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Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hern�ndez,
Holden, Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Medina, Melendez, Mullin, Muratsuchi, Nazarian,
Nestande, Olsen, Pan, Patterson, Perea, John A. P�rez, V.
Manuel P�rez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas,
Rodriguez, Salas, Skinner, Stone, Ting, Wagner, Waldron,
Weber, Wieckowski, Wilk, Williams, Yamada, Atkins
NO VOTE RECORDED: Mansoor, Vacancy
MW:nl 8/12/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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