Gramm-Leach-Bliley Act

This is not the actual text of the law. Instead, this is an explanation and history of the Act.

The Gramm-Leach-Bliley Act (GLBA), also known as the Financial Services Modernization Act of 1999, (Pub.L. 106-102, 113 Stat. 1338, enacted November 12, 1999) is an act of the 106th United States Congress (1999-2001) which repealed part of the Glass-Steagall Act of 1933, opening up the market among banking companies, securities companies and insurance companies. The Glass-Steagall Act prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and/or an insurance company.
The Gramm-Leach-Bliley Act allowed commercial banks, investment banks, securities firms and insurance companies to consolidate. For example, Citicorp (a commercial bank holding company) merged with Travelers Group (an insurance company) in 1998 to form the conglomerate Citigroup, a corporation combining banking, securities and insurance services under a house of brands that included Citibank, Smith Barney, Primerica and Travelers. This combination, announced in 1993 and finalized in 1994, would have violated the Glass-Steagall Act and the Bank Holding Company Act of 1956 by combining securities, insurance, and banking, if not for a temporary waiver process. The law was passed to legalize these mergers on a permanent basis. Historically, the combined industry has been known as the "financial services industry".
Legislative history
The banking industry had been seeking the repeal of the 1933 Glass-Steagall Act since the 1980s, if not earlier. In 1987 the Congressional Research Service prepared a report which explored the case for preserving Glass-Steagall and the case against preserving the act.
Respective versions of the legislation were introduced in the U.S. Senate by Phil Gramm (Republican of Texas) and in the U.S. House of Representatives by Jim Leach (R-Iowa). The third lawmaker associated with the bill was Rep. Thomas J. Bliley, Jr. (R-Virginia), Chairman of the House Commerce Committee from 1995 to 2001.
The House passed its version of the Financial Services Act of 1999 on July 1st by a bipartisan vote of 343-86 (|Republicans 205–16; Democrats 138–69; Independent/Socialist 0–1), two months after the Senate had already passed its version of the bill on May 6th by a much-narrower 54–44 vote along basically-partisan lines (53 Republicans and one Democrat in favor; 44 Democrats opposed).
When the two chambers could not agree on a joint version of the bill, the House voted on July 30th by a vote of 241-132 (R 58-131; D 182-1; Ind. 1–0) to instruct its negotiators to work for a law which ensured that consumers enjoyed medical and financial privacy as well as "robust competition and equal and non-discriminatory access to financial services and economic opportunities in their communities" (i.e., protection against exclusionary redlining).
The bill then moved to a joint conference committee to work out the differences between the Senate and House versions. Democrats agreed to support the bill after Republicans agreed to strengthen provisions of the anti-redlining Community Reinvestment Act and address certain privacy concerns; the conference committee then finished its work by the beginning of November. On November 4th, the final bill resolving the differences was passed by the Senate 90-8, and by the House 362-57. This legislation (whose voting margins, if repeated, would easily have overcome any Presidential veto) was signed into law by Democratic President Bill Clinton on November 12, 1999.
Changes caused by the Act
Many of the largest banks, brokerages, and insurance companies desired the Act at the time. The justification was that individuals usually put more money into investments when the economy is doing well, but they put most of their money into savings accounts when the economy turns bad. With the new Act, they would be able to do both 'savings' and 'investment' at the same financial institution, which would be able to do well in both good and bad economic times.
Prior to the Act, most financial services companies were already offering both saving and investment opportunities to their customers. On the retail/consumer side, a bank called Norwest which would later merge with Wells Fargo Bank led the charge in offering all types of financial services products in 1986. American Express attempted to own almost every field of financial business (although there was little synergy among them). Things culminated in 1998 when Citibank, merged with Travelers Insurance creating CitiCorp, the largest and the most profitable company in the world. The merger violated the Bank Holding Company Act (BHCA), but Citibank was given a two-year forbearance that was based on an assumption that they would be able to force a change in the law. The Gramm-Leach-Bliley Act passed in November 1999, repealing the BHCA and portions of the Glass-Steagall Act, allowing banks, brokerages, and insurance companies to merge, thus making the Citigroup/Traveler Group merger legal.
Top Citigroup officials were allowed to review and approve drafts of the legislation before it was formally introduced.
After resigning as Treasury Secretary and while secretly in negotiations to head Citigroup, Robert Rubin helped broker the final deal to pass the bill. He later became one of 3-CEO's that headed up CitiCorp.
Also prior to the passage of the Act, there were many relaxations to the Glass-Steagall Act. For example, a few years earlier, commercial Banks were allowed to get into investment banking, and before that banks were also allowed to get into stock and insurance brokerage. Insurance underwriting was the only main operation they weren't allowed to do, something rarely done by banks even after the passage of the Act.
Much consolidation occurred in the financial services industry since, but not at the scale some had expected. Retail banks, for example, do not tend to buy insurance underwriters, as they seek to engage in a more profitable business of insurance brokerage by selling products of other insurance companies. Other retail banks were slow to market investments and insurance products and package those products in a convincing way. Brokerage companies had a hard time getting into banking, because they do not have a large branch and backshop footprint. Banks have recently tended to buy other banks, such as the 2004 Bank of America and Fleet Boston merger, yet they have had less success integrating with investment and insurance companies. Many banks have expanded into investment banking, but have found it hard to package it with their banking services, without resorting to questionable tie-ins which caused scandals at Smith Barney.
Remaining restrictions
Crucial to the passing of this Act was an amendment made to the GLBA, stating that no merger may go ahead if any of the financial holding institutions, or affiliates thereof, received a "less than satisfactory [sic] rating at its most recent CRA exam", essentially meaning that any merger may only go ahead with the strict approval of the regulatory bodies responsible for the Community Reinvestment Act (CRA). This was an issue of hot contention, and the Clinton Administration stressed that it "would veto any legislation that would scale back minority-lending requirements."
The GLBA also did not remove the restrictions on banks placed by the Bank Holding Company Act of 1956 which prevented financial institutions from owning non-financial corporations. It conversely prohibits corporations outside of the banking or finance industry from entering retail and/or commercial banking. Many assume Wal-Mart's desire to convert its industrial bank to a commercial/retail bank ultimately drove the banking industry to back the GLBA restrictions.
Some restrictions remain to provide some amount of separation between the investment and commercial banking operations of a company. For example, licensed bankers must have separate business cards, e.g., "Personal Banker, Wells Fargo Bank" and "Investment Consultant, Wells Fargo Private Client Services". Much of the debate about financial privacy is specifically centered around allowing or preventing the banking, brokerage, and insurances divisions of a company from working together.
In terms of compliance, the key rules under the Act include The Financial Privacy Rule which governs the collection and disclosure of customers’ personal financial information by financial institutions. It also applies to companies, regardless of whether they are financial institutions, who receive such information. The Safeguards Rule requires all financial institutions to design, implement and maintain safeguards to protect customer information. The Safeguards Rule applies not only to financial institutions that collect information from their own customers, but also to financial institutions – such as credit reporting agencies – that receive customer information from other financial institutions.

