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AB-1247 Collateral Recovery Act: repossession agencies: limited liability companies. (2017-2018)

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Date Published: 05/02/2017 09:00 PM
AB1247:v98#DOCUMENT

Amended  IN  Assembly  May 02, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1247


Introduced by Assembly Member Chen

February 17, 2017


An act to amend, repeal, and add Sections 7500.1, 7503.1, 7503.4, and 7503.5 7503.5, 7507.2, 7508.2, 7508.7, 7508.8, 7510.1, and 7510.2 of, and to add and repeal Section 7503.15 to, of, the Business and Professions Code, relating to professions and vocations.


LEGISLATIVE COUNSEL'S DIGEST


AB 1247, as amended, Chen. Collateral Recovery Act: repossession agencies: limited liability companies.
Existing law, the Collateral Recovery Act, provides for the licensure and regulation of repossession agencies by the Bureau of Security and Investigative Services. A violation of the act is a crime. Under the act, a qualified manager is a person who possesses a valid qualification certificate and is in active control or management of, and who is a director of, the licensee’s place of business. Existing law prohibits a domestic or foreign limited liability company from being licensed as a repossession agency.
Existing law, the California Revised Uniform Limited Liability Company Act, authorizes a limited liability company to have any lawful purpose, except as specified, and authorizes a domestic or foreign limited liability company to render services that may be lawfully rendered only pursuant to a license, certificate, or registration authorized by the Business and Professions Code if the provisions of that code authorize a limited liability company or foreign limited liability company to hold that license, certificate, or registration.
This bill, until January 1, 2022, would authorize the bureau to issue a repossession agency license to a limited liability company. The bill would require a qualified manager and a managing member or manager of a limited liability company and its officers, if any, to submit with the application for licensure a specified personal identification form and fingerprints for a background check by federal law enforcement. The bill would also require a limited liability company applicant to include with the application the true names name and complete residence addresses address of each managing member or manager and any other officer or member and would authorize the bureau to request a copy of its certified articles of organization. The bill also would require the application to state the name and complete residence address of the person qualified manager to be actively in charge of the limited liability company. The bill would require the application to be signed under penalty of perjury by a managing member, manager, or officer. manager, member, and qualified manager, as specified. By expanding the crime of perjury, the bill would impose a state-mandated local program. The bill would authorize the denial denial, suspension, or revocation of a license if a qualified manager, managing member member, or manager of a limited liability company has committed specified acts. acts and would also authorize the imposition of administrative fines for prohibited acts committed by a qualified manager, managing member, or manager. Except as specified, the bill would prohibit the disclosure of, among other things, the residence address of a managing member or manager. If a qualified manager, managing member, or manager of a licensee who has committed specified prohibited acts and had his or her license revoked, the bill would require such person to dispose of any financial interest in any repossession agency, as provided.
This bill would require a limited liability company, as a condition of licensure, to maintain liability insurance, as specified, for damages arising out of claims based on acts, errors, or omissions arising out of the repossession services it provides. The bill would require a Certificate of Liability Insurance, as specified, to be submitted to the bureau, and would require the insurer issuing the certificate to report specified information to the bureau related to the policy. The bill would authorize suspension, as provided, of the license of a licensee that fails to maintain sufficient insurance, or fails to provide proof of the required insurance upon request by the bureau, and would render each member of the limited liability company personally liable, up to $1,000,000 each, for damages resulting to 3rd parties in connection with the company’s performance during the period of suspension, as specified. Because a violation of these requirements would be a crime, the bill would impose a state-mandated local program.
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.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 7500.1 of the Business and Professions Code is amended to read:

7500.1.
 (a) The following terms as used in this chapter have the meaning expressed in this section:

(a)

(1) “Advertisement” means any written or printed communication, including a directory listing, except a free telephone directory listing that does not allow space for a license number.

(b)

(2) “Assignment” or “repossession order” means any written authorization by the legal owner, lienholder, lessor, lessee, or registered owner, or the agent of any of them, to skip trace, locate, or repossess any collateral, including, but not limited to, collateral registered under the Vehicle Code that is subject to a security agreement that contains a repossession clause. “Assignment” or “repossession order” also means any written authorization by an employer to recover any collateral entrusted to an employee or former employee in possession of the collateral. A photocopy of an assignment or repossession order, facsimile copy of an assignment or repossession order, or electronic format of an assignment or repossession order shall have the same force and effect as an original written assignment or repossession order.

(c)

(3) “Bureau” means the Bureau of Security and Investigative Services.

(d)

(4) “Chief” means the Chief of the Bureau of Security and Investigative Services.

(e)

(5) “Collateral” means any specific vehicle, trailer, boat, recreational vehicle, motor home, appliance, or other property that is subject to a security agreement.

(f)

(6) “Combustibles” means any substances or articles that are capable of undergoing combustion or catching fire, or that are flammable, if retained.

(g)

(7) “Dangerous drugs” means any controlled substances as defined in Chapter 2 (commencing with Section 11053) of Division 10 of the Health and Safety Code.

