AFSA Statement on CA Assembly Adjournment Without Reconsideration AB 2501

Today the California Assembly adjourned without reconsidering the “COVID-19 Homeowner, Tenant, and Consumer Relief Law of 2020,” (AB 2501), which if approved would have required creditors to provide up to nine months of vehicle payment relief—with a repossession ban for two years (except under certain circumstances)—and 12 months of mortgage payment relief. 

It would have significantly hindered consumers’ access to credit, and weakened broader capital markets, by effectively turning vehicle secured credit obligations into unsecured loans. This may have led to ratings downgrades for vehicle asset-backed securities and certainly would have led to a collapse in confidence in the marketplace. Below is AFSA's statement on the legislation from Danielle Fagre Arlowe, Senior Vice President and head of the State Government Affairs Department: 

The American Financial Services Association and its member companies are pleased that the California Assembly declined to approve AB 2501. The legislation, while well intentioned, would have created greater economic hardship for consumers and businesses alike by limiting consumers’ access to credit and undercutting confidence in some forms of asset-backed securities in the capital markets.

The COVID-19 pandemic has created a unique set of circumstances for American consumers and businesses, and the consumer credit industry has taken unprecedented steps over the past four months to work with consumers to ensure the economic disruption many have experienced does not create undue hardship on them. AFSA and its members have made clear their ongoing commitment to work with their customers to resolve any financial challenges they may continue to experience in the months ahead.