California Compliance Analyses: Coerced Debt & DFPI Overdraft Reports

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On Sept. 30, 2022, California Gov. Gavin Newsom signed Senate Bill 975 into law, which creates a non-judicial process for addressing a debt incurred in the name of a debtor through duress, intimidation, threat, force, or fraud of the debtor’s resources or personal information for personal gain.

The new law states that no person shall cause another to incur a coerced debt. Anyone who does coerce

someone to incur debt will be civilly liable to the claimant (for the purposes of this guidance document — the credit union) for all or part of the debt (as determined by a court), as well as the claimant’s attorney’s fees.

Here are key takeaways of SB 975 and what credit unions need to know to comply, including what is coerced debt, other key definitions, compliance, exceptions, effective date, adequate documentation, and resources.

SB 1415: Annual Report to CA DFPI on Overdraft Fees
On Sept. 29, 2022, Newsom signed into law Senate Bill 1415, which will require financial institutions to report overdraft and non-sufficient fund (NSF) fee revenue each year.

This law comes as consumer financial protection concerns around overdraft and NSF fees are a topic of growing interest across the country.

Here are key takeaways of SB 1415, including the effective date, applicability, background, key definitions, reporting requirements, and additional resources.

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