Privacy
• GLBA compliance is mandatory; whether a financial institution discloses nonpublic information or not, there must be a policy in place to protect the information from foreseeable threats in security and data integrity.
• Major components put into place to govern the collection, disclosure, and protection of consumers’ nonpublic personal information; or personally identifiable information include:
o Financial Privacy Rule
o Safeguards Rule
o Pretexting Protection
Financial Privacy Rule
(Subtitle A: Disclosure of Nonpublic Personal Information, codified at 15 U.S.C. § 6801–6809)
The Financial Privacy Rule requires financial institutions to provide each consumer with a privacy notice at the time the consumer relationship is established and annually thereafter. The privacy notice must explain the information collected about the consumer, where that information is shared, how that information is used, and how that information is protected. The notice must also identify the consumer’s right to opt out of the information being shared with unaffiliated parties pursuant to the provisions of the Fair Credit Reporting Act. Should the privacy policy change at any point in time, the consumer must be notified again for acceptance. Each time the privacy notice is reestablished, the consumer has the right to opt out again. The unaffiliated parties receiving the nonpublic information are held to the acceptance terms of the consumer under the original relationship agreement. In summary, the financial privacy rule provides for a privacy policy agreement between the company and the consumer pertaining to the protection of the consumer’s personal nonpublic information.
On November 17, 2009, eight federal regulatory agencies released the final version of a model privacy notice form to make it easier for consumers to understand how financial institutions collect and share information about consumers.
Safeguards Rule
(Subtitle A: Disclosure of Nonpublic Personal Information, codified at 15 U.S.C. § 6801–6809)
The Safeguards Rule requires financial institutions to develop a written information security plan that describes how the company is prepared for, and plans to continue to protect clients’ nonpublic personal information. (The Safeguards Rule also applies to information of those no longer consumers of the financial institution.) This plan must include:
• Denoting at least one employee to manage the safeguards,
• Constructing a thorough [risk management] on each department handling the nonpublic information,
• Develop, monitor, and test a program to secure the information, and
• Change the safeguards as needed with the changes in how information is collected, stored, and used.
This rule is intended to do what most businesses should already be doing: protecting their clients. The Safeguards Rule forces financial institutions to take a closer look at how they manage private data and to do a risk analysis on their current processes. No process is perfect, so this has meant that every financial institution has had to make some effort to comply with the GLBA.
Pretexting protection
(Subtitle B: Fraudulent Access to Financial Information, codified at 15 U.S.C. § 6821–6827)
Pretexting (sometimes referred to as "social engineering") occurs when someone tries to gain access to personal nonpublic information without proper authority to do so. This may entail requesting private information while impersonating the account holder, by phone, by mail, by email, or even by "phishing" (i.e., using a "phony" website or email to collect data). The GLBA encourages the organizations covered by the GLBA to implement safeguards against pretexting. For example, a well-written plan designed to meet GLBA's Safeguards Rule ("develop, monitor, and test a program to secure the information") would likely include a section on training employees to recognize and deflect inquiries made under pretext. In fact, the evaluation of the effectiveness of such employee training probably should include a follow-up program of random spot-checks, "outside the classroom", after completion of the [initial] employee training, in order to check on the resistance of a given (randomly chosen) student to various types of "social engineering" -- perhaps even designed to focus attention on any new wrinkle that might have arisen after the [initial] effort to "develop" the curriculum for such employee training. Under United States law, pretexting by individuals is punishable as a common law crime of False Pretenses.
Financial institutions defined
The GLBA defines "financial institutions" as: "…companies that offer financial products or services to individuals, like loans, financial or investment advice, or insurance." The Federal Trade Commission (FTC) has jurisdiction over financial institutions similar to, and including, these:
• non-bank mortgage lenders,
• loan brokers,
• some financial or investment advisers,
• debt collectors,
• tax return preparers,
• banks, and
• real estate settlement service providers.
These companies must also be considered significantly engaged in the financial service or production that defines them as a "financial institution".
Insurance has jurisdiction first by the state, provided the state law at minimum complies with the GLBA. State law can require greater compliance, but not less than what is otherwise required by the GLBA.
Consumer vs. customer defined
The Gramm-Leach-Bliley Act defines a ‘consumer’ as
"an individual who obtains, from a financial institution, financial products or services which are to be used primarily for personal, family, or household purposes, and also means the legal representative of such an individual." (See 15 U.S.C. § 6809(9).}
A ‘customer’ is a consumer that has developed a relationship with privacy rights protected under the GLBA. A ‘customer’ is not someone using an automated teller machine (ATM) or having a check cashed at a cash advance business. These are not ongoing relationships like a ‘customer’ might have; i.e., a mortgage loan, tax advising, or credit financing. A business is not an individual with personal nonpublic information, so a business cannot be a customer under the GLBA. A business, however, may be liable for compliance to the GLBA depending upon the type of business and the activities utilizing individual’s personal nonpublic information.
Consumer/client privacy rights
Under the GLBA, financial institutions must provide their clients a privacy notice that explains what information the company gathers about the client, where this information is shared, and how the company safeguards that information. This privacy notice must be given to the client prior to entering into an agreement to do business. There are exceptions to this when the client accepts a delayed receipt of the notice in order to complete a transaction on a timely basis. This has been somewhat mitigated due to online acknowledgement agreements requiring the client to read or scroll through the notice and check a box to accept terms.
The privacy notice must also explain to the customer the opportunity to ‘opt-out’. Opting out means that the client can say "no" to allowing their information to be shared with affiliated parties. The Fair Credit Reporting Act is responsible for the ‘opt-out’ opportunity, but the privacy notice must inform the customer of this right under the GLBA. The client cannot opt-out of:
• information shared with those providing priority service to the financial institution
• marketing of products or services for the financial institution
• when the information is deemed legally required.
Effect on usury law in Arkansas & other states
Section 731 of the GLBA, codified as subsection (f) of 12 U.S.C. § 1831u, contains a unique provision aimed at Arkansas, whose usury limit was set at five percent above the Federal Reserve discount rate by the Arkansas Constitution and could not be changed by the Arkansas General Assembly. When the Office of the Comptroller of the Currency ruled that interstate banks established under the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 could use their home state's usury law for all branches nationwide with minimal restrictions, Arkansas-based banks were placed at a severe competitive disadvantage to Arkansas branches of interstate banks; this led to out-of-state takeovers of several Arkansas banks, including the sale of First Commercial Bank (then Arkansas' largest bank) to Regions Financial Corporation in 1998.
Under Section 731, all banks headquartered in a state covered by that law may charge up to the highest usury limit of any state that is headquarters to an interstate bank which has branches in the covered state. Therefore, since Arkansas has branches of banks based in Alabama, Georgia, Mississippi, Missouri, North Carolina, Ohio and Texas[20], any loan that is legal under the usury laws of any of those states may be made by an Arkansas-based bank under Section 731. The section does not apply to interstate banks with branches in the covered state, but headquartered elsewhere; however, Arkansas-based interstate banks like Arvest Bank may export their Section 731 limits to other states.
Due to Section 731, it is generally regarded that Arkansas-based banks now have no usury limit for credit cards or for any loan of greater than $2,000 (since Alabama, Regions' home state, has no limits on those loans), with a limit of 18% (the minimum usury limit in Texas) or more on all other loans. However, once Wells Fargo fully completes its proposed purchase of Century Bank (a Texas bank with Arkansas branches), Section 731 will do away with all usury limits for Arkansas-based banks since Wells Fargo's main bank charter is based in South Dakota, which repealed its usury laws many years ago.
Though designed for Arkansas, Section 731 may also apply to Alaska and California whose constitutions provide for the same basic usury limit, though unlike Arkansas their legislatures can (and generally do) set different limits. If Section 731 applies to those states, then all their usury limits are inapplicable to banks based in those states, since Wells Fargo has branches in both states.

Rosenthal Fair Debt Collection Practices Act

CIVIL CODE SECTION 1788-1788.3





1788. This title may be cited as the Rosenthal Fair Debt Collection
Practices Act.



1788.1. (a) The Legislature makes the following findings:
(1) The banking and credit system and grantors of credit to
consumers are dependent upon the collection of just and owing debts.
Unfair or deceptive collection practices undermine the public
confidence which is essential to the continued functioning of the
banking and credit system and sound extensions of credit to
consumers.
(2) There is need to ensure that debt collectors and debtors
exercise their responsibilities to one another with fairness, honesty
and due regard for the rights of the other.
(b) It is the purpose of this title to prohibit debt collectors
from engaging in unfair or deceptive acts or practices in the
collection of consumer debts and to require debtors to act fairly in
entering into and honoring such debts, as specified in this title.



1788.2. (a) Definitions and rules of construction set forth in this
section are applicable for the purpose of this title.
(b) The term "debt collection" means any act or practice in
connection with the collection of consumer debts.
(c) The term "debt collector" means any person who, in the
ordinary course of business, regularly, on behalf of himself or
herself or others, engages in debt collection. The term includes any
person who composes and sells, or offers to compose and sell, forms,
letters, and other collection media used or intended to be used for
debt collection, but does not include an attorney or counselor at
law.
(d) The term "debt" means money, property or their equivalent
which is due or owing or alleged to be due or owing from a natural
person to another person.
(e) The term "consumer credit transaction" means a transaction
between a natural person and another person in which property,
services or money is acquired on credit by that natural person from
such other person primarily for personal, family, or household
purposes.
(f) The terms "consumer debt" and "consumer credit" mean money,
property or their equivalent, due or owing or alleged to be due or
owing from a natural person by reason of a consumer credit
transaction.
(g) The term "person" means a natural person, partnership,
corporation, limited liability company, trust, estate, cooperative,
association or other similar entity.
(h) Except as provided in Section 1788.18, the term "debtor" means
a natural person from whom a debt collector seeks to collect a
consumer debt which is due and owing or alleged to be due and owing
from such person.
(i) The term "creditor" means a person who extends consumer credit
to a debtor.
(j) The term "consumer credit report" means any written, oral or
other communication of any information by a consumer reporting agency
bearing on a consumer's creditworthiness, credit standing, credit
capacity, character, general reputation, personal characteristics or
mode of living which is used or expected to be used or collected in
whole or in part for the purpose of serving as a factor in
establishing the consumer's eligibility for (1) credit or insurance
to be used primarily for person, family, or household purposes, or
(2) employment purposes, or (3) other purposes authorized under any
applicable federal or state law or regulation. The term does not
include (a) any report containing information solely as to
transactions or experiences between the consumer and the person
making the report; (b) any authorization or approval of a specific
extension of credit directly or indirectly by the issuer of a credit
card or similar device; or (c) any report in which a person who has
been requested by a third party to make a specific extension of
credit directly or indirectly to a consumer conveys his or her
decision with respect to that request, if the third party advises the
consumer of the name and address of the person to whom the request
was made and such person makes the disclosures to the consumer
required under any applicable federal or state law or regulation.
(k) The term "consumer reporting agency" means any person which,
for monetary fees, dues, or on a cooperative nonprofit basis,
regularly engages, in whole or in part, in the practice of assembling
or evaluating consumer credit information or other information on
consumers for the purpose of furnishing consumer credit reports to
third parties, and which uses any means or facility for the purpose
of preparing or furnishing consumer credit reports.



