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Assemblymember Kalra’s Bill to Protect Consumers from Predatory Debt Collectors Signed by Governor

For immediate release:

SACRAMENTO – Today, Assemblymember Kalra and bill co-sponsors celebrated the signing of AB 1414, a new law that will eliminate the use of outdated court procedures that allowed debt collectors to take advantage of California consumers. The law will require debt collectors who file lawsuits to use the same tools as everyone else who goes to court, not a special set of “common counts” that gives debt collectors a huge special advantage. 


“I am grateful Governor Newsom has signed AB 1414 to put an end to an exploitative practice that has allowed debt collectors, debt buyers, and creditors to evade modern consumer protection standards and caused extreme hardship for low-income families,” said Assemblymember Kalra. “This law will ensure greater transparency and level the playing field. Like any other business intending to sue on a contract, creditors will now have to produce the documents necessary to support their claim.”


“AB 1414 means an end to shortcuts and special treatment for sophisticated debt collectors,” said Ted Mermin, Director of co-sponsor California Low-Income Consumer Coalition. “It means that the hundreds of thousands of Californians who face debt collection lawsuits every year will have the same rights as other litigants and that debt collectors will have to prove their case. This is a crucial step in making sure our courts remain forums for justice rather than a debt collection machine.”


“Public Counsel applauds Governor Newsom for signing AB 1414. This law will give consumers a fair chance within the legal system. Requiring banks, lenders, debt collectors, debt buyers to sue on a contract will significantly reduce their habit of using the courts as an arm of the debt collection system. I cannot overstate the future impact of this law on consumers who are low-income, elderly, BIPOC, or veterans,” said Elizabeth Gonzalez, Senior Supervising Staff Attorney with co-sponsor Public Counsel.


Common counts are archaic claims in debt collection cases that allow a creditor to show the court a list of charges rather than an actual contract proving debt is owed. Too often, sophisticated creditors, debt buyers, and debt collectors use these “common counts” as a shortcut to avoid existing documentation requirements and more quickly get a default judgment that they can use to garnish someone’s wages or seize their bank account.


Debt buyers are the most frequent users of common counts and have been shown to pursue people of color more often. According to a 2017 Consumer Financial Protection Bureau report, 29% of white respondents have been contacted about a debt in collection, compared to 44% of people of color. AB 1414 puts an end to these shortcuts by requiring creditors seeking to collect on consumer debt to produce the written contract in court. A 6-month delay was incorporated into the bill to give impacted businesses additional time to come into compliance.




Assemblymember Ash Kalra represents California’s 25th Assembly District, which encompasses the majority of San José, including downtown and open space areas in southeast Santa Clara County. He was first elected in 2016, becoming the first Indian American to serve in the California Legislature in state history, and was re-elected to his fourth term in 2022. Assemblymember Kalra is the Chair of the Committee on Labor and Employment and also serves as a member on the Housing and Community Development, Judiciary, Transportation, and Water, Parks, and Wildlife committees.