(h)

(8) “Deadly weapon” means and includes any instrument or weapon of the kind commonly known as a blackjack, slungshot, billy, sandclub, sandbag, metal knuckles, dirk, dagger, pistol, or revolver, or any other firearm, any knife having a blade longer than five inches, any razor with an unguarded blade, and any metal pipe or bar used or intended to be used as a club.

(i)

(9) “Debtor” means any person obligated under a security agreement.

(j)

(10) “Department” means the Department of Consumer Affairs.

(k)

(11) “Director” means the Director of Consumer Affairs.

(l)

(12) “Electronic format” includes, but is not limited to, a text message, email, or Internet posting.

(m)

(13) “Health hazard” means any personal effects that if retained would produce an unsanitary or unhealthful condition, or which might damage other personal effects.

(n)

(14) “Legal owner” means a person holding a security interest in any collateral where the collateral is subject to a security agreement, a lien against any collateral, an assignment or a repossession order, or an interest in any collateral that is subject to a lease agreement.

(o)

(15) “Licensee” means an individual, partnership, limited liability company, or corporation licensed under this chapter as a repossession agency.
(16) “Manager” means a manager as that term is defined in Section 17701.02 of the Corporations Code.
(17) “Member” means a member as that term is defined in Section 17701.02 of the Corporations Code.

(p)

(18) “Multiple licensee” means a repossession agency holding more than one repossession license under this chapter, with one fictitious trade style and ownership, conducting repossession business from additional licensed locations other than the location shown on the original license.

(q)

(19) “Person” includes any individual, partnership, limited liability company, or corporation.

(r)

(20) “Personal effects” means any property that is not the property of the legal owner.

(s)

(21) “Private building” means and includes any dwelling, outbuilding, or other enclosed structure.

(t)

(22) “Qualified certificate holder” or “qualified manager” is a person who possesses a valid qualification certificate in accordance with the provisions of Article 5 (commencing with Section 7504) and is in active control or management of, and who is a director of, the licensee’s place of business.

(u)

(23) “Registered owner” means the individual listed in the records of the Department of Motor Vehicles, on a conditional sales contract, or on an assignment or a repossession order, as the registered owner.

(v)

(24) “Registrant” means a person registered under this chapter.

(w)

(25) “Secured area” means and includes any fenced and locked area.

(x)

(26) “Security agreement” means an obligation, pledge, mortgage, chattel mortgage, lease agreement, deposit, or lien, given by a debtor as security for payment or performance of his or her debt, by furnishing the creditor with a recourse to be used in case of failure in the principal obligation. “Security agreement” also includes a bailment where an employer-employee relationship exists or existed between the bailor and the bailee.

(y)

(27) “Services” means any duty or labor to be rendered by one person for another.

(z)

(28) “Violent act” means any act that results in bodily harm or injury to any party involved.

(aa)

(29) The amendments made to this section by Chapter 418 of the Statutes of 2006 shall not be deemed to exempt any person from the provisions of this chapter.
(b) This section shall remain in effect only until January 1, 2022, and as of that date is repealed.

SEC. 2.

 Section 7500.1 is added to the Business and Professions Code, to read:

