Assembly Standing Committee on Banking and Finance

The Assembly banking and finance committee is now called to order. Sergeant, please do us a favor and call the absent members. We accept written testimony through the position letter portal of this committee's website in order to facilitate the goal of hearings such as this as much from the public within the limits of our time. We will not permit conduct that disrupts, disturbs, or otherwise, in peeds the orderly conduct of legislative proceedings. We will not accept disruptive behavior or behavior that incites or threatens violence.

As a note, Assemblymember Schiavo will be absent today. I believe we have a quorum. Madam secretary, please call the roll.

Valencia? Here. Valencia present. Chen?

Here.

Chen present. Dixon?

Here.

Dixon present. Fong?

Here.

Fong present. Correll?

Here.

Correll present. Michelle Rodriguez?

Here.

Michelle Rodriguez here. Blanca Rubio?

Blanca Rubio here. Soria?

Here.

Thank you. Before we proceed with any bills, we will take up the consent calendar. We do have two bills on the consent calendar. SB 946, Senator Sayardo, the motion is do passed. And SB 700 by Senator Grayson, the motion is do passed to the committee on economic development, growth, and household impact.

Do we have a motion for the consent calendar?

So moved.

Do we have a second? Thank you. Madam secretary, please call the roll.

SB 700. The motion is do passed to the economic development growth and household impact committee and SB 946 do passed. Valencia?

Yes.

Valencia, Aye. Chen?

Aye.

Chen, Aye. Dixon? Aye. Dixon, Aye. Phong?

Aye. Phong, Aye. Corral? Aye. Corral, Aye.

Michelle Rodriguez? Aye. Michelle Rodriguez, Aye. Blanca Rubio? Aye.

Blanca Rubio, Aye. Soria?

Here. Aye.

Soria, aye.

Thank you. The consent calendar is passed. While we wait for Senator Richardson with file item one, miss Rubio, would you like to present file item two? Substituting in for Senator Grayson as Assembly member Rubio, and you may begin when ready. Thank you.

Good afternoon, Mister Chair and members. I'm here to present on behalf of Senator Grayson, Senate bill 546, which clarifies existing law to make it clear that third party billing administrators are not considered debt collectors under California's Debt Collection Licensing Act when they are engaged solely in administrative billing services. Billing administrators facilitate calculations, allocations, and transmissions of utility charges as they are consumed by residents on behalf of owners. They do not engage in any debt collection activity.

The Debt Collection Licensing Act was enacted to regulate businesses whose primary purpose is collecting consumer debt based on credit through direct collection activity, including collection, communications, threat of legal action, credit reporting, and other, coercive collection practices.

It was never intended to include billing administrators. SB 546 seeks to clarify any potential ambiguity, about whether third party billing administrators need to register as debt collectors. This ambiguity has created compliance burdens and legal risks for third party billing administrators even though they are not engaged in any debt collection activities or deal with consumer credit.

Existing law already exempts numerous entities whose activities are incidental to another regulated or administrative business function, and SB 546 simply addS Billing administrators to the list of exempt entities. Most importantly, SB 546 continues to maintain existing consumer protection, and billing agents would remain subject to California's consumer financial protection law, civil code requirement, governing billing practices, and unfair business practice laws.

SB 546 goes even further to protect consumers by specifically outlining a series of threatening or coercive collection activities that exempt billing agents, exempt billing agents cannot engage in. SB 546 remains consistent with the original legislative intent of the DCLA, which was to regulate entities engaged in business business of collecting, debt from consumers, not vendors performing administrative billing functions approximal to housing or utility operations.

Here with me today to testify and support is Shanta Paikian with Conservice, Conservice and Deborah Carlton with the California Apartment Association. Thank you.

Thank you. You each have two minutes.

Good morning. Good afternoon, Mister Chair and member. Sean Topekian on behalf of Conservice Utility Billing Management. Appreciate the opportunity to be here today. Conservice, works with rental property owners throughout the state to provide utility billing services.

Our role is strictly limited to calculating utility charges, preparing invoices and statements, and providing customer service. We do not engage in any debt collection activities. We do not call, text, send demands for payment. We don't threaten litigation or eviction. We do none of these things that traditional debt collectors would engage in.

SB 546 is a very narrow clarification of the Debt Collection Licensing Act. When that act was first enacted, it was intended to focus on debt collectors and debt buyers who engage in debt collection activities. If simply sending out a bill and accepting payment constitutes debt collection, then virtually every business that does billing or, collection services would be considered a debt collector in California. That's simply not the case.

As the Assembly member noted, this bill goes even one step further and strengthens existing consumer protections in law by expressly prohibiting companies like ours, billing companies, from engaging in any debt collection activity.

That includes harassment, threats of, litigation or eviction, and and so forth. So this bill is actually strengthening existing consumer protections. So we believe SB 546 shares the original intent of the legislation and at the same time preserves, unintended prohibits unintended consequences for companies like ours. For those reasons, we ask for your aye vote. Appreciate the time.

