Request Judicial NoticeCal. Super. - 6th Dist.August 20, 2019Electronically Filed by Superior Court of CA, County of Santa Clara, on 11/8/2019 6:53 PM Reviewed By: M Vu Case #19CV353682 Envelope: 3631835 \OOONGM-bWNh-d HHHp-Ab-Ih-du-v‘h-IH WQQU‘ILWNHO Brian N. Winn (State Bar No. 86779) Laura M. Hoalst (State Bar No. 101082) John E. Gordon (State Bar No. 180053) Jason M. Burrows (State Bar No. 309882) Amit Taneja (State Bar N0. 304559) Grace Gail Cara (State Bar N0. 3 1 5558) Cherrie Y. Tan (State Bar N0. 324871) Winn Law Group, A Professionai Corporation 110 E Wilshire Ave Ste 212, Fullenon CA 92832 Telephone: (714) 446-6686, Fax No.2 (714) 446-6680 File No: I9-07779-0-CDG-DGR- (I 9 1 0~00) Attorneys for Plaintiff SUPERIOR COURT OF CALIFORNIA SANTA CLARA COUNTY, SAN JOSE DISTRICT CAVALRY SPV I, LLC, as assignee of Case No. 19CV353682 CITIBANK, N.A., Limited Civil Case Plaintiff, PLAINTIFF’S REQUEST FOR vs. JUDICIAL NOTICE AND SUPPLEMENTAL REFERENCE LOAN T NGUYEN, et al., MEMORANDUM 0F COMPARISON EXHIBITS FOR LEGISLATIVE Defendant(s). HISTORY OF SB 233 and SB 890 Complaint Filed: 8/20/19 Plaintiffhereby requests the Court take judicial notice ofthe attached documents as legisiative history discussing Senate Bill 233, and Senate Bill 890 (its predecessor), t0 show the purpose of the statute enaction and the deletion of specific Eanguage in Civil Code section 1788.60: “{B) For the purpose ofthis section, the only evidence sufficient t0 establish the amount and nature 0f the debt shall be properly authenticated business records that satisfy the Page I PLAINTIFF'S MEMORANDUM 0F CASE IN SUPPORT 0F REQUEST FOR JUDGMENT OWOONJOUr-QWNH NNNNNNNNNHh-‘h-i-d-nr-dp-AHHH WQOMAMNMOOW‘JQMAUJMH requirements 0f Sections 1271 and 1272 ofthe Evidence Code. The authenticated records shall include {he foliowing itemsz” Exhibit A: SB - 233 Debt buying with Bill‘s History. (Pages 1-7, and page 8) - page 3. Exhibit B: SB - 233 Comparison to Version 04/01“ 3 (pages 1-7) - page 11. Exhibit C: SB - 890 Comparison t0 Version 05/17/1 1(pages 1-7) - page 19. Exhibit D: SB - 890 Compared to Version 02/08/1 1 (page 1-6) ~ page 28. Also attached are documents for anaiyses and history of the enactment Ofthe statute Exhibit E: Bill Analysis (table) - page 35. Exhibit F: Senate Banking and Financial Institutions dated 04/1 5/13 (pages 1-8) - page 37. Exhibit G: Senate Floor Analyses dated 05/ 1 7/1 3 (pages 1-8) - page 46. Exhibit H: Senate Judiciary Committee dated 05/06/ 1 3 (pages 1~1 2) « page 55. Plaintiff highlights page 23 herein for deletion ofthe hearsay requirement referenced. I hereby declare, under penalty of perjury under the laws of the state 0f California: that the attached documents “Compare Versions“ with dates designated, and analysis, are true copies of documents puiled from the website identified as “California Legislative Information”, its address is set forth 0n the bottom of the page. Dated: November 7, 2019 WINN LAW GROUP, APC /fl Brian N. Winn ] Laura M. Hoalsi John E. Gordon . Burrows Grace Gaii Cara [ ] Cherrie Y. Tan Atiorney for Plaintiff Page 2 PLAINTIFF‘S MEMORANDUM 0F CASE iN SUPPORT OF REQUEST FOR JUDGMENT W SB - 233 Debt buying with Bill’s History. (Pagw 1-7, and page 8). Page 3 Plaintifi‘e Mm“.n..,:..... .2- n . ,.. . Page 1 of 6 . .~.. . .umvtluvu *' 1.) X A .A 8a! {.- awning -' LEGISLATIVE INFORMATION Home V Bmmfofmauon ‘E Caflmnla Law 4‘ Publicwons E Other Resources 3‘ My Subscriptkms f My Favoribs $8433 Debt buying. (2013mm r~~MWNWw,UW.~_._.->....-m_.~.m hm ._.v -fi. um“ .-‘ SEC‘naN 1. The Legislature finds and dedars the following: (a) The coilem'on of debt purchased by debt buyers has become a signlfiwnt focus of pubtic concern due to the adequacy of documentation required to be maintained 0y the industry in support of ifs coliecfion activities and Iiu‘gation. (b) State law does no! cunently prescn'be the specific nature of documentation that a debt buyer must maintain and pmduce in a iegat action on the debt, (c) Documenmfian used m support the coflection of a debt must be sufficien: Io prove that the individua! who Isbeing asked to pay the debt ls m fact the individual associated with the on’ginat wntract cr agreement, and thattire amount of indebtedness is accurate. {d} It is important to create dammenration and process standards for the coliection of consumer debt that a}! interested parties an easiiy understand (e) This act is Inst intended to affect the legal enforceabmty, or calmbility, of a chargedwff consumer debt, but_ Is intended {o‘impose enforceable smndarfis upon the Coilecn'on and litigation of consumer debt that has been purchased by a‘debt buyer following the consumer debt’s charge off by a creditor. (f) Setting specific documentation and p/DCESS standam‘s will protect congamersa pmw‘de needed clarity to courts, and establish déamr criteria for debt buyers and the collection industry. SEC. 2. Titie 1.66.5 (commencing with Section 3788.50) is added to Part 4 of Divfsion 3 of the CM} Code, to read: TITLE 1.605. Fair Deb: Buying Pmctr‘ces 1788.50. (a) A5 used in this title: (J) “Debt buyer” means a person or entity that is regufady engaged in the business of purchasing charged-off consumer debt {or coI/ection purposes, whether it cn/fects the debt imam hires a third pamy far cot/em‘on. or hires an anomey‘ar-fiw far collection litigation. “Deb: buyefidoes not mean a person or entity that acquires a charged -o!'f consumer debt incidental to the purchase of a portfolio predominantly consisting of consumer debt mar has not been charged off, (2) ‘tharged-ofi consumer debt” means a consumer debt mat has been removed from a creditor’s books as an asset and treated as a loss or expense, including an Automated Clearing House Item, that has been returned unpaid to a merchant does not commute a pumhase of delmquem consumer debt under this tme, (c) Terms defined r‘n fine 1.6C (commencing with Section 1788) shall apply to this tide. (d) Tm: tide shall apply ta deb: buyers with respect ta all consumer debt sold or resoid on or after January 1, 2014. 1788.52. (a) A debt buyer shall not make any written smtement to a debtor in an attempt to collect a consumer debt unless the debt buyer possesses the following information: i I j (g) This act shall be known, and may be cited, as the Fair Debt Saying Pmctfces Act. i 1 i 4 ! F l i t l l i i (I) That the debt buyer Is the sofa owner of the debt a! issue a: has authority r0 assert the rights cf all owners of the debt. I _....._-..._.. ,__, .o ~-u 4;.71uubflucu (2) The debt balance at charge afi and an explanation of the amofint, nature, and reason for all pasr-charge-offInterest and fees, if any, imposed by Me charye-off creditor 0r any subsequent purchasers of the debt. Thisparagraph shat! not be deemed to require a specific Itemizatlon, but the explanation shail Identify'separately the charge-ofi' balance, the rota! ofany post-chatpevofl‘intwt, and the tote} of any post-cfaaryemfl fees. (3) The date of defauft or the date of the last payment. (4) The name arm an addm of the chargewfi' creditor at the lime of charge off, and the chargewfi creditor’saccount number associated with the debt. The cheme-off creditor‘s name and addrm she” be In suma'ent lbrmso as ta reasonably identfl'y the chargemt.“ creditor. (5) The name and last known address of the debtor as they appeared in the charge-ofl’ creditor’s records prior mthe sale of the debt. If the debt was sold prior to January 1, 2014, the name and Est known address of thedebtor as they appeared In the debt owner’s records on December 3.1, 2013, shall be swficienr. (6) The names and addresses of all persons or entitles that punchased the debt after charge off, including thedebt buyer makr‘ng the written statement. ??ze names and addresses shay be in sufficient form so as toreasonably identify each such purchaser. (b) A debt buyer snail not make any written statement m a debtor in an attempt to collect a consumer debtuniess the debt buyer has access to a copy of a contract or other document evidencing the debmr’s agreement tothe debt Ir the claim is based on debt far wind: no signed contract or agreement exists, me debt buyer shallhave access to a copy of a dawmenr provided to the debwr while the account was acme, demonstrating that thea'ebt was incurred by the demon For a revolving credtt account, me mast recent monthly statement recording apurchase transaction, last payment, or balance transfer shall be deemed suficient to satisfy this requirement. (c) A debt buyer shail provide the Information or documents identified 2n subdivisions (a) and (b) to the dethrwithout charge within 15 calendar dayg of recefpt ofa debtor’s written request for Information regarding the debtor proof of tbey-debt. 1f the debt buyer manor provide the fnfonnation or documents within 15 caiendar days, thedebt buyer sbéffl Cease alt collection of the deb: until the debt buyer provide; the debtor nae information ordocuments deéérlbed in subdivisions (a) and (b). Except as provided otherwise m b‘n’s tithe, the request by thedebtor shelf b‘gi‘consistent with the validation requimments contained in Section 16929 of Titie 15 of the UnitedStates Code. Azjdebz buyer shall provide ell debtors with whom It has contact an active postai address to whichthese requeflsf‘éfin be sent. A debt buyer may eIso provide an active email address to which these requests canbe sent and thrown which information and documents can be delivered, if the parties agree. (d) (1) A debt buyer shat! indude with its firs! written communicatinn with the debtor in no smaller than 12-pointrype, a separate prominent notice that provides: "You may reques: records showing the foliowiny: {1) that {insert name of debt buyer] has the right to seekcollection of the debt; (2) the debt balance, including an explanation of any Interest charges and additionai fees;(3) the date of default or the date of the last payment; (4) the name of the charge~off creditor and me accountnumber assaciated with the debt; (5) the name and last known address of the debtor as It appeared in the charge«off creditor’s or debt buyer’s records prior to the safe of the debt, as appropriate; and {6) the names of altpersoas or entities that ha ve purchased the debt. You may also request from us a copy of the oonaact or otherdocument evidencing your agreement to the debt. “A reauest for these records may be addressed m: {insert debt buyer’s active mailing address and email address,if appficabier " (2) When colfettin’gTjh é’ tiMeébHFIedHebt Where me debt is not past the date for obsolescence provided lbr inSection 605(3) of the federa! Fair Credit Reporting Act (15 U.S. C. Sec. 1681c): “The iaw limizs haw long you can be sued on a debt, Because bf the age of your debt, we w!!! nor sue you for it. Ifyou do not pay the debt, (Insert name ofdebt buyer] may [cantinue to] repel? It to {he credit reporting agenciesas unpaid for as long as the {aw permits dais reporting. ‘ (3) When collecting on a time~barred debt where the debt i5 past the dare {or obsolescence provided far inSection 605(3) of the fedeml Fair Credit Reporting Act (15 U.5.C. Sec. .1581 c): ,. 5/ Page 2 of 6 i 1 i i ~.-aH.wW~._-.Mfl-_w--n_ Ww-. 4-.,< __... Page 3 of6 v _.-.. . .u .- uubtlucu “The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for It, and we wili not Iepon it to any credit reporting agency. " (e) If a Ianguage other than English is prina‘palty used by the debt buyer in the initial oral contact wlm the debtor, the notice mqu/red by subdivision (d) shall be provided to the debtor :‘n that language within five working ‘ days. (f) In the event 9f a conflict between the requiremenm of subdivision (d) and federal !aw, so that it is impracticable to comply wfih both, the requirements of fedemr law shall prevaii. otherwise reduced to writing. 77m debt buyer shall ensure mat a copy of the written agreement ls provided to the debtvr. (b) A deb: buyer that receives paymenl on a debt shalt provide, within 30 calendar days, a receipt or monthly statement, m the debtor. me mipt or statement shall dearfy and wnsptcuously show the amaunt and date - paid, the name of the entity paid, the curler): amount number, the name of the charge-off creditor, the accvunt number issued by the charge-ofi‘ creditor, and the remaining balance owing, JYany‘ The receipt 0r statemeht may be provided elednonlally if rile parties agree. (c) A debt buyer that accepts a payment as payment in full, or as a full and final compromise of the debt, shab' provide, within 3o calendar days, a final statement that complies with subdivision (b). A debt buyer shall not sell an interest in a resolved debt, or any personal or financial imbrmation related to the resolved debt. g 1788.56. A debt buyer shall not bring suit or initiate an arbitration or other legal proceeding to coiled a consumer i debt (I the app/icable statute of limitations on me debt buyer's daim has expired. 5 f I 1788.54. (a) All settiement agreements between § debt buyer and a debtor shall be documented in open coun‘ 0r I 1788.58. In an‘gction brought by a debt buyer an a consumer debt:y ‘ i (a) The complaiézt shall allege all ofmg following.- (1) 7773f the pléihtlff Is a debt buyer. the underlying debt and the consumer transaction or transactions from which it is derived, in a j . (2) The nature ‘ short and plain flatement. ‘ (3) mat the debt buyer is the sole owner of the debt a1 Issue, or has authority to assert the rights o! all owners of the debt. i (4) The c'ebr baiance at charge off and an explanation of the amount, natum, and reason for all" post«charge-off Interest and fees, 2f any, imposed by the charge-ofl’ creditor or any subsequent purchase}: of the debt. T1215 paragraph Sheff not be deemed to require a specific item'aatlon, but the expianation shat! identify separately the charge-off balance, the rota! orany past-cherge'off interest, and the total of any past-charge-off fees.(5) The date of default or the date of the last payment. \ l j (6) me name and an addrass of the chaige-off creditOr at the time of charge off, and the chargemfi creditor's r account number associated with the debt. The charge-ofi‘ creditor's name and address shaf! be in sufficient form so as to reasonabfy identify the charge-off creditor. g (7) The name and last known address of the debtar as they appeared in the charge-offcreaitor’s records pn‘or to the sale of the debt. ll me debt was sold prior to January I, 2014, the delgzgg’s D§Me andJast knewn-address as 1 ilggggqpegcw injhefldemowner‘s {ecards on December 31, 2013, shelf be sufiident. E (8) The names and addresses of a}! persons or entities that purchased the debt after Marge off, including the plaintlff debt buyer, The names and addresses shall be in suffia'em form so as to reasonably Identify each such 3 purchaser; f (9) Thar the debt buyer has complied with Section 1 788.52. (b) A capy of the contract or other dowment dammed in subdivision (b) o! Section 1788.52, shall be attached to the compfalnt. (c) The requirements of this title shall not be deemed to require the disciosure In public records of personat, financial, or media! information, the confidentiality of which is pmteded by any state or federal la w. I “/21 www.i-M «uufl___..v_ .. - uuvAJuuU $788.60. (a) In an action initiated by a debt buyer, no default or otherjudgment may be entered against a debtor unless business records, authenticated thraugb a sworn declaration, are submmed by the debt buyer to the court to establish me facts required m be alleged by paragraphs (3) to (8), incfusive, of subdivision (a) cf Section 1788.58. (b) No default or other judgment may be entered against a debmr unless a copy of me contract or other documem described In subdivision (b) of Section 1788.52, authentimted thmugh a swam declaration, has been submitted by the debt buyer to the court. (c) In any eaion on a consumer debt. if a debt buyer plaintiff seeks a defaultjudgment and has not complied with the mquirements of this title, the court shai/ not enter a default judgment for the plaintiff and may. in Its discretion dismiss the action (d) Except as pmw‘ded in this title, this section is not intended to modify 0r otherwise amend the pmcedures established In Section 585 of the Code o! CM! Pmcedure. 1788.61 (a) In the case of an action bmught by an individual 0r individuals, a deb! buyer that violates any provision of (his title with respect to any person shelf be liable to that person in an amount equal m the sum of the foilewing: (1) Any actual damages sustained by that person a5 a result of the vioiatian, including, but not iImlted to, the amount of any judgment obtained by the debt buyer as a result of a tlme-barred salt to cotter: a debt from that person. (2) Statutory damages in an amount as me court may allow, which shai/ not be less than one hundred o'oflars ($1 00) nor greater than one thousand dollars ($1,000), (b) In the case of a class action, a debt buyer that violates any provision of this title shalt be liable for any statutory damages for aach named plaintifl a5 provided in paragraph (2) of suédiwgon (a). If the wun‘ finds that the debt buyefl engaged In a pattern and practice 0f violating any provision of this title, the court may award additional damfayes ta the dass in an amount not to exceed the lesser af rive hundred thousand dollars ($500,000) or}! percent of the net worth of the debt buyer. _ (6:) (2) 1n me case o! any successful action m enforce liability under this section, the cow? shall award costs or the action, together with reasonable attorney‘s fees as determined by the court. (2) Reasonable attorney‘s fees may be awarded to a prevai/ing debt buyer upon a finding by the court that the plaintiff‘s prosecution of the action was not in good faith. (d) In determining the amount of fiabflhy under subdivision (b), the- courr shall consider, among other mievant fitters, the frequency and persistence of nonwmpfiance by the debt buyer, the nature of the noncompliance, the resources of the debt buyer, and the number ofpersons adversefy afieczed. (e) A debt buyer shall have no civil liability under this section if the debt buyer shows by a preponderance of evidence that the vioiatian was nor Intentional and msukeo’ fmm a bone fide error, and occurred notwithstanding the maintenance of procedures reasonably adopted to avoid any error. (f) An action {o enforce any liability created by this title shall be brought within one year fmm the da te of me last violation, (g) Recovery in an action brought under the Rosenthai Fair Debt Collection Practices Act {Title 1.6C (commencing with Section 1788)) or the fedemf Fair Debi Colieaicn Pracgggg Ag: {:5 g!-.S_.C. Sec.._J692 et Sea.) shali predude recovgry for the same acts In en action bmught undef ih’Efirle. 1786.64. Any waiver of the provisions of this title is cannery to public pollcy, and Is void and unenforceabte.SEC. 3. Section 581.5 is addad to the Code of Civil Procedum, ta mad: 531.5. In a case involving consumer debt, as defined In Section 1768.2 of the CM! Code, and as regufated under Title 1.665 (commencing with Section 1788.50) of Parr 4 of Division 3 o! the Civil Code, If the defendant debtor appears for Ma) on the scheduled trial date, and the piaintiff debt buyer either fails to appear or is not prepared to plowed to trial, and the court does not find a good cause for continuance, the court may, in Its discretion, dismiss the action with or without prejudice‘ Notwithstanding any other law, in this Instance, the court may award the defendant debtors costs of preparing for trial, Inciuding, but nor limited to, lost wages and transportation expenses. Page 4 of4 PageSof( -_-...~u E sec. 4. Section 700.010 or the Coue of crvn Procedure is amended to read: 700.010. (a) At the time of levy pursuant to this arficle or prompkfy thereafier, the levying officer shalt serve a copy of the folfowing on the judgment debtor: (’1) The writ of execution. (2) A notice of tevy. (3) If the judgment debtor is a natural person, a copy of the form “sting exemptions prepared by the Judicie! Councfl pursuant to subdivision (c) of Section 681.030, the fist of exemption amounm pubushed pursuant to subdivision (e) cf Section ?03.150, a copy of the form that the judgment debtor may use to make a claim ot exemptéon pursuant to Section 703520, and a copy of the form the judgment debtcr may use to provide a financiai statement pursuant to Section 703.530. (4) Any affidavit 'of Identity, a5 defines in Section 680.135, for names of me debtor listed on the writ or execution. (b) Service under this section shail be made personauy or by man. S&C. 5. Section 766.103 of the Cede of Civil Procedure «'5 amended to read: (13 The original and one copy of the earnings withholdfng order. i 706503. (a) The levying officer shall serve upon the designated employer ail of the fofiowing: (2) The form for the empioyer‘s return. (3) The notice to employee of earnings withhwding order. (4) A copy of {he form that the judgment debtor may use to make a claim of exemption.