Assembly Standing Committee on Banking and Finance

The Assembly Banking and Finance Committee is called to order. Sergeants, if you will please call. Absent Members greatly appreciate that we don't have a quorum, obviously, at this time, but we can start as a Subcommitee. Welcome to the Assembly Banking Finance Committee.

Whether you're here in person or whether you're watching virtually, I'm grateful that you have joined us in room 444. I do want to note that we are accepting written testimony through the position letter portal on the Committee's website, and we do have today six bills on the agenda.

We will limit testimony to two minutes for each primary witness, and additional witnesses can simply state your name, organization and position. With that, it is time to move on to the hearing before us.

And being that we don't have a quorum, we will pass on the consent calendar for right now and move into the agenda of file item number one, SB 278 author Senator Dodd, the recommendation is do pass to the Committee on Judiciary. Senator Dodd, whenever you're ready, please. You can begin with your opening statement.

Thank you Mister Chair and Members to begin.

Mister Chairman, I want to compliment you and your Committee consultant for doing an amazing job drafting amendments that combine input from nearly all the stakeholders during negotiations which took place this last year. Thank you very much for your hard work. SB 278 is about protecting seniors from financial scams, plain and simple.

SB 278 is about updating current law to make clear what financial institutions who are mandated reporters of elder abuse need to do to protect elders when red flags signal a senior is being likely being scammed.

And with recent amendments, SB 278 is also about providing banks, credit unions and others with liability protection when they do the right thing to protect elderly people, their customers. Elder financial abuse is everywhere. Losses exceed $23 billion annually.

Once a senior falls prey to financial fraud, they may never recover as mandated reporters, banks and credit unions are well positioned to detect when an elder might be the victim of a scam or other financial abuse and take action to protect elders from the devastating loss of their life savings.

Unfortunately, our current financial elder abuse statute is not as clear as I think it should be on what a bank or credit union should what steps they should take to protect against senior scams. SB 278 will help protect seniors by enacting a comprehensive, upfront scam prevention policy for California banks and credit unions.

I also want to make it clear so there's no misunderstanding. This Bill includes liability protection for good actor banks and credit unions. But we have not yet finalized the important issue of enforcement, which will be brought up in the in the next Committee, the Judiciary Committee. It's a point of personal privilege.

I also would like to thank the financial institutions for coming to the table. I know that both sides really didn't get everything that they wanted in this process, and I really appreciate them, as well as all the other stakeholders, both for and against, for coming to the table.

And again, to you and your staff for doing such a great job. With me here today is Alice Lynn, a victim of elder financial fraud, and Shawna Reeves, with the legal assistance for seniors in Oakland. Thank you. Thank you, Senator. Two minutes each.

Hi, good afternoon, Mister Chair and the Members. There you go. My name is Alice Lynn. I'm 81 year old and the resident of Ahimba, California. I'm here to urge your support for Senate Bill 278. I immigrated to the United States from Taiwan to pursue American dream more than 50 years ago.

Both my husband and I work really hard to raise four kids and save some money for our retirement. Since my husband passing, I've been taking care of my older son, who is on disability. In 2022, I fell victim to a scammer who convinced me to wire the money for investment.

So I went to bank to ask them to wire the funds. When I went over there, no question was asked, no hesitation. The banker simply just get managers approval and wipe out the fund. And I went to the second time, again, no question was asked, no inquiry made. Then 6th, 4th, 5th, 6th, and seven times.

I was a faithful and long term customer of the bank, despite many red, red flags. And my bank failed to consider that I might be a victim of elder fraud. And they did not even contact my daughter, who is the joint account holder on the account.

So I end up being scammed more than almost all of my life, saving three quarter of $1.0 million in less than three weeks. Honestly, after this happened, I want to end my life. Today I'm here. I'm trying to help to prevent this from happening to the other elders.

Senate Bill 278 will help protect nearly 6 million elders in California. It will help to fight crime and will help to arm banks with a better approach. I'm grateful the Bank Association has removed their opposition and is willing to do right by its customers. This Bill will change life. It might save some.