1788.3. Nothing contained in this title shall be construed to
prohibit a credit union chartered under Division 5 (commencing with
Section 14000) of the Financial Code or under the Federal Credit
Union Act (Chapter 14 (commencing with Section 1751) of Title 12 of
the United States Code) from providing information to an employer
when the employer is ordinarily and necessarily entitled to receive
such information because he is an employee, officer, committee
member, or agent of such credit union.

________________________________________

Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (aka FDCPA), 15 U.S.C. § 1692 et seq., is a United States statute added in 1978 as Title VIII of the Consumer Credit Protection Act. Its purposes are to eliminate abusive practices in the collection of consumer debts, to promote fair debt collection and to provide consumers with an avenue for disputing and obtaining validation of debt information in order to ensure the information's accuracy. The Act creates guidelines under which debt collectors may conduct business, defines rights of consumers involved with debt collectors, and prescribes penalties and remedies for violations of the Act. It is sometimes used in conjunction with the Fair Credit Reporting Act.

Contents
• 1 People and entities covered by the FDCPA
• 2 Prohibited conduct
• 3 Required conduct
• 4 Enforcement of the FDCPA
• 5 Criticisms of the FDCPA
o 5.1 By consumer groups
o 5.2 By the credit industry
• 6 The FTC Report


People and entities covered by the FDCPA
The FDCPA broadly defines a debt collector as "any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." While the FDCPA generally only applies to third party debt collectors--not internal collectors for an "original creditor" -- some states, such as California, have similar state consumer protection laws which mirror the FDCPA, and regulate original creditors. In addition, courts have generally found debt buyers to be covered by the FDCPA even though they are collecting their own debts. The definitions and coverage have changed over time. The FDCPA itself contains numerous exceptions to the definition of a "debt collector," particularly after the October 13, 2006, passage of the Financial Services Regulatory Relief Act of 2006. Attorneys, originally explicitly excepted from the definition of a debt collector, have been included (to the extent that they otherwise meet the definition) since 1986.
The FDCPA's definitions of "consumers" and "debt" specifically restricts the coverage of the act to personal, family or household transactions. Thus, debts owed by businesses (or by individuals for business purposes) are not subject to the FDCPA.
Prohibited conduct
The Act prohibits certain types of "abusive and deceptive" conduct when attempting to collect debts, including the following:
• Hours for phone contact: contacting consumers by telephone outside of the hours of 8:00 a.m. to 9:00 p.m. local time
• Failure to cease communication upon request: communicating with consumers in any way (other than litigation) after receiving written notice that said consumer wishes no further communication or refuses to pay the alleged debt, with certain exceptions, including advising that collection efforts are being terminated or that the collector intends to file a lawsuit or pursue other remedies where permitted
• Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously: with intent to annoy, abuse, or harass any person at the called number.
• Communicating with consumers at their place of employment after having been advised that this is unacceptable or prohibited by the employer
• Contacting consumer known to be represented by an attorney
• Communicating with consumer after request for validation: communicating with the consumer or the pursuing collection efforts by the debt collector after receipt of a consumer's written request for verification of a debt (or for the name and address of the original creditor on a debt) and before the debt collector mails the consumer the requested verification or original creditor's name and address
• Misrepresentation or deceit: misrepresenting the debt or using deception to collect the debt, including a debt collector's misrepresentation that he or she is an attorney or law enforcement officer
• Publishing the consumer's name or address on a "bad debt" list
• Seeking unjustified amounts, which would include demanding any amounts not permitted under an applicable contract or as provided under applicable law
• Threatening arrest or legal action that is either not permitted or not actually contemplated
• Abusive or profane language used in the course of communication related to the debt
• Communication with third parties: revealing or discussing the nature of debts with third parties (other than the consumer's spouse or attorney)
• Contact by embarrassing media, such as communicating with a consumer regarding a debt by post card, or using any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business
• Reporting false information on a consumer's credit report or threatening to do so in the process of collection
Required conduct
Further, the FDCPA requires debt collectors to:
• Identify themselves and notify the consumer, in every communication, that the communication is from a debt collector, and in the initial communication that any information obtained will be used to effect collection of the debt
• Give the name and address of the original creditor (company to which the debt was originally payable) upon the consumer's written request made within 30 days of receipt of the §1692g notice;
• Notify the consumer of their right to dispute the debt, in part or in full, with the debt collector. This so-called 30-day "§1692g" notice is required to be sent by debt collectors within five days of the initial communication with the consumer, though in 2006 the definition of "initial communication" was amended to exclude "a formal pleading in a civil action" for purposes of triggering the §1692g notice, complicating the matter where the debt collector is an attorney or law firm. The consumer's receipt of this notice starts the clock running on the 30-day right to demand verification of the debt from the debt collector.
• Provide verification of the debt: If a consumer sends a written dispute or request for verification within 30 days of receiving the §1692g notice, then the debt collector must either mail the consumer the requested verification information or cease collection efforts altogether. Such asserted disputes must also be reported by the creditor to any credit bureau that reports the debt. Consumers may still dispute a debt verbally or after the thirty-day period has elapsed, but doing so waives the right to compel the debt collector to produce verification of the debt. Verification should include at a minimum the amount owed and the name and address of the original creditor.
• File a lawsuit in a proper venue - a debt collector may file a lawsuit, if at all, only in a place where the consumer lives or signed the contract[
This should not be understood to be an exhaustive list either of prohibited or required conduct.
Enforcement of the FDCPA
The Federal Trade Commission has the authority to administratively enforce the FDCPA using its powers under the Federal Trade Commission Act.[24] But under sweeping financial regulation reforms, a recent proposal by the U.S. Treasury Department would call for the FDCPA to be administered by a new Consumer Financial Protection Agency.
Aggrieved consumers may also file a private lawsuit in a state or federal court to collect damages (actual, statutory, attorney's fee and court-costs) from third-party debt collectors. The FDCPA is a strict liability law, which means that a consumer need not prove actual damages in order to claim statutory damages of up to $1,000 plus reasonable attorney fees if a debt collector is proven to have violated the FDCPA. The collector may, however, escape penalty if it shows that the violation (or violations) was unintentional and the result of a "bona fide error" that occurred despite procedures designed to avoid the error at issue.
Alternately, if the consumer loses the lawsuit and the court determines that the consumer filed the case in bad faith and for the purposes of harassment, the court may then award attorney's fees to the debt collector.
Criticisms of the FDCPA
By consumer groups
Some consumer groups argue that the FDCPA does not go far enough, and does not provide sufficient deterrence against unscrupulous collection agencies. Consumer groups have complained that the maximum statutory damages contained in the original 1977 version of the law has not kept up with inflation. According to the inflation calculator at the Bureau of Labor Statistics' website, that same penalty would be the equivalent of $3,505.86 by 2008 standards.
By the credit industry
Conversely, many in the credit industry and some courts have taken the stance that the FDCPA has often been used to file frivolous lawsuits and seek damages for minor technical violations and has, at times, seriously impeded their ability to collect valid debts. Given the strict liability nature of the FDCPA, the collections industry and the insurance companies who provide liability coverage for them have repeatedly lobbied Congress to relax provisions of the law to reduce their civil exposure for these "hyper-technical" violations.
The FTC Report
For its part, the Federal Trade Commission (FTC) produces an annual report to Congress of its findings with respect to its FDCPA enforcement activities. This report details consumer complaints to the FTC about alleged debt collector violations of the FDCPA. The 2008 report indicated that the FTC received 70,951 consumer complaints about third party debt collectors in 2007, which is an increase from the 69,249 received in 2006. The FTC receives more complaints about debt collectors than about any other specific industry, though the number of complaints represents a small percentage of the overall number of contacts by debt collectors with consumers.

Collateral Recovery Act

7500. This chapter of the Business and Professions Code constitutes the chapter on repossessors. It may be cited as the "Collateral Recovery Act."