(5) A copy of the form the judgment debtor may use to provide a financiaf statement.(b) At the timé {he levying officer makes Service pursuant to subdivision (a), the ievy'mg officer shall provide the employer With»); copy of the employer's instructions referred to 5n Section 706.127‘ The Iudiciai Councii may adopt rules prescribing the circumstances when compliance with this subdévision és not required.(c) No earnings withhoiding order shaii be served upon the employer after the tlme specified in subdivision (b) of Section 699.530 708.1“, Any employer who is served with an earnings wkhholdmg order shaft: (a) Denver to the judgment debtor a copy of the earnings withholding order, the notice to emptoyee of earnings withholdlng, a copy of the form that the judgment debtor may use to make a claim of exemption, and a copy of the form the judgment debtor may use to provide a financiai statement within 10 days from the date of service. If the judgment debtor is no longer employed by the empinyer and the employer dos not owe the employee any earnings! the empioyer is not required to make such delivery. The employer is not subject to any civil H&biflty for fanum to comp)y with {hi5 subdivision. Nothing in this subdivision limits the power of B court to how the employer In Contempt of court for fa‘xwre to camply with this subdivision. (D) Comp‘ete W3 employer's return on the form provided by the levying officer and man it by first~ctass mam“ L postage prepaid. to the ievying offlcecudtfiwksr daysfiom’tfi'e’d‘afifi"service. 1f the earnings withhofding order Is "”"Hflwineffecflve. the employer shall state in the empioyar‘s return that the order win not be compiled with for this reaSOn and shat: return the Order to the ievying officer with me employer's return. I I i i I é SEC. S. Section 706.104 of the Code of Chm Procedure is amended to read:i 1 é § i l l 1 f E .w‘....w_. M. i..¢k_w-k.~_fl._m_._..AWWWW SEC. 7. Section 706,:08 of the Code of CM: Procedure is amended to read; 706.108. {a} If a writ of execution has been tssued to the county where the judgment debtor's empmyer Is to be sewed and the time specified in subdivision (b) of Section 699.530 for ievy on pmperty under me writ has not expired, a judgment creditor may deliver an appfication for issuance of an earnings withholding order to a registered process server who may then issue an earnings withhofding order. (b) If the registered process server has issued the earnings withhoiding order, the registered proce55 server, before serving the earnings withholding nrder, shaltWWW deposit with the levying officer a copy Kg;hnhdnfiphn a- , ». . . that invalidity shall not afied other provisions or applications that can be- given effect wzrhaut the Invalid pmw‘siong or apph’cation. Page 6 of 6 m-v».uvu of the writ of execution, the appfication for issuance of an earnings withholdmg order, and a copy of the earnings withhoiding order. arm shakers? shallpay the fee provided by Section 26750 of the Government Code. l (c) A registered process server may serve an earnings withholding order on an empbyer whether the earnings l withhoiding order was Issued by a levying omoer or by a mattered process server, but no eamfngs withhoiding ' order may be served atter the time specified In subdivision (b) of Season 699.530. In performing this function, the registered process server shalt serve upon the designated empioyer an of the following: {1) The original and one copy of the earnings withholding order. (2) The form f0: the employer‘s return. (3} The notice to the employee of the earnings withholding order. (S) A copy of the form the judgment debtor may use m provide a financial statement. (6) A copy of the employer's instructions referred to in Sedion 706.127, except as otherwise prescribed in rules adopted by the Judicial Council. {d3 Within five court days after service under this section, alt of the following shat! be filed with the levying officer: s! i (4) A copy of the form that the judgmnt debmr may use to make a claim of exemption. l I I, i l l i é {1) The writ of execution, if it Is not already in the hands of the levying officer. i (2) Proof of service on the employer of the papers listed In subdivislon (c). I(3) Instructions in writing, as required by the provisions of Section 687.010. (e) If the fee provided by Secttcm 26750 of the Government Code hos been paid, the levying officer she)! performalt other duties equired by this chapter as If me levying officer had served the earnings withholding order. if the under mg} V _ rder and may termtnate the owe: and may reiease any withheid earnings to the judgmentdemo“ V (f) The fee for servites of a registered process server under this section +s- shall be allowed as a recoverable cost pursuant to Section 1033.5. - .m....-....._......__..m.. .«..........._.._.._ SEC. 8. Section 706.122 of the Code of Civil Procedure is amended to read: 706522.11“: “notice to empiovee of earnings withixolding ower" shall Contain a statement that informs theempioyee in 54mph terms of the nature of a wage garnishment, the right to an exemption. the procedure ferclaiming an exemption, and any other Information the Judicsai Council determines would be usefu! to theempioyee and appropriate for inclusion in the notice, indudlng afl of the fotfowing: (a) The named empioyer has been ordered to withhold from the earnings af the judgment debtor the amountsrequired to be withheid under Section 706.050. or such other amounts as are specmed In the earningswfithhoiding order, and to pay these amounts over tn the levying officer for transmma‘ to the person specified inme order In payment of the judgment described in the order. (b) The manner of computing the amounts required to be withhekd pursua nt to Section 706.050. (c) The judgment degtqméLéfijme mfikeep moreor all of the judgment debtor‘s earnlfib'é-if the 3udgmentdebtor provw the: the additions! eamlngs are necessary for the suppazt of the judgment debtor or the judgmentdebtor‘s family Supported in whom or in part by the judgment debtor. (d) If the judgment debtor wishes a court hearing to prove that amounts shomd not be withheid from the judgment debtor‘s earnings becaUse they are necessary for the support of the judgment debtor or the judgment debtor’s famiry supported in whole or in part by the judgment debtor, the judgment debtor shat! file with thelevying officer an original and one copy of the “judgment debtor's datm of exemption“ and an original and onetcpy 0f the “judgment debtor's financial surement." i SEC. 9. ‘me provisions of this act are severable. II any provision of this sedion or (ls application is held invalid ,9, Page 1 of} fl 8§(/&--fit-tx&;4i” [1' LEGISLATIVE INFORMATIONmun. Home mumfommon Catifomia Law Pubifcalions ; OtherResouroes g My Subscriptions My Favorites 33-233 Debt buying. (2013-2019 07/It/13 ~ Chamered by Secretary of Stake, chapter 6‘. 51am or 2013. U711 1:13 Approvw by me Governor. 0753/13 smoked aha financed in tea} Gokmsr n3 p51, 07101113 l 1n 5983a. amend Ea engiofiifié and enrouing. 07/01/13 Read 2mm ume. Passed. (#fis 72. Noe; o, 5m 2248.) 0mm: to the Same. 06/26/13 Ream semad ume. Mend to «him vowing. 06/15/13 from commiéxee: no pass. (Ayes 10. noes o.) (June 24). 96/36:” 5mm mmminee: Do pass and m-mer m Com. m 8 & F. (Ayes 9. Noe: o.) (June 1S}. Rowena to Com} an 6. a r. M-»-~.g...»~..__-u..-u.__..-.._._...__.A.w-_~.__ 06110113 uremd to Corns. on JUD‘ end s, & r. 05/24/13 in Amman Read 'tam‘ im.m e: pm. {25/2413 Read :mrv nme. mam {Ayes 36. um o. Page mu.) 0mm: com Asempw. ' ' oshw: Readum nnkefmaere'd'm third mam. v ' ‘ ' y ‘ I ' 05115.43 Ordered to second wading, 033nm: ’ neafitinéa um: am: amused. 05/09/13 Read ggéond tune. Omaha lo third reading. 05/02/15 Fro Enmmmee: no pass. (Aye; 6. woes o. Pigs 352.; (May 7; ’04/26/13 Sex (og‘heanny May 7, 0022!” Read second Lime avid amended. ke-mrevres lo Com. on )UD. 04/:6/13 Pram committee: Dc pass as $menaee and reAreier lo Com. on JUD. [Ayes 8. Noe: 0. Page 590.) (April 17).MIOSIJS ' Set for bearing April )7. 061D3113 Ru-veferred lo Cams. on 5, a H. end IUD, Dfilmlw From committee with author's amendmsnt: Reba second {Ime and amended. Re‘rererred w Cont op. ms02/21/13 Reréneu to Com. on ms, aznzna from pnnml Nay be acmd upon on or met March 14. Introduced. Run titsi ume. To Cum. on RLS. far assignment. Yo prim. “uh"n“..‘w-"w._W_MW.~_..._W__M‘_ .._..,......_.. u»... m... __.. _..... r... .. . u.-. - mm SB - 233 Comparison {o Version 04/01/13 (pages 1-7). D1 “5.4.133 ‘ a HOm¢ -_-m .HWWMmfl_-wm hm... ’If" ‘m tn Page 1 of 7 ' (I’I‘Iii‘a'a LEGISLATIVE INFORMATION AK / i aunnfogmgfion § Caniomia Law g Fubfimrions " OtherResowoes E My Subsaiptiom ; My Favorites SB~233 Debt buying. (2013-2014) Compare Vagina; curren: Version: 07/1 1/13 - Chaptered SECTION 1. The Legislature finds and dedares the following: (a) The coflecflon of debt purchased by debt buyers has become a significant focus of pubfic concern due to the adequacy of documentatéon required to be maintained by the industry in support of its collection activities and litigation . (b) State few does not currentiy prescribe the specific nature of documentation that a debt buyer must maintain and produce in a legal action on the debt. (c) Documentation used to support the collection of a debt must be sufficient to prove that the inalwdua) who ts being asked to pay the Gem is In fact the Individual associated with the orsginat contract or agreement. and thatthe amount of indebtedneSS is accurate. (d) It is important to create documentation and process standards for the coliection of consumer debt that al: incemsted parties can easiiy understand. (e) This act is‘hot intended to affect the legal enforceability. or collectabtllty, of a charged-off consumer debt, but is Intended ta impose enforceable standards upon the collection and Ilfigation of consumer debt that has been puzzhased by? debt buyer foiiowing the consumer debt's chaIye ofiby a creditor. (e9 (r) Setting“ specific docu mentation and process standards win protect consumers, provide needed clarity tocourts, and establish clearer criteria for debt buyers and the collectSon éndustry. (g) This ac: shall be known, and may be cited, as the Fair Debt Buying Practices Act, SEC. 2. Titie 1.665 (commencing with Section 1788.50) ls added t0 Part 4 of Diviskon 3 of the CM? Code. t0read: TITL£ 1.60.5. Fair 0912289193 Buying Prach‘cesfie! “5788.50, (a) As used in this title: (9-3 {1)WWW “Debt buyer” means a person or entity that is regularly engaged in thebusiness of purchasmg charged-off consumer ‘ . . .debt fer couection purposes, whether it coilects the debt itsefi hires a third party for collection, or hires ana-ttomey at law for coltection litigation. "Debt buyer does no! mean a persan or entity that acquires a charged--offconsumer deb! incidental to the purchase of s portfolio pmdominantly consisting of consumer debt that has notbeen charged off. fairf2) I amm "Charged-off consumer debt” means a consumer debt that has beenremoved from a atditor’s books as an asset and treated as a loss or expense £65 (b) The acquisition by a check servim company of the right co miiea on a paper or electronic checkinstrument, including an Automated Gearing house item, that has been returned unpaid to a merchant does notconstitute a purchase of delinquent consumer debt under this title. {d9 (c) Terms defined in Title 1.6C (commencing with Semen 1788) shall appfly ho this flue. (d) This title shat! appiy to debt buyers with respect to al} consumer debt sold or msold on or met January 1,2014. W/R“ 0-”. um...» .-W-n.._-.J --. WW -__..__. Page 2 of 7 1783.62. (a) A debt buyer shah not make any written statement to a debtor 5n an attempt to collect a consumerdebt unless the debt buyer possesses the following information: (1) That the debt buyer is the sole owner of the debt at swag issue or has authority to assert the rights of anowners of the debt. (2) The debt baianoe at charge off and an explanation of the amount, nature. and reason for 5:! posvcharge--offWW interest arid fees, if any, imposed by the chargc‘ofi’ creditor or any subsequent purchases cfthe debt This paragraph shall not be deemed to require a specificWWW Itemization, but theexplananon shall identify separately the charge-off balance, the total cf any post-charpe-ofilntmst, and the totalofany post-charge-off fees. (3) The date of default or the date of the last payment. (4) The name and an address of the chame-ofi‘ credltm at the time of charge off, and the chame-ufi creditor'saccount number associated with the debt. The charge-off creditor's name and address shall be In sufficient formso as to reasonably identify Re the d1mye~off creditor. (5) The name and last known address of the debtor as they appeared in the chargemff creditor’s records pdur tothe saie of me debt.We If the debt was said pnor to January I, 2034, the name and last known address ofthe debtor as they appeared in the deb: oWner's records on December 31, 2013, shah be sufficient. (6) The names and addresses of an persons or enu‘ties that pumhased the debt after charge off inclumng theWW debt buyer making the wn’tten statement The names and addresses Mese-pensens-e:m shall be in sufficient form so as to reasonabty Identify them: each such purchaser. (b) A debt buyer shall not make any written statement to a debtor in an attempt to collect a consumer debtunless the debt buyer has access to a copy of a contract or other document evidencing the debtor’s agreement tnthe debt. If the claim is based on debt f0: which no signed contract or agreement exists, the debt buyer shellhave access to é copy of a document provided to the debtor while the account was active, demonstrating that thedebt was incurred by the denier. For a revolving credit account the most recent mommy slamment recording apurchase transaction, last payment or balance transfer shalt be deemed sufficient to satisfy this requirement. (c) A debt buyer shat] pmvide the infomuon or documefits identified in subdivisions (a) and (b) to the debmrwithout charge within 15 calendar days of receipt of a debtor‘s written request for Information regarding the debtor proof of the debt If the debt buyer cannot provide the mformauon or documents within 15 calendar days. thedebt buyer she” cease an conection of the debt untfl the debt buyer provides the debtor the information ordocuments described in subdivisions (a) and (b). Except as nmvided otherwfise in this titte, the request by the(Sebtor shail be consistent with the vaiidation requirements contained 1n Section 16929 of Tine 15 of the UnitedStates Code. A debt buyer shali provide a1: debtors with whom it has contactMW an active pasta! address ammmmw which these requesw can be sent. A debt buyer may also provide an active e-mad email address to which these requests can be sen: and mm through which infomatlon and documents carsbe detivered, if the partia agree. (d) (1) A debt buyer shall include with its first written communication with the debtor in no smaller than 12-pointtype, a separate prominent notice that provides: “You may request records showing the fotlowing: (1) that [insert name of debt buyer] has the right m seekcolieotion of the debt; (2) the debt batanoe, includingWW an explanation cf anyinterest charges and additionaf fees,- (3) the date of defauit or the date of the last payment; (4) the name of thecharge-ofi‘ creditor and me account number associated with the debt; (5) the name and last known addresszefrrthe debtor as it appeared m the~chargemfi credit'd'f’é'“‘6‘F3E3fbi1yer's records prior to the sate of the debt, asappropriate; and (6) the names of alt pmons or entities that have purchased the debt. You may also requestfrom us a copy of the contract or Other document evidencing your agreement to the debt “A request for these records may be addressed ta: {insert debt buyer's active matting 96W address andemail address, if applicable}. ” [2) When coflecting on a time-barred debt where the debt is not past the date for obsolescence provided for inSection 605(a) of the federal Fair Credit Reporting Act (15 U.S.C. Sec. 1681c): - 1-?» M- M..~.~_mew . __ _ I, ......“.. _.......... W--.“ Page 3 of '. “‘Fhe Iaw limits how long you can be sued on a debt. Because of the age of your fiebt, we win not sue you for it. Ifyou do not pay the debt, {insert name of debt buyer) may {continue to] report It to the credit reporting agenciesas ufipaié-s" unpaid for a5 long a5 the law permits this reporting.” (3) When collecting an a tlme-baned debt where the debt is past the date for obsalacence provides for inSection 605(a) of the federal Fair Credit Reporting Act (15 U.S.C. Sec. 1581c}: “The flaw aimlm how long you can be sued on a debt. Because of the age of your debt, we win not sue you for it, and we wm not report it to any credit reporting agency." (e) If a ianguage other than English Is principally used by the debt buyer in me inmat oral contact with thedebtor. Wee- the notice required by subdivision (d) shat! be provided to the debtor in that language withinfive working days. (f) In the event of a conflict between the requiremens of subdivision (d) and fcderai law. so that 1t Es impracticable to comply with both, the requirements of federa! iaw shall prevaii. 1788.64. (a) An settlement agreements between a debt buyer and a debtor shall be documented in open court orotherwise reduced to writtng. The debt buyer shall ensure that a copy of the wrttten agreement is provided to thedebtor. (b) A debt buyer that receives payment on a debt shall provide. within 30 calendar days. a receipt or monthlystatement. to the debtor. The receipt or statement shaté deariy and conspicuously show the amount and datepaid, the name of the entity paid, the current account number, the name of the charge-off creditor, the accountnumber Issued by the charge-off mdit’or, and the remaining baiance owing, if any. The receipt 0r statement maybe provided eiectronlcany if the partiw agree. (c) A debt buier that accepfi a payment as payment in fuil, or as a fuir and final compromise of the debt, shallprovide, within 30 caiendar days. a finai statement that compzies with subdivision (b). A debt buyer shelf not senan Interest in g resolved debt, or any personal or financiai information related to the resented debt. 1788.66. A debt buyer shalt not bang suit or Initiate an arbitraxiorm or other Sega} proceeding to coliect a consumerdeb: if the applicable statute of limitations on the debt buyer’s daim ha; expired. 1783.58. 1n an action brought by a debt buyer on a consumer debt: (a) The complaint shall allege all of the following: (1) That the plaintiff is a dam buyer‘ (2) Tm nature of the underMng debt and the consumer transectinn or transactions from which it $5 derived, in ashort and main statement. (3) That the debt buyer is the sate owner of the debt at issue, or has authority to assen the rlghm of alt owners ofthe debt. (4) The debt balance at charge off and an expianation of the amount, nature, and reason for all aost-chatge-offintemsr and fees, if any, imposed by the chamemfi’ creditor or any subsequentW purchasers of the debt. This paragraph shat: not be deemed to require a specific item‘aatéen-efifiehaw itemlzatian, but the expianauon shall identify separately the chargerfi' balanggfliggfal,ofianygposrgflcbargewif lnteresfwandlhe total of-any-posf‘cflarye-off fees. (5) The date of default o: the date of the {fist payment. (6) The name and an address of the charge~off creditor at the time of charge off, and the charge‘ofi creditor'saccount number associated with the debt. The charge-off creditor‘s name and address shall be in sufficient formso as to reasonabiy idenun ét-r the charge-ofi' cladltor. (7) The name and East known addras of the debtor as they appeared in me charge-off creditor's mews pflor tothe sale of the debt. If the debt was sold prior ta January 1, 2014, the debtor‘s name and inst known address a5they appeared 5n the debt owner's records on December 31, 2013. shall be sufficient. - 5/, w--._-_.-..._~__~..4m..,_~w ”am... hm..." mm» .._.......-4.‘.‘..-_-_.