I urge your support, and I thank you from the bottom of my heart.

Thank you for your testimony. Do we have a quorum? So before the second witness speaks, I would like to establish a quorum in the Committee and we can move on from there. So, secretary, will you please call roll.

Roll Call

We have established a quorum and thank you for your testimony, and we will move to the second witness. Two minutes, please.

Good afternoon, Mister Chair and Members. My name is Shawna Reeves and I'm the special projects consultant at legal assistance for seniors in Oakland. We are Alameda County senior legal services provider. I'm also the former Director of elder abuse prevention at the Institute on Aging in San Francisco. I've been working to prevent elder financial abuse for two decades.

And for many years, when I told people what I did for a living, they would ask me to describe what I meant by elder financial abuse. Not anymore.

Elder financial abuse no longer requires an explanation, because now almost everyone has a story to tell about a friend or a loved one who lost substantial sums of money to a fraudster. And many of their stories sound like Alice Lynn's.

We are much closer than we were just a few years ago to receiving that heart wrenching phone call from our parent, our grandparent, or our partner, telling us that they gave away all their money to a scammer who they thought was providing much needed tech support, or who showed romantic interest in them, or who had a great investment opportunity.

We all have a role to play in preventing elder financial abuse. We can educate ourselves and we can raise awareness with our loved ones. Financial institutions, which are mandated reporters of this abuse, have a central role to play as they are perfectly positioned to detect suspected financial abuse of their senior account holders.

SB 278 follows the research and advice of the experts, including the FBI, the American Bankers Association, the CFPB, and AARP, on how best to stop seniors from losing their life savings to scammers. It provides a clear roadmap for financial institutions to follow in order to protect their senior customers from financial ruin.

SB 278 will solidify California's position as the leader in protecting our seniors from elder financial abuse, which is why I respectfully request your aye vote thank you.

Thank you for your testimony, are there any others in support in the room? Please step forward. State your name, organization and position, please.

Christopher Sanchez with the Mesa Verde Group on behalf of the California Consumer Federation.

Cindy Young, California Alliance for Retired Americans and strong support.

I'm Stan Wong with CARA and I'm in strong support.

C.T. Weber, Vice President, CARA Strong support. Thank you.

Good afternoon. Danny Candle Kaiser. On behalf of the co sponsors California Low Income Consumer Coalition, as well as a number of other organizations. With the chair's permission, may I please read if it's short?

Thank you. I'll keep it short.

Yes.

Rise Economy, Betsettic Legal Services, Legal Assistance for the Elderly, Open Door Legal, Public Counsel, Public Law Center, Riverside Legal Aids, Santa Clara Law, Watsonville Law Center, Centro Legal De LA Raza, Community Legal Services in East Palo Alto, Contra Costa senior legal services, elder law and advocacy, and legal aid of Marin, as well as legal assistance for seniors of Oakland. Thank you.

Thank you very much for your testimony. Any others in support? Seeing none, we will now go to the we have no registered opposition, but we will now move to witnesses who are either in either neutral or in opposition if you want to step forward. And yes, two minutes.

Thank you, Mister Chair Members of the Committee, I'm Jason Lane with the California Bankers Association. Appreciate the opportunity to talk about such an important Bill before the Committee today. First, like to thank the Chair and the Committee consultant for all the hard work.

This has been a herculean effort by both Senator Dodd, his sponsors and the Committee, and trying to produce a proposal that strikes the right balance of protecting seniors while also reducing liability for institutions if they get it wrong.

And we thank the author and the Committee for pressing pause on the Bill last year and allowing the industry to go back and have dialogues with senior groups.

We flew some of our subject matter experts from the East Coast in, and we had conversations about the types of things that the industry could operationalize that would be more focused on prevention and preventing funds from flowing out of the account than it did on liability and suing banks, which was the original version of the Bill.

