“Those forbearance periods shall continue to be extended upon request of the consumer up to a cumulative total of 270 days.”
Sacramento, CA – 5 June, 2020 – Before passing the California State Assembly Appropriations Committee on a 12-5 vote on Wednesday, AB 2501, titled “The COVID-19: homeowner, tenant, and consumer relief Law of 2020” a number of revisions were made. Unfortunately, none of these were a softening of the damaging impact that the bill poses to the future of the lending, credit, repossessions and auto sales industries in the state of California.
Probably the most noticeable change to the bill was mentioned by Appropriations Chair Assemblywoman Gonzalez during it’s reading on Wednesday, when she mentioned that “Those forbearance periods shall continue to be extended upon request of the consumer up to a cumulative total of 270 days.” That’s nine months, and requires only a simple written or verbal notice “that they are experiencing a financial hardship that prevents the borrower from making timely payments on the mortgage obligation due, directly or indirectly, to the COVID-19 emergency.”
Another noticeable revision, is the change from a simple freeze on any additional fees to an additional “The bill would authorize a servicer of vehicle-secured credit to assess, accrue, or apply to a consumer’s account a rate of interest of up to 7% per annum”
The bill will next go to the house of origin, California State Assembly. The State Assembly has eighty seats currently filled with 61 Democrats (76.3%), 17 Republicans (22.5%) and 1 Independent (1.3%). By state Assembly, AB 2501 must pass by a simple majority of 41. Important to note, in both committees is passed, it did receive some bipartisan opposition.
If it passes the Assembly, it will advance to the state Senate for another simple majority vote from it’s 40 seats, 29(D) and 11 Republican.
A date has yet to be set for this bill to be read on the Assembly Floor. The Assembly next meets on Monday, June 8.
On behalf of the California Chamber of Commerce, American Bankers Association (ABA), American Financial Services Association (AFSA), Bank Policy Institute (BPI), Credit Union National Association (CUNA), Housing Policy Council (HPC), Mortgage Bankers Association (MBA) and the Securities Industry and Financial Markets Association (SIFMA) as well as the state’s credit union league, the California Credit Unon League and the numerous auto, lending, collections, repossessions associations, we urge you to reach out to your local state assembly persons and voice or write your opposition to this bill.
This bill is both a “Credit and Job Killer!”
Find Your Assemblyperson Here!
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