Financial Code — Part 10 | FIN — United States — California law | Esheria

Financial Code

Part 10 of 17 · provisions 1,801–2,000

This section says the act may be cited as the Financial Code.

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The commissioner must let certain debt collectors keep operating if they applied before January 1, 2023, and may issue a conditional license while an application is pending. Local governments in this state may not require a debt collector to be licensed or to register as a debt collector. This division is named the Debt Collection Licensing Act and may be cited by that name. A person may not do debt collection business in this state without first getting a license, and the license is tied to the principal place of business and cannot be transferred or assigned. This section defines key terms used in the Debt Collection Licensing Act.

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Provisions of Financial Code

Showing 200 of 3,273

  1. 22328.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    For certain motor-vehicle-secured loans, the licensee must give advance written notice before disposing of a repossessed or surrendered vehicle and must provide required accounting and surplus-return information.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22328. (a) This section applies to a loan secured in whole or in part by a lien on a motor vehicle as defined by subdivision (k) of Section 2981 of the Civil Code. (b) Any provision in any loan contract to the contrary notwithstanding, at least 15 days’ written notice of intent to dispose of a repossessed or surrendered motor vehicle must be given to all persons liable on the loan. The notice shall be personally served or shall be sent by certified mail, return receipt requested, or first-class mail, postage prepaid, directed to the last known address of the persons liable on the loan. Except as otherwise provided in Section 2983.8 of the Civil Code, those persons shall be liable for any deficiency after disposition of the repossessed or surrendered motor vehicle only if the notice prescribed by this section is given within 60 days of repossession or surrender and does all of the following: (1) States that those persons shall have a right to redeem the motor vehicle by paying in full the indebtedness evidenced by the loan note until the expiration of 15 days from the date of giving or mailing the notice, provides an itemization of the loan balance and of any costs and fees authorized by this division, and states the computation or estimate of the amount of any credit for unearned finance charges or canceled insurance as of the date of the notice. (2) States either that there is a conditional right to reinstate the loan until the expiration of 15 days from the date of giving or mailing the notice and all the conditions precedent thereto or that there is no right of reinstatement and provides a statement of reasons therefor. (3) States that, upon written request, the licensee shall extend for an additional 10 days the redemption period or, if entitled to the conditional right of reinstatement, both the redemption and reinstatement periods. The licensee shall provide the proper form for applying for these extensions with the substance of the form being limited to the extension request, spaces for the requesting party to sign and date the form, and instructions that it must be personally served or sent by certified or registered mail, return receipt requested, to a person or office and address designated by the licensee and received before the expiration of the initial redemption and reinstatement periods. (4) Discloses the place at which the motor vehicle will be returned to the persons liable on the loan upon redemption or reinstatement. (5) Designates the name and address of the person or office to whom payment shall be made. (6) States the licensee’s intent to dispose of the motor vehicle upon the expiration of 15 days from the date of giving or mailing the notice, or if by mail and either the place of deposit in the mail or the place of address is outside of this state, the period shall be 20 days instead of 15 days, and further, that upon written request to extend the redemption period and any applicable reinstatement period for 10 days, the licensee shall, without further notice, extend the period accordingly. (7) Informs the persons liable on the loan that, upon written request, the licensee shall furnish a written accounting regarding the disposition of the motor vehicle as provided for in subdivision (c). The licensee shall advise them that the request must be personally served or sent by first-class mail, postage prepaid, or certified mail, return receipt requested, to a person or office and address designated by the licensee. (8) Includes a notice, in at least 10-point bold type if the notice is printed, reading as follows: “NOTICE: YOU MAY BE SUBJECT TO SUIT AND LIABILITY IF THE AMOUNT OBTAINED UPON DISPOSITION OF THE VEHICLE IS INSUFFICIENT TO PAY THE LOAN BALANCE AND ANY OTHER AMOUNTS DUE.” (c) Unless automatically provided to the borrower within 45 days after the disposition of the motor vehicle, the licensee shall provide a written accounting regarding the disposition to any person liable on the loan within 45 days after their written request, if the request is made within one year after the disposition. The accounting shall itemize: (1) The gross proceeds of the disposition. (2) The reasonable and necessary costs and fees authorized by this division incurred in repossessing the motor vehicle. (3) The satisfaction of indebtedness secured by any subordinate lien or encumbrance on the motor vehicle if written notification of demand therefor is received before distribution of the proceeds is completed. If requested by the licensee, the holder of a subordinate lien or encumbrance shall seasonably furnish reasonable proof of its interest, and unless it does so, the seller or holder need not comply with its demand. (d) In all sales that result in a surplus, the licensee shall furnish an accounting as provided in subdivision (c) whether or not requested by the borrower. The surplus shall be returned to the borrower within 45 days after the sale is conducted. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  2. 22329.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    For certain motor-vehicle-secured loans, the lender may not accelerate or repossess unless there is a default, and bankruptcy filing alone is not a default. After default and repossession or surrender, eligible persons have a right to reinstate, subject to limits and payment conditions.