DRN and MVTRAC Execs Explain Efforts to Stop LPR Regulation in California

By Nick Zulovich, Editor
June 08, 2012

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FORT WORTH, Texas, and PALATINE, Ill. — Imagine repossessing a vehicle and completing the recovery process for collateral in California without license plate recognition technology. Leaders of both Digital Recognition Network and MVTRAC are cheering this week that the scenario in the Golden State didn't come to fruition.

DRN and MVTRAC executives welcomed the defeat of Senate Bill 1330, a measure that would have restricted the use of LPR technology in the state, severely curbing finance companies' attempts to recover collateral as well as law enforcement's pursuits of justice.

"We were able to position the value — and this is the key to the whole story — of private companies like DRN who fulfill business missions with the ability to support the auto finance industry with data and analytics and we were able to position the use, benefit and value of that data being applied and made available to law enforcement so law enforcement could do its job more effectively, using the data for public good and public safety," DRN chief executive officer Chris Metaxas explained.

"As part of this whole process and the beauty of what came out of it all is law enforcement stood up in a very strong way, demonstrating to the senators who would make the decisions on this bill all the cases they solved, all of the crimes they averted, all of the public good they created using the data that was created through private enterprise," Metaxas continued.

Metaxas also touched on two other questions the bill raised.

"The thing the legislators saw is why would we want to restrict the use of something that's in public view that has public good that for the law enforcement community to replicate and do it themselves would have cost millions of dollars in taxpayer funding," he said. "Why would they go down that path?"

Scott Jackson, CEO of MVTRAC, said he testified before Senate committees multiple times and met with legislators on several other occasions in California. Jackson indicated that he and his MVTRAC team used several discussions to explain what LPR technology is and the legal standing of a vehicle's license plate.

"The bill was hinged on the fact that a license plate was private information. It's not," Jackson emphasized. "The license plate is issued by the state and, in fact, when you sign your registration you sign that legally that plate is technically the state's.

"To get past that plate, you have to abide by the Driver's Privacy Protection Act. And they were assuming that anyone was able to look up a plate and find the registration. That's just not true, either," Jackson continued.

Beyond what the loss of LPR technology could do to law enforcement, Jackson reinforced what the regulations could have done to the auto finance community when a potential bill amendment was created that the use of the data could last no longer than 60 days.

"We showed data that proved 60 days was unreasonable. That minimum should be is nine months but that we had found valuable data for cold cases, auto thefts, and repossession as far as 24 to 36 months out," Jackson explained.

"Interestingly 31 percent of revenue from auto finance came after 60 days. Let's just face it, if everyone enacted that same legislation, we'd lose 31 percent of our revenue," he projected.

In DRN's efforts to sway senators' views in the state capitol, Metaxas highlighted similar arguments about the legal standing of a vehicle's license plate.

"You walk down the block and you see license plates every day, but you don't know who the person is. License plate data is completely unrestricted," Metaxas stressed. "It's been tested in front of the Supreme Court several times. It doesn't get restricted like other things that may reveal the identity of a person like their Social Security number, their date of birth or their address. A license plate is merely an identifier on an asset that's in public view all of the time.

"The perplexing thing to us was why would anyone waste cycles of taxpayer money trying to pass legislation using scare tactics claiming that someone who knew somebody's license plate could commit a heinous crime, which in reality it's quite the opposite. We've proved that in what we were doing," he went on to say.

Now that SB 1330 has been squelched in California, Metaxas is hoping legislators in other states won't take up a similar undertaking.

"We're monitoring everything," Metaxas said. "The good news is we adhere to very strict standards that are analogous to what other data companies have to do for more private data. We apply those same standards to ourselves. We believe that because of the win in California, we believe maybe some of those fires that looked to be ignited now will be put out at this point in time.

"Quite frankly, we were surprised that California took on the challenge of trying to impose legislation that sought to restrict the stringent permissible use guidelines already imposed by the federal government and in active use by all law enforcement agencies, financial institutions, and insurance companies. We work closely with government to ensure that standards of use are met and diligently enforced," Metaxas went on to say.

Meanwhile over at MVTRAC, Jackson said his team has Google Alerts "for every word you can imagine," so the LPR company can respond to further developments.

"The key behind our success was taking immediate action and establishing a strong rapport with the legislators in California," Jackson said. "Overall we are very proud of what we accomplished and believe that our success in this forum demonstrates our undying commitment and passion to all parties directly and indirectly related to the industries that rely on our data technology."