Wieckowski bills to protect California consumers from aggressive debt collectors advance in Senate

April 9, 2019

SACRAMENTO – With strong support from legal aid organizations and non-profit groups that assist low-income Californians, two bills by Senator Bob Wieckowski (D-Fremont), SB 187 and SB 616, to rein in aggressive and harassing debt collectors were approved by the Senate Judiciary Committee this afternoon.

“These bills are necessary to clarify who is covered by our debt collection laws and to protect people who are living paycheck to paycheck from collectors who are attempting to empty out their bank account,” said Wieckowski, a member of the Senate Judiciary Committee. “When income inequality is widening and so many families are one misstep from homelessness, we must give struggling Californians these important protections to keep them from falling deeper into a cycle of poverty.”

SB 187 clarifies that mortgage servicers must adhere to the same rules and practices as any other debt collector under the state’s Fair Debt Collections Practices Act. The law approved in 1977 protects consumers from deceptive, dishonest, and unreasonable debt collection practices. Numerous court decisions at the federal and state levels have reached conflicted rulings as to whether mortgage debt is covered under the Act. It also removes the exception that an attorney or counselor at law are not subject to the state Fair Debt Collections Practices Act.

“With recent efforts by the United States Supreme Court and the federal Consumer Financial Protection Bureau to scale back protections for consumers, the Legislature should support SB 187 so California can close many loopholes that thwart the purpose of the Fair Debt Collections Practices Act – to protect consumers from the emotional trauma caused by abusive debt collection practices,” said Sharon Djemal, director of the East Bay Law Center’s Consumer Justice Clinic.  

SB 616 would establish a $2,000 minimal amount that must be left in a bank account when it is levied by a debt collector.  This would eliminate a debt collector’s ability to zero out the account and leave someone with no way to pay for rent, food or other living expenses.  Sixteen other states already provide similar levy protections. Without this protection, more Californians will opt for predatory lenders and face increased fees from overdraft accounts and late payments.   

“The average Californian owes more than $15,000 in non-mortgage debt,” Wieckowski said. “This bill does not eliminate the debt, but it does require the minimum $2,000 protection on a bank account to enable people to pay for basic expenses. If we are serious about preventing people from falling deeper into poverty, we should enact this common-sense bill.”

Senator Wieckowski represents the 10th Senate District, which includes southern Alameda County and parts of Santa Clara County.