Assembly Banking and Finance Committee approves Wieckowski consumer bill

SB 641 protects consumers who were never notified they owed a debt by allowing them to fight default judgments

July 6, 2015

Sacramento – The state Assembly Banking and Finance Committee today passed a bill authored by Senator Bob Wieckowski (D-Fremont) to allow consumers to have their day in court if they did not receive notice of debt buyers’ lawsuits against them.  SB 641 will allow consumers to motion to set aside default judgments.

“This bill will help stop people from getting their wages garnished when they never owed the debt in the first place,” said Wieckowski, a member of the Senate Judiciary Committee.  “Too many consumers don’t find out that default judgments have been entered against them until they are served post judgment with a notice of wage garnishment.  If that occurs two years after the default judgment was filed, in most cases low-income consumers won’t have a realistic way to challenge the debt.  SB 641 will give them the chance to have the case judged on the merits.” 

The Federal Trade Commission has called for state legislation to deal with the frequency of default judgments and lack of notice provided to defendants in collection lawsuits brought by debt buyers. 

Ted Mermin, a senior adviser to the consumer law clinic at the East Bay Community Law Center, spoke in support of the bill.

“SB 641 targets an injustice experienced by a growing number of clients at the law center; consumers who have had their wages garnished or their bank accounts emptied by debt buyers without ever getting actual notice that there was a lawsuit against them,” Mermin said, adding that people in such situations often cannot afford an attorney.  “And for those consumers, there is nothing they can do.”

SB 641 is part of Senator Wieckowski’s Economic Equity and Financial Stability Initiative, a three-bill package aimed at helping low-income families reduce their personal debt, protect their wages and regain their financial footing to make meaningful contributions to our economy. 

In addition to the East Bay Community Law Center, the bill’s supporters include the Center for Responsible Lending, Consumers Union, Bay Area Legal Aid and the Western Center on Law and Poverty.

Sen. Wieckowski represents the 10th Senate District, which includes southern Alameda County and northeast Santa Clara County.