Opinion Number ( 2007 )

Dear Commissioner Ducrest:

This Office is in receipt of your opinion request under letter dated April 11, 2007. The opinion request has been assigned to me for research and reply.

Your question for which you seek the opinion of this Office concerns the following issues:

1) whether the Additional Default Remedies Act (ADRA), LSA-R.S. 6:965 et seq., may be interpreted to permit the disclosed agent of a secured party to contract with a licensed repossession agent for repossession services, or

2) whether the ADRA requires a secured party to contract directly with the licensed repossession agent in order to comply with its provisions.

A review of relevant statutes concerning self-help repossession under the ADRA, as well as the Louisiana Administrative Code shows that there is a clear prohibition under LAC 10:XV.1315 against a repossession agency from contracting with a secured party for self-help repossession if the secured party is not authorized by the ADRA to use the provisions of the ADRA. However, this prohibition only applies to secured parties and does not address disclosed agents of secured parties. LSA-R.S.6:966(C) lists the persons and institutions that may use the provisions of the ADRA. With respect to the repossession agents themselves,LSA-R.S. 6:966(D) states that any individual who physically obtains possession of the collateral under the ADRA must obtain a repossession agent license from the Office of Financial Institutions. There is no provision under the ADRA or the Louisiana Administrative Code that expressly prohibits a secured party that is authorized to use the provisions of the ADRA from using a disclosed agent to contract with a licensed repossession agent for repossession services. As long as the aforementioned conditions are met, the ADRA is deemed to allow the disclosed agent of a secured party to contract with a licensed repossession agent.

We hope this interpretation of the law will be helpful to you. The opinions of this Office are not binding, but are solely advisory in nature. Should you have further inquiries regarding this matter, please contact us.

Very truly yours,

CHARLES C. FOTI, JR.

ATTORNEY GENERAL

BY: _________________________

R. Sara Kakar

Assistant Attorney General