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22329. (a) This section applies to a loan secured in whole or in part by a lien on a motor vehicle as defined by subdivision (k) of Section 2981 of the Civil Code. (b) (1) In the absence of default in the performance of any of the borrower’s obligations under the loan, the licensee may not accelerate the maturity of any part or all of the amount due thereunder or repossess the motor vehicle. (2) Neither the act of filing a petition commencing a case for bankruptcy under Title 11 of the United States Code by the borrower or other person liable on the loan nor the status of either of those persons as a debtor in bankruptcy constitutes a default in the performance of any of the borrower’s obligations under the loan, and neither may be used as a basis for accelerating the maturity of any part or all of the amount due under the loan or for repossessing the motor vehicle. A provision of a contract that states that the act of filing a petition commencing a case for bankruptcy under Title 11 of the United States Code by the buyer or other individual liable on the contract or the status of either of those persons as a debtor in bankruptcy is a default is void and unenforceable. (c) If, after default by the borrower, the licensee repossesses or voluntarily accepts surrender of the motor vehicle, any person liable on the loan shall have a right to reinstate the loan and the licensee shall not accelerate the maturity of any part or all of the loan prior to the expiration of the right to reinstate, unless the licensee reasonably and in good faith determines that: (1) The borrower or any other person liable on the loan by omission or commission intentionally provided false or misleading information of material importance on their credit application. (2) The borrower or any other person liable on the loan has concealed the motor vehicle or removed it from the state in order to avoid repossession. (3) The borrower or any other person liable on the loan has committed or threatens to commit acts of destruction, or has failed to take care of the motor vehicle in a reasonable manner, so that the motor vehicle has or may become substantially impaired in value. (d) Exercise of the right to reinstate the loan shall be limited to once in any 12-month period and twice during the term of the loan. (e) The provisions of this subdivision shall govern the method by which a loan shall be reinstated with respect to curing events of default that were grounds for repossession or that occurred subsequent to repossession. (1) When the default is the result of the borrower’s failure to make any payment due under the loan, the borrower or any other person liable on the loan shall make the defaulted payments and pay any applicable delinquency charges. (2) When the default is the result of the borrower’s failure to keep and maintain the motor vehicle free from all encumbrances and liens of every kind, the borrower or any person liable on the loan shall either satisfy all the encumbrances and liens or, in the event the licensee satisfies the encumbrances and liens, the borrower or any other person liable on the loan shall reimburse the licensee for all reasonable costs and expenses incurred therefor. (3) When the default is the result of the borrower’s failure to keep and maintain insurance on the motor vehicle, the borrower or any other person liable on the loan shall either obtain the insurance or, in the event the licensee has obtained the insurance, the borrower or any other person liable on the loan shall reimburse the licensee for premiums paid and all reasonable costs and expenses incurred therefor. (4) When the default is the result of the borrower’s failure to perform any other obligation under the loan, unless the licensee has made a good faith determination that the default is so substantial as to be incurable, the borrower or any other person liable on the loan shall reimburse the licensee for all reasonable costs and expenses incurred therefor. (5) Additionally, the borrower or any other person liable on the loan shall reimburse the licensee for actual and necessary fees in an amount not exceeding the amount specified in subdivision (e) of Section 22202 paid in connection with the repossession of a motor vehicle to a repossession agency licensed pursuant to Chapter 11 (commencing with Section 7500) of Division 3 of the Business and Professions Code, and actual fees in conformity with Sections 26751 and 41612 of the Government Code in an amount not exceeding the amount specified in those sections of the Government Code. (f) If the licensee denies the right to reinstatement under subdivision (c) or paragraph (4) of subdivision (e), the licensee shall have the burden of proof that the denial was justified in that it was reasonable and made in good faith. If the licensee fails to sustain the burden of proof, the licensee shall not be entitled to a deficiency. (Amended by Stats. 2022, Ch. 716, Sec. 7. (SB 1099) Effective January 1, 2023.)
  3. 22329.5.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    A licensee or the licensee’s agent who has received the specified notice must not make a later vehicle assignment for skip tracing, locating, or repossessing unless the assignee is told the notice information at the same time and in the same way the assignment is given.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22329.5. A licensee, or the agent of a licensee, that has received a notice pursuant to Section 7507.6 of the Business and Professions Code, shall not make a subsequent assignment to skip trace, locate, or repossess the vehicle without simultaneously, and in the same manner by which the assignment is given, advising the assignee of the assignment of the information contained in the notice. As used in this section, “assignment” has the same meaning set forth in Section 7500.1 of the Business and Professions Code. (Added by Stats. 2007, Ch. 192, Sec. 8. Effective September 7, 2007.)