And so we have the product before the Committee, and it's a strong work product that will offer meaningful protections for seniors in that it sets up a trusted third party contact. So it allows a point of intervention, and it also requires institutions to hold transactions of $5,000 or more.

If the institution reasonably suspects that there is fraud occurring on the account, it is not without its compliance challenges. We asked for a delayed implementation of January 2020, January 1, 2026 because the institutions will have to go back and reconfigure their back end systems. They will have to retrain their employees.

And all of this is fairly taxing, particularly on my community banks and smaller institutions. But the Bill is precedent setting.

It will go further than any other state in its protection of seniors to ensure that there's an opportunity for a pause, if you will, for seniors to reflect on whether or not they want to move forward with the transaction. Unfortunately, there are also unintended consequences with this measure.

Currently, the hold of transactions of $5,000 or more probably creates friction points that don't exist now between senior customers and their bank employees. That means in all likelihood you will have constituents who are 65 years and older who will walk into a branch and present with an out of pattern transaction and it will be declined.

Thank you very much for your time.

Thank you.

Two minutes. Thank you. Good afternoon, Chair, Members of the Committee. Robert Wilson, California Credit Union League. I'd first like to start by thanking the author of the Bill, the Chair, Committee consultant, everyone who put in a ton of work on this. It's been truly a year long effort and we really appreciate it.

As my colleague with the bankers said, this has really been a product of a year long negotiation and I think there's a lot to be proud of in this Bill.

This Bill is going to cause some friction between seniors and their financial institutions, and the Committee needs to consider how much of that friction we really want there to be. We don't want the money flying out the door.

But a lot of this is really going to depend on what happens in the next Committee in terms of enforcement mechanism. Our credit unions are still evaluating their position on this Bill and a lot of that's going to be predicated on what happens over in the next Committee.

But we think what's in front of us right now, while it's going to be a heavy lift for credit unions, the good outweighs the work that's going to go in there. This is going to protect seniors.

The report and hold, I'm sure you guys will probably get some calls at some point about some ticked off seniors in your district. But at the end of the day, that's going to, hopefully that's going to outweigh what we heard from the witness in support of the Bill. And I'm very sorry about your situation.

So we can prevent that just once, then this Bill is worth it. We'll see what happens in the next Committee. Want to thank the author again and the Committee Chair. And thank you.

Thank you very much for your testimony. Any others in the room that are either neutral or in opposition, simply state your name, organization and position, please.

Good afternoon. Joanne Bettencourt. On behalf of SIFMA, the securities industry, excuse me, and Financial Association, we are removing our opposition due to the new amendments. We'd like to thank Senator Dodd, the sponsors and Mister chair for their willingness to consider our concerns. And we appreciate that. Thank you.

Good afternoon. Lindsay Gullahorn with Capital Advocacy here on behalf of the California Community Banking Network, want to align my comments with CBA and the credit unions. We're still evaluating our position, but really do appreciate the work of the author and sponsors on this Bill.

Thank you very much. Any others in opposition or neutral? Seeing none. Let's bring it back to the Committee for comments or questions. Assembly Member Soria.

Thank you, Mister Chair. I just wanted to thank the author and then in particular thank the witness, Miss Allison, for sharing your story. I think, as was mentioned, your story is way too common in our communities and we hear it.

That's why many of us as legislators try to hold regularly senior scam stoppers, which is part of the prevention mechanism. But I think that today, I think the Bill does strike, you know, a balance in trying to protect and then also ensuring that our financial institutions can continue to operate in a fashion that is not as taxing.

So I do appreciate the work and the stakeholders getting together and making sure that we can see this move forward, and I'm happy to support this. Today. I'll make a motion.

Thank you. We have a motion from Assembly Member Soria, second from Assembly Member Fong, and Assembly Member Rubio.

Thank you. I met with several groups and I really do appreciate, Senator Dodd, your willingness to compromise, and I really commend the Committee consultant and the Chair for their work. I knew when they came in and I said if anybody can fix it, it would be Assembly Member Grayson and of course the Committee.