7500.1.
 (a) The following terms as used in this chapter have the meaning expressed in this section:
(1) “Advertisement” means any written or printed communication, including a directory listing, except a free telephone directory listing that does not allow space for a license number.
(2) “Assignment” or “repossession order” means any written authorization by the legal owner, lienholder, lessor, lessee, or registered owner, or the agent of any of them, to skip trace, locate, or repossess any collateral, including, but not limited to, collateral registered under the Vehicle Code that is subject to a security agreement that contains a repossession clause. “Assignment” or “repossession order” also means any written authorization by an employer to recover any collateral entrusted to an employee or former employee in possession of the collateral. A photocopy of an assignment or repossession order, facsimile copy of an assignment or repossession order, or electronic format of an assignment or repossession order shall have the same force and effect as an original written assignment or repossession order.
(3) “Bureau” means the Bureau of Security and Investigative Services.
(4) “Chief” means the Chief of the Bureau of Security and Investigative Services.
(5) “Collateral” means any specific vehicle, trailer, boat, recreational vehicle, motor home, appliance, or other property that is subject to a security agreement.
(6) “Combustibles” means any substances or articles that are capable of undergoing combustion or catching fire, or that are flammable, if retained.
(7) “Dangerous drugs” means any controlled substances as defined in Chapter 2 (commencing with Section 11053) of Division 10 of the Health and Safety Code.
(8) “Deadly weapon” means and includes any instrument or weapon of the kind commonly known as a blackjack, slungshot, billy, sandclub, sandbag, metal knuckles, dirk, dagger, pistol, or revolver, or any other firearm, any knife having a blade longer than five inches, any razor with an unguarded blade, and any metal pipe or bar used or intended to be used as a club.
(9) “Debtor” means any person obligated under a security agreement.
(10) “Department” means the Department of Consumer Affairs.
(11) “Director” means the Director of Consumer Affairs.
(12) “Electronic format” includes, but is not limited to, a text message, email, or Internet posting.
(13) “Health hazard” means any personal effects that if retained would produce an unsanitary or unhealthful condition, or which might damage other personal effects.
(14) “Legal owner” means a person holding a security interest in any collateral where the collateral is subject to a security agreement, a lien against any collateral, an assignment or a repossession order, or an interest in any collateral that is subject to a lease agreement.
(15) “Licensee” means an individual, partnership, limited liability company, or corporation licensed under this chapter as a repossession agency.
(16) “Multiple licensee” means a repossession agency holding more than one repossession license under this chapter, with one fictitious trade style and ownership, conducting repossession business from additional licensed locations other than the location shown on the original license.
(17) “Person” includes any individual, partnership, limited liability company, or corporation.
(18) “Personal effects” means any property that is not the property of the legal owner.
(19) “Private building” means and includes any dwelling, outbuilding, or other enclosed structure.
(20) “Qualified certificate holder” or “qualified manager” is a person who possesses a valid qualification certificate in accordance with the provisions of Article 5 (commencing with Section 7504) and is in active control or management of, and who is a director of, the licensee’s place of business.
(21) “Registered owner” means the individual listed in the records of the Department of Motor Vehicles, on a conditional sales contract, or on an assignment or a repossession order, as the registered owner.
(22) “Registrant” means a person registered under this chapter.
(23) “Secured area” means and includes any fenced and locked area.
(24) “Security agreement” means an obligation, pledge, mortgage, chattel mortgage, lease agreement, deposit, or lien, given by a debtor as security for payment or performance of his or her debt, by furnishing the creditor with a recourse to be used in case of failure in the principal obligation. “Security agreement” also includes a bailment where an employer-employee relationship exists or existed between the bailor and the bailee.
(25) “Services” means any duty or labor to be rendered by one person for another.
(26) “Violent act” means any act that results in bodily harm or injury to any party involved.
(27) The amendments made to this section by Chapter 418 of the Statutes of 2006 shall not be deemed to exempt any person from the provisions of this chapter.
(b) This section shall become operative on January 1, 2022.

SECTION 1.SEC. 3.

 Section 7503.1 of the Business and Professions Code is amended to read:

7503.1.
 (a) Each individual applicant for examination and each qualified manager, partner of a partnership, officer of a corporation, and each managing member or manager of a limited liability company and its officers officers, if any, shall submit with the application, one personal identification form provided by the chief upon which shall appear a photograph taken within one year immediately preceding the date of the filing of the application together with two legible sets of fingerprints, one set of which shall be forwarded to the Federal Bureau of Investigation for purposes of a background check, and a personal description of each person respectively.
(b) The bureau may impose a fee not to exceed three dollars ($3) for processing classifiable fingerprint cards submitted by applicants, excluding those submitted into an electronic fingerprint system using electronic fingerprint technology.
(c) This section shall remain in effect only until January 1, 2022, and as of that date is repealed.

SEC. 2.SEC. 4.

 Section 7503.1 is added to the Business and Professions Code, to read:

7503.1.
 (a) Each individual applicant for examination and each manager, partner of a partnership, and officer of a corporation shall submit with the application, one personal identification form provided by the chief upon which shall appear a photograph taken within one year immediately preceding the date of the filing of the application together with two legible sets of fingerprints, one set of which shall be forwarded to the Federal Bureau of Investigation for purposes of a background check, and a personal description of each person respectively.
(b) The bureau may impose a fee not to exceed three dollars ($3) for processing classifiable fingerprint cards submitted by applicants, excluding those submitted into an electronic fingerprint system using electronic fingerprint technology.
(c) This section shall become operative on January 1, 2022.

SEC. 3.SEC. 5.

 Section 7503.4 of the Business and Professions Code is amended to read:

7503.4.
 (a) If the applicant for a license is a corporation, the application shall state the true names and complete residence addresses of all officers. The application shall also state the name and address of the person to be actively in charge of the corporation for which the license is sought. The application shall be subscribed and verified by a duly authorized officer of the applicant and by the qualified certificate holder thereof. The application shall also state whether any of the officers has ever used an alias.

(b)If the applicant for a license is a limited liability company, the application shall state the true names and complete residence addresses of each managing member or manager and each officer, if any. A certified copy of the articles of organization shall be provided to the bureau upon request. The application shall also state the name and address of the person to be actively in charge of the limited liability company for which the license is sought. If a qualified certificate holder, if other than a managing member, manager, or officer is to be actively in charge of the limited liability company, then the application shall state the name and address of that person. The application shall be subscribed and verified by a managing member, manager, or officer and by the qualified certificate holder thereof. The application shall also state whether any of the managing members, managers, or officers has ever used an alias.