7500.1. The following terms as used in this chapter have the
meaning expressed in this section.
(a) "Advertisement" means any written or printed communication,
including a directory listing, except a free telephone directory
listing that does not allow space for a license number.
(b) "Assignment" means a written authorization by the legal owner,
lienholder, lessor or lessee, or the agent of any of them, to skip
trace, locate, or repossess or to collect money payment in lieu of
repossession of, any collateral, including, but not limited to,
collateral registered under the Vehicle Code that is subject to a
security agreement that contains a repossession clause. "Assignment"
also means a written authorization by an employer to recover any
collateral entrusted to an employee or former employee if the
possessor is wrongfully in possession of the collateral. A photocopy,
facsimile copy, or electronic copy of an assignment shall have the
same force and effect as an original written assignment.
(c) "Bureau" means the Bureau of Security and Investigative
Services.
(d) "Chief" means the Chief of the Bureau of Security and
Investigative Services.
(e) "Collateral" means any vehicle, boat, recreational vehicle,
motor home, appliance, or other property that is subject to a
security agreement.
(f) "Combustibles" means any substance or article that is capable
of undergoing combustion or catching fire, or that is flammable, if
retained.
(g) "Dangerous drugs" means any controlled substances as defined
in Chapter 2 (commencing with Section 11053) of Division 10 of the
Health and Safety Code.
(h) "Deadly weapon" means and includes any instrument or weapon of
the kind commonly known as a blackjack, slungshot, billy, sandclub,
sandbag, metal knuckles, dirk, dagger, pistol, or revolver, or any
other firearm, any knife having a blade longer than five inches, any
razor with an unguarded blade, and any metal pipe or bar used or
intended to be used as a club.
(i) "Debtor" means any person obligated under a security
agreement.
(j) "Department" means the Department of Consumer Affairs.
(k) "Director" means the Director of Consumer Affairs.
(l) "Health hazard" means any personal effects which if retained
would produce an unsanitary or unhealthful condition.
(m) "Legal owner" means a person holding a security interest in
any collateral that is subject to a security agreement, a lien
against any collateral, or an interest in any collateral that is
subject to a lease agreement.
(n) "Licensee" means an individual, partnership, limited liability
company, or corporation licensed under this chapter as a
repossession agency.
(o) "Multiple licensee" means a repossession agency holding more
than one repossession license under this chapter, with one fictitious
trade style and ownership, conducting repossession business from
additional licensed locations other than the location shown on the
original license.
(p) "Person" includes any individual, partnership, limited
liability company, or corporation.
(q) "Personal effects" means any property that is not the property
of the legal owner.
(r) "Private building" means and includes any dwelling,
outbuilding, or other enclosed structure.
(s) "Qualified certificate holder" or "qualified manager" is a
person who possesses a valid qualification certificate in accordance
with the provisions of Article 5 (commencing with Section 7504) and
is in active control or management of, and who is a director of, the
licensee's place of business.
(t) "Registrant" means a person registered under this chapter.
(u) "Secured area" means and includes any fenced and locked area.
(v) "Security agreement" means an obligation, pledge, mortgage,
chattel mortgage, lease agreement, deposit, or lien, given by a
debtor as security for payment or performance of his or her debt, by
furnishing the creditor with a recourse to be used in case of failure
in the principal obligation. "Security agreement" also includes a
bailment where an employer-employee relationship exists or existed
between the bailor and the bailee.
(w) "Services" means any duty or labor to be rendered by one
person for another.
(x) "Violent act" means any act that results in bodily harm or
injury to any party involved.
(y) The amendments made to this section during the 2005-06 Regular
Session shall not be deemed to exempt any person from the provisions
of this chapter.


7500.2. A repossession agency means and includes any person who,
for any consideration whatsoever, engages in business or accepts
employment to locate or recover collateral, whether voluntarily or
involuntarily, including, but not limited to, collateral registered
under the provisions of the Vehicle Code which is subject to a
security agreement, except for any person registered pursuant to
Article 7 (commencing with Section 7506).



7500.3. A repossession agency shall not include any of the
following:
(a) Any bank subject to the jurisdiction of the Commissioner of
Financial Institutions of the State of California under Division 1
(commencing with Section 99) of the Financial Code or the Comptroller
of the Currency of the United States.
(b) Any person organized, chartered, or holding a license or
authorization certificate to make loans pursuant to the laws of this
state or the United States who is subject to supervision by any
official or agency of this state or the United States.
(c) An attorney at law in performing his or her duties as an
attorney at law.
(d) The legal owner of collateral that is subject to a security
agreement or a bona fide employee employed exclusively and regularly
by the legal owner of collateral that is subject to a security
agreement. With regard to collateral subject to registration under
the Vehicle Code, the legal owner shall be the legal owner listed on
the records of the Department of Motor Vehicles or the seller or
lessor named on a valid conditional sales contract or rental or lease
agreement if the seller or lessor is a licensed vehicle dealer as
defined in Section 285 of the Vehicle Code.
(e) An officer or employee of the United States of America, or of
this state or a political subdivision thereof, while the officer or
employee is engaged in the performance of his or her official duties.
(f) A qualified certificate holder or a registrant when performing
services for, or on behalf of, a licensee.

BUSINESS AND PROFESSIONS CODE
SECTION 7501-7501.8



7501. There is in the Department of Consumer Affairs a Bureau of
Security and Investigative Services. The bureau is under the
supervision and control of the director. The director shall
administer and enforce the provisions of this chapter.




7501.05. Protection of the public shall be the highest priority for
the Bureau of Security and Investigative Services in exercising its
licensing, regulatory, and disciplinary functions. Whenever the
protection of the public is inconsistent with other interests sought
to be promoted, the protection of the public shall be paramount.




7501.1. The Governor shall appoint a chief of the bureau at a
salary to be fixed in accordance with Section 12080.3 of the
Government Code. The chief shall serve under the direction and
supervision of the director.



7501.2. Every power and duty granted to or imposed upon the
director under this chapter may be delegated to the chief, except
that the director may not delegate authority to adopt or otherwise
act upon any proposed decision of a hearing officer after a hearing
under the provisions of Chapter 5 (commencing with Section 11500) of
Part 1 of Division 3 of Title 2 of the Government Code. The chief may
delegate any power or duty granted to or imposed upon him or her
under this chapter to the deputy chief, to the assistant chief, or to
any inspection, investigation, or auditing personnel of the bureau.



7501.3. The director, in accordance with the State Civil Service
Act, and Section 159.5, may appoint and fix the compensation of such
clerical, inspection, investigation, and auditing personnel, as well
as an assistant chief, as may be necessary to carry out the
provisions of this chapter. Except as otherwise provided in Section
159.5, all personnel shall perform their respective duties under the
supervision and direction of the chief.



7501.4. The chief shall gather evidence of violations of this
chapter and of any rule or regulation established pursuant to this
chapter by persons engaged in the business of repossession who fail
to obtain licenses and shall gather evidence of violations and
furnish that evidence to the prosecuting officers of any county or
city for the purpose of prosecuting all violations occurring within
their jurisdiction.
The chief, with the approval of the director, may require the
attendance of witnesses and examine under oath all persons whose
testimony he or she requires, relative to the affairs of a licensee
or to the subject matter of any examination, investigation, or
hearing.


7501.5. It shall be the duty of the chief to initiate and conduct
investigations into the business and affairs of licensees on the
chief's own motion.


7501.6. The director may establish and enforce such rules and
regulations as may be reasonable and necessary for the examination
and licensing of applicants, for the conduct of licensees, and for
the general enforcement of various provisions of this chapter in the
protection of the public.



7501.7. If, upon investigation, the director determines that a
licensee, a qualified certificate holder, or a registrant is in
violation of Section 7508.1, 7508.2, 7508.3, 7508.4, 7508.5, or
7508.6, the director may issue a citation to the licensee, qualified
certificate holder, or registrant. The citation shall be in writing
and shall describe with particularity the nature of the violation,
including specific references to the provision of law determined to
have been violated, and shall be delivered by certified mail to the
licensee's, qualified certificate holder's, or registrant's address
of record. If the citation is issued to the qualified certificate
holder or registrant, a copy of the citation shall also be sent by
certified mail to the licensee's address of record. If the director
deems it appropriate, the citation may contain an order of abatement
fixing a reasonable time for abatement of the violation and may
contain assessment of an administrative fine not to exceed two
thousand five hundred dollars ($2,500).
A citation or fine assessment shall inform the licensee, qualified
certificate holder, or registrant that if he or she desires a
hearing to contest the finding of a violation, the hearing shall be
requested by written notice to the director within 30 days of the
issuance of the citation or assessment, as appropriate. Any request
for reconsideration received in writing by the director within the 30
days shall stay the 30 days allowed to request a hearing while the
director reconsiders the fine assessment. Upon decision, the director
shall notify the licensee, qualified certificate holder, or
registrant in writing whether the fine assessment has been withdrawn
or the fine assessment has been reaffirmed. If the fine assessment
has been reaffirmed, the director shall again inform the licensee,
qualified certificate holder, or registrant in writing that he or she
has 30 days to request a hearing. If a hearing is not requested
pursuant to this section, payment of any fine shall not constitute an
admission of the violation charged. Hearings shall be held pursuant
to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3
of Title 2 of the Government Code.
If the licensee, qualified certificate holder, or registrant
neither requests a hearing nor pays the assessed fine within 30 days
of the assessment, the license, qualification certificate, or
registration of the person shall not be renewed pursuant to Section
7503.10 and no registration shall be issued pursuant to Article 7
(commencing with Section 7506) until the assessed fine is paid.
Administrative fines collected pursuant to this section shall be
deposited in the Private Security Services Fund.




