BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2667
                                                                  Page  1

          Date of Hearing:   May 14, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                    AB 2667 (Bloom) - As Amended:  April 24, 2014 

          Policy Committee:                               
          JudiciaryVote:10-0
                        B&P                                   14-0

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill:

          1)Prohibits the use of geophysical location tracking technology  
            by lessors under rental-purchase agreements absent express  
            notice and consent, and then only for the purpose of providing  
            remote technical assistance and preventing fraud or loss.

          2)Requires that lessors in rental-purchase agreements give clear  
            and prominent notice when geophysical location tracking or  
            monitoring technology is installed or activated.

           FISCAL EFFECT  

          Potential minor nonreimbursable costs to counties for  
          prosecution, offset to some extent by fine revenues. (Violations  
          of rental purchase agreement statutes are a misdemeanor.)

           COMMENTS  

           Purpose  . According to the author, rental-purchase agreements,  
          typically referred to as "rent to own" agreements, are  
          increasingly pervasive, especially regarding electronic devices  
          such as lap top computers.  Due to the lack of threshold  
          consumer protections in this area, however, it has become  
          fertile ground for abuse. This bill requires that, before a  
          lessor of electronic devices can track the whereabouts of their  
          customers, they must provide the consumer notice and the  
          opportunity to consent. The use of tracking technology would be  
          allowed for providing remote technical assistance to consumers  








                                                                  AB 2667
                                                                  Page  2

          and preventing loss through fraud, recognizing the rent-to-own  
          industry's legitimate uses of such technology for these  
          functions.

          According to the author, this bill is needed to stem the abuse  
          of monitoring and geophysical location tracking technology in  
          electronic devices leased under rental-purchase agreements.  
          Under current law, lessors under rental-purchase agreements are  
          not prohibited from requesting security deposit fees to insure  
          against fraud or loss.  The author states that consumers have a  
          reasonable expectation that lessors will use security deposits  
          to insure against any losses that may occur in the course of the  
          rental-purchase transaction, and that they will not be secretly  
          spied upon as an unknown cost of participating in the  
          rent-to-own marketplace.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081