Assembly committee passes Wieckowski bill to prevent debt collectors from pushing families deeper into poverty

June 25, 2019

SACRAMENTO – Senator Bob Wieckowski’s (D-Fremont) Senate Bill 616, ensuring that at least $2,000 must be left in a bank account when it is levied by a debt collector, passed the Assembly Judiciary Committee this morning.

“SB 616 will help a low-income person keep funds for rent, food and other basic living expenses if a debt collector levies her account,” said Wieckowski, a member of the Senate Judiciary Committee. “Millions of Californians are living in poverty, surviving paycheck-to-paycheck. By preventing debt collectors from zeroing out a person’s account, as they can today, we will prevent more Californians from falling deeper into poverty and being evicted from their home or apartment. This bill does not eliminate the responsibility to pay the debt, but it does ensure more financial stability for people struggling to make ends meet.”

SB 616 allows for the $2,000 protection per individual, not per bank account. With the average Californian owing $15,000 in non-mortgage debt, including student loans, medical, auto and credit-card debt, having a minimal amount protected from a bank levy, improves a person’s ability to care for herself.  The bill will also reduce the likelihood that more Californians will become unbanked and turn to high-priced check-cashing services.

The claim of exemption process that individuals can use is cumbersome, time-consuming, and only protects funds after the money has been levied, when people might already be evicted or have taken on payday loans to avoid an eviction.  Sixteen other states have levy protection measures, ranging from $300 to $10,000. 

“We continue to hear reports from legal services throughout the state about the devastating impact of bank levies on the low-income people they serve,” said Jessica Bartholow of the Western Center on Law and Poverty.  “By ensuring that checking accounts have a basic amount protected, we can make sure Californians are able to pay their rent, food and medicine, which also makes them more able to pay down their debt, and to prevent debt accrual in the first place.”

In addition to the Western Center on Law & Poverty, SB 616 is also supported by the California Low-Income Consumer Coalition, the California Asset Building Coalition, Consumer Action, Disability Rights California, the California Democratic Party, the City of San Francisco and others.

The bill now heads to the Assembly Appropriations Committee.

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