AB 2476
Version: Chaptered
Author: Veterans Affairs
BILL NUMBER: AB 2476 CHAPTERED
BILL TEXT
CHAPTER 101
FILED WITH SECRETARY OF STATE JULY 13, 2012
APPROVED BY GOVERNOR JULY 13, 2012
PASSED THE SENATE JUNE 28, 2012
PASSED THE ASSEMBLY MAY 14, 2012
INTRODUCED BY Committee on Veterans Affairs (Assembly Members Cook (Chair), Pan
(Vice Chair), Atkins, Block, Beth Gaines, Nielsen, V. Manuel Perez, and Yamada)
FEBRUARY 24, 2012
An act to amend Section 405 of the Military and Veterans Code, relating to
military service.
LEGISLATIVE COUNSEL'S DIGEST
AB 2476, Committee on Veterans Affairs. Service member obligations or
liabilities: rate of interest.
Existing law provides certain legal rights for service members, including with
regard to credit agreements, interest liabilities, and mortgages and trusts.
Existing law prohibits an obligation or liability bearing interest at a rate in
excess of 6% per year incurred by a service member before that person's entry
into service from bearing interest at a rate in excess of 6% per year during
any part of the period of military service, except as prescribed. Existing law
provides that a person who violates this rate of interest provision is liable
for actual damages, reasonable attorney' s fees, and costs incurred by an
injured party.
This bill would, in addition, recast these provisions to prohibit an obligation
or liability consisting of a mortgage, trust deed, or other security in the
nature of a mortgage, that is bearing interest at a rate in excess of 6% per
year and incurred by a service member before that person's entry into service
from bearing interest in excess of 6% per year for one year after any part of
the period of military service.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 405 of the Military and Veterans Code is amended to read:
405. (a) No obligation or liability bearing interest at a rate in excess of 6
percent per year incurred by a service member before that person's entry into
service shall, except as provided in subdivision (b), bear interest at a rate
in excess of 6 percent per year as follows:
(1) For an obligation or liability consisting of a mortgage, trust deed, or
other security in the nature of a mortgage, during any part of the period of
military service and one year thereafter.
(2) For any other obligation or liability, during any part of the period of
military service.
(b) Notwithstanding subdivision (a), if in the opinion of a court, upon
application thereto by the obligee, the ability of the service member to pay
interest upon an obligation or liability at a rate in excess of 6 percent per
year is not materially affected by reason of that service, the court may make
that order as in its opinion may be just.
(c) As used in this section, "interest" includes service charges, renewal
charges, fees, or any other charges, except bona fide insurance, in respect of
any obligation or liability.
(d) Any person violating this section shall be liable for actual damages,
reasonable attorney's fees, and costs incurred by the injured party.