‘. ,7 7... Page4 of 7 (8) The names and addresses of ali persons 0r entities that purchased the debt after charge off, lnctuding theptaintlff debt buyer. The names end addressesWW shat! be in sufficient form so as toreasonably identify them: each Such purchaser. (9) That the debt buyer has complied with Section 1788.52. (b) A copy of the contract or other document described tn subdivision (b) of Seam. 1788.52, she)! be attached tothe compiamt. (c) The requirements of this title shaii not be deemed to require the disclosure in pubilc records of personai.financiai, or medical Jnformatlon, the confidentiafity of‘wmch is protected by any state or federai law. 1788.60. (a) 1n an actioa initiated by a debt buyer, no default or other judgment may be entered against a debtoruniess business records, authenticated through a swam decimation, are Submitted by the debt buyer to the courtto establish the facts required to be atéeged by paragraphs (3) t0 {8), inclusive, of subdivision (a) of Section1788.58. (b) No defaun or other judgment may be entered against a debtor unless a copy of the contract or otherdocument described in subdivision (b) o! Section 1788.52, authenticated through a sworn declaration, has beensubmitted by the debt buyer to the court. (c) In any action on a consumer debt, if a debt buyer plaintffi seeks a default judgment and has not oomplfiad withthe requirements of this title, the court shaft not enter a defauit judgment for the plaintiff and may‘ in Itsdiscretien. dismiss the action. (d) Except as provided in this title. thés section ls not Intended to modify or otherwise amend the proceduresestablished In Section 585 of the Code cf CM: Procedure. 1788.62. (a) Aw In the ass of an action bmwm by an Individual or IndeuaIs, a debt buyer that viofates anyprovision of this title with respect to any person shafl be ttabte to that person In an amount equal to the sum ofthe foliowing: {1) Any actuafldamages sustained by that person as a result of the vioiation, Including, but not zimited to, theamount of anyfjudgment obiained by the debt buyer as a resuit of a time-barred suit to cottect a debt from thatperson. ‘ (2) Statutory damages in an amount as the court may aflow. which shall not be Jess than one hundred doltars($100) nor greater than one thousand dollarsWW ($1,000). (b) 1n the case of a dass acfion, a debt buyer that vioiates any provision of this titfe shall be liable for anystatutory damages for each named plaintiff es provided in paragraph (2) of subdivision (a). If the court finds thatthe debt buyer engaged in a pattern and practice of violating any pmvision of this title, the coun may awardadditionai damages to the ciass in an amount not to exceed the lesser of five hundred thousand dozlars($500,000) or 1 percent of the net worth of the debt buyer. (c) (1) In the case or any successful action to enforce liabmty under this section, the court shall award costs ofthe acUon, together with reasonable attomey’s fees as determined by the court. (2) Reasonabie attorney‘s fees may be awarded to a prevamng debt buyer upon a finding by the court that theplaintiff‘s prosecution of the awon was not in good faith. (d) In determinlng the amount of Habnity under subdivision (b), the court shall consider, among other reiewntfactors, the frequency and persisrence of nnncompnance by the debt buyer, the nature cfwtbflgfgpinfgmpjjanc’ehmeresources of the dehtbuym, and the numberrofmersons adversely affected. (e) A debt buyer shan have no civil iiabllity under this section if the debt buyer shows by a preponderance ofevidence that the violation was not intentional and multed from a bone ride error, and occurred notwithstandingthe maintenance of procedures reasonably adopted to avoid any error. (f) An amen to enforCe any fiabffity created by this title shah be brought within one year from the daie of the iastviolation. (g) Recovery in an action brought under the Rosenthal Fair Debt Ccilectron Practica Act (Title 1.6(2 {commencingwith Section $3883 1?88)) or the federal Fair Debt Cofiection Practices Act (15 U.S.C. Sec. 1692 et ma} seq.)snail preclude recovery for the same acts in an action bmght under this tine. 178m. Any waiver of the provisions of this titre is contrary to public policy, and is void and unenforceabie. ~{I’ .t, - .._ v. .u . r ‘..‘.._.A..‘-.A _.“»,.. .m-.....___-w.Vv...-V.-.A_.-.44m_ _V.;V V.- l ¢~-....-___~.-n...“....._..»W.............~.v.»*...._..4...v.m_w 44 .. ...__... ww- Page 5 of 7 SEC. 3. Section 583.5 is added to the Code of CM! Procedure, to read: 581.5. In a case involving consumer debt, as defined Sn Section 1788.2 of the Civil Code, and a5 regulated unda Ttfle LEGS (commencing wlth Section 1788.50) of Part 4 of Division 3 of the Civfl Code, if the defendant debtorappears for tréa! on the scheduied trim date, and the ptm’ntiff debt buyer either fails to appear or is not preparedto proceed to trial. and the court does not find a good cause for tonflnuance. the court may. in Rs discretion!désméss me action with or without prejudice. Notwithstanding any other Jaw, (n this instance, the court may awardthe defendant debtor’s costs of preparing for mat, Incruding, but not limited to. fost wages and transportationexpenses. SEC. 4. Section 700.0i0 of the Code of Civil Procadure ls amended to read: 700.010. (a) At the time of levy pursuant to thfs article or promptty thereafter. the xevylng officer shall serve a copy of the following on the judgment debtor: (1) The writ of axecutlon. (2) A notice of ?evy. (3) 1f the judgment debtor ls a naturaf person, a ccpy of the form tasting exemptions prepared by the Judiciat Councii pursuant to subdivision (c) of Section 682.030, the fist of exemption amounts published pursuant to subdivision (e) of Section 703.150, a copy o{ the form mat the judgment debtor may use to make a claim ofexemption pursuant to Section 703.520, and a copy of the form the judgment debtor may use to provlde afinancial statement pursuant ta Section 703.530. (4)Any affidavit of identity, as defined 1n Sectéon 680.135, {w names of the debtor listed on the writ ofexecmion. (b) Sewice under this section shal! be made persunaliy or by mail. SEC. 5. Section 706.103 of the Code of Civil Procedure is amended to read: 706403. (a) The ievying officer shat! serve upon the designated employer all of the folfiowing: r 1) The criglnél and one copy of the earnings wizhhofding order. (2) The form for the employer‘s return. (3) The notice to emptoyee of earnings withholding order. (4) A copy of the form that the judgment debtor may use to make a daim of eXemptim. (5) A copy of the form the judgment debtor may use ta pmvide a financial statement (tn) At the time the levying officer makes service pumuant to Subdivision (a), the levying officer shai! provide theemmayer with a copy of the empioyer’s snstructions referred to m Section 706.127. The Judicfai Councif mayadopt rules prescrfbing the circumstances when compliance with this subdivision is not required. (c) No earnings withhoid'mg order shah be served upon the employer after the time specified m subdivision {b} ofSection 699.530. SEC. 6. Section 706.104 of the Code of CM! Procedure is amended to read: 706.104. Any empmye: who is_§§fy¢d with an earnings withhoming order 5haii%vr~-* V (a) Deuver to the judgment debtor a copy of the earnings wtthhoiding order, {he notice to empioyee of earningswtthhofidlng, a ccpy of the form that the judgment debtor may use to make a claim of exemption, and a copy ofthe farm the judgment debtor may use to pmflde a financiai statement within 10 days from the date of service. Ifthe judgment debtor is no longer employed by the employer and the employer does not owe the empioyee anyeamflxgs, the empbyer Ls not required to make such delivery. The employer is not subject to any ch liability forfailure to comply with this subdivision. Naming in this subdivision Simim the power of a court m hold the employerin contempt of court for failure to comply with rials subdivision. (b) Compiete the employer's return on the form provided Dy the levying officer and malt It by first-ctass mad,postage prepaid, to the levying officer within 15 days from the date of service. 1f the earnings withholdlng order is ineffective, the employer shal? state ‘m the employer’s return that the order wilt not be compfied with for thisreason and shall return the onier to the ?evyfing office: with the empioyer‘s return -/(,r M.a--m-.w;w»mw _......._.,~--t_-.._..‘_._.‘...m n... -u _ Li...» _..- l E s Page 6 of 7 8EC. 7. Secuon 706.108 of the Code of Civil Procedure Es amended to read: 706.108. (a) If a writ of execution has been issued to the county where the judgment debtor‘s empmyer is to be served and the time smcified in subdivision (b) of Sectmn 699.530 for levy on property under the writ has not expired, a judgment credItor may deliver an appficatlon for issuance of an earnings withholding order to a registered process server who may then issue an earnings wtthhoiding order. (b) lf the-‘registered process server has Issued the eamlngs withhoiding order, the regmared process server, before serving the earnings withholding order, shall deposit with the levying officer a copy of the writ of exeCution, the application for issuance of an earmngs withholding order, and a copy of the earnings withholding order, and shat! pay the fee previded by Semen 26750 of the Government Code. (c) A registered process server may serve an earnings withboidkng order on an employer whether the earnings withholding order was issued by a levying officer or by a registered process server, but no earnings withholding order may be served after the time specified In subdivislm (b) or Section 699.530. In perfcrming this function. the registered process server shalt serve upon tixe designated employer at! of the following: (1) The origina! and one copy of the earnings withholdlng order. (2) The farm for the employer’s return. (3) The notice to the employee of the earnings wimhoddlng order. {4) A copy of the form that the judgment debtor may use to make a glaim of exempuon. (5) A copy of the form the judgment debtor may use to provide a financial statement. (6) A copy of the employer‘s instructions referred to In Section 706.127, except as otherwise prescribed in rules adopted by the Judiciai Councfi. (d) Within five court days after service under this section, ait of the foiiowing shall be filed with the levying officgr: (:1) The wn‘t of execution, Sf it is not aiready in the hands of the levying officer. (2) Proof of Service on the empioyer of the papers :lsted in subdivision (c). (3) Instructions In writing, as required by the provisions of Section 68?.01G, (e) 1f the fee pmvided by Section 26750 of the Government Code has been paid, the levying officer shall perform afl other duties required by this chapter as if the ievying officer had served the earnings withholding order. 1f the registered process server does not compiy with subdivismns (bx where applscabie, and (d). the Service of the earnings withholdlng order is inefieczive and the levying offiCer is not required to perform any duties under the Order and may terminate the order and may release any withhetd earnings to the judgment debtor, (f) The fee for services of a registered proceSS server under this section shall be aflowed a5 a recoverabte cos: pursuant to Section 1033.5. SEC. 8. Section 706.122 of the Code of Civii Procedure is amended to read: 706.122.The “notice to emptoyee of earnings withhelding erder” sham contain a statement that informs the employee in simple terms of the natwe of a wage garnishment, the right m an exemption‘ me procedure forclaiming an exemption, and any other lnformatioa the Judiciat Councii determines wouid be useful to theemptovee and appropriate for inclusion in the notice, Incfiudlngjnof-the-fouowingr"" M“ (a) The named emphyer has been ordered to wlthhoid from me earnings of the judgment debtor the amounts required to be wfihheid under Section 706,050, or such other amounts as are specified in the earnings withholding order, and to pay these amounts over to the Eevylng officer for transmittar to the person specified m the order in payment of the judgment described in the order‘ (b) The manner of computing the amounts requirea to be withhefd pursuant ta Section 706.050. (c) The judgment debtor may be able to keep more or an of the judgment debtor's earnings if the judgment debtor pmvs that the additional earnings are necessary for the support of the judgment debtor or me judgment debtor’s family supported 'm whole or in part by the judgment debtor. ,17’ Page 7 (d) If the judgment debtor wishes a court hearing to prove that amounts shoved not be withhetd from the judgment debtor’s earnings because they are necessary for the support of the judgment debtor or the judgment debrar’s famiiy supported in whole or in pan by the judgment debtor, the judgment debtor shall file with the {evying officer an originai and one copy of the “judgment debtor's claim of exemption” and en ofiginal and one copy of the “judgment debtor’s financial statement! SEQ 9. The provtsions of this act are sevemble. If any provision of this section or lbs applimtlon is held invalid,that invaiidity shall not affect other pmvésions or appiications that can be given effect without the invalid provisionor appfication. K >0 i of'. Emmi C SB - 890 Comparison to Version 05/1 7/1 I(pages 1-7). Page 1 of 7 If ,2 LEGISLATIVE INFORMATIONk. My Subscriptions Myfiavonm 5 ‘ éHome g ammfmmafion California Law Publications OtherResouroas 55-890 Debt buyers. (mmmz) ,‘fl_-,.._.....___.._..,..w..Mm.“WM _..,,, _.__”._..‘.,¢..,.,.,_._ .A , Mm....~-._..wm... .. WV w-._.uh,_.,,~_,w..! r K i 1 ,4“ V ,. ... w. .Cmnparn Version! Current Vcrflon: 06/27/12 - Amended Assemhtv Comwrw to Vania“:0 880.4. SECTION 1 TheW‘ . ~w“...- mfldwmfiieaflea’ Legislature finds and dedara the tbllawing: (a) The comedian of debt purchased by debt buyers has become a significant focus of public concern due to the g adequacy of documentation required Io be maintained by the industry in support of its collection activities and litigarion. (b) sate law does not currentiy pmscn‘be the specific nature of documentation that a debt buyer must maintain and produce in a legs! action on the debt, nh-L (c) Documentation used to support the coliecfion of a debt must be suflicient ta prove that the individual who is being asked to pay the debt is in fact the individual associated with the ariginai contract or agreement, and that the amount of Indebtedness is accurate. (d) 1t is important to mate documentation and process standards for the collection of consumer debt that a1!interested parties can easily understand. (e) Setting specific dowmentation and process standards wiil protect consumers, provide needed fian‘zy to courts, and establish clearer criteria for debt buyers and the collection indusay.W SEC. 2. Titae 1,6C.5 (commencing with Section 1788.50) ts added to Pan 4 of Diviskon 3 of the CivilCode, to read: TITLE 1-60. 5. Fair Deb! Buyers Practices Act 1785.50. (a) As used m this title, "debt buyefi means a person whe-éWq-eeemmkmfiegm«gaWWag-ddmmfi- o; entity that is regularly engaged in the busmecs of purchasing charged-offconsumer loans, er- consumer credit accounts. or other definquent consumer deewL‘Qe-be-btwi-«wmWW deb! for coitecn‘on purposes, whethe: it callects rhe debt itself, hires athird patty for collection. or hires an aflarneyet-Iaw for collection litigation. (b) “Debt buyer” includes any parent, subsidiary, or other affiliate that exercises direct control over the persw; or entity described in subdivision (a). (c) The acquisition by a check services company of the right ta collect 6n a paper er eiectmnic check instrumenz, 3 inciuding an Automated Clearing House item, that has been returned unpaid to a merghamfluesnot constitute'afi’g' i purchase of delinquent-mnsumermm undfit’hls title. (-9) (d) Terms defined in Titie 1.6C (commencing with Section 1788) shai! apply to this tide. (e) The provisions of this title shall appty to debt buyers with raped ta all debt sold ar resold on or after July 1, 2013. 4989:5i1 E 1788.52. (a) A debt buyer shall not make any written statement to a demo: in an attempt to coitect a consumeraWW debt unless the debt buyerW E2I¥iE?liiIzl5 I q ~.___.A.u_w__._w._. FW_-~..._‘M _‘-._..,4..........__..~..__..-...._..w-..4_ Page 2 of 7 {1,3 That the debt buyer i5 me sole owner of the debt at issue, or has authon'ty to assert the nights of all owners o!(he debt. {2} The debt balance at cha rge off, and an explanation of the amount. nature, and reason for at} post~cherge-offfees and charges, imposed by the charge-ofi creditor or any subsequent purchasers of the debt. Thissubparagrepb Shel! nor be deemed to require a specific gremization cf each charge. (3) The date of defauii or me date of the fast payment. (4} The name and an address of the charge-off creditor at the time of charge ofi, and the chargevof! creditor'saccount number associated with the debz‘ The charge~off creditor's name and address shalt be m sufiicient formso as to reasonab/y identify Ir. (5) The name and last known address of the debtor as they appeared in the chargevoff creditor's records prior tothe safe of the debt. Where the deb! was sold prior to January I, .2013, the name end fast known address as theyappeared in {he debt owner’s records on December 31, 2012, shall be sulfidenr. (6) The names and addresses of all persons or entitifi that purchased the debt alter marge off, including theplaintiff debt buyer. me names and addresses of these persons or entt‘ties shat! be 1n sufficient form sn as toreasonably Identify mem. (1:) A deb: buyer shall not make any written statement to a debtor in an attempt to coIJect a consumer debtunless the debt buyer has access lo a capy ofa contract or other document evidencing the debtor's agreement tothe debt. If me claim is based on debt {Or which no signed tantrac: or agreement exists, the debt buyer shallhave access lo a copy of a dacumen: provided lo the debtor while the account was acme, demonstrating that thedebt was incurred by the debtor. Far a revolving credit amount, the most recent monthfy statement recording apurrhase transaction, last payment, or baIance transfer shall be deemed suffidem ta satisfy this requirement. (c) A debt buyer shat! provide me information or documents identified in subdivismns {a} and (b) to the debtorwithout charge within 15 calendar days of recerI of a debtor's written request for information regarding the debtor proof of {he debt. If the deb: buyer cannot provide {he information or documents within )5 calendar days, thedebt buyer shall cease all collection of me debt until the debt buyer pmvides the debtor the infomation ordocuments described in subdivisions {a} and (b). Except as provided orhenvise in this firie, (he mquesr by thedebtor shall be consr‘stent with the validation requirements contained in Semen 16929 or Title 15 of the UnitzdStates Code. A debt buyer shal! provide ail debtors with whom Ir has contact with an acme postal addreSS and anactive email address to which these requests can be sent. A debt buyer may also provide an active e-mail addressto whéch these requests can be sent and from which information and documents can be delivered, (f the partiesagree. (d) (J) A debt bearer shall include with its first written communication with Che debtor in no smaller than IZ-poin:type, a separate pmmment notice mat provides: “You may mquesl records showing me r’ouowx'ng: (l) mat [insert name of debt bayer] has the right to seekcollection of :he debt; (2) the debt balance, including any additional feesandichargespcsythe date of defauft orrfihe *dste of'the'éa'st’payhie'fif (4) the name ofthe creditor and the account number associated with the debt; (5)the name and last known address of the dearer as it appeared In the Creditors or debt buyer's records prior tothe safe o! the debt, as appropn‘a re; (6) the names of at! persons or entitles that have purchased me debt. Youmay also request from us a copy of the contract or other dawmenr evidencing your agreement to the debt. “A request for these records may be addremed to: {Insert debt buyer's active mailing address]. ” (2) When collecting on a time-barmd debt whom the debt is no: pan the date {or obsolescence provided for inSection 605(a) of the Fair Credit Reporting Act (15 £1.56. Sec. 1681c): /_ > [a -.._.___ ~-m...y..