(a) For the purposes of this section, the following terms are defined as follows:
(1) “Adverse information” means information directly or indirectly indicating that a delinquency has occurred, because a cosigner has not complied with the contractual provisions of a consumer credit contract.
(2) “Collection action” means requesting a cosigner to pay all or part of the obligation on a consumer credit contract.
(3) “Cosigner” means a natural person, other than the primary obligor or the spouse of the primary obligor, who renders himself or herself liable for the obligation on a consumer credit contract without compensation. The term includes a person whose signature is requested by a creditor as a condition to granting credit to another person. A person who does not receive goods, services, or money in return for executing a consumer credit contract does not receive compensation within the meaning of this section. “Cosigner” does not include a joint applicant for open-end credit pursuant to subdivision (c) of Section 1799.91. A person is a cosigner within the meaning of this section whether or not he or she is designated as such on a consumer credit contract or other document creating the consumer credit contract obligation for the cosigner.
(4) “Delinquency” means a failure to make timely payment to the creditor of all or a portion of any installment under a consumer credit contract.
(5) “Notice” means a writing which describes, recites, or otherwise refers to a delinquency.
(6) “Obligation” means an indebtedness incurred by an individual for personal, family, or household purposes.
(7) “Person” means an individual, firm, partnership, association, limited liability company, or corporation.
(8) “Primary obligor” means one or more persons, other than a cosigner, who sign a consumer credit contract and assume an obligation as debtor under that contract.
(b) Except as provided in subdivisions (d) and (e), no creditor shall provide any adverse information with respect to any cosigner, to a consumer credit reporting agency regarding a delinquency on a consumer credit contract entered into on or after July 1, 1992, unless, at or before the time the information is provided to the consumer credit reporting agency, written notice of the delinquency is provided to the cosigner.
(c) No creditor shall provide any information regarding the cosigner’s obligation on a consumer credit contract to a debt collector, as defined in subdivision (c) of Section 1788.2, until notice has been provided to the cosigner under subdivision (b).
(d) The notice requirements of subdivisions (b) and (c) do not apply to any cosigner whose address, as shown in the creditor’s records respecting the consumer credit contract, is the same as the primary obligor.
(e) The notice requirements of subdivisions (b) and (c) shall be satisfied by mailing a copy of the required notice to the cosigner at the cosigner’s address, as shown in the creditor’s records respecting the consumer credit contract. However, if more than one cosigner reside at the same address, as shown in the creditor’s records respecting the consumer credit contract, a notice addressed to any cosigner at that address shall be deemed notice to all the cosigners residing at that address.
(f) Nothing in this section shall require any particular form or language with respect to a notice of delinquency sent to either a primary obligor or cosigner.
(g) Within a reasonable time after a creditor has reported to a credit reporting agency that a delinquency or delinquencies that have been reported to the consumer credit reporting agency and included in the cosigner’s file maintained by the consumer credit reporting agency have been cured, the consumer credit reporting agency shall indicate in the file that the payment was made.
(h) Nothing in this section shall be construed to require notice of a delinquency to be provided to a cosigner in any instance not expressly specified in this section, or to provide notice to persons other than cosigners.
(i) This section shall become operative on July 1, 1992.
(Amended by Stats. 1994, Ch. 1010, Sec. 42. Effective January 1, 1995.)
Last modified: October 25, 2018