BILL ANALYSIS Ó AB 1113 Page 1 Date of Hearing: May 6, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 1113 (Chau) - As Introduced February 27, 2015 ----------------------------------------------------------------- |Policy |Banking and Finance |Vote:|12 - 0 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill specifies that a person subject to a desist and refrain order from the Commissioner of the Department of Business Oversight (DBO) for violating the Check Sellers, Bill Payers, and Proraters Law (Proraters Law) has 30 days from the date of service of the order to request a hearing to challenge the order. Following a request for hearing, DBO will have 15 business days to commence the hearing, failing which the order will be rescinded. FISCAL EFFECT: AB 1113 Page 2 Minor and absorbable costs to DBO. COMMENTS: 1)Purpose. Existing law authorizes DBO to issue desist and refrain orders to require persons to cease violations of the Proraters Law. The law allows that person to request an administrative hearing to contest the order, but does not specify any time limitation for making the request. As a result, there is uncertainty as to when an uncontested order has become final, and without a finding of finality, DBO's enforcement remedies may be limited. AB 1113 creates a 30-day time limitation for requesting a hearing to challenge an order, and establishes a 15-business-day time period for commencing the hearing. 2)Proraters Law. There are four different types of businesses licensed under the Proraters Law: (i) check sellers, which sell checks, money orders, or drafts to be used by others for the payment of obligations and the transfer of money; (ii) bill payers, which receive money as an agent of an obligor for the purpose of paying bills; (iii) general proraters, which intermediate between delinquent debtors and creditors to settle obligations on behalf of the debtors; and (iv) special proraters, which pay customers' bills as part of the broader management of their customers' affairs. Many of these entities are debt settlement businesses that negotiate with creditors on behalf of consumers to lower the consumers' debt. Nonprofit credit counseling organizations are exempt from licensing under the Proraters Law. AB 1113 Page 3 Analysis Prepared by:Joel Tashjian / APPR. / (916) 319-2081