-..._.._ Page 3 of 7 “The law limits how long you can be sued on a debt. Because cf the age of your debt, we wt?! not sue you for It. I!you do not pay the debt, [insert name of debt buyer] may [continue Io] report it ro the credit reporting agencies.35 unpaid. ” (3) When collecting on a time-ban‘ed debt when:- the debt is past the date for obsolescence provided for inSection 605(a) of the Fair Credit Reporting Act (15 U.S.C. Sec. 1681 c): "The law limits how tang you can be sued on a debt] Because of the age of your debt, we will not sue you for it, and we will not report it to any credit reporting agency. “ (e) If a language other than English is principaliy used by the debt buyer in the initial oral connect with thedebtor, 8 notice she!) be provided w the debtor in that language within five working days. (r) In me event of a conflict between the requirements of subdMsion (d) and federal (aw, so that it Isimpracticabie w CompIy with both, the requirements of fedem) law shall prevail. ms“. A (a)W setflement agrtements between a debt buyer and a debtor shall be documented in open court or otherwisereduced to writing The debt buyer shafl ensure that a copy of theWW6mMWWWWWeM-shfl+ written agmement Is provided tothe debmr. (e) (b) We- A debt buyer that receives payment on a debt shaf/ provide, within 30 calendar days, a receiptor monthly statement, to me demon The receipt or statement shall clearly and conspicuousfy show the amountand date paid, the name of the entity paid, the current account number, the name of {he era‘géna! charge-offcmditor W the account number Issued by theWWWWWafiewwwmmwwwmmmfimwmmamw;WM marge--of{ creditor, and the remainmg balance owing, If any. The receipt or statement may beprovided eéectmnicaliy if the parties agree. (Ba (C)WWWWWA debt buyer that accepts a payment aspayment inM full, or as a fufl and final compromise of theWW weed: dent, shall provide, within 30 calendar days, a final sfatemenl that complies with subdivision (b) A debtbuyer shall no: 56!! an interest in a resolved debt, or any personal or financia! Information refated to me resolveddam. 1788.58 A debt buyer shall not bringWaWWWWWMW» 5m? or initiate enarbitration or other legal proceeding to couect a consumer debt if the appucabte statute of [imitatizms on the63W debt buyer’s claim has expired. 1788.58. In an action brought by a debt buyer on a consumer debt: (a) The WWWWWbuyee complaint shal! adage all of the foffowmg: {ha (1) WW That the plaintiff is a debt buyer {+3 [2)WWWWWWfiwWWWWr rrmwmwemmmmwwmaeeeemfi The nature of the underlying deb! and the consumer transaction or transactions from which it is derived,in a short and plain statement. (2-) (3)WW That the debt buyer is the soieW owner o! thedewW WWWMWW debt a! issue, or has authority to assertthe rights of all owners of the debt /,\)-D ' “MM? Page 4 of 7 (4) The debt balance at theme off and an explanation of the amount, nature, and reason for al/ post-charge-offfees and charges, imposed by the chargewff creditor or any Subsequent purchaser of the debt. This paragraphshall not be deemed to require a specific iremization of each charge. {5) The dale of defauit or the date ofme iast payment. (6) The name and an address of the chargeafl creditor at the rime of charge off, and the charge~off creditor’saccaunt number associated with the debt. The charye-off Creditors name and address shall be in suficient formso a5 to reasonably fdantm/ it. (7) The name and last known address cf the debtor as they appeared In the creditor's records prior to the sale ofthe debt. If the debt was sold prior to January 1, 2013, the debtor’s name and fast known address as theyappeared in the debt owner’s records an December 31, 201 2, shall be sufficient. (8) The names and addresses of all persons or entities that purchased the debt after charge ofi: including theplaintiff debt buyer. The names and addresses of these persons or entities shalt be in sufficient fotm so as toreasonably identify them. {9) That the debt buyer has complied with Section 1788.52. (b) The document described in subdivision (b) af Section 1788.52, shall be attached to the complaint. {3%(0) ' - ' - "-' h .. a "‘.‘" ' : '-- ‘: ' " .‘rWW The requirements af this title shall nor be deemed to requirethe disclosure in public recmds of personal financial, or medical information, the privacy of whith is protected byany state or fedem/ [am 178850. (a) 1n an action initiated by a debt . - ' 'mmmmmmmmmmmmMGWWMM+ buyer, no default o: other judgment may be entered against a debtozunlefi business records authenticated through 5- swom declaration, are submitted by the debt buyer to the courttuestablishthem-m z-r .WWW facts required t0 be alleged by paragraphs (3) m (8), Inclusive, of subdwision (a) ofSedion 1 788 58. (-17‘ (b) Av No defiult or ether judgment may be entered against a debtor unless a copy of theWW described in subdivision (b) of Section 1788 52, authenuated through a sworn declaration, has been submittedby the debt buyer to the wurr. (c)WWW In any action on a consumer debt, If a debt buyer plaintiff seeks a defauft judgment endhas not compiied with the requirements of this seefien; tme, the court shall not enter a defamt judgment for theplaintiff andW may, in its discretion, dismiss the aW-erejudiee. action. 1788.62. (a)WWWWWA debt buyer met wwates anyprovision of mks tide with respect to any person 45v shall be liable t0 the that person In an amount equal to thesum of the following: _, ,3 2 - 46‘ ’Dn/“LL- i i l E J I i 5 § i i z _. ZAfiAAl Page 5 of 7 (1) Any actual damage damages sustained by the- that parser: as a result of the violation, inciudlng, but not limited to, me amount of any judgmem obtained by the debt buyer as a resu/t of a timebaned suif to coiled a debt from thar person. {A} (2)WW Statutory damages in an amount as the court may allow, Wk which shall not be éess than five one hundred doilarsWMEWMWWW ($100) nor greater than one thousand dollars ($1,000) per vfofation.€89 (b) 1n the case of a class action,W a debt buyer that violates any pmvz‘sion or this titre shat! beliable {or any statutory damages for each named plaintiff asWWWmeshes- provided in paragraph (2) of subdivision (a) If the cuur: finds that the deb: buyer engaged in apattern end practice of violating any pmvision of (his Utie, the court may ' ~ - - - ' award additional damages to the class :‘n an amount nor to exceed the lesser or five hundred thousand doflars ($500,000} 0r 1 percent of the net worth of the debt buyer. {35 (c) (1) 1n the case of any successful action to enforceWWW Habimy under this section,the court snarl award costs of the action, together with a» reasonabie attorney’s fiee fees as determined by thecourt. {2) Reasanable attamey‘s fees may be awarded to a prevailing debt buyer upon a finding by the court that the plaintiff’s prosecution of the action was nor in good faith. (b) (d) 1n determining the amount of liabilfty undermWefi-SWW subdivislorw (b), the courtshai! consider, among other reievant factors, theMW frequency and persistence of noncompliance by thedebt buyer, me nature of the noncompliance, the resources of the deb! buyer, and the number of personsadversely affected. 66-) (e) A debt buyer shalfimmye-WWW have no civil liabifih) under thissemen if the debt buyer shows by a preponderance of evidence that the vloiation was not ‘mtentional andresulted from a bona fade me- error, and occurred notwithstanding the maintenance of procedures reasonabiyaéapteé adopted to avoaj any 9%??- ermr. {4% (f) An action to enforce any kiabmty created by this tltfe may shall be brought withinWWWve-WWW one year from the last violation. (g) Recovery m an action brought under the Rosentha! Fair Debt Colledian Practices Act {Title L6C (commencingwith Section 1788) or the fedezai Fair Deb: Collection Practices Ac: (15 U.S.C. Sec. 1692 er seq.) snail precluderetovenr for me same acts in an action brought under this title. 1788.64. Any waiver of the provisions o? this title is contrary to public policy, and is void and unenforceabie.SEC. 27 3. Section 581.5 is added to the Code of CM: Procedure, to read: 581.5. In a case tnvolving tonsumer debt, as defined m Section 3788. 2 of the Civii Code, and as regulated underTire 1 6C 5 (commencing with Sectlon 1788. 50) of Pan 4 of Division 3 of the Civil Code. if the defendant debtorappeazs fay trial on the scheduled trial date, and me wainuff debt buyer either fails ta appear or is not preparedto praceed to trial, and the court does not find a good cause for continuance.WWWeebteaw the court may. in its discretion, dismiss the action with or without prejudice, Notwithstanding any otherlaw, in this instance, the court may award the defendant debtor's costs of preparing for mat, induding, but notlimited to, (ost wages and transpormtion expenses. SEC. 31 4. Section 700.010 of the Code of CM! Procedure is amended to read: 700.010- (a) At the time of levy pursuant m this article or pmmptly thereafter, the tevying officer shail serve acopy of the foMoang on the judgment debtor: ,‘994 Page 6 of 7 (1) The writ of execution. (2) A notice of levy. (3) If the judgment debtor Is a natural pemon, a copy or the form Iisting exemptions prepared by the Judiciaf Council pursuant to subdivision (c) of Section 681.030. the fist of exemption amounts published pursuant to subdiviskm (e) of Section 703.150, a copy of the form that the judgment debtor may use t0 make a claim of exemption pursuant to Section 703.620, and a copy of the form the judgment debxor may use to previde a financial statement pursuant m Section 703.530. (4) Any affidavit of identity; as defined in Section 680.135, for namas of the debtor Hsted on the wrll of execution. 5 i 5 E § f é 3 (b) Service under this section she" be made personalfy or by man. SEC. 4v 5. Sealon 706.103 o! the Code cf CM! Pmedure és amended to read: 708.103. {a} The levying officer shalt serve uaen the designated employer ail of the following: {1) The origina? and one copy of the earnings withholding order. i (2} The form for the employer’s return. i (3) The notice to employee of earnings withholding order. (4) A copy of the form mat the judgment debtor mav use to make a claim c! exemption (b) At the Ume the ievying officer makes service pursuant to subdivisian (a), the levying officer shaif provide the empioyer with a copy of the emntoyer’s instructions referred to in Secticn 705‘127. The Juaicia! Council may adopt rules prescribing the clrcumstances when compfinnce with this subdiviswn is not required. {c} No earnings withholding order shall be served upon the employer after the time specified in subdivision (b) of P J f {5) A copy of the form the judgment debtor may use to provide a financia! statement. E I E 5 Secticn 699.530. gSEC. & 6. Section 705.104 of the Code of Civil Procedure is amended to read: 706.104. Any employer who is served with an earnings withholding order shail: (a) Demer to the judgment debtor a copy of the earnings withholding order, the notice to empfoyee of earnings .3 withhoidmg, a copy of the form that the judgment debter may use to make a daim of exemption, and a copy o! i the form the )‘udgment debtor may use to provide a financial statement within 10 days from the date of service. 2f f the judgment debtor is no longer empbyed by the employer and me empwyer (10$ not owe the employee any 5 eammgs, the employer Is not required to make such delivery. The employer Is not subject to any civil iiabmty for P failure to compiy with this subdivision. Nothing in this subdivision limits the power of z: court to hold the employer i in contempt of court for faiiure to compiy with this subdivision. (b) Complete the employer‘s return on the form provided by the Ievying officer and man it by firstvdass mail, postage prepaid, to the ievying officer within 15 days from the date of service. If the earnings wlthhoéding crder 35 ineffective, the employer shall state in the employer’s return that the order wm nor be complied with for this reason and Shaw return the order to the ievying officer with the employer's. return. SEC. 6r. f. Semen 706.108 of the Codercyf Civil Procedure Js amended to read: w» ~ 706.108, (a) 1f a wri: of execution has been issued to the county where the judgment debtor's empioyer ls to be served and the time specified In subdivision (b) of Section 699.530 for ievy on property under the writ has not expired. a éuégmem creditor may deliver an appiicaticn for Issuance of an earnings withholding order to a \ § S 3 i registered process Server who may then ?ssue an earnings withholding order. f 3 5 I 5 z (13} If the registered process server has issued the earnings withholding order, the registered process server, before serving the earnings withholding order, shall deposit with the ievymg officer a copy of the writ of execution, the appkicafion for issuance of an earnings withholding order, and a mpy of the earnings withholdingorder, and shelf pay the fee provided by Sedion 26750 of the Government Code. (c) A registered process server may serve an earnings withholding order on an empioyer whether the earnings wzthholding order was issued by a §evy5ng officer or by a registered process server. but no eaméngs withhaiding Fags 7 of 7 order may be served after the time specified in subdivision (b) of Section 699.530. In performing this function, the registered process server shat! serve upon the designated empioyer ale of the follnwing: (1) The originaf and one copy of the earnings withholding order, (2) The form for the employer‘s return. {3) The notice to the empiayee of the earnings wlmhoiding order. (4) A copy of the form that the judgment debtor may use to make a claim of exemption. (5) A copy of the form the. judgment debtor may use to provide a finance! statement. (6) A copy of me employer's instructions referred to in Section 706.127, except as otherwise prescribed in rules adapted by the Judiciai Council. (d) Wkthin five court days after service under this section, an of the following shafl be med with the ievying officer: (1) The writ of execution, If it is not already In the hands of the levying officer. (2) Proof of service on the employer of the papers listed In Subdivision (c). (3} Instructions in wrmng, as required by the provisions of Section 687.010. (e) If the fee pmvided by Section 26750 of the Government Code has beers paid, the levying officer she]! perform an other duties required by this chapter as if the levying officer had served the earnings withhofdtng Order. If the registered process server does not comply mm subdivisions (b), where appiicame, and {d}, the service of theearnings withholding o’rder Is inefiectiva and the levying officer is not required to perform any duties under theorder and may terminate the order and may reiease any withheid earnings to the judgment debtor. (f) The fee for services of a registered process server under this section snail be allowed as a recoverabze cast pursuant to Section 1033.5‘ SEC. Z. 8. Section ?06.122 of the Code of Civil Procedure is amended to read: 708.122. The “notice to employee of earnings withhoming order“ shall contain a statement that informs the empioyee in simpie terms of the nature of a wage garnishment, the ugh: to an exemption, the procedure for claiming an exemption. and any other information the Judicial Council determines wouki be useful to the employee and appropriate for inclUSion in the notice, including all or the fotlowlng: (a) The named employer has been ordered to withhoid from the earnings of the judgment debtor the amounts required to be wikhheid under Section 706.050, or such other amounts as are specified tn the earnings withholding order, and to pay these amaunts over to the ievymg officer for transmittal to the person specified in the order in payment of the judgment described in the order. (b) The manner o! ccmputing the amounts required to be withheld pursuant to Section 706.050. (c) The judgment debtor may be abie w keep more or all of the judgment debtor‘s earnings K the judgmentdebtor proves that the additional earnings are necessary for the support of the judgment debtor or the judgmentdebmr’s family suppcrted in whole or in part by the judgment debtor. (d) If the judgment debtor wishes a court hearing to prove then amounts shoma not be withheid from the judgment debtor‘s earnings because they are necessary for the support of the jgdgflgnfigflgpr the judgment‘iept9iffijaf'3fliwIJQQEd 3n whole ar in part by the judgment'a'Eb’t‘éffThéfiéfigmem debtor shafi file with the 7 ”levying officer an original and one copy cf the “judgment debtor's claim of exemption” and an originat and one copy of the “judgment debtor‘s financlai statement. " SEC, 9. The pmvisr’ans o! this act are severable. If any provision of this section or its application Is held invalid, that invafidfry shell not afiect other provisions or appllations tbs! can be given effect without the invalid pmvislon or application. -m_.Www. MM SB - 890 Compared to Version 02/18/1 1 (page 1-6). m, m_m...__.‘_.....~_, fl...“ Page I of 6 / LEGISLATEVE INFORMATION ,1 Z 3 Calflomia Law 1 Pubiimflons 5’ OtherResoumes My Subsulpfiom If My Favorites Bill Information $8.890 Debt buyers. (2051-2022) 93’1"" 'M‘MW n .. Currant Version: 05/27/32 - Amended Assembly Compnrcd to VuslomQ SECTION 1. The Legislature finds and declares the following: (a) The coliection o! debt purchased by debt buyers ms become a significant focus of public concert: due to theadequacy of documentation required to be mainmc'ned by the industnx in support of its collection activities andlitigation. (b) State law does not currently presume the specific nature of documentation that a debt bvyer must maintainand produce in a legal action on the debt, ItV: 1 v‘ " ;“ C" ‘ ‘- w “‘rr * “z .Documentationusedtosuppoi‘t the collection of a debt must be sufficient to prove that the Individual who is being asked to pay the debtis in fact the individual associated with the an‘gina/ contract or agreement, and that the amount of indebtedness isEmulate. (d) It is important to create documentation and pmess standards for the collection of censumer debt that allinterested parties can easliy understand. (e) Setting specific documentation and process standards will protect consumers, provide needed clarity tocourts, and establésn clearer criteria for debt buyers and the coliection industry. SEC. 2. Title 1.605 (commencing with Section 13'88‘50) is added ta Part 4 of Division 3 of the Civil Code, toread: 1112.5 1.66.5. FairDebf Buyers Practices Act 1785.50. (a) As used in this title, “debt buyer” means a person or entity that is regulariy engaged in the businessof putthasing charged’olf consumer loans, consumer credit accounts, 0r other definquent consumer debt {orcoliection purposes, whether it collects the debt itself, hires a third parry for collection, or hires an attomey-at-Iawfor collection litigation. (b) “Dem buyer” incfiuo‘es any parent, subsidiary, or other affiliate char exercises direct control over the person orentity described in subdivision (a). (c) The acquisition by a chad: services company of the right to collect on e paper or electronic check instiquengww ,, Including an Automated creating Hqgsgjmm, thathasbeen resumed unpaid m a melthant does not constitute apurchase ofdelinquent consumer debt under this tide. (d) Terms defined in fitle 1.6C (commencing with Section 1788) shall apply to this title. (e) The provisions a! this tide shall apply to debt buyers with respect to all debt said or resold on or after July 1' 2013. 1788.52. (a) A debt bayer shall not make any written statement m a debtor in an attempt to coliect a consumerdebt unless the debt buyer possesses the foilowing Infomatlon: (1) That the debt buyer is the sole owner of the debt at lssae, or has authority to assert the rights of all owners ofthe debt. ._.M“...m.-.