Buffy Wicks
- Democratic
- Assemblymember
- District 14
Author
Existing law regulates various practices related to debt, including its sale and collection. Existing law, for purposes of debt collection, defines "consumer debt" as, among other things, money due or owing or alleged to be due or owing from a natural person by reason of a consumer credit transaction. Existing law, the Check Sellers, Bill Payers and Proraters Law, prohibits a person from engaging in the business of acting as a prorater without first obtaining a license from the Commissioner of Financial Protection and Innovation and defines a "prorater" as, among other things, a person who, for compensation, engages in the business of receiving money for the purpose of distributing the money among creditors in payment or partial payment of the obligations of the debtor. Under existing law, the Consumers Legal Remedies Act, specified unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or that result in the sale or lease of goods or services to any consumer are unlawful. This bill would enact the Fair Debt Settlement Practices Act. The bill would define "debt settlement provider" as a person who, for compensation and on behalf of a consumer, provides debt settlement services, as defined. The bill would define a payment processor as a person who provides payment processing services, as defined. This bill would prohibit a debt settlement provider from engaging in false, deceptive, or misleading acts or practices, as specified, when providing debt settlement services. The bill would require a debt settlement provider to provide a consumer with certain disclosures along with an unsigned copy of the proposed written contract between the debt settlement provider and the consumer. The bill would prescribe requirements for the contents of these contracts. This bill would prohibit certain unfair, abusive, or deceptive practices in connection with debt settlement provider and payment processor activities, some of which would apply to both a debt settlement service provider and a payment processor, and some of which would only apply to a debt settlement service provider, or a payment processor. The bill would authorize a consumer to terminate a contract for debt settlement services at any time without a fee or penalty of any sort by notifying the debt settlement provider. The bill would make the notice of termination effective immediately when the notice is made electronically or orally. The bill would make the notice effective upon receipt if the notice is sent via certified mail and would make the notice effective 7 calendar days from the date of mailing if the notice is sent by noncertified mail. The bill would specify requirements for the debt settlement provider upon effective notice of termination, including immediately canceling the contract and notifying the payment processor, as provided. The bill would require a payment processor, upon notice of cancellation from the consumer or debt settlement provider, to stop accumulating service fees, close the settlement account, and deliver to the consumer the balance of the settlement account within 7 days. The bill would require the debt settlement provider to immediately forward any notice of a lawsuit or settlement agreement to the consumer, as provided. The bill would specify the application of its provisions, excluding certain parties. This bill would authorize a consumer to bring a civil action for violation of these provisions. The bill would authorize statutory damages of not more than $5,000, actual damages, injunctive relief, and other relief the court deems proper. The bill would require that a court award costs of the action and reasonable attorney's fees for any successful cause of action. The bill would specify that reasonable attorney's fees may be awarded to a prevailing debt settlement provider or prevailing payment processor upon a finding by the court that the consumer's prosecution of the cause of action was not in good faith. The bill would specify that a debt settlement provider or a payment processor would not be civilly liable under specified circumstances. The bill would require a cause of action to be brought within 4 years of specified dates. The bill would provide that a waiver of its provisions is contrary to public policy and that its provisions are severable.
Chaptered by Secretary of State - Chapter 454, Statutes of 2021.
Approved by the Governor.
Enrolled and presented to the Governor at 3 p.m.
Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 53. Noes 17. Page 2836.).
Read third time. Passed. Ordered to the Assembly. (Ayes 33. Noes 6. Page 2337.).
In Assembly. Concurrence in Senate amendments pending. May be considered on or after September 4 pursuant to Assembly Rule 77.
From committee: Do pass. (Ayes 5. Noes 2.) (August 26).
Read second time. Ordered to third reading.
In committee: Hearing postponed by committee.
From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on APPR.
From committee: Do pass and re-refer to Com. on APPR. (Ayes 9. Noes 1.) (July 13). Re-referred to Com. on APPR.
From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on JUD.
Read second time and amended. Re-referred to Com. on JUD.
From committee: Amend, and do pass as amended and re-refer to Com. on JUD. (Ayes 7. Noes 0.) (June 23).
From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on B. & F.I.
Referred to Coms. on B. & F.I., JUD. and APPR.
In Senate. Read first time. To Com. on RLS. for assignment.
Read third time. Passed. Ordered to the Senate. (Ayes 54. Noes 16. Page 1832.)
Read second time. Ordered to third reading.
From committee: Do pass. (Ayes 12. Noes 4.) (May 20).
In committee: Set, first hearing. Referred to APPR. suspense file.
Read second time and amended.
From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 8. Noes 2.) (May 4).
Read second time and amended.
From committee: Amend, and do pass as amended and re-refer to Com. on JUD. (Ayes 9. Noes 3.) (April 15).
From committee chair, with author's amendments: Amend, and re-refer to Com. on B. & F. Read second time and amended.
Read first time.
From printer. May be heard in committee March 22.
Introduced. To print.
| Bill Text Versions | Format |
|---|---|
| AB1405 | HTML |
| 02/19/21 - Introduced | |
| 03/25/21 - Amended Assembly | |
| 04/20/21 - Amended Assembly | |
| 05/05/21 - Amended Assembly | |
| 06/14/21 - Amended Senate | |
| 06/29/21 - Amended Senate | |
| 07/01/21 - Amended Senate | |
| 08/16/21 - Amended Senate | |
| 09/09/21 - Enrolled | |
| 10/04/21 - Chaptered |
| Document | Format |
|---|---|
| 04/14/21- Assembly Banking and Finance | PDF PDF |
| 04/30/21- Assembly Judiciary | |
| 05/11/21- Assembly Appropriations | |
| 05/24/21- ASSEMBLY FLOOR ANALYSIS | |
| 06/20/21- Senate Banking and Financial Institutions | |
| 07/09/21- Senate Judiciary | |
| 08/20/21- Senate Appropriations | |
| 08/28/21- Sen. Floor Analyses | |
| 09/02/21- ASSEMBLY FLOOR ANALYSIS |
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