Compliance Bulletin

State Law Amended to Give Debtors More Protection
October 19, 2015

The Fair Debt Buying Practices Act, which became effective in 2014, regulates the buying of charged-off consumer debt for collection purposes. The Act prohibits entry of a default or other judgment unless business records authenticated through sworn declaration are submitted to the Court. However the California Legislature became concerned about claims by borrowers that they were not served with the relevant pleadings either in time to provide an effective defense or at all. Senate Bill 641 provides that a debtor/defendant may file a motion to set aside any default judgment if service of the summons did not result in actual notice to the defendant in time to defend the action. Alex Alanis was CBA’s lead lobbyist on the bill. See the analysis of SB 641, which was prepared by Peter Munoz, partner with Reed Smith and member of CBA’s Legal Affairs Committee.