AFSA’s State Government Affairs team has sent a veto letter to California Governor Gavin Newsom opposing Senate Bill 1286, which addresses small business debt and the Rosenthal Fair Debt Collection Practices Act. The bill proposes expanding the Rosenthal Act to include commercial collections, a move AFSA has resisted in favor of exemptions for floor-planning members.
The veto letter outlines several concerns with SB 1286, emphasizing that it could disrupt essential communication between floorplan lenders and motor vehicle dealers, potentially harming their working relationship. A significant issue highlighted is the bill's vague definition of “total value of credit,” which complicates open-end credit lines where borrowing often exceeds specified limits.
Governor Newsom’s proposed exemption for lines of credit exceeding $500,000 does not fully address the needs of independent sector members engaged in floor planning. According to AFSA, this threshold fails to meet broader requirements and challenges faced by its members, indicating a need for a more comprehensive solution. Additionally, the bill's restrictions on judicial proceedings locations could hinder collateral recovery and negatively impact lending practices.
AFSA urges Governor Newsom to veto the bill in its current form due to these unresolved issues.
The veto letter and other recent letters from SGA are available on AFSA’s website under the direct advocacy section.
September 12th, 2024