7501.8. (a) When considering the denial of a license, registration,
or certificate under Section 7503.5, for which application has been
made under this chapter, the director, in evaluating the
rehabilitation of the applicant and the applicant's present
eligibility for a license, registration, or certificate, shall
consider the following criteria:
(1) The nature and severity of the act or crime under
consideration as grounds for denial.
(2) Evidence of any act committed subsequent to the act or crime
under consideration as grounds for denial, which also could be
considered as grounds for denial under Section 7503.5.
(3) The time that has elapsed since commission of the act or crime
referred to in paragraph (1) or (2).
(4) The extent to which the applicant has complied with any terms
of parole, probation, restitution, or any other sanctions lawfully
imposed against the applicant.
(5) Evidence, if any, of rehabilitation submitted by the
appplicant.
(b) When considering the suspension or revocation of a license,
registration, or certificate issued under this chapter on the grounds
of conviction of a crime, the director, in evaluating the
rehabilitation of the person and the person's present eligibility for
a license, registration, or certificate, shall consider the
following criteria:
(1) Nature and severity of the act or offense.
(2) Total criminal record.
(3) The time that has elapsed since commission of the act or
offense.
(4) Whether the licensee has complied with any terms of parole,
probation, restitution, or any other sanctions lawfully imposed
against the licensee.
(5) If applicable, evidence of expungement proceedings pursuant to
Section 1203.4 of the Penal Code.
(6) Evidence, if any, of rehabilitation submitted by the licensee.
(c) When considering a petition for reinstatement of a license,
registration, or certificate, the director shall evaluate evidence of
rehabilitation, considering those criteria of rehabilitation listed
in subdivision (b).

BUSINESS AND PROFESSIONS CODE
SECTION 7502-7502.6



7502. No person shall engage within this state in the activities of
a repossession agency as defined in Section 7500.2 unless the person
holds a valid repossession agency license or is exempt from
licensure pursuant to Section 7500.2 or 7500.3.




7502.1. (a) Any person who violates any provision of this chapter,
or who conspires with another person to violate any provision of this
chapter, or who knowingly engages a nonexempt unlicensed person to
repossess collateral on his or her behalf is guilty of a misdemeanor,
and is punishable by a fine of five thousand dollars ($5,000), or by
imprisonment in the county jail for not more than one year, or by
both the fine and imprisonment.
(b) Within existing resources, the Commissioner of Financial
Institutions, the Commissioner of Corporations, and the Director of
Motor Vehicles may each designate employees to investigate and report
on violations of this chapter by any of the licensees of their
respective departments. Those employees are authorized to actively
cooperate with the bureau in the investigation of those activities.
(c) A proceeding to impose the penalties specified in subdivision
(a) may be brought in any court of competent jurisdiction in the name
of the people of the State of California by the Attorney General or
by any district attorney or city attorney, or with the consent of the
district attorney, by the city prosecutor in any city or city and
county having a full-time city prosecutor, for the jurisdiction in
which the violation occurred. If the action is brought by a district
attorney, the penalty collected shall be paid to the treasurer of the
county in which the judgment is entered. If the action is brought by
a city attorney or city prosecutor, one-half of the penalty
collected shall be paid to the treasurer of the city in which the
judgment was entered and one-half to the treasurer of the county in
which the judgment was entered. If the action is brought by the
Attorney General, all of the penalty collected shall be deposited in
the Private Security Services Fund.



7502.2. (a) Any financial institution that knowingly engages a
nonexempt unlicensed person to repossess collateral on its behalf is
guilty of a misdemeanor, and is punishable by a fine of five thousand
dollars ($5,000).
(b) Within existing resources, the Commissioner of Financial
Institutions and the Commissioner of Corporations may each designate
employees to investigate and report on violations of this section by
any of the licensees of their respective departments. Those employees
are authorized to actively cooperate with the bureau in the
investigation of those activities.
(c) A proceeding to impose the fine specified in subdivision (a)
may be brought in any court of competent jurisdiction in the name of
the people of the State of California by the Attorney General or by
any district attorney or city attorney, or with the consent of the
district attorney, by the city prosecutor in any city or city and
county having a full-time city prosecutor, for the jurisdiction in
which the violation occurred. If the action is brought by a district
attorney, the penalty collected shall be paid to the treasurer of the
county in which the judgment is entered. If the action is brought by
a city attorney or city prosecutor, one-half of the penalty
collected shall be paid to the treasurer of the city in which the
judgment was entered and one-half to the treasurer of the county in
which the judgment was entered. If the action is brought by the
Attorney General, all of the penalty collected shall be deposited in
the Private Security Services Fund.



7502.3. Any person who knowingly falsifies the fingerprints or
photographs required by any provision of this chapter is guilty of a
felony.


7502.4. In addition to the remedy provided for in Section 125.5,
the superior court for the county in which any licensee licensed
under this chapter has engaged or is about to engage in any act which
constitutes a violation of this chapter may, upon a petition filed
by the director and accompanied by an affidavit or affidavits in
support thereof and a memorandum of points and authorities, issue a
temporary restraining order or other appropriate order restraining
the licensee from engaging in the business or profession for which
the person is licensed or from any part thereof, in accordance with
the provisions of this section.
(a) If an affidavit in support of the petition show that the
licensee has engaged or is about to engage in acts or ommissions
constituting a violation of this chapter and if the court is
satisfied that permitting the licensee to continue to engage in the
business and profession for which the license was issued will
endanger the public health, safety, or welfare, the court may issue
an order temporarily restraining the licensee from engaging in the
profession for which he or she is licensed.
(b) The order may not be issued without notice to the licensee
unless it appears from facts shown by the affidavit that serious
injury would result to the public before the matter can be heard on
notice.
(c) Except as otherwise specifically provided by this section,
proceedings under this section shall be governed by Chapter 3
(commencing with Section 525) of Title 7 of Part 2 of the Code of
Civil Procedure, except that no undertaking shall be required.
(d) When a restraining order is issued pursuant to this section,
or within a time to be allowed by the superior court, but in any case
not more than 30 days after the restraining order is issued, an
accusation shall be filed by the director pursuant to Section 11503
of the Government Code. The accusation shall be served upon the
licensee as provided by Section 11505 of the Government Code. The
licensee shall have all of the rights and privileges available as
specified in Chapter 5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code. However, if the
licensee requests a hearing on the accusation, the director shall
provide the licensee with a hearing within 30 days of the request and
a decision within 15 days of the date of the conclusion of the
hearing, or the court may nullify the restraining order previously
issued. Any restraining order issued pursuant to this section shall
be dissolved by operation of law at such time the director's decision
is subject to judicial review pursuant to Section 1094.5 of the Code
of Civil Procedure.



7502.5. The provisions of this chapter do not prevent the local
authorities in any city, county, or city and county, by ordinance and
within the exercise of the police power of the city, county, or city
and county from requiring repossession agency licensees or
registrants to register their names and a file copy of their state
identification cards with the city, county, or city and county. No
fee may be charged nor may any application be required by the city,
county, or city and county for the registration.



7502.6. (a) The superior court in and for the county wherein any
person carries on, or attempts to carry on, business as a
repossession agency without first having obtained a license pursuant
to this chapter, or carries on that business after the revocation or
expiration of any license or during the period of suspension of any
license, may, on application of the director, or any person licensed
under this act or association representing those licensees or any
member of the general public, issue an injunction or other
appropriate order restraining that conduct and may impose civil fines
not exceeding ten thousand dollars ($10,000).
(b) A proceeding to impose the fine specified in subdivision (a)
and enjoin the unlicensed operation of a repossession agency business
may be brought in any court of competent jurisdiction in the name of
the people of the State of California by the Attorney General or by
any district attorney or city attorney, or with the consent of the
district attorney, by a city prosecutor in any city or city and
county having a full-time city prosecutor, for the jurisdiction in
which the unlicensed activity has occurred. If the action is brought
by a district attorney, the penalty collected shall be paid to the
treasurer of the county in which the judgment is entered. If the
action is brought by a city attorney or city prosecutor, one-half of
the penalty collected shall be paid to the treasurer of the city in
which the judgment was entered, and one-half to the treasurer of the
county in which the judgment was entered. If the action is brought by
the Attorney General, all of the penalty collected shall be
deposited in the Private Investigator Fund.
(c) The proceedings under this section shall be governed by
Chapter 3 (commencing with Section 525) of Title 7 of Part 2 of the
Code of Civil Procedure, except that there shall be no requirement to
allege facts necessary to show or tending to show lack of an
adequate remedy at law or irreparable injury.

