On Monday, September 28, Governor Gavin Newsom signed into law AB 2463 (Wicks), effectively stopping the unjust practice of forcing the sale of family homes over small, unsecured debts. East Bay Community Law Center (EBCLC) celebrates the passage of this long-overdue legislation, which will prevent a statewide foreclosure crisis by expanding consumer protections for all Californians.
A landmark victory in an expansive slate of housing security initiatives advanced by EBCLC this year, AB 2463 will protect families from tumbling into foreclosure – losing the roof over their heads and their most valuable asset – over debts as small as a $625 unpaid credit card bill. EBCLC sounded the alarm about the forced sale of family homes in our 2020 study, Unsecured Debts, Insecure Communities, and partnered with Assemblymember Buffy Wicks to author a legislative solution to this disturbingly widespread problem.
“EBCLC has fielded too many desperate calls from low-income Californians fearful that they will be out on the streets after a debt buyer tries to force the sale of their home,” said Miguel Soto, Staff Attorney and Clinical Supervisor in EBCLC’s Consumer Justice Clinic. “Unscrupulous debt buyers have been targeting homeowners of color, forcing them to live under the constant threat of homelessness due to small unpaid consumer debts. With the passage of AB 2463, we are restoring our clients’ housing security, safeguarding their savings, and defending their health.”
AB 2463 will prevent foreclosures by ensuring that debt collectors cannot foreclose or threaten to foreclose on a family home due to any consumer debt that wasn’t secured by the home, such as a credit card or medical bill.
“The ability to own and retain your home remains a key indicator of economic stability in the United States, and a leading contributor to the racial wealth gap,” said EBCLC Executive Director, Zoë Polk. “For generations, U.S. policies including the GI Bill, redlining, trickle-down economics, and subprime mortgage targeting have benefited white people at the literal expense of generations of African Americans and families of color. With this bill, we take direct aim at the racial wealth gap by ensuring that the family home and the financial stability it provides will not be lost because of a missed credit card bill payment.”
Under current law, Californians have little recourse when a creditor tries to force the sale of their home over an unpaid debt. In Unsecured Debts, Insecure Communities, EBCLC profiled families who had lost their houses over very small debts, victims of identity theft who were sued over debts that did not belong to them, and individuals who were given almost no notice before being forced out of their homes. Our analysis of 1,610 forced sale cases revealed that debt buyers consistently used this tactic to strip wealth from people of color, seniors, and people living with medical debt.
EBCLC commends the lawmakers, advocates, students, and impacted people who fought to secure this timely and critical consumer protection. We will continue to champion impactful systemic changes such as AB 2463 in our fight to stabilize our clients’ housing and root out racial injustice in our community and state.