  4. 22330.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    A licensee may not take a deed of trust, mortgage, or lien on real property as security for a loan under this division, except for a lien created by law when an abstract of judgment is recorded.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22330. No licensee shall take a deed of trust, mortgage, or lien upon real property as security for any loan made under this division, except any lien as is created by law upon the recording of an abstract of judgment. This section shall not apply to any loan of a bona fide principal amount of five thousand dollars ($5,000) or more as determined in accordance with Section 22251. (Amended by Stats. 1999, Ch. 347, Sec. 4. Effective January 1, 2000.)
  5. 22331.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    A licensee may not take a confession of judgment or a power of attorney, except for a power of attorney used to transfer ownership of a motor vehicle or mobilehome when the loan is made.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22331. No licensee shall take any confession of judgment or any power of attorney, except a power of attorney taken to effectuate the transfer of the ownership of any motor vehicle or mobilehome at the time of making the loan. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  6. 22332.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    A licensee must not take a note or promise to pay unless it accurately discloses the loan amount, loan term, and the agreed rate of charge or annual percentage rate under Regulation Z.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22332. No licensee shall take any note or promise to pay that does not accurately disclose the actual amount of the loan, the time for which it is made, and the agreed rate of charge or the annual percentage rate pursuant to Regulation Z promulgated by the Consumer Financial Protection Bureau. (Amended by Stats. 2014, Ch. 64, Sec. 18. (AB 2742) Effective January 1, 2015.)
  7. 22333.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    A licensee must not take an instrument if blanks will be filled in after execution.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22333. No licensee shall take any instrument in which blanks are left to be filled in after execution. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  8. 22334.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    A licensee generally may not make a loan contract that gives for repayment over longer than the allowed maximum term, and may not make a contract with repayment under 12 months in the specified loan range.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22334. (a) Except as provided in subdivision (b), a licensee shall not enter into any contract for a loan that provides for a scheduled repayment of principal over more than the maximum terms set forth below opposite the respective size of loans. Principal amount of loan Maximum term Less than $500 ........................ 24 months and 15 days $500 but less than $1,500 ........................ 36 months and 15 days $1,500 but less than $3,000 ........................ 48 months and 15 days $3,000 but less than $10,000 ........................ 60 months and 15 days (b) The maximum loan term of 60 months and 15 days does not apply to a loan secured by real property of a bona fide principal amount of at least five thousand dollars ($5,000). (c) A licensee shall not enter into any contract for a loan that provides for a scheduled repayment of principal that is less than 12 months. This subdivision applies to a loan of a bona fide principal amount of at least two thousand five hundred dollars ($2,500), but less than ten thousand dollars ($10,000). (d) This section does not apply to an open-end loan, a student loan made by an eligible lender under the Higher Education Act of 1965, as amended (20 U.S.C. Sec. 1070 et seq.), or a student loan made pursuant to the Public Health Service Act, as amended (42 U.S.C. Sec. 294 et seq.). (Amended by Stats. 2019, Ch. 708, Sec. 8. (AB 539) Effective January 1, 2020.)
  9. 22335.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    Payments made for assignments of wages or similar compensation are treated as loans secured by the assignment, and the excess over the amount paid is treated as interest and charges.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22335. The payment by any person in money, credit, goods, or things in action as consideration for any sale or assignment of, or order for, the payment of wages, salary, commissions, or other compensation for services, whether earned or to be earned, is, for the purposes of regulation under this division, a loan secured by the assignment. The amount by which the assigned compensation exceeds the amount of the consideration actually paid is interest and charges upon or for the loan, calculated from the date of payment to the date the compensation is payable. This section shall not be construed as modifying or affecting existing statutes governing wage assignments in the state, or as authorizing those assignments. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  10. 22336.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    A licensee may contract for, collect, or receive certain statutory fees and specified premiums, and those amounts are not counted toward the article’s maximum charges.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22336. This article does not prohibit any licensee from contracting for, collecting, or receiving the following: (a) The statutory fee paid by the licensee to any public officer for acknowledging, filing, recording, or releasing in any public office any instrument securing the loan or executed in connection with the loan. (b) Premiums paid by the licensee of the kind and to the extent described in paragraph (2) of subsection (e) of Section 226.4 of Regulation Z promulgated by the Board of Governors of the Federal Reserve System (12 C.F.R. 226). These amounts are not included in determining the maximum charges which may be made under this article. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  11. 22337.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    Licensed finance lenders must give borrowers certain written disclosures, keep broker-related statements for three years in some cases, provide receipts for loan payments, and fully release loan security when a loan is paid off, subject to listed exceptions.