AB 281: Collateral recovery.

(1)Existing law, 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. The chief of the bureau serves under the direction and supervision of the director. Existing law makes a violation of the act a crime.

Existing law also provides for the denial of a license for specified acts, and authorizes the director to assess administrative fines.

This bill would establish, beginning July 1, 2017, a Collateral Recovery Disciplinary Review Committee, to consist of 5 members to be appointed by, and to serve at the pleasure of, the Governor, for purposes of reviewing the request of a licensee, certificate holder, or registrant to contest the assessment of an administrative fine or to appeal a denial, revocation, or suspension, except as specified. The bill would set forth the duties of the Collateral Recovery Disciplinary Review Committee in that regard, and would authorize the members of the committee to be paid per diem and reimbursed for actual travel expenses.

(2)Existing law prohibits a person from performing the duties of a registrant for a licensed repossession agency unless the person has in his or her possession a valid repossessor registration card or evidence of a valid temporary registration or registration renewal. Existing law authorizes a person to perform the duties of a registrant for a licensee pending receipt of a registration card if the person has been approved by the bureau and carries on his or her person a hardcopy printout of the bureaus approval from the bureaus Internet Web site.

This bill would exempt from that prohibition a person who has in his or her possession a hardcopy printout or electronic copy of the bureaus approval from the bureaus Internet Web site. The bill would also specify for the above-described purposes that an electronic copy of the bureaus approval may include an easily legible electronic screenshot display of that information.

(3)The Collateral Recovery Act authorizes licensed repossessors to perform repair work upon vehicles and charge owners if expressly authorized to do so.

This bill would prohibit licensed repossessors from performing, or charging for, repair work, cleaning, or detailing.

(4)The Collateral Recovery Act requires licensees to remove personal effects from collateral, make a complete and accurate inventory of the personal effects, and provide the inventory to a debtor not later than 48 hours after the recovery of the collateral, with certain exceptions, as specified. The act requires licensees to label and store the personal effects, except for the personal effects removed by or in the presence of the debtor or the party in possession at the time of the repossession, in a secure manner for a minimum of 60 days, and authorizes licensees to dispose of the personal effects after the expiration of that period, as specified. The act authorizes a licensee, if personal effects or other personal property not covered by a security agreement are to be released to someone other than the debtor, to request written authorization to do so from the debtor.

This bill would instead require a licensee to request that authorization. The bill would require the inventory to be provided to a debtor no later than 96 hours after the recovery of the collateral if a licensee is unable to open a locked compartment that is part of the collateral, with specified exceptions. The bill would prohibit a licensee from selling personal effects and remitting money from the sale to a third party.

(5)The Collateral Recovery Act prohibits a repossession agency, except as otherwise provided by law, from disclosing the personal information of persons employed by the agency.

This bill would exclude disclosure to an individual to whom the information pertains from these prohibitions, and would allow a repossession agency to disclose the name, drivers license number, and date of birth of a person employed by the agency to an insurance company for the purpose of verifying information for the issuance or renewal of a policy of insurance.

(6)The Collateral Recovery Act, among other things, prohibits a licensed repossession agency or its registrants from making demand for payment in lieu of repossession, selling recovered collateral, or appraising or determining the value of any collateral, and provides that licensed repossession agencies are not liable for the acts or omissions of legal owners and that legal owners are not liable for acts or omissions of licensed repossession agencies, as specified.

This bill would require a licensed repossession agency, at least annually, to provide a legal owner with a copy of those prohibitions and provisions.

This bill would define the terms registered owner and repossession for the purposes of the act. The bill would also make technical and conforming changes.

(7)Existing law requires a person who takes possession of a vehicle by or on behalf of the vehicles legal owner to notify the law enforcement department with applicable jurisdiction of the repossession within one hour of the repossession, as specified, and to forward a written notice to the city police or sheriffs department within one business day. Under existing law, a person who fails to provide this notification is guilty of an infraction and subject to a $300 to $500 fine.

This bill would delete the requirement to forward that written notice within one business day.

Under existing law, whenever a peace officer determines, among other things, that a person was driving without a license or while his or her driving privilege was suspended or revoked, the peace officer is authorized to remove and seize that vehicle. Existing law requires the law enforcement agency and the impounding agency, including any storage facility acting on behalf of the law enforcement agency or impounding agency, to comply with specified provisions and precludes liability to the registered owner for the improper release of the vehicle to the legal owner or the legal owners agent if the release complies with certain requirements.

Existing law requires the legal owner to indemnify and hold harmless a storage facility from any claims arising out of the release of the vehicle to the legal owner or the legal owners agent and from any damage to the vehicle after its release, including the reasonable costs associated with defending any such claims.

This bill would instead require the legal owner of collateral, by operation of law and without requiring further action, to indemnify and hold harmless the state, a law enforcement agency, city, county, city and county, a tow yard, storage facility, or an impounding yard from a claim arising out of the release of the collateral to a licensed repossessor or licensed repossession agency, and from any damage to the collateral after its release, including reasonable attorneys fees and costs associated with defending a claim, if the collateral was released in compliance, as specified.

Existing law requires any person, defined as a natural person or specified business entity, that charges for towing or storage, or both, except for storage unrelated to a tow, to, among other things, provide, upon request, a copy of the Towing Fees and Access Notice to any owner or operator of a towed or stored vehicle.

This bill would define a person to include the state, a city, county, city and county, law enforcement agency, a tow yard, storage facility, or an impounding yard that imposes such charges. By expanding this requirement to local agencies, the bill would create a state-mandated local program.

(8)This bill would incorporate additional changes in Section 14602.9 of the Vehicle Code proposed by SB 541 that would become operative only if SB 541 and this bill are both chaptered and become effective on or before January 1, 2016, and this bill is chaptered last.

(9)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 with regard to certain mandates no reimbursement is required by this act for a specified reason.

With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.