(b) If the applicant for a license is a limited liability company, the application shall state the true name and complete residence address of each managing member and any other officer or member who will be active in the business to be licensed. A copy of the articles of organization, as filed with the Secretary of State, shall be supplied to the bureau upon request. The application shall also state the name and complete residence address of the qualified manager to be actively in charge of the business for which the license is sought. In the case of a manager-managed limited liability company, the application shall be subscribed, verified, and signed by a manager; otherwise, in the case of a member-managed limited liability company, the application shall be subscribed, verified, and signed by a duly authorized member of the applicant and by the qualified manager thereof. The application shall also state whether any of the members, managers, officers, or the qualified manager has ever used an alias.
(c) This section shall remain in effect only until January 1, 2022, and as of that date is repealed.

SEC. 4.SEC. 6.

 Section 7503.4 is added to the Business and Professions Code, to read:

7503.4.
 (a) If the applicant for a license is a corporation, the application shall state the true names and complete residence addresses of all officers. The application shall also state the name and address of the person to be actively in charge of the business for which the license is sought. The application shall be subscribed and verified by a duly authorized officer of the applicant and by the qualified certificate holder thereof. The application shall also state whether any of the officers has ever used an alias.
(b) Nothing in this chapter permits a domestic or foreign limited liability company to be licensed as a repossession agency.
(c) This section shall become operative on January 1, 2022.

SEC. 5.SEC. 7.

 Section 7503.5 of the Business and Professions Code is amended to read:

7503.5.
 If the director determines that the applicant, if an individual, or if the applicant is a person other than an individual, that its qualified manager and any of its officers and partners, or managing member or manager or officer of a limited liability company have committed any of the following acts, the director may deny the license:
(a) Committed any act, which, if committed by a licensee, would be a ground for the suspension or revocation of a license under this chapter.
(b) Committed any act constituting dishonesty or fraud.
(c) Been refused a license under this chapter or had a license revoked.
(d) Been an officer, partner, or qualified manager of any person, or managing member or manager or officer of a limited liability company who has been refused a license under this chapter or whose license has been revoked.
(e) Committed, or aided and abetted the commission of, any act for which a license is required by this chapter while unlicensed.
(f) Knowingly made any false statement in his or her application.
(g) Committed any act or crime constituting grounds for denial of licensure under Section 480.
The denial shall be in writing and shall describe the basis for the denial. The denial shall inform the applicant that if he or she desires a hearing to contest the denial, the hearing shall be requested of the director, in writing, within 30 days of the issuance of the denial.
When a hearing is held under this section, it shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(h) This section shall remain in effect only until January 1, 2022, and as of that date is repealed.

SEC. 6.SEC. 8.

 Section 7503.5 is added to the Business and Professions Code, to read:

7503.5.
 If the director determines that the applicant, if an individual, or if the applicant is a person other than an individual, that its manager and any of its officers and partners have committed any of the following acts, the director may deny the license:
(a) Committed any act, which, if committed by a licensee, would be a ground for the suspension or revocation of a license under this chapter.
(b) Committed any act constituting dishonesty or fraud.
(c) Been refused a license under this chapter or had a license revoked.
(d) Been an officer, partner, or manager of any person who has been refused a license under this chapter or whose license has been revoked.
(e) Committed, or aided and abetted the commission of, any act for which a license is required by this chapter while unlicensed.
(f) Knowingly made any false statement in his or her application.
(g) Committed any act or crime constituting grounds for denial of licensure under Section 480.
The denial shall be in writing and shall describe the basis for the denial. The denial shall inform the applicant that if he or she desires a hearing to contest the denial, the hearing shall be requested of the director, in writing, within 30 days of the issuance of the denial.
When a hearing is held under this section, it shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(h) This section shall become operative on January 1, 2022.

SEC. 7.SEC. 9.

 Section 7503.15 is added to the Business and Professions Code, to read:

7503.15.
 (a) As a condition of the issuance, reinstatement, reactivation, or continued valid use of a license under this chapter, a limited liability company shall, in accordance with this section, maintain a policy or policies of insurance against liability imposed on or against it by law for damages arising out of claims based upon acts, errors, or omissions arising out of the repossession services it provides.
(b) The total aggregate limit of liability under the policy or policies of insurance required under this section shall be as follows:
(1) For a limited liability company licensee with five or fewer persons named as managing members or managers, the aggregate limit shall not be less than one million dollars ($1,000,000).
(2) For a limited liability company licensee with more than five persons named as managing members or managers, an additional one hundred thousand dollars ($100,000) of insurance shall be obtained for each person named as a managing member or manager of the licensee except that the maximum amount of insurance is not required to exceed five million dollars ($5,000,000) in any one designated period, less amounts paid in defending, settling, or discharging claims as set forth under this section.
(c) Prior to the issuance, reinstatement, or reactivation of a limited liability company license as provided under this chapter, the applicant or licensee shall, in the manner prescribed by the bureau, submit the information and documentation required by this section and requested by the bureau, demonstrating compliance with the financial security requirements specified by this section.
(d) For any insurance policy secured by a licensee in satisfaction of this section, a Certificate of Liability Insurance, signed by an authorized agent or employee of the insurer, shall be submitted electronically or otherwise to the bureau. The insurer issuing the certificate shall report to the bureau the following information for any policy required under this section: name, license number, policy number, dates that coverage is scheduled to commence and lapse, and cancellation date if applicable. The insurer shall list the bureau as the certificate holder for the purposes of receiving notifications related to the policy’s status.
(e) (1) If a licensee fails to maintain sufficient insurance as required by this section, or fails to provide proof of the required insurance upon request by the bureau, the license is subject to suspension and shall be automatically suspended pursuant to this subdivision until the date that the licensee provides proof to the bureau of compliance with the insurance coverage requirement.
(2) Prior to an automatic suspension, the bureau shall notify the licensee, in writing, that it has 30 days to provide proof to the bureau of having the required insurance or the license shall be automatically suspended.
(3) If the licensee fails to provide proof of insurance coverage within this period, the bureau may automatically suspend the license.
(f) If the license of a limited liability company is suspended pursuant to subdivision (e), each member of the limited liability company shall be personally liable up to one million dollars ($1,000,000) each for damages resulting to third parties in connection with the company’s performance, during the period of suspension, of any act or contract when a license is required by this chapter.
(g) This section shall remain in effect only until January 1, 2022, and as of that date is repealed.