-~-.WH_WM‘ Page 2 of 6 (2} The debt balance at charge off, and an explanation of the amount, nawre, and reason for all post~charge~ofi fees and charges, imposed by me charge-aff aeditor or any subsequent purchasm of the debt. This subparagraph shall not be deemed £0 require a specific ltemization of each charge (3) The dam of deéult or the date of the last payment. (4) The name and an address of the charge-oft’ creditor at the time of charge off, and the charge-off creditor? account number associated with the debt. The chargemh‘ credltur's name and address shall be In sufficient form 56 as to reasonably identify it, (5’) The name and last known address of the debtor as they appeared In the charge-ofi creditor’s recards prior to the sale of the debt, Where the debt was said prior ta January 1, 2013, the name and fast known address as they appeared in the debt owner's records on December 31, 2012, shafl be sufficient. (6) The names and addresses of a!) persons or entities that purchased (he debt after charge off, induding the plaintiff debt buyen The names and addresses of these persons or entities shall be in sufi‘icien: (arm so as to reasonably Identifir them. (b) A debt buyer shall not make any written statement :0 a debtor in an attempt to called a consumer debt unless the debt buyer has arzeSS to a copy of a contract or other document evidencing me- debtor’s agreement to the debt. If the claim (s based on debt for which no signed contract or agreement exists, the debt buyer shall have access to a copy of a document pmw‘ded to the debtor while the accomt was active, demcnstratlng that the debt was incurred by the debtor. For a revolving credit account, the most recant mommy statement recording apurchase transaction, last payment, or balance (finsfer she}! be deemed suffia‘ent ta sarixfy this requirement. (c) A debt buyer shah“ provide the information or documents identified In subdivisions (a) and (b) to me debtorwithout charge within 15‘ calendar days of receipt of a debtor's written request fnr information regarding the debtor proof of the debt, If the deb: buyer cannot pmw‘de the informafibn or documents within 15 ca!endar days, thedebt buyer shall cease all coflects‘on af the debt anti! the debt buyer pmvldm the debtor the information ordocuments described in subdivisions (a) and (b). Except as provided otherwise in rm; title, the request by thedebtor shad! be consistent with the validation requimments contained in Section 16929 of Title 15 of the UnitedStates Code. A debt buyer Shel! pmvide a1) debtors with whom tr has contact with an active pasta! address and anactive email 50’de to which these requesrs can be sent. A debt buyer may also provide an active e-mal/ address:0 which these requests can be sent and from which informant; and doeuments can be delivered, if the partiesagree. (d) (I) A debt buyer shall include with ifs first written communicaflon with the debtor in no smaller than 12-pointtype, a separate prominent notice that provides: “You may request records showing the foliowing: (1) mat {insert name of debt buyer} has the right ta seekcollection of the debt; (2) the debt balance, including any additional fees and charges; (3) {he dare of default orthe daze of the last payment; (4) the name of the creditor and the account number associated with the debt; (5} the name and last known address of the debtor as it appeared In the cmditofs or deb! buyer’s records prior tothe sale of the debt, as appmpriate; (6) me names of 3f! persons or entities that have purchased the debt. Youmay afso request (mm us a copy of the contract or other document evidencing your agreement to the debt.“A request for these records may be addressed rc: {mam deb: buyer’s active mailing addreszj. ” {2} When collecting 0n a Ume-baned debt where me debt is not past the date for obsoiscence provided for inSection 605(5) 0f the Fair Credit Reporting Act (15 U.S.C. Sec. 16815): WWW” 7, “The law limits how long you can be sued on a debt. Secause of the age of your debt, we wit! not sue you for It, Iryou do not pay the debt, [insert name of debt buyer} may {continue to] report it to the credit reponfng agenciesas unpaid.” (3) When collecting on a tlme-barred debt where the debt is past the date for obsolescence provided for inSection 605(5) of the Fair Credit Reporting Act (15 U.$‘C. Sec. 1681c): “20/ 4....-.- _..~ Page3 of6 "The law limits how long you mn be sued on a debt. Because of the age of your debt, we will not sue you {or It,and we w!!! nor report It to any o'eo‘it' reporting agency. " " (e) if a language other than English Is pnhcipally used by me deb! buyer in the Initial oral contract with thedebtor, a notice shall be provided ta the debtor In that ianpuage within five working days. (f) In the event of a conflict between the requirements o! subdivision (d) and fedeial raw, so that it is impraaicabie to comply with bath, the mquirements of federai law shell prevail. 17685:. (a) Al! settiement agreements between a debt buyer and a debtor shat! be documented In open court 9rotherwise reduced to writing. The debt buyer shall ensure that a copy of the written agreement 1‘s provided to thedebtor. (b) A debt buyer that mcefves payment (m a debt shaft provide, within 30 calendar days, a receipt or monthiystatement, to the debtor. The receipt or statement shall cleady and conspicuously show the amoun: and datepaid, the name of the entity paid, the current account number, the name of the cbarge-oif aedltor, the accountnumber issued by the charge-off creditor, and the remaining balance owing, If any. 7716 receipt or statement maybe provided electmnicafiy If the parties 59mg (c) A debt buyer that accepts a payment as payment in full, or as a fuli and final compromise of the debt, shallprovide, within 30 catendar days, a fine! statement (hat complies with subdivision {b}. A debt buyer shall not sellan interest In a resotved debt, or any personal or financial information related to the resolved debt. 1788.56. A deb! buyer shall not bring suit or initiate an arbitration or other legal proceeding £0 coliecc a consumerdebt If the appliab/e statute of limitations on the deb: buyer's claim has expired. 1788.68. 1n an action brought by a debt buyer on a consumer debt: (a) The complaint shalt arlege at) of the foflowing: (J) That the plaintiff is a debt buyer. (2) The nature of the underlying debt and the consumer transaction or transactions fmm which i: 2's derived, in ashort and plain statement. (3) mat {he debt buyer is the sole owner of the deb: at issue, or has authority to assen me rights oral! owners ofthe debt. (4} The debt balance a! charge ofi‘ and an explanation of the amount, nature, and reason for air post-charge-offfees and charges, imposed by the charge-ofi credifor or any subsequent purchaser of the debt. This paragraphshat! net be deemed to require a specific Itemizazion of each charge. (5) The date of default or the date of the last payment. (6) The name and an address of the charge-off creditor at the time of change off, and the charge-ofi creditor‘saccount number associated with the debt. The charge-ofl‘ credn‘or's name and address snail be In sufficient form$0 as {a reasonabiy Identify it. (7} The name and last known addrws of the debtor as they appeared in the creditor’s records prior :0 the sale ofthe debt. If (he debt was said pn’ar to January 1, 2013, the debtor's name and last known address as theyappeared m the debt owner’s records on December 31, 2012, snail be sufficient. plaintjfi.denc..buyem .The-nameg-tnd addresses of these persons or entities shall be in suficient form so as toreasona'my Identify them. {8) The names and aa‘dressa of all persons or entities that purchased the debgifgeggharyang.including the (9) That the debt buyer has Complied with Section 1 788.52. (b) The document described in subdivision (b) of Section 1788.52, shall be attached to the complaint (c) The requirements of this title shali not be deemed to require the disclosure in public records of personaf.financiai, or medical Information, the privacy of which is protected by any state or federal law. 1783.60, (a) In an action initiated by a debt buyer, no deéuit or other judgment may be entered against a debtorunfess business records, authenticated through a swam dectaration, are submitted by the deb: buyer (a me court __ §D~ i m.-...__._ m Page 4 of 6 to esaablis!) the facts required to be a:leged by paragraphs (3) to (8) inclusive, of subdivision (a) of Section 1788 58 (b) No daisy): or other judgment may be entered against a debtor unless a copy of the document described in subdivision (b) of Section 1788 52, authenticated through a sworn declaration, has been submitted by the debt buyer ta the court. (c) In any action on a consumer debt, if a debt buyer plaintifi‘seeks a defaultjudgment and has not compiled wim the requirements of this title, the court shaII not enter a default judgment for the plaintiff and may, in its discretion, dismiss the action. 1788.82. (a) A n‘ebr buyer that violates any pmw‘sian of this title with respect to any person shall be Ilable to that person in an amount equal to the sum of the fotiowing: (1) Any actual damages sustained by that person as a resuit of me violation, including, but not limited to, theamount of any judgment obtained by the debt buyer as a result of a time-barred sui: to colfect a debt from thatperson. (2} Statutaiy damages in an amount as the court may allow, which shal! no: be less than one hunwed dollars($IOO) nor greater than one thousand doliars ($1,000) per viabilon. (b) In the case of a class action, a debt buyer that violates any provision of this title shelf be tiable for any statutory damages far each named plaintiff as provided in paragraph (2) of subdfvislon (e). If the court finds thatthe debt buyer engaged in a pattern and practice of violating any provision of this title, the court may awardadditional damages to the ciess m an amount not to exceed the lesser of five hundred thousand dollars($500,000) or 1 percent of the net worth of the debt buyer. (c) (1) In the case of any successful action w enforCe liability under this section, the court shall award costs ofthe action, together with reasonable attorney’s fees as determined by the court. (2) Reasonable attorney’s fees may be awanied to a prevailing debt buyer upon a finding by the coutt that theplaintiff’s prosecution of the action was not in good faith. (d) In determining (fie amount of liabiiz‘ry under subdivision (b), the com shafl consider, among other relevantfactws, (he frequency and pem’stence of noncomph‘ance by the debt buyer, the nature of the noncompliance, theresources of the debt buyer, and the number of persons advemely afi‘ected. (e) A debt buyer shall have no civil #abifl‘ty under this section if the debt buyer shows by a preponderance ofevidence that the violatibn was not Intentional and resulted from a bona fide error, and occurred notwithstandingthe mefntenance of procedures reasonabfy adapted to avoid any error. (f) An action zo enforce any liability created by this titre shall be Draught within one year {mm the last violation. (g) Recovery in an action brought under the Rosenthel Fair Debt Collection Practices Act (Title 1 . 6C (commencingwith Section 1788) or the federal Fair Debt Collection Practices Act (15 U.5,C. Sec. 1692 e: seq) shaf/ precluderecovery for the same acts in an adion brought under this tide. ”85.54. Any waiver of the provisions 9f this title Is centrary to pubiz‘c poiicy, and is vaidand unenforceable.SEC. 3. Section 581.5 is added to the Code of Civil Pmcedum, to read.- 581.5. In a case involving consumer debt, as defined in Section 1788.2 of (he Civii Cade, and as regulated underTitle I 6C. 5 (commencing with Section 1788 56) of Pan 4 of Division 3 of the Civil Code (I the defendant debtor ‘to pmwed to trial and Me court does not find a good cause for conb'nuance, the court may, in Its discretiondismiss the action with or without prejudice Notwithstanding any other law, r‘n this instance. the court may awardthe defendant debtor‘s costs o! preparing for trial, including, but not limited to, lost wages and transponatfionexpenses. SEC. 4. Section ?00.01 0 of the Code of Civil Procedure is amended to read: 700.010. (a) A! me time of Ievy pursuant to this article or promptly thereafter, the levying officer shall serve acopy of the (allowing on the judgment debtor: (1 ) The writ of execution. {2) A notice of levy ‘ iii» _...._-_~....... ?age 5 of C (3) If the judgment debtor is a natural person, a copy of the form Iisting exemptions prepared by the Judiciai Counc/l pursuant to subdivision (c) of Section 681.030, the iist of exemption amounts pubfished pursuant to subdivision (e) of Section 703.150, a copy of the form that the judgment debtor may use to make a claim of exemption pursuant to Section ?03520, and a copy of the form the judgment debtor may use to provide a financial statement pursuant to Section 703.530. {4) Any afiidavit of identity, as defined in Section 680.135, far names of the debtor listed an the writ of execution. (b) Service under this section shal! be made personally or by mail. SEC. 5. Section 706.103 o! the Code of Civil Precedure is amended to read: 706,103. (a) The Ievylng olficer shalt serve upon the designated employer ail of the foilo wing: (1) The myths! and one copy of the earnings withholding ower. (2) The form for the empioyer’s return. (3) The notice to employee of earnings withholding order. {4) A copy of the form that the judgment debtor may use to make a claim of exemption, (5) A copy of the form the judgment debtor may use to prow‘de a financial statement. (b) At the time the levying officer makes service pursuant ta Subdivision (a), the sewing officer shall pmvide theemployer wfm a copy of the emphyer’s instructions referred to in Section 706.127. The Judicial Council mayadopt rates prescribing the circumstances when compilance with this subdivision is not required. (c) No earnings withhofding order shalt be served upon the employer after tree time specified )n subdivision {b} of Section 699.530. SEC. 6. Section 706.104 of {he Code of CM! Protedure is amended to read: 706.104. Any employer who is sewed with an earnings withholding order shall: (a) Deliver to the judgment debtor a copy of the earnings withhoiding order, me notice to employee of earningswithhoiding, a copy of the form that the judgment debtor may use to make a claim of exemption, and a copy ofthe form rhejudgment debtor may use to pmw’de a financial statement within 10 days from the date ofsem'ce. Irthe judgment debtor fs no longer employed by the employer and the empioyer does not owe the employee anyearnin s, the empioyer is not required to make sac): delive/y. The emptoyer is not subject to any civil liability forfa:?ure to comply with this subdivision. Norhing in this subdivision limits the power of a court to bald the empfoyerin cantempt of court for failure to compiy with this subdlvls/on. {b} Complete the employer’s return on the form provided by the levying officer 3nd mail it by flrsr-dass maii,postage prepaid: to the levying officer within 15 days fmm the date of service. if the earnings withhofdlng order isinefl'ective, the employer shai! stare in the empioyer’s return that the order will not be complied with for thisreason and shall return the order to the levying officer with the employer‘s return. SEC. '1‘, Section 706. 208 of the Code of Civil Procedure is amended co read: 706.108. (a) 1f a wn‘r or execution has been issued to the county where the judgment debtor’s employer is to beserved and the time specified in Subdivision {b} of Secflm 699.530 for Ievy on property under the wn‘t has not ,,expired, a judgment creditor may detiver-.aLn--appfication-forissuant‘Efifwan earnings withholding order to a ' regisfered process server who may men issue an earnings withhafdmg order. (0) If the registered pmcess server has issued the earnings Mthholdlng om’er, the registemd process server,before serving (he earnings witlmoiding order, shall deposit with the levying officer a copy of the rm't ofexecution, the appliation for Issuance o! an eamlngs withholding order, and a copy of the earnings withholdingorder, and shall pay the fee provided by Section 26750 of the Government Code. (c) A registered process server may serve an eamings withholding order on an empioyer whether the earningswithholding order was Issued by a levying officer 0r by a registered process server, but no earnings withholdingorder may be served afler the time specified in subdivision (b) of Section 699.530. In performing this function,the registered process server shall serve upon the daignated employer all of the foffowing: (1) The on‘gmal and one copy of the earnings withholding order. -__....».......-.._..~--._..--M--...._-..-...«.- ~wm-_--L..._~AN --...r...._.~,....._. \w 1 HM L Page 6 of 6 (2) The form for me employer’s return, (3) The notice to the employee of the earnings withhoiding order. (4) A copy of the form that the judgment debtor may use to make a claim of exemption. (5) A copy of the farm the judgment debtor may use to provide a financial statement. {6) A copy of the employer’s Instructions referred to in Section 706.12}; except as otherwise presarlbea’ in rules adopted by Me Judia‘al Council. (d) Withln five couit days afier service under this section, all of the following shall 0e flied with the levying officer; (1) The writ of executfan, If I: is nor aiready In the hands of the levying officer. (2) Proof ofsenate on (he employer of the papers listed in subdivision (c), (3) Instructions In writing, as required by the provisions of Settlon 687.01 0, (e) If me fee pmw’ded by Section 26750 of the Government Code has been paid, the levying offimr shall perform aII other duties required by this chapter as 1f the levying officer had served the earnings withholding order. 1f the registemd process server does not comply mm subdivisions (b), where applicable, and (d), the service of the earnings withholding awe! (s Ineffective and the levying officer is not required to perform any duties under the order and may terminate me order and may release any withheld earnings r0 the judgment debtor. (f) The fee for services o! a registered process server under this section shall be allowed as a zecoverabfe cost pursuant to Section 1033.5. SEC. 8. Section 706.122 of me Code of Civil Pmcedure is amended to read: 706.122. The “notice ro employee of eamlngs withhofding order‘ shall contain a statement that informs the employee m simple terms of the nature of a wage garnishment, the right to an exemption the procedure for claiming an exemption, and any other information the Judicial Councft determines would be useful to the employee and appropriate for inclusion In the notice, including all of the foltowmg: (a) The named employer has been ordered m withhold from the earnings of me judgment debtor the amountsrequired go be withheid under Section 706.050, or such other amounts as are specified in the earnings withholding order, and to pay these amounts over Io the levying officer for transmittal (a the person specified in me Older in payment of me judgment described in the order, (b) The manner of computing the amounts required to be withheld pursuant to Section 706050. (c) The judgment debtor may be able to keep more or all of the judgment debtor’s earnings if the judgment debtor proves that the adda‘tiona! earnings are necessary for the support of the judgment debtor or Me judgment debtor's family supported in whoIe or in part by the judgment debror. (d) 1/ the judgment dearer wishes a court hean‘ng to prove that amounis should not be withheld from the judgment debtor’s earnings because they are necessary for the support of the judgment debtor 0r the judgment debtor's family suppolted In whole or in pan by the judgment debtor, the judgrnmt debtor shall file Wm: the ievying officer an original and one copy of the "judgment debtor's claim of exemption" and an original and [me copy of {he “judgment debtor‘s financia! statement. ’ SEC. S. The provisians of this act are severab/e. 1f anyimirsion of this section or its app/ication i5 heiddnvalid,” mar invamty snail no: affea atriam'wsfons' o‘f’appycazwns mat can be given efiecr without the invaiid pro vision or applfca (ion. w»...- ?1/‘ Exhibit E Bil} Analysis (table) Piggy Page l of 1 (1 r&-?&ivzma LEGISLATIVE mFORMATION I Home f Bmmformauon Caflfomia Law 3 Pubiicalions g OtherResouroes i MySubsw‘puons g My Favorites 53-233 Debt buying. (20:3-2014) Amw._-.-___,.-‘.,.._u..~ -_. .._,M.-. _,... . -w..._~. -A/nw..-‘.~w...- n w. . Eghibi; F Senate Banking and Financia} Institutions dated 04/1 5/13 (pages 1-8) Olc-Iuifm. ‘ I SENATE BANKING & FINANCIAL INSTITUTwNS COMMITTEE Senator Lou Correa, Chair 2013-2014 Reguiar Session SB 233 (Leno and Correa) Hearing Date: April 17, 2013 As Amended: Apri! 1, 2013 Fiscal: No Urgency: No SUMMARY Wouki enact the Fair Destuyers Practices Ac}, to farmer regulate theactiw‘ties of persons and entities Mt purchase definquent or charged~off consumerdebt, as specified. DESCRIPTION 1. Woutd define a debt buyer. for purposes of the bis}, as a person or entity that isreguiariy engaged in the business ofpurchasing charged-off consumer loans.consumer creditaccounts, or other delinquent consumer debt for collectionpurposes, whether it coflects the debt itseff, hires a third pany for coflection, orhires an attorney for cofiecfion iitigaflon. 2. Adebt buyer would aiso inciude any parent, subsidiary, or other affiliate thatexercises direct control over a person or entity that meets the definition of a debtbuyer in Number 1‘ immediately above. 