So I want to thank you and thank you, Senator Dodd, for being so open to working through this. And to the former opposition, thank you for also interjecting and making sure that this just strikes a balance.

I know it's not completely done yet, but I have every hope that Senator Dodd and you all can come to an agreement. So thank you and thank you for your testimony. And I'm so sorry about what happened.

Assembly Member Dixon.

Thank you, Mister Chair, and thank you, Assembly Member Rubio. I just want to clarify where we all are. We're close and we think we're going to get there, where we could all get together and support this Bill. I think there's a high level of confidence that we'll get there. Okay. All right, very good.

Thank you, Assembly Member Fong. And then Senator Prtrie-Norris.

Thank you so much, Chair Grayson. And thank you, Senator, for bringing this very important measure forward. And thank you to all the parties for the work and efforts on this in the last couple of years. And just want to thank my constituent.

Miss Allison, I know you came to one of our senior scam stopper seminars to share your story as well and shall pass. And I'm sorry for everything that's happened. But I really appreciate all your leadership around this. Thank you.

Thank you. Petrie-Norris recognized.

As other Members have said, I really do want to thank Senator Dodd, the sponsors and the institutions for the way that you all have come together to collaborate and for your hard work on this.

I know that when the original measure was before the Committee, a number of us had concerns about unintended consequences and how this might play out in the real world. And, you know, you too, Mister Chair, and your team, I think, have helped to forge a really, you know, a right balance, but kind of a very delicate balance.

And I did miss the very beginning of your comments. So apologies if I missed this, but is there something that's still kind of a work in progress? Is that.

Well, the work, the work in progress is going through the judiciary and in terms of what enforcement mechanism they're going to put on it. And essentially it's, I've talked to both sides about this and it's ill during financial abuse section, and that's what we're looking to do.

So we'll just have to see what the Judiciary Committee has in store for that.

Okay? Understand? So if, I understand.

If it didn't have to go through one Committee, we'd be Kumbaya right now.

Perfect. Okay, good. Let's just cherish this Kumbaya moment. And, yes, so in its current form, I am very happy to support and, you know, certainly hope that it stays in that form as we move forward. All right. Thank you, Senator. Thank you.

Well, if anybody has an Acoustic guitar, we could bust out its song right now. Senator Dodd, any other comments or questions seeing. And, Senator Dodd, I do want to thank you for introducing the Bill.

It really does address a very important issue, and I want to thank both the supporters and the industry stakeholders for working with us over the last year to fine tune the proposal.

One of the takeaways from our many hours, and I say that with much compassion for our consultant here for the many hours of discussions, is that the problem is that this problem can be very complicated, not an easy task to address, despite our shared goal of protecting seniors from financial fraud and abuse.

And even though there are laws that we already have in place meant to prevent such abuse, the situation appears, at least for right now, appears to be getting worse. So with that, and for these reasons, I believe that this Bill is a start.

And if I can underscore that it's a start of the legislators work to combat elder financial abuse. So, Senator Dodd, I do encourage you to keep working with stakeholders over the next few months as the Bill moves forward as needed. And with that, would you, as author, like to provide a closing statement?

Yes. As you know, Mister Chair, I was not real thrilled when you made this a two year Bill. I do. But you know, I am one to always recognize when I'm at fault and when I'm wrong. And I was wrong. And I really appreciate the work.

And I've said this, everybody said this of you and the great consultant here and the work that you've done to make this a better Bill. Respectfully ask for your aye vote.

Thank you, Senator Dodd. And with that, I believe we can move forward. Secretary, please call. We do have a motion in a second, so, secretary, please call the roll on the Bill, SB 278.

Roll Call

The Bill has six votes. We'll hold it for add ons for more Committee Members.

Thank you, Mister Chair, Members. Appreciate it.