________________________________________

BUSINESS AND PROFESSIONS CODE
SECTION 7503-7503.14



7503. An application for a repossession agency license shall be
made in writing to, and filed with, the bureau in the form that may
be required by the director and shall be accompanied by the original
license fee prescribed by this chapter. The director may require the
submission of any other pertinent information, evidence, statements,
or documents.
Every application for a repossession agency license shall be
signed by the applicant and state, among other things that may be
required, the name of the applicant and the name under which the
applicant will do business, the location by number and street and
city of the office of the business for which the license is sought,
and the usual business hours the business will maintain. An applicant
who declares as true any material matter pursuant to this section
that he or she knows to be false is guilty of a misdemeanor. The
residence address, residence telephone number, and driver's license
number of each licensee, principal owner of each licensee, and any
applicant for a license, if requested, shall be confidential pursuant
to the Information Practices Act of 1977 (Chapter 1 (commencing with
Section 1798) of Title 1.8 of Part 4 of Division 3 of the Civil
Code) and shall not be released to the public.
No license shall be issued in any fictitious name which may be
confused with or which is similar to any federal, state, county, or
municipal governmental function or agency, or in any name which may
tend to describe any business function or enterprise not actually
engaged in by the applicant, or in any name which is the same as or
so similar to that of any existing licensee as would tend to deceive
the public, or in any name which would otherwise tend to be deceptive
or misleading.
The application form shall contain a statement informing the
applicant that a false or dishonest answer to a question may be
grounds for denial or subsequent suspension or revocation of a
repossession agency license.



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




7503.2. If the applicant for license is an individual, the
application shall state the full residence address of the applicant
and that the applicant is to be personally and actively in charge of
the business for which the license is sought, or if any other
qualified certificate holder is to be actively in charge of such
business, the application shall so state and set forth the name of
the person. The application shall also state whether the applicant
has ever used an alias. The application shall be subscribed and
verified by the applicant and, if any other person is to be actively
in charge of the business, the application shall also be subscribed
and verified by that person.



7503.3. If the applicants for license are copartners, the
application shall state the true names and addresses of all partners
and the name of the partner to be actively in charge of the business
for which the license is sought. If a qualified certificate holder
other than a partner is to be actively in charge of the business then
the application shall state the name and address of that person. The
application shall be subscribed and verified by all of the partners
and, if any other person is to be actively in charge of the business,
the application shall also be subscribed and verified by that
person. The application shall also state whether any of the partners
has ever used an alias.


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



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



7503.6. No license may be issued to any applicant pending final
disposition of any disciplinary action by the director previously
filed against the person or applicant or against any partner or
officer.


7503.7. The form and content of the license shall be determined by
the director in accordance with Section 164.



7503.8. Each repossession agency license or duplicate license,
together with current renewal license, if any, shall at all times be
conspicuously displayed at the place of business on record with the
bureau.


7503.9. (a) Except as provided in this section, a repossession
agency license issued under this chapter is not assignable.
(b) A repossession agency may apply to the chief for consent and,
upon receipt of the consent and payment of the processing fee
authorized by Section 7511, may assign a license to another business
entity as long as the direct and indirect owners of the assignor own
all of the assignee immediately after the assignment.



7503.10. (a) An original repossession agency license shall expire
one year following the date of issuance, unless renewed as provided
in this chapter.
(b) A renewal repossession agency license shall expire two years
following the date of renewal, unless renewed as provided in this
chapter.
(c) At least 60 days prior to the expiration of the license, the
bureau shall mail to the licensee a renewal form prescribed by the
director. To renew an unexpired license, the licensee shall complete
and mail the renewal form to the bureau, pay any and all fines
assessed pursuant to Section 7501.7 and resolved in accordance with
the provisions of that section, and pay the renewal fee prescribed by
this chapter.
(d) Upon the issuance of the initial license or renewal license,
the bureau shall issue to the licensee a suitable pocket
identification card which includes a photograph of the licensee. The
photograph shall be of a size prescribed by the bureau. The card
shall contain the name of the licensee's company.



7503.11. An expired license may be reinstated within one year of
the date of expiration upon compliance with the provisions of this
chapter, application by the licensee, and payment of any and all
fines assessed pursuant to Section 7501.7 and not resolved in
accordance with the provisions of that section and payment of the
reinstatement fee provided by this chapter. Reinstatement of an
expired license shall not prohibit the bringing of disciplinary
proceedings for any act committed in violation of this chapter during
the period the license is expired.


7503.12. A suspended repossession agency license is subject to
expiration and shall be renewed as provided in this article, but
renewal of the license does not entitle the licensee, while the
license remains suspended and until it is reinstated, to engage in
the licensed activity, or in any other activity or conduct in
violation of the order or judgment by which the license was
suspended.


7503.13. A revoked repossession agency license is subject to
expiration as provided in this article, but it may not be renewed. If
it is reinstated after its expiration, the licensee, as a condition
precedent to its reinstatement, shall pay a reinstatement fee in an
amount equal to the renewal fee in effect on the last regular renewal
date before the date on which it is reinstated, plus the delinquency
fee, if any, accrued at the time of its revocation.



7503.14. A repossession agency license which is not renewed within
three years after its expiration may not be renewed, restored,
reinstated, or reissued thereafter.
The holder of the repossession agency license may obtain a new
license only upon compliance with all of the provisions of this
chapter relating to the issuance of an original license.

________________________________________

BUSINESS AND PROFESSIONS CODE
SECTION 7504-7504.7



7504. (a) Except as otherwise provided in this chapter, an
applicant for a qualification certificate shall comply with all of
the following:
(1) Be at least 18 years of age.
(2) Have been, for at least two years of lawful experience, during
the five years preceding the date on which his or her application is
filed, a registrant or have had two years of lawful experience in
recovering collateral within this state. Lawful experience means
experience in recovering collateral as a registrant pursuant to this
chapter or as a salaried employee of a financial institution or
vehicle dealer.
Two years' experience shall consist of not less than 4,000 hours
of actual compensated work performed by the applicant preceding the
filing of an application.
An applicant shall certify that he or she has completed the
claimed hours of qualifying experience and the exact details as to
the character and nature thereof by written certifications from the
employer, licensee, financial institution, or vehicle dealer, subject
to independent verification by the director as he or she may
determine. In the event of the inability of an applicant to supply
the written certifications from the employer, licensee, financial
institution or vehicle dealer, in whole or in part, applicants may
offer other written certifications from other persons substantiating
their experience for consideration by the director. All
certifications shall include a statement that representations made
are true, correct, and contain no material omissions of fact to the
best knowledge and belief of the applicant or the person submitting
the certification. An applicant or person submitting the
certification who declares as true any material matter pursuant to
this paragraph that he or she knows to be false is guilty of a
misdemeanor.
(3) Complete and forward to the bureau a qualified certificate
holder application which shall be on a form prescribed by the
director and signed by the applicant. An applicant who declares as
true any material matter pursuant to this paragraph that he or she
knows to be false is guilty of a misdemeanor. The application shall
be accompanied by two recent photographs of the applicant, of a type
prescribed by the director, and two classifiable sets of his or her
fingerprints. The residence address, residence telephone number, and
driver's license number of each qualified certificate holder or
applicant for a qualification certificate, if requested, shall be
confidential pursuant to the Information Practices Act of 1977
(Chapter 1 (commencing with Section 1798) of Title 1.8 of Part 4 of
Division 3 of the Civil Code) and shall not be released to the
public.
(4) Pass the required examination.
(5) Pay the required application and examination fees to the
bureau.
(b) Upon the issuance of the initial qualification certificate or
renewal qualification certificate, the bureau shall issue to the
certificate holder a suitable pocket identification card which
includes a photograph of the certificate holder. The photograph shall
be of a size prescribed by the bureau. The card shall contain the
name of the licensee with whom the certificate holder is employed.
(c) The application form shall contain a statement informing the
applicant that a false or dishonest answer to a question may be
grounds for denial or subsequent suspension or revocation of a
qualification certificate.



7504.1. The director may refuse to issue a qualification
certificate, or may suspend or revoke a previously issued
qualification certificate, if the individual has committed any act
which, if committed by a licensee, would be grounds for refusing to
issue a license, or for the suspension or revocation of a license
under this chapter.
The denial shall be in writing and shall describe the basis for
the denial. The denial shall inform the applicant that if he or she
desires a hearing to contest the denial, the hearing shall be
requested of the director within 30 days of the issuance of the
denial.
When a hearing is held under this section, it shall be conducted
in accordance with Chapter 5 (commencing with Section 11500) of Part
1 of Division 3 of Title 2 of the Government Code.



7504.2. Examinations and reexaminations shall be given at least
once every other month at such places and on such specific dates as
the chief may from time to time determine and fix.



7504.3. In order to be eligible for an initial examination, an
applicant shall have completed and filed his or her application
together with the application fee prescribed by this chapter in the
office of the bureau in Sacramento, California, not later than 30
days prior to the next scheduled examination date. Applicants whose
applications are not completed and filed within the time limits of
this section may, at the discretion of the bureau, be scheduled for
the first examination next following the scheduled examination.



