Entities

California (31)
Topics and Issues

Credit repair (34)

In 2022, California passed a law to amend its credit repair regulation. The legislature passed A.B. 2424 (Ch. 965, Laws 2022) by Assemblymember Blanca Rubio. As noted in the official summary of the legislation:

This bill would replace the term “buyer” with the term “consumer” for purposes of describing a person utilizing the services of a credit services organization and would prescribe other definitions in this regard. The bill would require a credit services organization to provide a consumer a monthly statement detailing the services performed, and would require the organization to perform services agreed upon within 180 days of contracting for those services. Because the bill would expand the definition of a crime, it would impose a state-mandated local program.

This bill would require the information statement and contract to inform the consumer that the contract can be canceled before midnight on the 5th working day after the consumer signs it. The bill would extend prohibitions on counseling a consumer to make untrue statements to other specified parties. Among other things, the bill would prohibit a credit services organization from submitting a dispute to a consumer credit reporting agency, creditor, debt collector, or debt buyer more than 180 days after the disputed account has been removed from the consumer’s credit report or from failing to provide along with its first written communication to a credit reporting agency or data furnisher sufficient information to investigate a dispute of an account. The bill would also require a consumer credit reporting agency, creditor, debt collector, or debt buyer that knows that a consumer is represented by a credit services organization to communicate with the credit services organization, except as specified. Because the bill would expand the definition of a crime, it would impose a state-mandated local program.

This bill would require a credit services organization to redact specified information in certain written communications. The bill would require a credit services organization to maintain certain information on file for 4 years. Because the bill would expand the definition of a crime, it would impose a state-mandated local program. The bill would revise information that must be provided before a credit services contract is executed, including a notice regarding the filing of complaints with the Attorney General. The bill would revise statements that a credit services contract must include.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

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