Professor Kenneth Scott spoke with the Daily Journal's Chase Scheinbaum on the Fair Debt Buying Practices Act and the possible consequences that could follow.

Gov. Jerry Brown late last week signed into law a measure to protect consumers against the abusive debt-collection practices of debt buyers, such as “robo-signing” reviews of debts and filing lawsuits against credit card holders for claims that are beyond the statute of limitations.

SB 233, known as the Fair Debt Buying Practices Act, could help curb the questionable methods that experts say debt buyers and big banks have increasingly employed to recoup borrowed money since the financial crisis. It's part of a national trend of both federal and state regulators cracking down on such practices.

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The heightened regulations would increase the cost of collecting unpaid credit card debt, said Stanford Law School professor Kenneth Scott. The rules could deter specious lawsuits from entering the courts and free consumers of having to fight them. But there could be another, perhaps unintended consequence for consumers. Scott wrote in an email: “Banks would likely increase fees on all card accounts and/or their standards for applicants.”