SEC. 10.

 Section 7507.2 of the Business and Professions Code is amended to read:

7507.2.
 (a) A licensee is responsible for those actions that are performed in violation of this chapter by his or her registrants, including his or her qualified manager, when acting within the course and scope of his or her employment or contract.
(b) Each licensee shall maintain a file or record of the name, address, commencing date of employment or retention, and position of each registrant, and the date of termination of the employment or contract when a registrant is terminated. The file and records, together with usual compensation records, shall be available for inspection by the bureau, and copies thereof, and information pertaining thereto or contained therein, shall be submitted to the bureau upon request.
(c) This section shall remain in effect only until January 1, 2022, and as of that date is repealed.

SEC. 11.

 Section 7507.2 is added to the Business and Professions Code, to read:

7507.2.
 (a) A licensee is responsible for those actions that are performed in violation of this chapter by his or her registrants, including his or her manager, when acting within the course and scope of his or her employment or contract.
(b) Each licensee shall maintain a file or record of the name, address, commencing date of employment or retention, and position of each registrant, and the date of termination of the employment or contract when a registrant is terminated. The file and records, together with usual compensation records, shall be available for inspection by the bureau, and copies thereof, and information pertaining thereto or contained therein, shall be submitted to the bureau upon request.
(c) This section shall become operative on January 1, 2022.

SEC. 12.

 Section 7508.2 of the Business and Professions Code is amended to read:

7508.2.
 The director may assess administrative fines for any of the following prohibited acts:
(a) Recovering collateral or making any money demand in lieu thereof, including, but not limited to, collateral registered under the Vehicle Code, that has been sold under a security agreement before a signed or telegraphic authorization has been received from the legal owner, debtor, lienholder, lessor, or repossession agency acting on behalf of the legal owner, debtor, lienholder, or lessor of the collateral. A telephonic assignment is acceptable if the legal owner, debtor, lienholder, lessor, or repossession agency acting on behalf of the legal owner, debtor, lienholder, or lessor is known to the licensee and a written authorization from the legal owner, debtor, lienholder, lessor, or repossession agency acting on behalf of the legal owner, debtor, lienholder, or lessor is received by the licensee within 10 working days or a request by the licensee for a written authorization from the legal owner, debtor, lienholder, lessor, or repossession agency acting on behalf of the legal owner, debtor, lienholder, or lessor is made in writing within 10 working days. Referrals of assignments from one licensee to another licensee are acceptable. The referral of an assignment shall be made under the same terms and conditions as in the original assignment. The fine shall be one hundred dollars ($100) for the first violation and five hundred dollars ($500) for each violation thereafter, per audit.
(b) Using collateral or personal effects, which have been recovered, for the personal benefit of a licensee, or officer, partner, qualified manager, managing member, manager, registrant, or employee of a licensee. The fine shall be two hundred fifty dollars ($250) for the first violation and a fine not to exceed one thousand dollars ($1,000) for each violation thereafter. This subdivision does not apply to personal effects disposed of pursuant to subdivision (c) of Section 7507.9. Nothing in this subdivision prohibits the using or taking of personal property connected, adjoined, or affixed to the collateral through an unbroken sequence if that use or taking is reasonably necessary to effectuate the recovery in a safe manner or to protect the collateral or personal effects.
(c) Selling collateral recovered under this chapter, or making a demand for payment in lieu of repossession. The fine shall be two hundred fifty dollars ($250) for the first violation and a fine not to exceed one thousand dollars ($1,000) for each subsequent violation.
(d) Unlawfully entering any private building or secured area without the consent of the owner, or of the person in legal possession thereof, at the time of repossession. The fine shall be five hundred dollars ($500) for each violation.
(e) Committing unlawful assault or battery on another person during the course of a repossession. The fine shall not exceed two thousand five hundred dollars ($2,500) for each violation.
(f) Falsification of an inventory. The fine shall be one hundred dollars ($100) for the first violation and two hundred fifty dollars ($250) for each violation thereafter.
(g) Soliciting from the legal owner the recovery of specific collateral registered under the Vehicle Code or under the motor vehicle licensing laws of other states after the collateral has been seen or located on a public street or on public or private property without divulging the location of the vehicle. The fine shall be one hundred dollars ($100) for the first violation and two hundred fifty dollars ($250) for each violation thereafter.
(h) This section shall remain in effect only until January 1, 2022, and as of that date is repealed.

