AB 1859: Collateral recovery.

(1)The Collateral Recovery Act provides for the licensure and regulation of repossession agencies by the Bureau of Security and Investigative Services under the supervision and control of the Director of Consumer Affairs. That act defines the term repossession as meaning the locating or recovering of collateral by means of an assignment. That act defines the term assignment as any written authorization by the legal owner, lienholder, lessor, lessee, registered owner, or the agent of any of them, to repossess any collateral or any written authorization by an employer to recover any collateral entrusted to an employee or former employee in possession of the collateral. That act provides for the issuance of qualification certificates, required for the management of the places of business of licensed repossession agencies, to applicants who meet certain requirements, including, among others, 2 years of lawful experience in recovering collateral and provides that lawful experience does not include employment performing work other than skip tracing, debt collection, or actual collateral recovery. That act makes a violation of any of its provisions a crime.

This bill would remove debt collection from the employment included under lawful experience. The bill would change the definition of assignment to also include any written authorization to skip trace or locate, would define the term repossession order as having the same meaning as assignment, and would make conforming changes. The bill would delete the definition for the term repossession. By expanding the scope of a crime, this bill would impose a state-mandated local program.

Under the Collateral Recovery Act, licensed repossession agencies are not liable for specified acts or omissions of a legal owner, debtor, lienholder, lessor, lessee, registered owner, or agent of any of them, and are entitled to indemnity from the legal owner, debtor, lienholder, lessor, lessee, or registered owner for losses incurred as a result of those acts or omissions. Under the act, those persons or their agents are not liable for acts or omissions by a licensed repossession agency or its agent in carrying out a repossession order and are entitled to indemnity from the licensed repossession agency for losses incurred as a result of those acts or omissions, as specified.

This bill would extend the above-described provisions applicable to a legal owner, debtor, lienholder, lessor, lessee, or registered owner to a debt collector.

(2)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.