3‘ Wowd prohibit a debt buyer from making any written statemeni to a debtor in anattempt to collect a consumer debt, Mess it possesses the fofiowing information: a. That the debt buyer is the sole owner of the debt at issue orotherwise hasauthority to assert the fights of all owners ofthe debt b. Tm debt baiance at charge off and an explanation of the amount nature, andreason for all post-charge off fees and charges imposed by the charge-offcreditor or any subsequent purchasers ofthe debt. c, The date ofdefauit or the date of the iastmpuayment by the debtor. _ d. The name and an address of the charge-off creditor at the time of charge off,and the charge-off creditor's account number associated with the debt e. The name and last known address of the debtor as they appeared in thecharge~off creditor’s records prior to the sale ofthe debt i The names and addresses of aii persons orenfifies that purchased the debtafter charge off. d <0- 10. H. 12. SB 233 (Leno and Correa)‘ Page 2 Wouid prohibit a debt bwer from making any written statemen£ to a debtor in anattempt to coflect a consumer debt. unless it has access to a copy ofthe contractor other document evidencing the debtor’s agreement to the debt Woufd require a debt buyer to include a statement with its first writtencommunication to a debtor, Informing the debtor that he orshe is eiigible to requestall of the Enformation listed in Numbers 3 and 4 above. and wouid require the debtbuyer to provide that information to a debtor. without charge, within 15 caiendar _ 'days of receiving a debtor's wn'tten request for It. Any debt buyer who is unable toprovide the information to a debtor within 15 calendar days must cease ail attemptsto collect the debt, mm that debt buyer is abie to provide the information. Woutd provide that, if a ianguage other than English is principally used by a debtbuyer in its initial ore! contaci with a debtor, the debt buyer must provide thestatement described in Number 5 above to that debtor in that language‘ asspecified. Would require aii setflement agreements between a debt buyer and a debtor to bedocumenied in open court orotherwise reduced to wfiting, and wouid require adebt buyer to ensure that a copy of the written agreement is provided to the debtor. Womd require debt buyers who receive payment on a debtto provide a writtenrecaiptor mommy statement reflecting thai payment (or a final statement reflectingthat payment, if the payment is accepted as payment in fuii or as a finalcompromise ofthe debt) to the debtorwithin 30 calendar days. Would prohibit a debt buyer from bringing suit or initiating an arbitration or otherIegai proceeding to collect a consumer debtif the appficable statute of limitationson the debt buyer‘s claim has expired. Except as necessary to protect confidenfia! personal. financiaf, ormed£caiinfomation, wouid require the commaint in any action brought by a debt buyer on aconsumer debt to ailege the nature ofthe underlying debt and the consumertransaction or transactions from which itis den‘ved. and to inciude at! of theinfomah'on )isted in Number 3 above. along with a smtement that the debt buyercompiied with the provisions ofthe biif described in Numbers 3 through 6 above.Would further require each complaint to contain a ccpy of the contract or otherdocument evidencing the debtor‘s agreement to the debt as an attachment go thecomplaint. L 7 7 777777 fi Wouid provide that no default orother judgment may be entered against a debtor,Mess business records, authenticated through a sworn declaration, are submittedby the debt buyer to the court to establish the information thafi is alleged In thecomplaint, and unless a copy ofthe contract orother document evidencing thedebtor’s agreement to the debt, authenticated through a sworn declaration, hasbeen submitted by the debt buyer to the court. Wouid provide that, if a debt buyer piaintiff seeks a defauit judgment and has notcompiied with the provisions ofthe biii, the court may not enter a defauit judgment SB 233 (Leno and Correa), Page 3 for the ptainn'ff and may. in its discretion, dismiss the action. 13. Would provide for ail ofthe fottowing, to enforce the provisions of this bm: 8. A debt buyer who violates fine prow‘sions ofthe bit! with respect to a person isIiabie to that person for actual damages‘ as specified, pius statutory damagesbetween $100 and $1000 per violation, p£us reasonable attorneys’ fees andcosts, as determined by the court In the case of a class action, a debt buyer who vioiaEs the provisions ofthebi}! with respect to a class is liable for statutory damages of between $100and $1000 per violation for each named plaintiff, pius reasonabfie attomeys’fees and costs, as determined by the com. fr, as part of a class action. a com finds that the debt buyer engaged in apattern and practice of violating the bi", the com may award addifiona!damages to the class in an amount not to exceed the fesser of $500,000 oz"1% ofthe net worth of the debtbuyet Courts are authorized to award reasonabie attomeys' fees and costs to aprevailing debt buyer, upon a finding by the court that the pIaintifi’sprosecution of the action was not in good faith. A debt buyer has no civil liability under the provisions of the bi}! if it shows. bya preponderance of the em’dence, that its violation was not intentional,resufied from a bona fade error. and occurred notwithstanding the ' maintenance of procedures reasonably adopted to avoid any such error. Would require that any action brought to enforce the provisions of the biii bebrought within one year from the date ofthe last afieged violation by the debtbuyer. Wouid provide that recovery in an action brought under the Rosenthal FairDebt Corlection Practices Act or the federal Fair Debt Coflecfion Practices Actpreciudes recovery for the same acts in an action brought under theprovisions ofthis bill. 14. Would prow'de that any waiver of the provisions of this bm :5 contrary to publicpoficy,§}:q is vpid and unenforceabie --- f" 15. Would amend the Code of Civil Procedwe to align the additional informationrequimmenm of this bm with the requirements that levying officers, processsem’cersl and employers must fottow in connection with wage garnishment EXISTING FEDERAL LAW 1. Provides for the Fair Debt Collection Practices Act(FDCPA; 15 USO Section1692), whose stated purposes ate to etiminate abusive practices in the conection SB 233 (Leno and Correa), Page4 of consumer debts, promote fairdebt collection, and provide consumers with anavenue for diSpufing and obtaining vaiidation of debt information En order to ensurethe infomah‘on‘s accuracy. The Act creates guidefines under which debt collectorsmay condom business, defines n'ghts of consumers involved with debtcotlectors,and prescribes penalties and remedies for violations of the Act. Responsibility forenforcing the FDCPA was transferred from the FaderalTrade Commission to thefederat Consumer Financiai Protection Bureau through the DodduFrank Wail StreetReform and Consumer Protection Act. EXISTING STATE LAW 1 . Provides for the Rosentha! Fair Dethotiection Practices Act (Civil Code Section1788 et seq), whose stated purposes are to prohibit debtcoliectors from engagingin unfair or deceptive acts or practices in the collection of consumer debts and torequire debtors to act fairly in entering into and honoring such debts. Tne Actprohibits deceptive. dishonest, unfair and unreasonable debt collection practicesby debt couectors, and reguiates the form and content ofcommunications by debtcoiiectors to debtors and others. COMMENTS 1, Purgose: This bill is intended :0 provide better documentation of afleged debts toconsumers who are contacted by debt coflectors. and to reduce the occurrence ofdebt collection activities directed toward time-barred debt or to the wrong person.or both. 1t does so by establishing clear, enforceabte standards governing thedocumentation required to support the coliection of purchased delinquent orcharged-off debt, particuiady in coflecflon Iifigafion. According tothe author's ofi‘ice, the debt buying industry has become asignificantfocus of pubifc concern, related. in part to the inadequacy of documentationmaintained by the industry in support of Its debt collection activities and litigation.There have been widespread accounts of debt buyer coilection efforts. Enciudingcollection litigation. against the Mong person, or targeting debtthat is fime-barredor has already been paid. Couection efforts have become increasingfymisdirected, as consumer debt is sold and resoid, repeatedfy, without renamedocumemation evidencing its origin. This bill is a response to these concerns. Background: According to the federai Consumer Financial Prigterggggeureau(CEPB),7,derbtrceilecfion is a muifivbiiiion doflar ind‘U’S’W; ”During 2012,approximately 30 million individuals nationwide (14% of American adLHts who havecredit reports) had debt that was subject to the collections process. me averageamount of consumer debt held by these consumers was $1.500. In a rule reéeased by the CFPB in October 2012 (see discussion below)‘ CFPBdescribed the importance of reguiau'ng the consumer debt coflection industry. ftnoted that consumer debt coiiection is important to {he fwucfiom‘ng of the consumercredit markets. By couecting consumer debt, cofiecters reduce creditors' tosses .from non-repayment and help keep credit accessibie and more affordable toconsumers. SB 233 (Leno and Correa), Page 5 However, debt collection performed in mega! ways has the pctenfia! to causeconsumers substantial harm. tf collectors falsely represent amounts owed.consumers may pay debts they do not owe. either to stop collection efforts orbecause they are unsure how much they owe. Consumers may aisounintentionafly yieid their rights, by waiving the statute of fimémtions on debtciaimsforwhich the re£evant Iimitpen‘ods have expired. “Whether or not consumers oweand are liable for the debts consctors are attempting to recover, unlawfu: couectionpractices can cause significant reputaflonal damage, invade persona} privacy, andinflict emotional distress. Among the possible consequences, a cohector'sinappropriate interference with a consumer’s employment relationships can alsoimpairthe consumer's ability to repay debts.” Afihough federa! and state laws already exist to protect consumers from suchharms, severe! interested parties, including the Federal Trade Commission andthis bill’s sponsor, beiieve that existing law is inadequate, and that more needs tobe done to protect consumers. Discussion: a. Relation to SB 890: The pmvisions ofthis bill are substantially similartoprow‘sions ofSB 890 (Leno). a bill that was extensively debated during the2011-12 Legislative Session. and which was ultimatety amended to reflect acompromise between the author. sponsor, debt buyer, and debt conectorindustries. SB 890 ultimatety faiied passage inthe Assembly Banking 8:Finance Committee. due to opposition from the Caiifomia BankersAssociation. SB 233 bums on the compromise reached last year with the debt buyer anddebt coliector industries. Although complete consensus on the bin has not yetbeen reached with the California Bankers Association. the two sides aremuch closer than they were {est year, and have tentativeiy agreed to a newdefinition of“debt buyer." That agreement is summarized below in theAmendments section. b. Recent Federai Action: The Dode-‘rank Wall Street Reform and ConsumerProtection Actgranted CFPB authority to supervise certain nonbank personsfor compliance with federai consunlqrrfinangiaikwjnd for other purposes.r ”MWCFPB has the authority to sup’éfiriée nonbank covered persons of ail sizes inthe residenfiai modgage, private education lending. and payday lendingmarkets. 2t has the authority to supervise nonbank “larger partiCEpants” inmarkets of other consumer financial products or sem‘ces, as the Bureaudefines by ruie. Since SB 898 failed passage on Juiy 2, 2012, the CFPB hastaken two actions rekated to the debt coflecfion industry. 1n October 2012‘ the CFPB published a Fina! Consumer Debt Cofiection Rae,defining iarger participants in the context of consumer debt collection, andgiving CFPB authority to undertake supervisory activities Mth respect to thoseconsumer debtcoliectors. effective January 2, 2013. in its ruie (codified as SB 233 (Leno and Correa), Pages 12 CFR Part 1090.1 05), CFPB defined “consumer debt coiiection,“ “creditor."and “debt conector,” and defined a £arger patticipant in the context ofconsumer debt collection as one whose annual receipts resulting fromconsumer debt coiieczion are more than $10 miifion. Consisteni with its new supem'sory authority over larger consumer debtcoliectors, the CFPB issued a manual of examination procedures in Oczober2012. for use by CFPB emminers in reviewing the activities of thosecollectors. That examination manuat does not impose any new rutes forlarger consume! debt coifectors; instead, itprovides chemists for use byCFPB examiners in evaluating whether larger consumer debt coiiectors arecomplying with existing federal taw in this area. Staffs review of the new federal Mes and examination guidelines did notidentify any conflict with what is being proposed in SB 233. There are,however. differences in this bifl's definition ofa ”debt buyer” and the CFPB’Sdefinition of a “debt collector," which is tikeiy to mean that the new rulesproposed by SB 233 wifl faif on a somewhat different population than miesthat may be promuigated for iarge debtcollectors in the future by the CFPB. 4. Summafl of Amuments in Sggoriz 8. Attorney General Kamata Harris is sponsoring SB 233. "me AttorneyGenerai’s interest in the area stems from industry practices, M11011 arecausing collection efforts to be directed toward the wrong consumer, ortoward the coliection of debt that is fime~barred or has been paid. TheAttorney Generai's concerns are compounded, because a very highpercentage ofdebt coliectéon litigation result in defeat judgments, whereconsumers do not appear to present whatever defenses may be availabie tothem. SB 233 addresses these concerns in a number of ways, but principally byensun‘ng that conection efforts on purchased debzwili be supported byadequate documentation By requiring all payments and agreementsassociated with debtto be reduced to writing, the bifl will ensure that nojudgment is entered on purchased debt that is time barred orthat lacksdocumentary evidence. consumers U“‘°“"3“d"’he Cemef“f°'fiesponsibse Lending write that s'e‘émésm 7777777 7 is sorely needed. “Tens of thowsands of Califomians are contacted everyyear by debt buyers they have never done business with. for debts that maybe 03d or in an amount that doesn’t match the consumer’s memory or recordsThe debt may even be owed by someone else or the resuit of identity theft.Yet some debt buyers have litfle more than a robo~signed affidavit to back uptheir ctaims in court.” SB 233 wit! help consumers and courts determine if theconsumer is, in fact; the person who incurred the debt To ensure fairness inall ciw‘i conections cases. the bill wouid require debtbuyers to show how thedebt was calculated, including the original amount and the nature and type ofpost charge~off fees and charges. This is a protection that does not currently SB 233 (Leno and Correa), Page 7 exist for persons who are sued on a debt. c. The Public Law Center routinely sees cases in which iow-income andformedy middle-class Californians are victims ofunscrupuious debt buyerpractices. u observes that colfection iawsuits have increased by 20%statewide over the past five years. This marked workload increase is comingduring a fiscal crisis, when California cows are closing their doors eafly andcutting staff hours as a resuit of budget strain. When legislation similarto SB233 passed in North Caroh'na, the result was a marked drop in the courts' civilcaseload. 5. Summam of Arguments in Oggosifion: None received. 6. Amegqments: The author, sponsor, debtbuyer. and debtcouector industries haveagreed on a series of targew techm'cai amendments to the April 1“ version of thebin, which wit! be offered by the author in Committee. Tm three most substantivechanges to the bw’s language that are contained in those amendments inciude thehMMm: a. The definition ofa debt buyer wiit now read as fofiows: 1788.50 (a) "As usedin this title, ‘debt buyer means a person orentity that is reguiady engaged inthe business of purchasing charged-off consmner debtfor cofiectionpurposes, whether it coliects the debt itself: hires a third party for couection, orhires an attorney~at4aw for cotlection litigaficn.” The definition ofa debt buyer will no longer include “any parent, subsidiary, orother affifiate that exercises direci contra} over the person or entity describedin subdivision (a)." A definition ofwhat is meant by charged-off debt Wm be added t0 the bin.Language to reflect this definition was not avaitable atthe time thisCommittee analysis was prepared. Stafl understands that this definétionrepresents the final point of contention between the California BankersAssociation and this bifl‘s sponsor. b. Language will be added, which appiies the bifl to debt buyers with respect toai! charged-off consumer debtsoid or resold on or after January 1,2014. c. The wgmsjper molafionzmme deleted from the provision ome’fiin'fié‘iauthcrizes courts to award statutory damages to persons who prevail in anaction against a debtbuyer for a violation of the bill. This has the effect ofawarding statutory damages ofbetween $100 and $100 per action, ratherthan perviolafion. 7‘ Priorand Reiated Legislation: a. SB 890 (Leno), 201 1 42 Legislafive Session: The final version of SB 890 issubstanfiafly simflarto the current \ersion of SB 233. Failed passage in theAssembly Banking & Finance Committee. SB 233 (Leno and Correa), Pages UST OF REGISTERED SUPPORTIOPPOSITION Sgggort Attorney Genera! Kamaia Harris (sponsor)AARP Center for Responsible Lending Consumers Union Public Law Center Ogggyfion None received Consultant Eileen Newhail (916) 651-4102 n! t! Egg);ibit g3 Senate Floor Analyses dated 05/1 7/1 3 (pages 1-8). / Page q 3 SENATE RULES COMMITTEE SB 233Office of Senate Floor Analyses1020 N Street, Suite 524 (916) 651-1520 Fax: (916) 327.4478 THIRD READWG Bil} No: SB 233 Author: Leno (D), ct a}. Amended: 5/15/13 Vote: 21 SENATE BANKING & FINANCIAL INSTITUTIONSCom; 8-0, 4/17/13AYES: Correa, Berryhill, Baal], Calderon, CorbetgHfll, Hueso, RothNO VOTE RECORDED: Walters SENAI g JUDICIARY COMMITTEE: 6-0, 5/7/13AYES: Evans, Anderson, Corbett, Jackson, Leno, ManningNO VOTE RECORDED: Walters SUBJECT: Debt buying SOURCE: Attorney General Kamaia Hams DIGEST: This bin enacts the Fair Debt Buying Practices Act, to further regulatethe activities ofpersons and entities that purchase “chargedmfi‘consumer debt,” asdefined. Senate Floor Amendments ofS/l 521437,,addcoauthersséefmc “charged~offconsumer 'd’efif," and add intent language. ANALYSIS: Existing federal 33w provides for the Fair Debt Coflection PracticesAct (FDCPA), whose stated purposes are to eliminate abusive practices in thecollection of consumer debts, promote fair debt collection, and provide consumerswith an avcnue for disputing and obtaining validation ofdebt mformation in orderto ensure the infonnafion's accuracy. The FDCPA creates guidelines under whichdebt collectors may conduct business, defines rights ofconsumers involved withdebt collectors, and prescnbes penalties and remedies for violations of FDCPA. CONTINUEDfl. SB 233 Page 2 Responsibility for enforcing the FDCPA was transferred fiom the Federal TradeCommission (FTC) to the federal Consumer Financial Protection Bureau throughthe Dodd~Frank Wall Sires: Reform and Consumer Protection Act. Existing state law provides for the Rosenthal Fair Debt Collection Practices Act,whose stated purposes are to prohmit debt coilectors fiom engaging in unfair ordeceptive acts or practices in the collection ofconsumer debts and Io requiredebtors to act fairly in entering into and honoring such debts. The Act prohibitsdeceptive, dishonest, unfair and unreasonable debt collection practices by debtcollectors, and regulates the form and content of communications by debtcoflectors to debtors and others. This bilh 1. Establishes the Fair Debt Buying Practices Act to mgulate the activities ofaperson or entity (debt buyer) that has bought charged-ofi‘ consumer debt forcollection purposes. 2. Defines the following temzs: A: “Debt buyer,” as a person orentity that is regularly engaged in the businessofpurchasing charged-ofi" consumer debt for collection purposes, whetherit collects the debt itself, hires a third party for collection, or hires anattorney for collection litigation. It does not mean a personor entity thatacq uires a charged-off consumer debt incidental tome purchase ofapoflfofio predominantly consisting ofconsumer debt that has not beencharged off. B. “Charged-ofi' consumer dsbt” as a consumer debt that has been removedfrom a creditor’s books as an asset and treated as a loss or expense. Ll) January 1, 2014. 