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AB-2759 Collateral recovery.(2019-2020)

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Date Published: 02/20/2020 09:00 PM
AB2759:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 2759


Introduced by Assembly Member Obernolte

February 20, 2020


An act to amend Sections 7500.1, 7503.14, 7504.4, 7506.7, and 7508.2 of the Business and Professions Code, relating to collateral recovery.


LEGISLATIVE COUNSEL'S DIGEST


AB 2759, as introduced, Obernolte. Collateral recovery.
The Collateral Recovery Act, a violation of which is punishable as a misdemeanor, provides for the licensure and regulation of repossession agencies by the Bureau of Security and Investigative Services under the supervision and control of the Director of Consumer Affairs. The act authorizes the director to suspend or revoke a repossession agency license, a qualification certificate, or registration 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 been convicted of a felony or a crime substantially related to the repossession agency business, including illegally using, carrying, or possessing a deadly weapon, which the act defines as 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 5 inches, any razor with an unguarded blade, and any metal pipe or bar used or intended to be used as a club.
This bill would, among other things, redefine “deadly weapon” to mean an instrument or weapon of the kind commonly known as a firearm. The bill also would define “repossession” to mean, among other things, when the repossessor gains control of the collateral.
The act prohibits a repossession agency license that has not been renewed within 3 years after its expiration from being renewed, restored, reinstated, or reissued thereafter.
This bill would instead prohibit a repossession agency license that has not been renewed within 10 years after its expiration from being renewed, restored, reinstated, or reissued thereafter. The bill would require, in the case of a qualified manager of a repossession agency that has died, that the qualified manager’s parents, siblings, children, or grandchildren be allowed to reinstate and retain the old F or repossession agency number by paying the current renewal fee and meeting the requirements of the act.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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.

The following terms as used in this chapter have the meaning expressed in this section:

7500.1.
 As used in this chapter:
(a) “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) “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) “Bureau” means the Bureau of Security and Investigative Services.
(d) “Chief” means the Chief of the Bureau of Security and Investigative Services.
(e) “Collateral” means any specific vehicle, trailer, boat, recreational vehicle, motor home, appliance, or other property that is subject to a security agreement.
(f) “Combustibles” means any substances or articles that are capable of undergoing combustion or catching fire, or that are flammable, if retained.
(g) “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) “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. firearm.
(i) “Debtor” means any person obligated under a security agreement.
(j) “Department” means the Department of Consumer Affairs.
(k) “Director” means the Director of Consumer Affairs.
(l) “Electronic format” includes, but is not limited to, a text message, email, or Internet posting.
(m) “Health hazard” means any personal effects that if retained would produce an unsanitary or unhealthful condition, or which might damage other personal effects.
(n) “Legal owner” means a person holding a security interest in any collateral where if 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. agreement or on an assignment or repossession order as the legal owner.
(o) “Licensee” means an individual, partnership, limited liability company, or corporation licensed under this chapter as a repossession agency.
(p) “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) “Person” includes any individual, partnership, limited liability company, or corporation.
(r) “Personal effects” means any property that is not the property of the legal owner. owner and is not listed on the repossession assignment.
(s) “Private building” means and includes any dwelling, outbuilding, or other enclosed structure. structure that is not locked and secured at the time of entry.
(t) “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) “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) “Registrant” means a person registered under this chapter.
(w) “Repossession” means any of the following:
(1) When the repossessor gains entry to the collateral.
(2) The collateral becomes connected to a tow truck or to a repossessor’s tow vehicle.
(3) The repossessor moves the entire collateral present.
(4) The repossessor gains control of the collateral.

(w)

(x) “Secured area” means and includes any fenced and locked area. area that is not open at the time of entry.

(x)

(y) “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 a 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)

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

(z)

(aa) “Violent act” means any act that results in bodily harm or injury to any party involved. involved during the repossession.

(aa)

(ab) 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.

SEC. 2.

 Section 7503.14 of the Business and Professions Code is amended to read:

7503.14.
 (a) (1) A repossession agency license which is not renewed within three 10 years after its expiration may shall not be renewed, restored, reinstated, or reissued thereafter.

The

(2) The holder of the repossession agency license may obtain a new license only upon compliance with all of the provisions of this chapter relating to the issuance of an original license.
(b) If the qualified manager of a repossession agency has died, the qualified manager’s parents, siblings, children, or grandchildren shall be allowed to reinstate and retain the old F or repossession agency number by paying the current renewal fee and meeting the requirements of this chapter.

SEC. 3.

 Section 7504.4 of the Business and Professions Code is amended to read:

7504.4.
 If an applicant fails to pass an initial examination, he or she the applicant shall not be eligible for any a subsequent examination except upon payment of the reexamination fee for each subsequent examination, accompanied by a completed application for reexamination filed within the time limits and conditions relating to applications for initial examinations provided in Section 7504.3.

SEC. 4.

 Section 7506.7 of the Business and Professions Code is amended to read:

7506.7.
 Employees of a licensee who are engaged exclusively in stenographic, typing, filing, clerical, in-office or out-of-office skip tracing, including driving a camera car, or other office activities are not required to register under this article.

SEC. 5.

 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, 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 area, that is not open at the time of entry, 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.