Why Isn’t there an exception regarding the credit reporting section?

Credit reports are broadly accepted as a crucial instrument in determining a persons mobility in society—despite the inaccuracies and flawed application. Sole proprietors (and general partners in a general partnership), who by definition are one in the same with their company, do have their business debt reported on their consumer credit report.

Likewise, with more predatory small business financing schemes, like merchant cash advances which use a “factoring” model to determine a business’s credit worthiness, the protections in the credit reporting section of the RFDCPA are quite applicable to businesses.

Furthermore, some of the opposition groups have proposed new amendments to Section 1788.18 (i)—a section that this bill never altered, and more significantly, a section that was codified in only 2023 (AB 1312, Effective, January 1, 2024)

Substantive Changes that have been made in Collaboration with industry

1. Explicit clarification that this statute does not have the effect or intent of creating an additional licensing requirement.

2. Exception from the rule governing communication with employers. (§1788.12(a))

3. Exception from the rule governing communication with family members. (§1788.12(b))