SEC. 13.

 Section 7508.2 is added to the Business and Professions Code, to read:

7508.2.
 The director may assess administrative fines for any of the following prohibited acts:
(a) Recovering collateral or making any money demand in lieu thereof, including, but not limited to, collateral registered under the Vehicle Code, that has been sold under a security agreement before a signed or telegraphic authorization has been received from the legal owner, debtor, lienholder, lessor, or repossession agency acting on behalf of the legal owner, debtor, lienholder, or lessor of the collateral. A telephonic assignment is acceptable if the legal owner, debtor, lienholder, lessor, or repossession agency acting on behalf of the legal owner, debtor, lienholder, or lessor is known to the licensee and a written authorization from the legal owner, debtor, lienholder, lessor, or repossession agency acting on behalf of the legal owner, debtor, lienholder, or lessor is received by the licensee within 10 working days or a request by the licensee for a written authorization from the legal owner, debtor, lienholder, lessor, or repossession agency acting on behalf of the legal owner, debtor, lienholder, or lessor is made in writing within 10 working days. Referrals of assignments from one licensee to another licensee are acceptable. The referral of an assignment shall be made under the same terms and conditions as in the original assignment. The fine shall be one hundred dollars ($100) for the first violation and five hundred dollars ($500) for each violation thereafter, per audit.
(b) Using collateral or personal effects, which have been recovered, for the personal benefit of a licensee, or officer, partner, manager, registrant, or employee of a licensee. The fine shall be two hundred fifty dollars ($250) for the first violation and a fine not to exceed one thousand dollars ($1,000) for each violation thereafter. This subdivision does not apply to personal effects disposed of pursuant to subdivision (c) of Section 7507.9. Nothing in this subdivision prohibits the using or taking of personal property connected, adjoined, or affixed to the collateral through an unbroken sequence if that use or taking is reasonably necessary to effectuate the recovery in a safe manner or to protect the collateral or personal effects.
(c) Selling collateral recovered under this chapter, or making a demand for payment in lieu of repossession. The fine shall be two hundred fifty dollars ($250) for the first violation and a fine not to exceed one thousand dollars ($1,000) for each subsequent violation.
(d) Unlawfully entering any private building or secured area without the consent of the owner, or of the person in legal possession thereof, at the time of repossession. The fine shall be five hundred dollars ($500) for each violation.
(e) Committing unlawful assault or battery on another person during the course of a repossession. The fine shall not exceed two thousand five hundred dollars ($2,500) for each violation.
(f) Falsification of an inventory. The fine shall be one hundred dollars ($100) for the first violation and two hundred fifty dollars ($250) for each violation thereafter.
(g) Soliciting from the legal owner the recovery of specific collateral registered under the Vehicle Code or under the motor vehicle licensing laws of other states after the collateral has been seen or located on a public street or on public or private property without divulging the location of the vehicle. The fine shall be one hundred dollars ($100) for the first violation and two hundred fifty dollars ($250) for each violation thereafter.
(h) This section shall become operative on January 1, 2022.

SEC. 14.

 Section 7508.7 of the Business and Professions Code is amended to read:

7508.7.
 (a) Except as otherwise provided by law, a repossession agency shall not disclose to the public, any person other than the individual to whom the information pertains, or any nongovernmental entity, without a court order, the residence address, residence telephone number, cellular telephone number, driver’s license number, work schedule, past, present, or future location, or any other personal information of any licensee, registrant, qualified certificate holder, qualified manager, managing member, manager, employee, or independent contractor the agency employs.
(b) For the purpose of verifying information for the issuance or renewal of a policy of insurance, a repossession agency may provide to an insurance company the name, driver’s license number, and date of birth of a licensee, registrant, qualified certificate holder, qualified manager, managing member, manager, employee, or independent contractor the agency employs.
(c) This section shall remain in effect only until January 1, 2022, and as of that date is repealed.

SEC. 15.

 Section 7508.7 is added to the Business and Professions Code, to read:

7508.7.
 (a) Except as otherwise provided by law, a repossession agency shall not disclose to the public, any person other than the individual to whom the information pertains, or any nongovernmental entity, without a court order, the residence address, residence telephone number, cellular telephone number, driver’s license number, work schedule, past, present, or future location, or any other personal information of any licensee, registrant, qualified certificate holder, qualified manager, employee, or independent contractor the agency employs.
(b) For the purpose of verifying information for the issuance or renewal of a policy of insurance, a repossession agency may provide to an insurance company the name, driver’s license number, and date of birth of a licensee, registrant, qualified certificate holder, qualified manager, employee, or independent contractor the agency employs.
(c) This section shall become operative on January 1, 2022.