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



7504.5. All applicants shall be examined concerning their
competency, experience, and qualifications by the chief and the chief
may take testimony of anyone in regard thereto under oath.



7504.6. If an applicant fails to complete his or her application
within one year after it has been filed, or fails to take the
examination within a one-year period after becoming eligible
therefor, the application shall be considered to be abandoned. An
application submitted subsequent to the abandonment of a former
application shall be treated as a new application.



7504.7. (a) Except as provided in this section, every qualification
certificate issued or renewed under this chapter on or after July 1,
1998, is subject to the same renewal provisions that apply to a
repossession agency license as set forth in Sections 7503.10,
7503.11, 7503.12, 7503.13, and 7503.14.
(b) An initial qualification certificate shall expire one year
following the date of issuance, unless renewed as provided in this
chapter.
(c) A renewal qualification certificate shall expire two years
following the date of renewal, unless renewed as provided in this
chapter.

________________________________________

BUSINESS AND PROFESSIONS CODE
SECTION 7505-7505.5



7505. A licensee desiring to operate a repossession business at a
location other than the address shown on his or her license shall
apply and qualify for a license for each additional location. A
licensee desiring to operate a repossession business under one or
more fictitious trade styles shall apply and qualify for a license
for each fictitious trade style. No licensee shall indicate, or cause
to be indicated, in any printed matter, or in any directory or
listing, that he or she conducts a repossession business under any
name, or at any address, other than the names and addresses for which
he or she is licensed.
An application for a license for an additional location or an
additional trade style shall be in the same form, and the applicant
shall meet the same requirements, as for an original license.




7505.1. Every office licensed as a repossession agency shall be
under the active charge of a qualified certificate holder.



7505.2. Nothing in this chapter prohibits the using or taking of
personal effects that are connected, adjoined, or affixed to the
collateral through an unbroken sequence, if that use or taking is
reasonably necessary to effectuate the recovery in a safe manner or
to protect the collateral or personal effects. No storage fee shall
be charged for the first week on any personal effects used to
effectuate a recovery pursuant to this section. Any personal effects
used or taken pursuant to this section shall be processed in a
reasonably expedient manner pursuant to Sections 7507.9 and 7507.10.



7505.3. (a) Whenever a qualified certificate holder actively in
charge of an office ceases to be in charge, the licensee shall file
with the bureau notice, in writing, within 30 days from such
cessation.
If the notice is filed, the license shall remain in force for a
period of 90 days after the filing of the notice. At the end of the
90-day period or an additional period, not to exceed one year, as
specified by the director, if written notice is not given that a
qualified person is then actively in charge of the office, the agency
license shall be automatically suspended.
If the licensee shall fail to give written notice at the end of
the 30-day period, the agency license shall be automatically
suspended.
A license suspended under this section may be reinstated upon
payment of the reinstatement fee and submission of a reinstatement
application.
A person who performs any act for which a repossession agency
license is required during the period of suspension is subject to the
penal provisions of Article 3 (commencing with Section 7502), in
addition to the provisions of Article 9 (commencing with Section
7508) and Article 10 (commencing with Section 7510).
(b) In case of the death of a person licensed as an individual, a
member of the immediate family of the deceased licensee shall be
entitled to continue the business under the same license for 120 days
following the death of the licensee, provided that written notice is
made to the bureau within 30 days following the death of the
licensee. At the end of the 120-day period, the license shall be
automatically canceled. If no request is received within the 30-day
period, the license shall be automatically canceled at the end of
that period.
(c) In the case of the death or disassociation of a partner of an
entity licensed as a partnership, the licensee shall notify the
bureau, in writing, within 30 days from the death or disassociation
of the individual. If notice is given, the license shall remain in
force for 90 days following the death or disassociation. At the end
of that period, the license shall be automatically canceled. If the
licensee fails to notify the bureau within the 30-day period, the
license shall be automatically canceled at the end of that period.
(d) A license extended under this section is subject to all other
provisions of this chapter.



7505.4. Except as herein otherwise provided, no person shall be in
charge of any licensed office if the person has ever had a license
revoked or suspended or has ever been denied registration pursuant to
Article 7 (commencing with Section 7506); or if the person was a
partner, managing employee, or officer, of a repossession agency the
license of which has been revoked for cause.



7505.5. The person deemed to be actively in charge of an office
shall be the holder of a qualification certificate and the
certificate, together with the current renewal certificate, shall be
prominently displayed below the repossession agency's license. The
person shall be in charge of only one licensed location. The person
shall share equally with the licensee the responsibility for the
conduct of the business and the personnel of the licensed agency or
agencies, if more than one agency is licensed at that location. This
section shall not apply to any licensee who notifies the bureau in
writing that the licensee is not conducting any business, but wishes
to maintain a current license status with the bureau. When the
licensee resumes conducting business, the licensee shall so inform
the bureau in writing within 30 days.

________________________________________

BUSINESS AND PROFESSIONS CODE
SECTION 7506.3-7506.14



7506.3. Except as otherwise provided in this article, every person
entering the employ of, or contracting with, a licensee or multiple
licensee after the effective date of this article shall immediately
complete an application for an initial registration or a
reregistration and file the appropriate application with the chief
within 15 working days after the commencement of employment or
contracted services for the licensee or multiple licensee for whom
the applicant is employed or contracted. Applicants for registration
must be at least 18 years of age. An applicant who declares as true
any material matter pursuant to this section that he or she knows to
be false is guilty of a misdemeanor.
(a) An initial registration application shall be required of those
persons who have not previously submitted an application for
registration, or been registered as a registrant.
(b) A reregistration application shall be required of those
persons who have previously submitted or been registered as a
registrant.
(c) No registrant of a multiple licensee shall be required to file
more than one application for registration or reregistration for
each multiple licensee.
(d) The application form shall contain a statement informing the
applicant that a false or dishonest answer to a question may be
grounds for denial or subsequent suspension or revocation of a
registration or reregistration.



7506.4. The application for an initial registration or a
reregistration under this article shall be on a form prescribed by
the director and shall be accompanied by the fee provided for in
Section 7511.



7506.5. All information obtained on the application shall be
confidential pursuant to the Information Practices Act (Chapter 1
(commencing with Section 1798) of Title 1.8 of Part 4 of Division 3
of the Civil Code) and shall not be released to the public except for
the registrant's full name, the licensee's name and address, and the
registration number. The application shall be verified and shall
include:
(a) The full name, residence address, residence telephone number,
date and place of birth, and driver's license number of the applicant
or registrant.
(b) A statement listing any and all names used by the applicant or
registrant, other than the name by which he or she is currently
known. If the applicant or registrant has never used a name other
than his or her true name, this fact shall be set forth in the
statement.
(c) The name and address of the licensee and the date the
employment or contract commenced.
(d) The title of the position occupied by the applicant or
registrant and a description of his or her duties.
(e) Two recent photographs of the applicant or registrant, of a
type prescribed by the chief, and two classifiable sets of his or her
fingerprints, one set of which shall be forwarded to the Federal
Bureau of Investigation for purposes of a background check.
(f) The bureau may impose a fee not to exceed three dollars ($3)
for processing classifiable fingerprint cards submitted by
applicants, excluding those submitted into an electronic fingerprint
system using electronic fingerprint technology.



7506.6. Qualified certificate holders who comply with other
provisions of this chapter are not required to register under this
article.


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


7506.8. (a) The director may refuse to register any applicant if
the individual has failed to pay any or all fines assessed pursuant
to Section 7501.7 and not resolved in accordance with that section,
or has committed any act that, if committed by a licensee, would be
grounds for refusing to issue a license or for the suspension or
revocation of a license under this chapter, or has committed acts or
crimes constituting grounds for denial of a license under Section
480.
The denial shall be in writing and shall describe the basis for
the denial. The denial shall inform the applicant that if he or she
desires a hearing to contest the denial, the hearing shall be
requested of the director, in writing, within 30 days of the issuance
of the denial.
When a hearing is held under this section, it shall be conducted
in accordance with Chapter 5 (commencing with Section 11500) of Part
1 of Division 3 of Title 2 of the Government Code.
(b) The director may suspend or revoke a registration if the
registrant has committed any act that, if committed by a licensee,
would be grounds for refusing to issue a license or for the
suspension or revocation of a license under this chapter.



