On February 19, 2021, California Assembly Member Buffy Wicks introduced Assembly Bill No. 1405 (the “Bill”), which initially sought to amend the Consumer Legal Remedies Act and was later amended to establish the Fair Debt Settlement Practices Act (the “Act”). The Bill has made its way through the CA legislative process, and as of June 2, 2021, the Bill was approved by the CA House of Representatives and ordered to the CA Senate, where it will be reviewed and possibly again amended by a Senate Committee. Once the Senate has reviewed the Bill, it will be sent to the floor for a vote, where if amended, it will return to the Assembly for concurrence, or if approved, will be sent to CA’s Governor to either sign into law or veto the Bill.
As it stands, the Bill would require debt settlement providers to follow specific regulations and prohibit certain debt settlement practices, as summarized in our previous update, if they wish to operate in the state. We will continue to monitor the Bill and update you on its trajectory through the California Legislature.
If you would like to read the text of the entire proposed legislation, please click on the following link: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB1405.