Thank you so much. And we will now head into file item number two, SB 919. Senator Umberg, the recommendation is do pass, as amended to the Committee on Judiciary. The amendments are detailed in our Committee analysis. So Senator Umberg, when you are ready, please begin with your opening statement.

Well, thank you, Mister Chair. And Members in particular, we want to thank you and your staff, Luke Reidenbach, for their on the Bill, we'll be accepting the Committee's amendments. I want to present SB 919, which will increase transparency in the franchise sales process for prospective. The prospective franchisee.

California Franchise investment law currently requires annual registration by franchisors and disclosure of certain information to prospective franchisees. However, third party franchise sellers currently are not required to file notice with the Commissioner yet. These third party franchise sellers often are the first point of contact for prospective franchisees. So this adds transparency.

I would ask for an aye vote with me today is Mister Randy Pollack with the International Franchise Association and Keith Miller with the American Association of Franchise Dealers. Thank you, Senator. Two minutes each,

Mister Chair and Members of the Committee, Randy Pollock, on behalf of the International Franchise Association, and we represent about 10,000 franchisees and about 1000 brands. And it is always a good day when we can be here as a community working with the franchisees associations here and supporting one Bill. And mainly this is a consumer protection Bill.

As Senator indicated, third party brokers have no idea. Third party brokers do not provide any information to a prospective franchisee. And so what this Bill does is provide that information. A little bit of background about your third party broker. Who are they? What's their experience? Have they sold franchises in the past?

And the franchises they've sold in the past, who did they sell them to so that you have the ability to check on those franchisees, whether they're successful in those businesses, and whether this is a business that you want to go into.

And we believe it's very important, especially when you have a prospective franchisee who could spend somewhere between 10,000 to several $100,000 for a franchise. So we think it's very important to make sure that they know that they're dealing with somebody who's reputable, that someone who's registered with the state. And for those reasons, we ask for an aye vote.

Thank you, Chair Grayson and Members of the Committee. Thank you. My name is Keith Miller and I'm here today on behalf of the American Association of Franchises and Dealers and the Coalition of Franchisee Associations. I've also been a subway franchisee for over 35 years.

For many years, I've sponsored and pushed legislation to protect franchise owners, and rarely in this case, because Randy and I are usually arguing about something when it comes to franchising. I noticed you put the author between the two of them. Well, we don't want to get too close. I mean, it just loses a sport in it, actually.

But today we're here together, and as I've discussed over the years, when franchisees invest in a franchise, they put everything at risk. If it fails, due to the personal guarantees involved, they may lose their business, savings, and even their house.

There are federal and California disclosure laws to protect the investor, to make sure there is transparent disclosure, so prospective franchisees know what they're getting into. However, these third party sellers, often called franchise brokers, these protections aren't in play. These sellers are not held to the requirements of existing law.

This Bill will not only make them abide by the existing laws, but it'll also make them liable if they are. Not often these third party sellers are compared to real estate agents or brokers. But nothing could be further from the truth. The reality is, there are absolutely no requirements today to become a franchise broker.

In fact, by the time I finish this sentence, all of you can become a franchise broker simply by calling yourself one. Let's make sure franchisees putting everything at risk, cavalry is in protection, and that these third party sellers are held to the standards of existing laws. Thank you.

Thank you so much for your testimony. Any others in the room in support? Would you like to step forward? See none. We will go to those in opposition. No registered opposition. Are there those in the room seeing none? We can bring it back to the Committee at this time for questions or comments. Seeing no Assembly Member with riveting questions. Comments. We will then turn to the author for closing statement.

Thank you, Mister Chair. Thank you, Mister Pollock, Mister Miller, for attending today. Although Mister Miller is a frequent subway customer, I'm disappointed. I don't think there's any food involved in this, so. All right. With that, I urge your aye vote.

Thank you. So we do have a motion and a second. The motion was from Senator or Assemblymember Rubio and Assembly Petrie north. Seconded. Secretary Ruby, please call the roll on the Bill SB 919.

The motion is do pass as amended and refer to Committee on Judiciary. [Roll Call]. The Bill has six votes.