7506.9. (a) Upon the issuance of the initial registration,
reregistration or renewal, the chief shall issue to the registrant a
suitable pocket identification card. At the request of the
registrant, the identification card may include a photograph of the
registrant. The photograph shall be of a size prescribed by the
bureau. The card shall contain the name of the licensee with whom the
registrant is registered. The applicant may request to be issued an
enhanced pocket card that shall be composed of durable material and
may incorporate technologically advanced security features. The
bureau may charge a fee sufficient to reimburse the department for
costs for furnishing the enhanced pocket card. The fee charged may
not exceed the actual cost for system development, maintenance, and
processing necessary to provide the service, and may not exceed six
dollars ($6). If the applicant does not request an enhanced card, the
department shall issue a standard card at no cost to the applicant.
(b) Until the registration certificate is issued or denied, a
person may be assigned to work with a temporary registration on a
secure form prescribed by the chief, and issued by the qualified
certificate holder, that has been embossed by the bureau with the
state seal for a period not to exceed 120 days from the date the
employment or contract commenced, provided the person signs a
declaration under penalty of perjury that he or she has not been
convicted of a felony or committed any other act constituting grounds
for denial of a registration pursuant to Section 7506.8 (unless he
or she declares that the conviction of a felony or the commission of
a specified act or acts occurred prior to the issuance of a
registration by the chief and the conduct was not the cause of any
subsequent suspension or termination of a registration), and that he
or she has read and understands the provisions of this chapter.
(c) The chief shall issue an additional temporary registration for
not less than 60 days nor more than 120 days, if the chief
determines that the investigation of the applicant will take longer
to complete than the initial temporary registration time period.
(d) No person shall perform the duties of a registrant for a
licensee unless the person has in his or her possession a valid
repossessor registration card or evidence of a valid temporary
registration or registration renewal as described in subdivision (b)
of this section or subdivision (c) of Section 7506.10. Every person,
while engaged in any activity for which licensure is required, shall
display his or her valid pocket card as provided by regulation.




7506.10. (a) Every initial registration shall expire one year
following the date of issuance, unless renewed as provided in this
section, except for those registrations issued on or after January 1,
1984, which shall expire on December 31, 1985, and every year
thereafter, unless renewed as provided in this section. A renewal
registration shall expire two years following the date of renewal,
unless renewed as provided in this section.
(b) At least 60 days prior to the expiration, the bureau shall
mail a renewal form to the registrant at the licensee's place of
business. A registrant who desires to renew his or her registration
shall forward to the bureau for each registration the properly
completed renewal form obtained from the bureau, with the renewal fee
prescribed by this chapter, for renewal of his or her registration.
Until the registration renewal certificate is issued, a registrant
may continue to work with a temporary registration renewal
certificate on a secure form prescribed by the chief and issued by
the qualified certificate holder that has been embossed by the bureau
with the state seal for a period not to exceed 120 days from the
date of expiration of the registration.
(c) A licensee shall provide to his or her registrants information
regarding procedures for renewal of registration.
(d) A registration that is not renewed within 60 days after its
expiration may not be renewed. If the registration is renewed within
60 days after its expiration, the registrant, as a condition
precedent to renewal, shall pay the renewal fee and also pay the
delinquency fee prescribed in this chapter. Registrants working with
expired registrations shall pay all accrued fees and penalties prior
to renewal or reregistration.
(e) The delinquency fee is 50 percent of the renewal fee in effect
on the date of expiration, but not less than twenty-five dollars
($25).
(f) Upon renewal, evidence of renewal, as the director may
prescribe, shall be issued to the registrant. If evidence of renewal
has not been delivered to the registrant prior to the date of
expiration, the registrant may present evidence of renewal to
substantiate continued registration for a period not to exceed 60
days after the date of expiration or a temporary registration renewal
certificate as described in subdivision (b).
(g) A registration shall not be renewed until any and all fines
assessed pursuant to this chapter and not resolved in accordance with
this chapter have been paid.



7506.11. (a) Each registration is valid until the registrant ceases
performing services for the licensee indicated on the registration
card or until the registration expires.
(b) Each person registered under this article shall notify the
chief, in writing, within 30 days of any change in employment or
contract status with a licensee. If the person ceases to be employed
by or perform services for a licensee, the licensee shall notify the
chief, in writing, within 30 days. The registered individual shall
surrender his or her registration card to the licensee. The licensee
shall forward the registration card to the chief. If at some
subsequent time the person is again employed or retained by a
licensee, he or she shall apply for reregistration in the manner
provided in this article.
(c) Each registrant, while registered, shall notify the chief, in
writing, within 30 days after any change in his or her residence
address.


7506.12. The proceedings under this article shall be conducted in
accordance with Chapter 5 (commencing with Section 11500) of Part 1
of Division 3 of Title 2 of the Government Code, and the director
shall have all the powers granted therein.




7506.13. (a) The licensee shall at all times be responsible for
ascertaining that his or her registrants are currently registered or
have made proper application for registration as provided in this
article. The licensee may not have in his or her employment or under
contract a person subject to registration who has not registered
within the time required or whose registration has expired or been
revoked, denied, suspended, or canceled.
(b) The bureau shall keep current and accurate records of all
persons registered under this article.



7506.14. If the chief determines that continued services by an
applicant for registration in his or her current capacity may present
undue hazard to public safety, the licensee, upon proper
notification from the chief, shall suspend the applicant from
rendering services in that capacity until the licensee is notified in
writing by the chief within 60 days from the date of notification of
suspension that the applicant's registration has been approved or
denied.
________________________________________

BUSINESS AND PROFESSIONS CODE
SECTION 7507-7507.13



7507. A licensee shall notify the bureau within 30 days of any
change of its corporate officers or of the addition of any partners.
Applications, on forms prescribed by the director, shall be submitted
by all new officers and partners. The director may suspend or revoke
a license issued under this chapter if the director determines that
a new officer or partner has committed any act that constitutes
grounds for the denial of a license pursuant to Section 7503.5.



7507.1. A licensee or a qualified certificate holder shall, within
30 days after such change, notify the bureau of any change of his or
her address. The principal place of business may be at a residence or
at a business address, but it shall be the place at which the
licensee maintains a permanent office.



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



7507.3. A repossession agency shall be required to keep and
maintain adequate records of all transactions, including, but not
limited to, assignment forms; vehicle report of repossession required
by Section 28 of the Vehicle Code; vehicle condition reports,
including odometer readings, if available; personal effects
inventory; notice of seizure; and records of all transactions
pertaining to the sale of collateral that has been repossessed,
including, but not limited to, bids solicited and received, cash
received, deposits made to the trust account, remittances to the
seller, and allocation of any moneys not so remitted to appropriate
ledger accounts. Records, including bank statements of the trust
account, shall be retained for a period of not less than four years
and shall be available for examination by the bureau upon demand. In
addition, collateral and personal effects storage areas shall be made
accessible for inspection by the bureau upon demand. An assignment
form may be an original, a photocopy, a facsimile copy, or a copy
stored in an electronic format.



7507.4. A licensed repossession agency or its registrants may make
demand for payment in lieu of repossession, if the demand is made
pursuant to an assignment for repossession.
In making demand upon a debtor for a money payment in lieu of
repossession, the repossessor shall present the demand in compliance
with the Rosenthal Fair Debt Collection Act (Title 1.6C (commencing
with Section 1788) of Part 4 of Division 3 of the Civil Code),
setting forth in the demand only the amount that was specified by the
creditor in the repossession referral and the fees that are properly
chargeable. Itemized receipts shall be furnished the debtor at the
time payment is received. Payments received shall forthwith be
transmitted to the creditor, disclosing the full amount of money
received from the debtor in addition to the contract payments.



7507.5. No charge shall be made for services incurred in connection
with the recovery, transportation, and storage of collateral except
under terms agreed to by the legal owner at the time of the
repossession authorization or specifically agreed upon at a
subsequent time. Repair work may not be charged to the legal owner
unless expressly authorized by him or her.



7507.6. (a) Within seven days after a violent act has occurred
involving a licensee, or any officer, partner, qualified certificate
holder, registrant or employee of a licensee, while acting within the
course and scope of his or her employment or contract, that results
in a police report or bodily harm or bodily injury, the licensee or
the licensee's qualified certificate holder or registrant, shall mail
or deliver to the chief a notice concerning the incident upon a form
provided by the bureau.
(b) Within seven days after the occurrence of a violent act or a
threatened violent act involving a licensee, or any officer, partner,
qualified certificate holder, registrant, or employee of a licensee
while acting within the course and scope of his or her employment or
contract, that results in a police report or bodily harm or bodily
injury, the licensee or the licensee's qualified certificate holder
or registrant shall send by certified mail, return receipt requested,
a notice containing information about the incident to the person or
individual who made the assignment. If the assignor is not the legal
owner, the assignor shall notify the legal owner of the contents of
the notice.
(c) A licensee, qualified certificate holder, or registrant may
send the notice set forth in subdivision (b) for a violent act or
threatened violent act even if a police report is not made or no
bodily harm or bodily injury occurs. Any notice of a threatened
violent act provided pursuant to subdivision (b) may only be used to
notify a subsequent assignee and not for any collateral purpose.
Nothing in this subdivision or subdivision (b) shall be construed to
provide immunity against any claim for defamation.



7507.7. Within seven days after receiving a final civil court
judgment filed against the licensee or any officer, partner,
qualified certificate holder, or registrant of a licensee, for an
amount of more than the then prevailing maximum claim that may be
brought in a small claims court pertaining to an act done within the
course and scope of his or her employment or contract, the licensee,
or his or her qualified certificate holder, or his or her registrant,