Assembly Bill 281 (Gallagher)

Assembly Bill (AB) 281 (Gallagher) signed into law October 10, 2015 requires the Governor to appoint a Collateral Recovery Disciplinary Review Committee and makes several changes to the Collateral Recovery Act.

Collateral Recovery Disciplinary Review Committee

Effective July 1, 2017, the Collateral Recovery Act will provide for a Collateral Recovery Disciplinary Review Committee. Licensees, registrants and applicants will have the option to appeal the assessment of administrative fines to the Collateral Recovery Disciplinary Review Committee. The Disciplinary Review Committee will have the authority to affirm, rescind or modify decisions of the Bureau. Licensees and applicants will still maintain the option of appealing in accordance with the Administrative Hearing Act if the licensee or applicant does not agree with the decision(s) of the Disciplinary Review Committee.

Other Relevant Changes

Effective January 1, 2016, AB 281 will:

  • Allow a licensee or registrant to use a hard copy printout from the Bureau’s website or a legible electronic screenshot display as proof of licensure or registration in lieu of receiving a license or registration in the mail from the Bureau.
  • Prohibit licensed repossessors and their agents from performing or charging for repair work, cleaning, or detailing of repossessed collateral.
  • Add and define the terms “registered owner” and “repossession” in §7500.1 of the Business and Professions Code.
  • Require a licensee to provide the available inventory of repossessed collateral no later than 96 hours (120 hours if the time period encompasses a weekend or holiday) after recovery of the collateral when the licensee is unable to open a locked compartment in the collateral.
  • Prohibit a licensee from selling a consumer’s personal effects or personal property not covered by a security agreement.
  • Clarify that in addition to the public, a repossession agency shall not, without a court order, disclose certain personally identifiable information about its licensed, certified, or registered employees or independent contractors to any person or nongovernmental entity. Limited information may be provided to an insurance company for the purposes of policy issuance or renewal.

In addition, AB 281 makes various changes to the Vehicle Code that impact repossession activities including:

  • Prohibiting a legal owner of collateral from taking action against various entities, including law enforcement, for releasing collateral to a licensed repossessor, and other claims.
  • Allowing a licensed repossessor various rights, such as the ability to request a copy of the towing fees and access notice, when recovering a vehicle from a tow yard.