AAmong the numerous commercial finance bills currently before the California Legislature is SB1286, which would extend consumer debt collection protections to commercial debts.

If this bill is ultimately passed, it would require commercial debt collectors to obtain the same license currently required for private debt collectors under current law. In addition, it would be a crime for a commercial debt collector to “send a communication that imitates legal or judicial proceedings or that appears to be authorized, issued, or approved by a government agency or attorney when it is not.”

There are other elements that must be followed as well. For example, current law requires a debt collector to stop collecting a consumer debt if a suspected debtor provides the debt collector with certain information, including information about the debtor’s status as a suspected victim of identity theft. This would also apply to commercial debt. You can read the full text of the bill here.

Another bill currently in the works is SB1482. It would “impose various duties on commercial financing providers and brokers, including, but not limited to, prohibiting the acceptance of an admission of debt or power of attorney at any time prior to a default.”

Although both bills were introduced in February, they are currently being passed in committee.

Last modified: 20 August 2024