7 4. Prohibits a debt buyer from making any written statement to a debtor in anattempt to collect a consumer debt, unless it possesses the followinginformation: A. That the debt buyer is the sole owner ofthe debt at issue 0r otherwise hasauthority to assert the rights ofall owners of the debt. Hw comm mm Applies the provisions ofthis bill to consumer debtsold or resoid on or‘afierw r ~ SB 233 Page 3 B. The debt baiance at charge ofi’and an explanation ofthe amount, nature,and reason for a1! post-charge ofiinterest and fees, if any, imposed by thecharge~off creditor or any subsequent purchasers ofthe debt. A specificitemization is not required, but the expianafion shall identify sepamtely thecharge-ofl balance, the total ofany post-chargc-ofi'intemst, and the total ofany post~charge~ofifees C. The date ofdefault or the date ofthe last payment by the debtor. D. The name and an address ofthe charge-ofi” creditor at the time ofchargeoff, and the charge~ofi° creditor’s account number associated with the debt. E. The name and last known address ofthe debtoras they appeamd in thecharge-ofi‘ creditor’s records prior to the sale ofthe debt. F. The names and addresses ofal] persons or entities that purchased the debtafier charge off, including the debt buyer making the written statement. S. Prohibits a debt buyer fiom making any written statement to a debtor in anattempt to collect a consumer debt, unless it has access to a copyofthecontract or oiher document evidencing the debtor’s agreement to the debt. 6. Requires a debt buyer to include a statement with its first writtencommunication to a debtorin no smaller than 12-poinI type, a separateprominent notice informing the debtorthat he/she is eligfbie to request all ofthe information fisted in #4 and #5 above, and requires the debt buyer 10provide thaI information to a debtor, without charge, within IS calendar daysafreceiving a debtor’s written request for it Any debt buyer who is unable toprovide the infomafion to a debtor within 15 calendar days must cease allattempts t0 collect the debt, until that debt buyer is able to provide theinformation. buyer in its initial om] contact with a debtor, the debt buyer must provide thestatement described in #6 above to that debtor in that language, as Specified. 8. Requires all settlement agreements between a debt buyer and a debtorto bedocumented in open court or otherwise reduced to writmg, and requires a debtbuyer to ensure thai a copy of the written agcement is provided to the debtor. CONTINUED SB 233 Page 4 9. Requires debt buyers who receive payment on a debt to provide a mittenreceipt or monthly statement reflecting that payment (or a final statementreflecting that payment, if the payment is accepted as payment in full oras afinal compromise ofthe debt) to the debtorwithin 30 calendar days. IO. Prohibits a debt buyer fiom br‘mging suit or Mating an arbitration or otherlegal proceeding to collect a consumer debt if the applicable statute of‘limitations on the debt buyer’s claim has expired. 11. Except as necessary to protect confidential personal, financial, or medicalinfomation, requires the complaint in an action brought by a debt buyer on aconsumer debt to allege the nature of the underlying debt and the consumertransactiona) fiom which i1 is derived, and to include all ofthe informationlisted in #4 above, along with a statmncm that the debt buyer compkd with theprovisicns of the bill described in #4 through #7 above. Requires eachcompiaim to contain a copy ofthe contract or other document evidencing thedebtor'sfyagreement to the debt as an attachment to the complaint. 12. Provides that no default or other judgnent may be entered against a debtor,unlass business records, authenticated through a sworn declaxation, aresubmitted by the debt buyer to the court to establish the information that isafieged in the complaint, and unless a copy ofthe contract or other documentevidencing the debtor’s agreement to the debt, authenticated through a sworndeclaration, has been submitted by the debt buyer to the court. 13. Provides that, if a debt buyer plaintiff seeks a default judgment and has notcomplied with the provisions ofthe bill, the court may not enter a defaultjudgment for the plaintiff and may, in its discretion, dismiss the action. 14. Provides for ail ofthe fellowing, to enforcethe provisions of this bill: A. In the case ofan action brought by an individuaKs), ‘gglelggfllguyggflho__..___‘_~’.viona£eS--ihefimvisions ofthe bili with respééTféijjérsonis fiable to thatperson for actual damages, as specified, plus statutory damages between$100 and $1,000, plus reasonable attomeys’ fees and costs, as determhedby the court. B. In the case ofa class action, a debtbuyer who violates the provisicns ofthebill with reSpect to a class is liable for statutory damages ofbetween $100and $1,000 for each named plaintiff, plus reasonable aflomeys’ fees andcosts, as determined by the com. CONTINUED C. If, as part ofa class action, a court finds that the debt buyer engaged in apattern and practice ofviolating this bill, the court may award additionaldamages to the class in an amount not to excwd the lesser of$500,000 or1% ofthe net worth ofthe debt buyer. D. Courts are authorized to award reasonable anomeys’ fees and costs to aprevailing debt buyer, upon a finding by the court that tha plaintiff’sprosecuxion ofthe action was not in good faith. E. A debt buyer has no civil liability under the provisions ofthe bill if itshows, by a preponderance ofthe evidence, that its violation was notintentional, resulted fiom a bona fide extor, and occurred nonvifllstahdingthe maintenance ofprocedures reasonably adopted to avoid any such error. F. Requires that any action broughtto enforce the provisions ofthe bill bebrought within one year flom the date ofthe last violation by the debtbuyer. G. Provides that recovery in an action brought under the Rosenthal Fair DebtCollection Practices Act or the FDCPA precludes recovery for the sameacts in an action brought under the provisions ofthis bflL 15. Provides that any waiver ofthe provisions ofthis bili is contraryto public:policy, and is void and unenforceabie. 16. Amends the Codeof Civil Procedureto align the additional informationrequirements ofthis bill with the requirements that ievying officers, processservicers, and employers must follow in connection with wage garnishment. 17. States legislative findings, declarations, and intent relating to the coflection andlitigation ofconsumer debt. IW Dmg 201'2, approxhnatery 3o million mdividuass nationwide (14% «Americanadults who have credit reports) had debtthat was subject to the collections process.The average amount ofconsumer debt held by these consumers was $1 ,500. Debt buyers are companies thal purchase delinquent or charged-off debts fi~om acreditor for a fiaction ofthe face value ofthe debt. Those companies have become CONTlNI IPD SB 233 Page 6 subject to increased scruthuy due to numerous complaints on behalf ofconsumers.FTC issued a report in July 2010 examining debt collection litigation andarbitration proceedings that concluded the “system for resolving consumer debtcollection disputes is broken” and recommended significant mforms. (RepairingaBroken System (July 2010)) In a rule released by the federal Consumer Financial Protection Bureau (CFPB)inOctober2012, CFPB dwcnbed the importance ofregulating the consumr debtcollection industry. It noted that commner debt collection. is important to thefunctioning ofthe consumer credit markets By collecting consumer debt,collectors reduce creditors’ losses from non-repayment and help keep creditaccessible and more affordable to consumers. However, debt collection pexfonned in illegal ways has the potential to causeconsumers substantial harm. If collectors falsely represent amounts owed,consumers may pay debts they do not owe, either to stop collectien efi‘ons orbecausethey are unsure howmuch they owe. Cons umers may also unintentionallyyield their rights, by waiving the statute oflimitations on debt claims for which therelevant limit periods have expired. “Whether or not consumers owe and are liablefor the debts collectors are attempting to recovcr, unlawful collection practices cancause sigfificant reputational damage, invade personal privacy, and inflictemotional distress. Among the possibleconsequences, acollector’s inappropriateinterference with a consumer’s employment relationships can also impair theconsumer’s ability to repay debts." Although federal and state laws already exist to protect consmners fiom suchharms, several interested panics, including FTC and this bill’s sponsor, believe thatexisting law is inadequate, and that. more needs to be done to protect consumers. Comments According t0 the anthor’s Officc‘ the dam buying “”3“? has 1360011168 significangmw_ ...‘,.M_focus ofpublic concern, reiatedg~inq>m~g~10vthemequacy ofdoc'mnemafionmaintained by the industry in support ofits debt coflection activities and litigationThere have been widespread accounts ofdebt buyer collection efi‘orts, includingcollection litigation, against the wrong person, or targen'ng debt that is time~banedorhas already been paid. Collection efforts have become increasingly misdirected,as consumer debtis sold and resold, repeatedly, without reliable documentationevidencing its origin. CONTINUEDt“ f SB 233 Page 7 This bill is intended to provide better documentation of alleged debts to consumersWho are contacted by debt coilectors, and to reduce the occurrence ofdebtcollection activities directed toward fime-barmd debt, orto the Wrong person, orboth. It does so by estabfish'nag clear, enforceable standards governing thedocumentation required to support the collection ofpm'chased delinquent orcharged-ofi debt, particularly in collection litigation. FISCALEFFECT: Appropriation: No Fiscal Com: No Local: No SUPPORT: (Vaified 5/9/13) Attorney General Kamala Harris (source) AARP California Sate Council ofthe SEFU Center for Responsible Lending Consumers Union Bast Bay Community Law Center Encore Capital Group Public Law Center omenge County ARGWNTSWSUPPORT: The Attorney General’s interest in the areastems fiom ind ustxy practices, which are causing collection cfi‘orts to be dimmedtoward the wrong consumer, or tomd the collection ofdebt that is time-barred orhas been paid. The Attorney General’s concerns are compounded, because a veryhigh percentage of debt collection litigation rank in default judgments, whereconsumers do not appear to present whatever defenses may be available to them. Consumers Union and the Center for Responsible Lending write that this bill issorely needed. “Tens of thousands ofCalifornians are contacted every year bydebt buyers they havaneyer. .done-busiaess with, for debts that may bebi'd‘b‘fmanamount that docsn’tmatch the consumer’s memory or records. Thedebt may evenbe owed by someone else or the result of identity thefi. Yet, some debt buyershave little more than a robo-sigxed affidavit to back up their claims in court.” Thisbil! will help consumers and courts determine if the consumer is, in fact, the personwho incurred the debt. To ensure fairness in all civil collections cases,this billrequires debt buyers to showhow the debt was calcuiawd, including the originalamount and the nature and type ofpost charge-ofi‘fees and charges. This is aprotection that does not currently exist for persons who are swd on a debt. CONTINUED(x Mka 5/16/13 Senate FloorAnalyses SUPPORT/OPPOSITION: SEE ABOVEmum END mum 32/ Ema Senate Judiciary Committee dated 05/06/1 3 (pages 1-32) Eggs S ' flPrflinfi'fififi RAGvnno-n-J~._~. ... SENATE JUDICIARY COMMITTEE Senator Noreen Evans, Chair 2013-2614 Regular Session SB 233 (Leno and Correa) As Amended Aprii 22, 2013 Hearing Date: May 7, 2013 Fiscal: No Urgency: No BCP UB CT Debt Buyers DESCRXPTION This bill, the Fair Debt Buying Practices Ac}, would regulate the acfivih‘es of a person orentity (ciebt buyer) that has bought chargedflff consumer loans for collection purposes.Specifically, this bill would: G prohibit a debt buyer from making any written statement in an attempt to collect aconsumer debt unless the debt buyer possesses specified information;require the debt buyer to make that information available to the debtor, withoutcharge, upon receipt of a request, within 15 days; require all settlement agreements between a debt buyer and a debtor to bedocumented in open court or otherwise in writing; require a debt buyer who receives a payment on a debt to provide a receipt orstatement containing certain information; prohibit a debt buyer from initiating a suit to collect a debt if the statute ofIimitah'ons on the cause of action has expired; require a debt buyer bringing an action on consumer debt to include certaininformation in his or her complaint; and prohibitan entry of judgment in favor of a plaintiff debt buyer unless businessrecords, authenticated through a sworn ‘deqlgggfigygnimgmg ownership of the----- - ~M~M"derbtrare submitted by the debt bujér to-the court. This bill would provide that a debt buyerwho violates the provisions of this bill is liablefor specified damages, including costs and reasonable attorney’s fees, hut permits adebt buyer to avoid liability for unintentional bona fide errors. This bill would also require a claim of exemption, and related financial statement form,to be provided to a judgment debtor by a levying officer, as specified. 7‘“( (more) SB 233 (Leno and Conea) Page 2 of 12 BACKGROUND Debt buyers are companies that purchase delinquent or charged-off debts from acreditor for a {racfion of the face value of the debt. Those companies have becomesubject to increased scrutiny due to numerous complaints on behalf of consumers. TheFederal Trade Commission (FTC) issued a report in IuIy 2010 examining debt collectionlitigation and arbiu-ation proceedings that concluded tixe ”system for msolvingconsumer debt collection dispu tes is broken" and recommended significant reforms.(Repain'ng a Broken System Only 2010) Federal Trade Commission [as of May 3, 2013} at p. i.) The FTC furthernoted that: The report finds very few consumers defend or otherwise participate in debtcollecfionlitigation. The Commission therefore recommends stam and ioca]governments consider making a variety cf reforms to service of process,pleading, and court rules and practices to increase the ability of consumers todefend or otherwise participate in debt collectionh‘tigation The report also findscomplaints and attachments in debt collection cases often'do not provideadequate informau‘on for consumers to answer complaints or forjudges to ruleon motions for defaultjud gment. The FTC therefore recommends that courtsmore rigorously apply existing rules to require that collectors provide adequateinformation and that jurisdictions consider adopting rules mandating theinformation which must be included in or attached to the compkaint. The reportadditionally finds that state Statutes of limitations on filing actions to recover on I debt are sometimes variable and complex, and generally not understood byconsumers. The Commission suggests that states consider modifying their lawsto make it simpler to determine the applicable statute of limitations, and torequire that collectors provide consumers with important information abouttheir legal rights when collecting debt they know or should know is timebarred.(Id. at p. 2.) Additionally, on October 24, 2012, the federal Consumer Financial Protection Bureau(CFPB) published a rule to allow the agency to federally supervise the larger consumerdebt couectors. The CFPB noted that: Approximately 30 minion Amerigypshayelflon average, $1,500 of debt subjectm-W * “coilection- Debt collect'o'izsfibft‘éh‘ report consumers’ coilection status to the creditbureaus. If they get the Mormau’on wrong, fiu‘s can be the difference betweengetfing approved or denied for such financial products as a mortgage or a carloan. The consumer debt collection market covered by the rule includes three maintypes of debt coflection: first, firms that may buy defaulted debt and collect theproceeds for themselves; second, firms that may collect defaulted debt owned byanother company in return for a fee; and third, there are debt coiiection attorneys f7» SB 233 (Leno and Correa) Page 3 of 12 that collect through litigation. A single company may be involved in any or a1] ofthese activities. By expanding the supervision program to oversee the nonbanksthat are larger participants in the consumer debt collection market, flue Bureauwill now have a window into every stage of the process -- from the origination ofcredit to debt collection. The CFPB'S supervision au thority over these entities will begin when the ruletakes effect on January 2, 2013, Und er the rule, any firm that has more than $10million in annual receipts from consumer debt collecfionactivifies will be subjectto the CFPB’S supervisory authority. This authority will extend to about 17S debtcollectors, which account for over 60 percent of the indushy’s annual receipts inthe consumer debt collection market. (Consmner Financial Protechbn Bureau iooversee debt collectors (Oct. 24, 2012) Consumer Financial Protection Bureau [as ofMay 1, 20] 3].) 1n furlher response to the above issues, this bill, sponsored by Attorney General KamalaHarris, seeks to make numerous changes relating t0 debt buyers, including prohibitinga debt buyer from making a written statement to collect a consumer debt withoutpossessing specific information, requiring a Complaint in an action to collect on aconsumer debt to include specific allegations, and prohibiting a debt buyer frombringing suit if the appiicabie statute of limitations has expired. This biII was approved by the Senate Committee on Banking Sr Financial msfitufions onApril 17, 2013, by a vote of 8-0, and is similarto SB 890 (Leno, 201] ), which wasapproved by this Commi ttee but failed passage in the Assembly Committee on Banking& Finance, CHANGES TO EXISTING LAW 1. Existing fed era! law generaliy regulates the collection of debt through, among otherthings, the Fair Debt Collection Practices Act, Fair Credit Reporting Act, and theGramm~Leach~Blfley Act Existing state law, the Rosenthal Fair Debt Collection Practices Act, generallyprohibits deceptive, dishonest, unfair, and unreasonabk debt collectionpractices by” . r,debt collectors; mxd’regulaté’s’thé'férm and content of commumcations by coliectorst0 debtors and others. (Civ. Code Sec. 1788 et seq.) This bifl would establish the Fair Debt Buying Practices Act and prohibit a debtbuyer from making any written statement to a debtor in an attempt to collectaconsumer debt unless the debt buyer possesses the following information: o the debt buyer is the sole owner of the debt or has authority to assert the rights ofall owners of the debt; 3~\ Q SB 233 (Leno and Correa) Page 4 0f 12 e the deb: balance at charge off and an explanation for all post-charge-off interestrakes and fees, if any, imposed by charge~off creditor or any subsequ entpurchasers of the debt; g the date of default or date of the last payment; a the name and address of the chargeooff creditor at the time 0f charge off, and thechargewoff creditor’s account number associated with the debt;o the name and last known address of the debtor as they appeared in the chargevoff creditor’s records prior to the sale of the debt; andthe names and addresses of all persons or entities that purchased the debt aftercharge ofl, including the debt buyer making the written statement; This biil would pmhibita debf buyer from making any written statement to a debtorin an attempt to collect a consumer debt unless the debtbuyer has access to a coPyof the centract or other document evidencing the debtox’s agreement to the debt Ifthe claim is based on debt for which no signed contract or agreement exists, the debtbuyer shall have access t0 a copy of a documentprovided to the debtor while theaccount was active, demonstrating that the debt was incurred by the debtor. This bill would require a debt buyer to provide the information or documentsidentified above to the debtor without charge within 15 calendar days of receipt of adebtor’s wn'tten request for information regarding the debt or proof of debL 1f thedebt buyer cannot provide the informafion or documents within 15 calendar days,the debt buyer shall cease all coilecfion of the debt until the debt buyer provides theinformation or documents. A debt buyer must provide an active postal address towhich these requests can be sent, and may provide an active email address to whichthese requests can be sent and through which informatiOn and documents can bedelivered. This bin would require a debt buyer to include a prominent statutory notice with itsfirst written commurfication with the debtor that is in no smaller than 12-point type,as specified. This bill would provide that when a debt buyer attempts to collect on a time~barreddebi where the debt is not past the date for obsolescence, the buyer must provide thefoflowing notice: "The law limits how long you can be sued on a debt. Because ofthe age of your debt, we will not sue you for it. 1f you dq,ppt,p,ay,rthe debt, {insertname ofrdebt buye'rj’rifi}? [continue to} report it to the credit reporting agencies asunpaid for as long as the law permits this reporting.” 