SEC. 16.

 Section 7508.8 of the Business and Professions Code is amended to read:

7508.8.
 (a) Notwithstanding Section 7508.3, an oval, shield, round, square, or non-seven-point badge, cap insignia, or jacket patch may be worn by a licensee, officer, director, partner, manager, managing member, independent contractor, qualified certificate holder, qualified manager, or employee of a repossession agency. If a badge, cap insignia, or jacket patch is worn, it shall bear on its face all of the following:
(1) All or a substantial part of the repossession agency’s name.
(2) The repossession agency license number issued by the director to that individual or agency.
(3) The word “repossessor.”
(b) A repossessor shall not wear a badge on his or her belt or hang a badge around his or her neck.
(c) All badges, cap insignias, and jacket patches worn by a repossessor shall be a standard design approved by the director and shall be clearly visible.
(d) This section shall not apply to a holder of a temporary registration pursuant to Section 7506.9.
(e) The director may assess a fine of one hundred dollars ($100) for the first violation, one hundred seventy-five dollars ($175) for the second violation, and two hundred fifty dollars ($250) for each subsequent violation.
(f) This section shall remain in effect only until January 1, 2022, and as of that date is repealed.

SEC. 17.

 Section 7508.8 is added to the Business and Professions Code, to read:

7508.8.
 (a) Notwithstanding Section 7508.3, an oval, shield, round, square, or non-seven-point badge, cap insignia, or jacket patch may be worn by a licensee, officer, director, partner, manager, independent contractor, qualified certificate holder, qualified manager, or employee of a repossession agency. If a badge, cap insignia, or jacket patch is worn, it shall bear on its face all of the following:
(1) All or a substantial part of the repossession agency’s name.
(2) The repossession agency license number issued by the director to that individual or agency.
(3) The word “repossessor.”
(b) A repossessor shall not wear a badge on his or her belt or hang a badge around his or her neck.
(c) All badges, cap insignias, and jacket patches worn by a repossessor shall be a standard design approved by the director and shall be clearly visible.
(d) This section shall not apply to a holder of a temporary registration pursuant to Section 7506.9.
(e) The director may assess a fine of one hundred dollars ($100) for the first violation, one hundred seventy-five dollars ($175) for the second violation, and two hundred fifty dollars ($250) for each subsequent violation.
(f) This section shall become operative on January 1, 2022.

SEC. 18.

 Section 7510.1 of the Business and Professions Code is amended to read:

7510.1.
 (a) In addition to any other remedies authorized by this chapter, the director may suspend or revoke a repossession agency license, a qualification certificate, or registration issued under this chapter if the director determines that the licensee or the licensee’s qualified manager, if an individual, or if the licensee is a person other than an individual, that any of its officers, partners, registrants, employees, managing members, or its manager, has:

(a)

(1) Made any false statement or given any false information in connection with an application for a license, qualification certificate, or registration, or a renewal or reinstatement thereof.

(b)

(2) Violated any provisions of this chapter.

(c)

(3) Violated any rule of the director adopted pursuant to authority contained in this chapter.

(d)

(4) Been convicted of a felony or any crime substantially related to the repossession agency business including illegally using, carrying, or possessing a deadly weapon.

(e)

(5) Committed or permitted any registrant or employee to commit any act while the license was expired which would be cause for the suspension or revocation of a license, or grounds for the denial of an application for a license.

(f)

(6) Unlawfully committed assault, battery, or kidnapping, or used force or violence on any person.

(g)

(7) Knowingly violated, or advised, encouraged, or assisted the violation of any court order or injunction in the course of business as a licensee.

(h)

(8) Been convicted of a violation of Section 148 of the Penal Code, resisting or obstructing a public officer.

(i)

(9) Committed any act which is a ground for denial of an application for license under this chapter.

(j)

(10) Committed any act prohibited by Chapter 1.5 (commencing with Section 630) of Title 15 of Part 1 of the Penal Code.

(k)

(11) Committed any act in the course of the licensee’s business constituting dishonesty or fraud, including, but not limited to:

(1)

(A) Knowingly making a false statement relating to evidence or information obtained in the course of employment or while under contract, or knowingly publishing a slander or a libel in the course of business.

(2)

(B) Using illegal means in the collection or attempted collection of a debt or obligation.

(l )

(12) Represented that the licensee has an office and conducts business at a specific address when that is not the case.
(b) This section shall remain in effect only until January 1, 2022, and as of that date is repealed.

SEC. 19.

