The state of California has enacted a comprehensive piece of legislation

The state of California has enacted a comprehensive piece of legislation that will, for example, make it easier for recovery agents to appeal fines and rulings by the state but ultimately fell short of what the industry was hoping to get passed.

The bill, AB281, was signed last week by Gov. Jerry Brown. Among the provisions is the creation of a Discipline Review Committee, which will be made up of three licensed and qualified recovery agents and two civilians, who will be chosen by Gov. Brown for four-year terms. The DRC will hear appeals by recovery agents of fines and other penalties assessed by the Bureau of Security and Investigative Services, the regulatory agency that oversees the repossession industry in California.

Previously, appeals had to be heard by an administrative law judge and a hearing could take up to three years to get scheduled, said Joe Collins, the legislative director for the California Association of Licensed Repossessors (Cal-R). Now, the DRC should be able to hear cases within six months of an appeal being filed.
“Now, we can appeal a decision to a captive audience who understands the industry,” Collins said.
Among some of the other changes:
• Agents do not have to mail letters to law enforcement when a vehicle has been repossessed. A phone call notifying local police of the recovery is still required.
• Recovery agencies are no longer allowed to sell the personal property from recovered vehicles and remit those funds to the lien holders.
• Recovery agencies are required to send notifications to all clients and lien holders of certain provisions of the state’s Vehicle Code, as a means of educating and informing clients of some of the acts that are allowed and not allowed.
• Licensed repossessors and agencies are held harmless against claims by consumers related to releasing a vehicle back to the owner.
One area that the industry was hoping to obtain some positive movement was in the area of keys. Currently, agencies must remove all personal property from a vehicle prior to it being released to an auction or taken away from the agency’s storage lot. Collins said that the auto finance industry had agreed to furnish all keys to recovery agencies for this purpose, but the provision was taken out and not included in the version of the bill that was signed by Gov. Brown.