BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 1113

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          Date of Hearing:  May 6, 2015


                                 Jimmy Gomez, Chair

          1113 (Chau) - As Introduced February 27, 2015

          |Policy       |Banking and Finance            |Vote:|12 - 0       |
          |Committee:   |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |

          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          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          will be rescinded.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

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          Minor and absorbable costs to DBO.


          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

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          Analysis Prepared by:Joel Tashjian / APPR. / (916)