Good afternoon, members. Deborah Carlton with the California Apartment Association. I I wanna thank the Senator and Assembly member Blanca for the presentation. I can attest to the fact that we hire third party billing companies to help us inform tenants of the water they use. That's the typical use.

It's only about billing for water. It has nothing to do with asking them or at least forcing a debt payment. That would be, of course, turned back to the rental property owner to understand maybe what wasn't paid. In fact, we even have legislation that protects tenants from that activity even from the landlord. So, based upon that, we respectfully ask your aye vote today.

Thank you. Are there any additional witnesses in support in this hearing room? So please come up to the mic, state your name, organization, and position. Seeing none, we will now move on to opposition. Are there any key witnesses in opposition?

Seeing none, we'll move on to additional opposition in the room. Seeing none, we'll bring it back to the committee. Are there any questions from committee members? We have a first and a second. Seeing no questions.

Oh, yes. Miss Dixon, apologies.

I support the bill. I second the motion. Curious, Mister Gunn and a man that's come suddenly, what are they external or existential issues that suddenly surfaced that needed to happen? I'm just curious. I support the bill.

Just curious what's going on in the industry.

Through through the Chair, I think I would say, you know, it it's the concerns about being able to comply with existing law as well as threats of litigation. So we're trying to get ahead of that.

K. Alright. Thank you.

Thank you. Seeing no additional questions from the committee, Assembly member Rubio, would you like to close?

Just, respectfully ask for an aye vote.

Wonderful. Thank you very much. With that, madam secretary, can you please call the roll?

SB 546 by Senator Grayson. The motion is do passed to the committee on appropriations. Valencia?

Yes.

Valencia, Aye. Chin?

Chin, Aye. Dixon? Aye. Dixon, Aye. Fong?

Aye.

Aye. Fong, aye. Krell? Aye. Krell, aye.

Michelle Rodriguez? Aye. Michelle Rodriguez, aye. Blanca Rubio? Aye.

Blanca Rubio, aye. Soria? Aye. Soria, aye.

That bill passes.

Thank you.

We will give Senator Richardson a moment. I believe she is on her way. Thank you. Wonderful. We will now move back to file item one, SB 505 from a Senator Richardson.

On behalf of Senator Richardson to present is Assembly member Maggie Krell. Please begin your opening statement when ready.

Thank you, Chair. Members, I'm pleased to present Senate bill 505 on behalf of Senator Richardson. This bill prohibits a digital wallet provider or money transmitter operating in the state from allowing a user to log in without using two factor authentication or multi factor authentication for any login by that user. This is an important bill as more Californians rely on digital wallets and peer to peer payment platforms to manage their everyday finances.

It's critical that appropriate safeguards are in place to protect users from fraud, unauthorized access, and financial exploitation.

That's precisely what this bill does. For those reasons, I respectfully ask for your aye vote on Senate bill 505 on behalf half of Senator Richardson.

Thank you. Are there any witnesses in support of the bill?

Hi. Megan Varvay with Kaiser Advocacy on behalf of the National Consumer Law Center in support.

Thank you.

Thank you, Mister Chair and members. Jason Schmelzer, on behalf of TechNet. Currently opposed, but looking forward to removing our opposition. Wanna thank the author and the committee for working with us on amendments. Thank you so much.

Thank you.

Are there any additional witnesses in support? Seeing none. Any witnesses in opposition? Seeing none. Any questions from the committee?

There's just

a quick question, but I but you can't answer.

I'll just make a comment. I think I'm supporting the bill. I think that's a good thing, but we all are accustomed to use going through the authentication authentication process. But I would find irksome if I've already been authenticated on my own personal computer, then to after two times and then return time, usually, it says, do you want is this a known computer? Do you want to give your authentication?

I think that's a convenience if it's my personal computer. If that's what they're working on, that's great. So I'm for it, but keep it simple for trusted users and trusted equipment. I guess that's what I'm saying.

Thank you. My understanding is that they're working through those logistics to ensure ease of use while also backing that up with precautions to ensure that the consumer is protected. Yeah.

Good. Thank you.

With that, miss Crow, would you like to close?

I respectfully ask your aye vote.

Thank you. Madam secretary, please call the roll.

SB 505 by Senator Richardson. The motion is do passed to the committee on appropriations. Valencia?

Yes.

Valencia, Aye. Chin? Aye. Chen, Aye. Dixon, Aye.

Dixon, Aye. Phong? Aye. Phong, Aye. Correll?

Aye. Correll, Aye. Michelle Rodriguez? Aye. Michelle Rodriguez, Aye.

Blanca Rubio? Aye. Blanca Rubio, Aye. Soria? Soria, aye.

That bill is out. We have completed our agenda for today's hearing.

Thank you. Of course.

The Assembly banking and finance committee is adjourned.

Yes.

Yeah.