Bill has six votes. And we will hold it open for absent Members to add on, we will now move to file item number three. Is she okay? File item number three. SB 985. Senator Ochoa Bogh. Yeah. You are up and ready to go. The recommendation is do pass to Committee on appropriations. Senator, when you are ready, please feel free to begin with your opening statement.

Thank you, Mister Chair Members. Senate Bill 985 will grant nonprofit financial counseling agencies a one-time adjustment to their fee schedule so they can continue to provide debt management and settlement services to Californians. Currently, there are about two dozen nonprofit financial counseling agencies in California.

Consumers seeking credit counseling services are invited to meet with the financial counselor at no charge. Given that only about 20% of clients enroll in a debt management or settlement plan, the current fee does not adequately cover expenses, nor does it allow for the expansion of services.

The IR's requires all nonprofit financial counseling agencies to obtain at least 50% of their operation revenue from client fees. This rule is intended to ensure all nonprofit counseling agencies remain focused on producing the best outcomes possible for consumers. However, this rule also means that funding gaps cannot be filled through donations or grants.

While fee adjustments have occurred in other states, California nonprofit agency fees have only been adjusted once since originally established in 1983. Modifying the current fee schedule will not affect clients currently enrolled in debt management or settlement plans.

The adjusted cap merely gives nonprofit agencies the ability to use a higher sliding scale, which gives all consumers access to valuable credit counseling services. With me to answer questions is Joe Devlin, representing the sponsor of the Bill, Financial Counseling Association of American America.

Thank you so very much. Do you have comments or just answering questions?

Yes, I do have just a brief comment. Two minutes. Thank you, sir. Good afternoon, Mister Chairman, Members of the Committee. My name is Joseph Devlin. On behalf of the Financial Counseling Association of America.

FCAA is a collection of small nonprofit organizations who provide important financial literacy education, tools and resources to help struggling Californians manage credit card debt when it becomes too burdensome for them to manage for themselves. Members of the Financial Counseling Association of America provide free financial counsel literacy and, when appropriate, assistance with debt management.

When counseling alone is insufficient to alleviate the consumer situation. This Bill comes at an important moment when consumer credit. Consumer debt is quickly rising, interest rates are at a nearly 40 year high, student loan payments have resumed, and the usage of credit cards have become ubiquitous with paying bills, groceries and other everyday transactions.

Together, this confluence of events have made it more important than ever that working families have access to financial literacy, education and the consumer centric debt management resources like those offered by the nonprofit Members of FCAA.

SB 985 provides an important update to the code section, which has not been updated in many years and will ensure that these nonprofit remain a financially viable option for consumers here in California.

Thank you for your testimony. Are there any others in the room in support? Please step forward. Seeing none, I don't believe we have any registered opposition. So are there any folks in the room in opposition? No one moving. Good for you. We'll bring it back to the Committee Members. Any questions or comments? Assemblymember Dixon, you're recognized.

Thank you, Chair. And thank you, Senator. I'm in support of the Bill. I'm just curious. So every time there's a cost of living increase, you're going to have to come back for another piece of legislation to get support for additional fee increase. Isn't there any long term way it can be resolved instead of coming back?

Not at this time, not with this particular Bill, we won't. But we could definitely look into that moving forward. Yes.

I just think for nonprofit agencies, I mean, you're trying to do a good thing here to provide good financial advice, and to think I'm just surprised that there couldn't be a longer term fix to this. So anyway, I would be happy to look into that with you, and I'm supportive, and I'd like to make the motion to support, but I just had a question. Thank you. Thank you.

Thank you. We do have a motion to support Assemblymember Dixon, or motion and a second by Senator Petrie Norris. Any other questions or comments from Members seeing none. Would you like to author or offer a closing statement?

Absolutely. Restructuring credit card debt and learning how to manage that are key aspects to financial literacy. Amending the fee cap will allow nonprofit agencies to maintain and expand their services to help more Californians gain financial freedom, especially those in underserved communities. I respectfully ask for an aye vote.