 Section 7510.1 is added to the Business and Professions Code, to read:

7510.1.
 (a) In addition to any other remedies authorized by this chapter, the director may suspend or revoke a repossession agency license, a qualification certificate, or registration issued under this chapter if the director determines that the licensee or the licensee’s manager, if an individual, or if the licensee is a person other than an individual, that any of its officers, partners, registrants, employees, or its manager, has:
(1) Made any false statement or given any false information in connection with an application for a license, qualification certificate, or registration, or a renewal or reinstatement thereof.
(2) Violated any provisions of this chapter.
(3) Violated any rule of the director adopted pursuant to authority contained in this chapter.
(4) Been convicted of a felony or any crime substantially related to the repossession agency business including illegally using, carrying, or possessing a deadly weapon.
(5) Committed or permitted any registrant or employee to commit any act while the license was expired which would be cause for the suspension or revocation of a license, or grounds for the denial of an application for a license.
(6) Unlawfully committed assault, battery, or kidnapping, or used force or violence on any person.
(7) Knowingly violated, or advised, encouraged, or assisted the violation of any court order or injunction in the course of business as a licensee.
(8) Been convicted of a violation of Section 148 of the Penal Code, resisting or obstructing a public officer.
(9) Committed any act which is a ground for denial of an application for license under this chapter.
(10) Committed any act prohibited by Chapter 1.5 (commencing with Section 630) of Title 15 of Part 1 of the Penal Code.
(11) Committed any act in the course of the licensee’s business constituting dishonesty or fraud, including, but not limited to:
(12) Knowingly making a false statement relating to evidence or information obtained in the course of employment or while under contract, or knowingly publishing a slander or a libel in the course of business.
(13) Using illegal means in the collection or attempted collection of a debt or obligation.
(14) Represented that the licensee has an office and conducts business at a specific address when that is not the case.
(b) This section shall become operative on January 1, 2022.

SEC. 20.

 Section 7510.2 of the Business and Professions Code is amended to read:

7510.2.
 (a) Any licensee, or any officer, partner, registrant, employee, or manager qualified manager, managing member, or manager of a licensee, who is found by the director to have committed any acts prohibited by Section 7510.1, resulting in revocation of a license, shall dispose of any financial interest in any repossession agency required to be licensed by this act within 90 days of the effective date of the revocation, or at a later date, approved in writing by the director, not to exceed 180 days.
(b) No licensee, or any officer, partner, registrant, employee, or manager qualified manager, managing member, or manager of a licensee, who is found by the director to have committed any acts prohibited by Section 7510.1, shall, during the period of suspension or revocation, acquire any financial interest in any repossession agency required to be licensed by this act.
(c) The requirements and prohibitions of this section shall also apply to any immediate family member of a licensee, or officer, partner, registrant, employee, or manager qualified manager, managing member, or manager of a licensee, if the family member actively participated in the management or operation of the repossession agency whose license was revoked.
(d) Any immediate family member of a licensee, or officer, partner, registrant, employee, or manager qualified manager, managing member, or manager of a licensee, not subject to subdivision (c), shall dispose of all financial interest in the repossession agency of the licensee whose license was revoked, within the time period required in subdivision (a).
(e) Any financial interest transferred for the purpose of avoiding the prohibitions of this section shall be deemed a financial interest of the transferor.
(f) As used in this section, “financial interest” includes, but is not limited to, any type of ownership interest, debt, loan, lease, compensation, remuneration, discount, rebate, refund, dividend, distribution, subsidy, or other form of direct or indirect payment, whether in money or otherwise.
(g) As used in this section, “immediate family” includes one’s spouse, children, parents, siblings, and spouses of one’s children or siblings.
(h) This section shall remain in effect only until January 1, 2022, and as of that date is repealed.

SEC. 21.

 Section 7510.2 is added to the Business and Professions Code, to read:

7510.2.
 (a) Any licensee, or any officer, partner, registrant, employee, or manager of a licensee, who is found by the director to have committed any acts prohibited by Section 7510.1, resulting in revocation of a license, shall dispose of any financial interest in any repossession agency required to be licensed by this act within 90 days of the effective date of the revocation, or at a later date, approved in writing by the director, not to exceed 180 days.
(b) No licensee, or any officer, partner, registrant, employee, or manager of a licensee, who is found by the director to have committed any acts prohibited by Section 7510.1, shall, during the period of suspension or revocation, acquire any financial interest in any repossession agency required to be licensed by this act.
(c) The requirements and prohibitions of this section shall also apply to any immediate family member of a licensee, or officer, partner, registrant, employee, or manager of a licensee, if the family member actively participated in the management or operation of the repossession agency whose license was revoked.
(d) Any immediate family member of a licensee, or officer, partner, registrant, employee, or manager of a licensee, not subject to subdivision (c), shall dispose of all financial interest in the repossession agency of the licensee whose license was revoked, within the time period required in subdivision (a).
(e) Any financial interest transferred for the purpose of avoiding the prohibitions of this section shall be deemed a financial interest of the transferor.
(f) As used in this section, “financial interest” includes, but is not limited to, any type of ownership interest, debt, loan, lease, compensation, remuneration, discount, rebate, refund, dividend, distribution, subsidy, or other form of direct or indirect payment, whether in money or otherwise.
(g) As used in this section, “immediate family” includes one’s spouse, children, parents, siblings, and spouses of one’s children or siblings.
(h) This section shall become operative on January 1, 2022.

SEC. 8.SEC. 22.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.