1f the debtis both time-barredand past the date for obsolescence,tbe debtor shall provide the following notice:”The law limits how long you can be sued on a debt. Because ofthe age of yourdebt, we will not sue you for it, and we win not reportit to any credit reportingagency SB 233 (Leno and Cornea) Page S of I2 This bill would sate that if a language other than English 1's principaliy used by the debt buyer in the initial om! contact with the debtor, the above-required notices shallbe provided to the debtor in that language within five working days. This bill would require all settlement agreements between a debt buyer and a debtorto be documented in open court or otherwise reduced to writing, and, the debtbuyer shall ensure that a copy of the Written agreement is provided to the debtor- This bill would require a debt buyer that receives payment on a debt to provide,within 30 calendar days, a remipt or monthly statement to the debtor, as specified.A debt buyer that accepts a payment as payment in full, or as a full and finalcompromise of the debt, shall provide, within 30 calendar days, a final statement tothe debtor. A debt buyer shaIE not sell an interest in a resolved debt or any personalor financiai information related to the resolved debt. This bill would prohibit a debt buyer from bringing suit or initiating an arbitrationor other legal proceeding to collect a consumer debtif the applicable statute oflimitations on the debt buyer's daim has expired. This bill would provide that in an action brought by a debt buyer 0n a consumerdebt, the complaint shall allege a3} of the following:e» that the plaintiff is a debt buyer; e the nature of the underlying debt and the consumer transaction or tansactionsfrom which it is derived, in a short and plain statement;e that the debt buyer is the sole owner of the debt at issue, orhas aufiwority toassert the rights of all owners 0f the debt; c the debt balance at charge off and an explanation of the amount, nature, andreason for all post-charge-off interest and fees, as specified;e the date of default or date of the East payment;the name and an address of the charge-off creditor at the time of charge off, andthe charge~off creditor’s account number associated with the debt;fi‘ne names and addresses o! all persons 0r entities that purchased the debt aftercharge off; and that the debtbuyer has complied with sp ecified requirements 0f this bill. Q, This bill wouid require a copy of the contactgjgiher documentrthait evidences the «MM ”debtor’s 'a'g'i‘éément t0 the debt to be attached to the complaint. This bi}! would provide that the above requirements shall not be deemed to requirethe disclosure in public records of personal. financial, or medical information, theconfidentiality of which is protected by any state or federal law. This bill would provide that in an action initiated by a debt buyer, no default orother judgment may be entered against a debtor unless business records, W195» SB 233 (Leno and Correa) Page 6 of l2 authenticated through a sworn declaration, are submitted by the debt buyer to thecourt to establish specified facts required to be alleged in the complaint. This bill would pxohibita default or other judgmentfrom being entered against adebtor unless a copy of the contract 0r other document, as specified, authenficatedthrough a sworn declaraticn, has been submitted by the debt buyer to the court This bill would provide that in any action on a consumer debt, if a debt buyerplaintiff seeks a defaultjudgment and has not complied with the aboverequiremenw, the court shall not enter a defaultjudgment for the plaintiff and may,in its discrefion, dismiss the action. This bill would provide that in the case of an action brought by an individual orindividuals, a debt buyer that violates any provision above with respect t0 anyperson shall be liable to that person in an amount equal t0 a sum of: (1) actualdamages; and (2) statutory damages, which shall not be less than $100 nor greaterthan $1,000. This bill would provide that, 'm the case 0f a class action, a debt buyer that violatesany of the above provisions shall be liable for statutory damages for each plaintiff,and, if the court finds that the debt buyer engages in a pattern and practice ofviolating any provision of this bill, the court may award ad difional damages to theclass in an amount not to exceed flue lesser of $500,000 or one percent of tile networth of the debt buyer. This bill would provide that, in the case of any successful action to enforce iiabfiityunder this bili, the court shallaward the costs of the action, together with reasonableattorney’s fees as determined by the ceurt. This biH would allow reasonable attorney’s fees to be awarded to a prevailing debtbuyer upon a finding by the cour’: that the plaintiff’s prosecution of the action wasnot in good faith. This bill would also provide that a debt buyer shaH hHVe no civilliability if the debt buyer shows by a preponderance of evidence that the vioiationwas not intentional and resulted from a bona fide error, and occurrednotwithstanding the maintenance of procadures reasonably adopted to avoid anyerror. V 413115 bin would require an actiOn to enforce any liability created by this bill to bebrought within one year from the date of the last violation This bin wouid fixrtherstate that recovery in an action brought under the Rosenthai Fair Debt CollectionPracfices Act shall preclude recovery for the same acts in an action brought underthis bill. This bill would further provide that in a case involving consumer debt, as regulatedby this bill, if the defendant debtor appears for tn'al on the scheduled trial date, and ,4 f)» SB 233 (Leno and Correa} Page 7 of 12 the. plaintiff debt buyer either fails to appear or is not prepared to proceed to triad,and the court does n01 find a good cause for continuance, the court may, 'm itsdiscretion, dismiss the action with or Without prejudice. The court may also awardthe defendant debtor’s costs of preparing for trial, including, butnot limited to, lostwages and transportation expenses. This bill would additionally define ”debt buyer,” apply the above provisions toconsumer debt sold or resold on or after January 1, 2014, and make related findingsand declarations. 2. Exisu'ng law establishes a process for the enforcement ofmoney judgments andrequires a levying officer to provide cermin documents and information to ajudgment debtor and to a designated empioyer in connection with wagegarnishment. Existing law permits a process server also to serve an earningswithhoiding order on an employer and requires that the process server also servecertain documents at this time. Existing law requires an employer who is servedwith an eamings withlmlding order to provide certain documents to an empioyeewho is a judgment debtor. (Code Civ. Proc Secs. 700.010; 706.103; 706.104; 706.108;7061223 This bin would require, in the circumsmnces described above, that a copy of theform that the judgment debtor may use t0 make a claim 0f exemption and a copy ofthe form used to provide a financial statement also be provided. COMMENT 1. Smted need for the bin According to the author: mhe Federal Trade Commission [(FTC) has stateci that], {tjhe system forresolving disputes about consumer debts is broken, and has urged states t0 passIegislafion to provide adequate protection for consumers. The system 1's broken because courts have been swamped with debtcollectionlaw suits driven by the growth of an industry that bu ys and sells bundied V W] ppgtfglios 0f consumer debt, and misusesihe'courts fc'léfiage their collectionefiorts. The industry’s practices echo the scandal surrounding the processing ofdefinquent mortgages. Here, debt buyers use "robe signers” who sign affidavitsavem’ng that they have reviewed and verified debtors’ records, when they haveonly reviewed basic, and often incompiete, account statements records 0rspreadsheets 0n a computer screen. Moreover, because consumer debt 1's beingbought and sold so frequenfly, and over a period of years, companies are ,A/# SB 233 (Leno and Correa) Page 8 of l2 fraqn ently pursuing the wrong person, or the filing daims that haVe no lawfulbasis. Frequently, these debt collection actions are filed by debt buyers without proofthat the debt ever existed. Yet actions proceed to judgment because ninety-fivepercent of consumers do not respond to these lawsuits --many because they d0not receive notice -- allowing the debt collector to take a defaultjudgment againstthe consumer and levy against the consumer's personnel accounts. The Fair Debt Buyers Act wouid reform the debt collecfionlitigation process in anumber of ways to aid consumers and unburden the courts from costly,unmeritorious litigation. 2. Imglemenh‘ng the FTCs recommendations As noted above, the FTC recently released a comprehensive report entitled RepairingA Broken System: Protecting Consumers in Debt Collection Litigation and Arbitration thatcontained recommendations for reforms similar to those proposed by this bill. a. Comgiaingg must include detailed information The FTC found that complaints filed by debtcollectors to initiate collectionactions against debtors were lacking. The FTCS report noted that "[t1he functionof debt collection complains in a notice pleading system is to provide sufficientinformau'on so that: (1) consumers can determine whether to admit or deny thecomplaint allegations and assert affirmative defenses in their answers,- and (2)judges can determine whether to grant a motion for a more definite statement orenter a default judgment. . . Based on the evidence gathered in connection withthese proceedings, the FTC believes that many debt collectiOn complaints do notprovide this information to consumers." To address that issue, this bill would,among other things, enhance the complaint so that the debbor has more completeinformation regarding the debt at issue, and, in turn, is able to respondappmpriately to the compiaint Specifically, the bill would provide that in an acfion brought by a debt buyer one»consumer debt, the compi‘ai’fif mu'st'all'é'gmei' V(Tféhat the plaintiff is a debt buyer;(2) the nature of the underlying debt and the transaction fiom which it isderived; (3) that the debt buyer is the sole owner or has authority to assert theowners rights; (4) the debt balance at charge off and the reason for aH post-charge-off interest and fees,- (5) tile date of the last payment; (6) the name andaddress of the charge-off creditor, and the creditor’s account number; (7) thename and last known address of the debtor as they appear in the charge -offcreditor’s records; and (8) the names and addresses 0f all entities that purchasedthe debt after charge off. The compiaint must also allege that the debtbuyer “@2,” SB 233 (Leno and Correa) Page 9 of 12 complied with this biii’s requirement for debt buyers to possess specificinformation before making a Written smbement to a debtor in an attempt tocollect the debt. Regarding the necessity of requiring additional information from debt buyers when they seek to collect upon debt, Consumers Union (CU), in support, contends that "Mans of thousands of Californians are contacted every year by debtbuyers they have never done business with, for debts that may beold or in an amount that doesn’t match the consumer’s memory or records. Thedebtmay even be owed by someone else or the nesultof identity theft Yet somedebt buyer[s] have little more than a robo-signed affidavit to back up their claimsin court" To address the reported abuses, the detailed complaint requiremenmwould appear to provide consumers with necessaxy information about the debtfor which collection is attempted. and in tum, allow those consumers to file anappropriate answer to the complaint. It is important to note that many of the complaints currently filed by some debtbuyers are simply farm complaints that provide little, if any, useful informationb0 the consumer being sued about the underlying debt. Regarding the filingpracfices of some of flmse firms, the New York Times’ October 31, 2010 articleentitled Debt Collectors Face a Hazard: Wter's Cramp reported that: 1n some instances, banks are selling account informafion that is riddled witherrors. More often, essential background information simply is not acquiredby debt buyers, in large part because that data adds to the price of eachaccount. But court rules state that anyone submitting an affidavit to a courtagainst a debtor must have proof of that claim -- proper documentation of adebt’s origins, history and amount. Without that information it is hard to imagine how any company could meefthe legal standard of due diligence, particularly While churning outthousands and thousands of affidavits a week. Analysts say that affidavitvsigners at debt-buying companies appear to have little choice but to take atface value the few facts typically provided to them -- often little more thanbasic account information on a computer screen. {Sega}, Deb! Collectors Pace aHazard: Wn‘tez’s Cramp (Oct. 31, 2010) New York Times {as ofMay 3,2013l.) 7/-7 77777 b. Disclosare of information prigr to judgggents To ensure that the court has sufficient information about the underlying debt, thisbill would prohibita default or other judgmentfrom being entered against a debtor until the debt buyer submits business records that have been authenticated through sworn declarau'on and establish specified facts regarding the debt. Specifically,those records must show proper ownership of the debt, the debt balance and reasonfor any post-chargeuoff fees, date of default or last payment, and the name and ., 42., SB 233 (Leno and Correa) Page 10 of 12 address of the charge-off creditor, debtor, and ali persons or entities who purchased the debt after charge-off. Furthermore, the debtbuyer must also provide a copy of the contract or other document evidencing the debtor’s agreement to the debt, authenticated through sworn declaration, prim- to entering a default or other judgment against a debtor. As a result, the proposed requirements would appearto ensure that the court has relatively detailed information about the nature and history of the debt. It should be noted that a large percenmge of debt collection actions reportedly result in defaultjudgmenw. Those judgmens are entered in favor of the plaintiff (debt buyer) due to the failure of the defendant (consumer) t0 file a timely response to the complaint When those consumers faii to respond, there is no advocate to raise, on their behalf, applicable defenses or challenge the assertions made by the debt buyer. The FTCS report noted concern about the number of defaultjudgments and recommended steps to ”increase consumer participationin debt collection litigation to help decrease the prevalence of defaultjudgments,” and noted that "(fin an effort to address this problem in another way, some court systems have adopted measures to encouragejudges t0 apply appropriate and consistent standards -- including lega} standards and court rules u in deciding whether to grant such judgments." (Repairing :2 Broken System (July 201’ 0) Federal Trade Commission {as of May 3, 203 3} at p. 20.) The requirements discussed above essentially provide a set of consistent standards for a judge to use when granting a defauitjudgment. This bin would also provide that if a debt buyer seeks a defaultjudgment and has not complied with the requirement 0f this biil, the court shaH not enter a default judgment and may dismiss the action Simiiarly, if a defendant debtor appears for trial and the plaintifi debt buyer fails to appear 0r 1's not prepared t0 proceed (and there 1's no good cause for continuance), the court may dismiss the action and award the defendam debtor’s costs for prepan‘ng for trial. c. Statute of limitations The FTCS report also expressed concern that certain cogggwtgirgfl"rezguiafly sue/ reality that many consumers do not defend themselves against these suits, even when the action would be barred by the statute of limitations. The FTC further asserted that "[bJECause an expired statute of limitations is an affirmative defense in most states, collectors have no obligation to allege in the complaint that the debt is not time-barred, and many collectors do not include this informafion. If consumers do not defend, there is no One to raise the defense that the debt is time-barred. Indeed, some judges who participated in the roundtables statedthat, even if a debt coflecfion acfion appears to be time-barred, it would be w W, SB 233 (Leno and Correa)Page 11 of 22 improper for courts to consider affirmative defenses that no party had raised. As a result, some courts appear to be granting defaultjudgments cm time~barred debt," (Repairing a Broken System Guiy 2010) Federal Trade Commission [as of May 3, * 2013] at p. 30.) This bill would address those issues by, among other things, prohibitinga debt buyer from bn’nging suit or initiau‘ng an arbitration or other legal proceeding to collecta consumer debtif the applicable statute oflimitafions has expired, and requiring a debt buyer to nou'fy a debtor if a debt is fime-barred. Regarding the need to address the issue of fime-baned debts, the Attomey Genexal, sponsor, assets: ‘ Indushy practices have become a significant focus of public concern due to collection efforts being directed to the wrong consumer, or seeking the collection of debt that is time barred or has been paid. These concerns are compounded because a very high percentage of debt collection litigation results in defauitjudgments where consumers do not appear to present whatever defenses may be available to them. 8. Additional limitations on debt collection This bill would addifionally prohibit a debt buyer from making a written statement to a debtor in an attempt to collect a consumer debt unless the debt buyer possesses specific documentation regarding the debt. The debt buyer must make that information available, without charge, to the debtor within 15 calendar days of receiptof a request. 1f the debt buyer cannot provide the information within that time frame, the debt buyermust cease all collection of the debt until the information is provided. 1n support of the documentation requirements, AARP notes that "[t]he elderly are disproportionatelyvictims of identity theft and are thus often targeted with lawsuits for debts tiley never obtained or authorized. . . . This legislation will provide cru cial protections to ensure that the senior will not be subjected to this type of unwarranted lwassment requiring that debtbuyers have essential information about a debt before they try to collect the debt and that the mfmmahon be shar ed with the conspmer on request. “M 4.329% This bill would provide specific penalties and damages against a debt buyes who violates ihe above requirements. Specifically, the debt buyer would be liable to the consumer in an amount equal to the actual damages plus statutory damages (between $100 and $1000 per vioian’on per person), and also would allow a prevailing debtor to receive reasonable attorney’s fees and costs. This bill would ,«Af SB 2.33 {Leno and Correa)Page 12 of I 2 also provide that in any class action where a court finds that the debt buyer engaged in a pattern and pradice of violating this bill, the court may award additional damages in an amount not to exceed the lesser of $500,000 or one percent of the net worth of the debt buyer. It should be noted that this bill would also limit the liability of debt buyers if the buyer shows that the violation was not intentional and resulted from a bona fide error, and occurred notwithstanding the nwintenance of procedures reasonably adopted to avoid any error. . That safe harbor provision would appear to shield debt buyers from Iiabih’ty in cases where the error was truly inadvertent.E.MW Under existing law, a judgment debtor can claim that his or her property or money is exempt irom collection efforts. Those claims may be filed with the levying officer within 10 days after the date the nofice of levy was served on the judgment debtor, and must include a financial statement. (Code Civ. Proc. Secs. 703.520, 703.530.) To facilitaie exemptiOns, this bill would require the levying Officer enforcing a money judgment to also provide a copy of the forms that the judgment debtor may use to make a claim of exemption and provide a financial statement, as specified. Suggort: AARP; Center for Responsible Lending; Consumers Union; East Bay Community Law Center; Encore Capital Group; Public Law Center ngosifion: None Known HISTORY Source: Aftomey General Kamala Harris Related Pending Legislation: SB 7G2 (Anderson) would require applicafions for default judgment to contain specified information This bill is Set for hearing in this Committee on May '1’, 2013. Prior Legislation: SB 890 (Leno, 2011) See Backgoggd. WM “““(PnorVote Senate Committee on Banking 8r Financial Institutions (Ayes 8, Noes 0) ¥I~fiflfi$ffi§$fik¥$$ , HAM