Thank you so very much. With that, we do have a motion and a second. Secretary, please call the roll on Bill SB 985.

The motion is do pass and refer to Committee on Appropriations. [Roll Call]. That Bill has seven votes.

Bill has seven votes. We'll keep it open for absent Members. Thank you. Thank you so very much. Next up on the docket, file item number four, SB 1146. Senator Wilk recommendation is do pass to Committee on Judiciary. So, Senator Welk, when you are ready, please feel free to open up.

Thank you, Mister. Thank you, Mister Chair and Members. SB 1146 is a cleanup measure addressing California's mortgage, excuse me, foreclosure and mortgage laws.

My new staffer, who's sitting here, wrote me a three page script, but I think what would be more beneficial to you is turn it over to Mike Belote to explain usury law and why this is needed.

So with that, I would wholeheartedly agree, Mister Chair and Members, Mike Belote, on behalf of the California Mortgage Association and United Trustees Association. The Bill is very technical, and I appreciate the good analysis.

The most recent amendments deal with usury, and usury can be a sensitive subject, and it's a technical one, but we think the changes in the law here are very, very technical. First, I represent real estate brokers who are attempting, usually to keep people out of foreclosure by modifying, extending a loan.

And those phrases are used sometimes in the statute, but not uniformly. And in a recent case, a bankruptcy court held that the usury exemption didn't apply because it was styled as a modification rather than an extension. Those things are essentially synonymous.

But if you don't think one word matters in a statute, what the current law also says is if a real estate broker did the first transaction and the broker does the second transaction to avoid foreclosure, the court said it must be because the word is the, it must be the same broker.

Well, the same broker may be out of state or retired or deceased, and obviously can't do the second transaction. So we change it from the to a because you want a real estate broker involved in it. And so we think this solves problems. A one word change makes a big difference. We don't think it's controversial.

It'll help us keep people out of foreclosure. And we would ask for an aye vote.

Thank you so much for your testimony. We have a motion by Senator Petrie-Norris, second by Senator Soria. Any others in the room in support, please step forward. State your name, organization and position.

Chair and Members. Vanessa Chavez, on behalf of the California Association of Realtors and Support. Thank you.

Thank you so very much. Any others? Seeing none, we will go to opposition. No registered opposition. Any in the room in opposition? Seeing none, we will bring it to Committee for comments. Questions from Committee Members? Seeing none, would you like to offer a closing statement?

Yes, and that's why I did not read my three page statement. I respectfully asked for an aye vote.

Thank you, author. You had us all nervous there. Just for a second. We do have a motion, a second secretary. Please call the roll.

Roll Call

Bill has seven votes. We'll hold it open for absent members.

Thank you, Mister Chairman, very much.

While we're waiting for the next author to arrive, can we go back and get a motion for the consent calendar?

So we have a motion by Assemblymember Rubio? Second by Assemblymember Cervantes. Secretary, please call the roll.

Second.

On the consent calendar, SB 1521. The motion is do pass and refer to Committee on Appropriations. [Roll Call] Seven votes.

Seven votes on the consent calendar, we'll hold it open for absent Members. Senator Roth, file item number five, SB 1198 recommendation is do passed to Committee on Appropriations. When you're ready, please feel free to open up.

Thank you, Mr. chair and Members. The bill, this bill ensures the financial viability of the pawn industry by increasing handling and storage fees to account for increased security costs, allowing for a new remote transaction fee and also increasing the fee to prepare the loan expiration notice.

As you may know, all of you, every five years, the pawn brokers come before the Legislature to request approval, as they must to adjust maximum fees that can be charged on a pawn loan transaction to keep pace with rising operational costs. We're now at that five-year mark, which is why we're back.

Pawn shops throughout the state serve as a reliable source of short-term loans, allowing someone to access much needed cash without the hassle often associated with traditional lending institutions.

