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CALIFORNIA CREDIT CARD INDUSTRY JOBS AT STAKE WHEN SENATE JUDICIARY VOTES ON 'SB 1145 (BOATWRIGHT),' JAN. 11

 SACRAMENTO, Calif., Jan. 5 /PRNewswire/ -- California's credit card industry and its 20,000-plus employees throughout the state will be watching closely as the Senate Judiciary Committee takes up "SB 1145 (Boatwright)" at hearings scheduled for Jan. 11.
 After numerous abusive class action lawsuits filed against California credit card issuers for charging modest late fees to those card holders who do not pay on time, the industry has made it clear: either reform the law or expect an exodus of California credit card jobs to states like Arizona and Nevada.
 According to Greg Wilhelm, director of Government Relations, California Bankers Association, "Real jobs and real families' livelihoods are on the line if the Judiciary Committee fails to approve this measure. The Committee's inaction has already attracted the attention of economic development teams from states anxious to capitalize on the Legislature's apparent indifference to California's hostile legal environment for card issuers.
 "It is abhorrent that a small clique of class action litigators are reaping bonanzas by filing huge lawsuits -- even against Golden One, the non-profit credit union for California public employees (lawsuit filed by San Diego class action specialists Milberg Weiss Bershad Hynes & Lerach). The fees being challenged are a mere fraction of those charged in the national marketplace which, in turn, are small relative to the fees charged consumers by California's public agencies. Surely consumer groups and fair-minded legislators can spot lawsuit abuse when they see it ... and do something about it."
 Two of these lawsuits have cost California issuers over $34 million. Wells Fargo Bank alone has spent over $20 million defending and settling a series of cases challenging their modest late fees. In these cases, the class action firm Sturdevant & Sturdevant received some $3.5 million in legal fees while members of the class -- those individuals in whose name all of these suits are filed -- each received approximately $3.50.
 "SB 1145" will provide for a $15 ceiling on fees which can be assessed for late payment, exceeding the credit limit, and paying with a dishonored check. Market-based fees in 17 states, including Nevada and Arizona, average or exceed this $15 limit. (Because of federal preemption, these states establish the national market.) By comparison, the new California Department of Motor Vehicles registration renewal late fee is a 60 percent penalty for payments made 30 days late -- a penalty of $72 when imposed on the average 1992-93 renewal fee of $120.
 Passage of "SB 1145 (Boatwright)" has been endorsed by, among others, the California Association for Local Economic Development; the City of Oakland Office of Economic Development; the Los Angeles Economic Development Corp.; the Hispanic Bankers Association; the California Chamber of Commerce; and the California Credit Union League.
 -0- 1/5/94
 /CONTACT: Greg Wilhelm, 916-441-7377/


CO: California Bankers Association ST: California, Arizona, Nevada IN: FIN SU:

JP-LS -- LA041 -- 9487 01/05/94 16:49 EST
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Publication:PR Newswire
Date:Jan 5, 1994
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