Assembly approves Wieckowski bill to protect consumers with mortgages from abusive debt collectors

August 30, 2019

SACRAMENTO – The state Assembly today overwhelmingly passed a bipartisan bill by Senator Bob Wieckowski (D-Fremont) to protect consumers with mortgages from abusive debt collection tactics.  SB 187 now goes to Governor Newsom for his consideration.

“SB 187 clarifies that the state’s Fair Debt Collections Practices Act protects individuals with mortgage debt and prevents mortgage servicers from threatening and harassing them to collect that debt,” said Wieckowski, a member of the Senate Judiciary Committee.  “This will end the conflicting court rulings that have occurred over the years.  It also removes the exception that attorneys or counselors at law are not subject to the act.  For too long, attorneys have harassed individuals for payment over mortgage debt.  SB 187 will end these threats.”

In 1977, Congress created the Fair Debt Collection Practices Act, to regulate how creditors and debt collection agencies enforce and collect payment of debts.  It granted consumers protections and rights, such as an avenue for disputing debt, the ability to obtain accurate debt information, and rules on how and when a collection agency can contact a consumer. That same year, California approved the Rosenthal Fair Debt Collections Practices Act, which expanded upon the protections in the federal statute.

But the law was silent as to whether it applies to collection agencies trying to collect mortgage debt. 

“This is a great victory for consumers because SB 187 removes any doubt that the Fair Debt Collection Practices Act covers individuals with mortgage debt,” said Ted Mermin, director of the California Low-Income Consumer Coalition.  “This will reduce the number of consumers who are subjected to deceptive and dishonest collection practices.   Now, people with mortgage debt will have the same rights and protections as all other consumers.”

Last year, in a ruling issued by the Fourth District Court of Appeal, the court reversed a trial court ruling and found that mortgage collectors are covered under the Rosenthal Act.  The plaintiff argued that he was the victim of hundreds of harassing and threatening phone calls demanding payment of his mortgage, despite his history of timely payments. The calls came at inconvenient times during the day, including at work, and included threats to foreclose on his home and report negative credit information.

SB 187 is supported by a large coalition of legal aid organizations, the Alexander Community Law Center at Santa Clara University, Consumer Attorneys of California and other groups throughout the state.

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