Assuming they can get traditional lending institutions to lend them money. Whether it's covering medical bills, car repairs or other urgent expenses, pawn shops offer an instant and accessible solution for those in need, oftentimes in our disadvantaged communities. Current law limits the amount of compensation that pawn brokers may charge or receive for providing their services.

And without these fee increases, these lending businesses may continue to close throughout the state, having an immediate and dramatic impact on our low income communities, the communities that they serve. At the appropriate point in time, I respectfully ask for your aye vote.

But before that, here with me to today, to testify in support of the bill, former Assemblymember Alberto Torrico, on behalf of the California Pawn Brokers Association.

Thank you, Senator, please.

Thank you, Mr. Chairman, Senator Roth. First of all, let me thank the Chair and the consultant on the Committee for the analysis and your help on the bill. Just want to highlight a couple of things that were in the analysis and also mentioned by Senator Roth.

First and foremost, the customers of the pawn brokers are almost all unbanked. They don't have access to any other form of credit. And these almost always as well are bridge loans in case of emergency.

The second thing is that one of the significant cost drivers for the pawn brokers over the last five years in particular are mirrored in traditional retail shops. They also are victims of retail theft in large numbers.

And because they are required to keep the collateral in a safe place, they have to have different, more extensive measures of security.

So they have, if you see these pawn steps at night, they have iron gates, they have to have bank level safes in the back to keep, to store the very valuable goods, and they also have to have security guards.

So these are expenses that are new over the last five years, and we think the bill starts to account for those to make sure that these shops can stay in business. Thank you very much.

Thank you so much for your testimony. And we will ask for any others in support in the room. Please come forward. Seeing none. No registered opposition, but we will ask if there are any in the room opposed, step forward. Seeing none, we'll bring it to Committee for comments or questions. And we have a motion.

Assemblymember Petrie-Norris, second by Assemblymember Rubio. Would you like to make a closing statement?

I respectfully ask for your aye vote and thank you for your consideration.

Thank you so very much, Senator. And with that secretary, please call the roll.

On the bill, SB 1198, the motion is do pass and refer to Committee on appropriations. [Roll Call] That Bill has seven votes.

Bill has seven votes.

Thank you, Mr. Chair and Members, thank you for your consideration.

Thank you so very much. We'll keep the roll open for absent Members. Secretary, can we start from the very beginning and just go through each one and let add ons?

SB 278. The motion is do pass and refer to Committee on Judiciary. [Roll Call] That Bill has seven votes. SB 919. The motion is do pass as amended and referred to Committee on Judiciary. [Roll Call] That Bill has seven votes.

We'll continue to hold the roll open for an absent Member. And rest of you have a great day. Yeah, we'll wait for. We'll keep it open no longer than 10 minutes.

We are going to go through each item starting. Secretary, starting right at the beginning, please.

SB 278. The motion is do pass and refer to Committee on Judiciary. [Roll Call] The bill has eight votes.

The bill gets out with eight votes.

SB 919. The motions do pass as amended and refer to Committee on Judiciary. [Roll Call] The bill has eight votes.

The bill has eight votes. Passes and is out of Committee.

SB 985. The motion is do pass and refer to Committee on Appropriations. [Roll Call] That is eight votes.

Eight votes. It passes and is out of Commission.

SB 1146. [Roll Call]. That Bill has eight votes. I'm sorry. The motion to do path and refer to Committee on Judiciary.

Thank you for that, Secretary. The bill has eight votes and passes. It is out of Committee.

SB 1198. The motion is do pass and refer to Committee on Appropriations. [Roll Call] The bill has eight votes.

Bill has eight votes. It passes and is out of Committee.

On the consent calendar SB 1521. The motion is do pass and refer to Committee on Appropriations. [Roll Call] That has eight votes.

Consent calendar has eight votes and the bills and has been adopted. Thank you very much. We have completed our agenda for today's hearing. We will now move to close the, the hearing. Thank you very much. The Committee hearing is adjourned.