California Assembly Bill AB1414

California 2023-2024 Regular Session

• Introduced: 2/17/23
• Refer: 3/16/23
• Report Pass: 4/11/23
• Refer: 4/17/23
• Report Pass: 4/25/23
• Engrossed: 5/31/23
• Refer: 6/1/23
• Refer: 6/14/23
• Report Pass: 7/6/23
• Enrolled: 9/13/23
• Chaptered: 10/10/23
• Passed: 10/10/23

Caption

Civil actions: consumer debt.

Impact

The implementation of AB 1414 is poised to affect various facets of debt collection practices in California. By excluding consumer debt from the book account definition, the bill effectively alters the approach creditors must take when seeking to recover debts. It prohibits creditors from employing 'common counts' in consumer debt recovery actions, which may impact their ability to assert such claims in court effectively. This legislative change aims to protect consumers by imposing stricter rules around how consumer debts are categorized and pursued in legal proceedings.

Summary

Assembly Bill No. 1414, enacted in California, addresses regulations regarding civil actions related to consumer debt. The bill specifically amends Section 337a of the Code of Civil Procedure, establishing that consumer debt is distinctly defined and does not fall within the traditional scope of a 'book account.' This change distinguishes consumer debt obligations incurred after July 1, 2024, which are primarily related to personal, family, or household purposes. This limitation is significant for individuals and creditors as it aims to provide clarity in the legal definitions used in civil actions involving consumer debts.

Sentiment

The sentiment surrounding AB 1414 appears to be generally supportive among consumer advocacy groups, who view the bill as a necessary measure to protect consumers from aggressive debt collection practices. However, some creditors and debt buyers may see this legislation as limiting their avenues for recovering debts, thereby complicating their operations. Overall, the bill strikes a balance between consumer rights and creditor interests, but it has sparked discussions about the implications for the debt recovery industry.

Contention

Notable points of contention regarding AB 1414 revolve around the prohibition of using common counts for consumer debt recovery. Critics argue that restricting these legal tools could undermine the efficiency of debt recovery processes for creditors. Supporters, on the other hand, contend that the bill safeguards consumers from potential overreach by debt collectors and allows for more equitable treatment in the legal system. The tension between consumer protection and the business advocacy sector is evident, and stakeholder reactions will likely shape future discussions on debt recovery legislation.