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22337. Each licensed finance lender shall: (a) Deliver or cause to be delivered to the borrower, or any one thereof, at the time the loan is made, a statement showing in clear and distinct terms the name, address, and license number of the finance lender and the broker, if any. The statement shall show the date, amount, and maturity of the loan contract, how and when repayable, the nature of the security for the loan, if any, and the agreed rate of charge or the annual percentage rate pursuant to Regulation Z promulgated by the Consumer Financial Protection Bureau (12 C.F.R. 1026). (b) Obtain from the borrower a signed statement as to whether any person has performed any act as a broker in connection with the making of the loan. If the statement discloses that a broker or other person has participated, then the finance lender shall obtain a full statement of all sums paid or payable to the broker or other person. The finance lender shall keep these statements for a period of three years from and after the date the loan has been paid in full, or has matured according to its terms, or has been charged off. (c) Permit payment to be made in advance in any amount on any contract of loan at any time. The licensee may apply the payment first to any agreed prepayment penalty, then to all charges due, including charges at the agreed rate or rates up to the date of payment, not to exceed the applicable maximum rate permitted by this article. (d) Deliver or cause to be delivered to the person making any cash payment, or to the person who requests a receipt at the time of making any payment, at the time payment is made on account of any loan, a plain and complete receipt showing the total amount received and identifying the loan contract upon which the payment is applied. (e) Upon repayment of any loan in full, release all security for the loan, endorse and return any certificate of ownership, and cancel or plainly mark “paid” and return to the borrower or person making final payment, any note, mortgage, security agreement, trust deed, assignment, or order signed by the borrower, or an optical image reproduction thereof, except those documents that are a part of the court record in any action, or that have been delivered to a third person for the purpose of carrying out their terms, or a security agreement that secures any other indebtedness of a borrower to the licensee, or original documents otherwise required by law. When a trust deed on real property has been taken as security for a loan that has been subsequently paid in full, a duly executed request for reconveyance shall be delivered to the trustor or trustee for the purpose of recording a reconveyance. A termination statement, furnished to the borrower as provided for in Sections 9512 and 9513 of the Commercial Code, shall be deemed a release of the security when a financing statement has been filed pursuant to Section 9501 of the Commercial Code. For purposes of this subdivision, an optical image reproduction shall meet all of the following requirements: (1) The optical image storage media used to store the document shall be nonerasable write once, read many (WORM) optical image media that does not allow changes to the stored document. (2) The optical image reproduction shall be made consistent with the minimum standards of quality approved by either the National Institute of Standards and Technology or the Association for Information and Image Management. (3) Written authentication identifying the optical image reproduction as an exact unaltered copy of the note, trust deed, mortgage, security agreement, assignment or order shall be stamped or printed on the optical image reproduction. (f) Deliver or cause to be delivered to the potential borrower, or any one thereof, at the time the licensee first requires or accepts any signed instrument or the payment of any fee, a statement showing in clear and distinct terms the name, address, and license number of the finance lender and the broker, if any. (Amended by Stats. 2014, Ch. 64, Sec. 19. (AB 2742) Effective January 1, 2015.)
  12. 22338.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    Licensed brokers must give required statements and receipts to borrowers, the finance lender, and certain payers, and must ensure lender compliance when the loan is paid in full.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22338. Each licensed broker shall: (a) Deliver to the borrower, or any one thereof, at the time the final negotiation or arrangement is made, a statement showing in clear and distinct terms the name, address, and license number of the broker and the finance lender. The statement shall show the date, amount, and terms of the agreement with the broker, and all amounts paid or to be paid to the broker and to any person other than the finance lender. (b) Deliver to the finance lender making the loan a copy of the statement referred to and described in subdivision (a). (c) Deliver to the person making any payment to the broker to be retained by the broker, a plain and complete receipt for each payment made, at the time it is made, showing the total amount received, and identifying the brokerage agreement and the loan contract upon which the payment is applied. If the payment is made by a person other than the finance lender, a copy of the receipt shall be delivered to the finance lender. (d) When the borrower pays the loan in full, ensure that the finance lender fully complies with subdivision (e) of Section 22337. (e) Deliver to the potential borrower or borrowers, at the time the licensee first requires or accepts any signed instrument or the payment of any fee, a statement showing in clear and distinct terms the name, address, and license number of the broker and finance lender. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  13. 22339.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    A licensee may take and use a security agreement that also secures later advances or borrower-directed expenditures made after the agreement is signed and before it is satisfied.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22339. Nothing contained in this article shall be construed to deny to any licensee hereunder the right of taking and using a security agreement that, in addition to securing an original obligation, may secure the repayment of sums that may be advanced to, or expenditures that may be made at the direction of, the borrower subsequent to the execution of the security agreement and prior to the satisfaction thereof. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  14. 22340.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    A licensee may sell certain promissory notes to institutional investors and may make related servicing agreements. Unless the licensee and investor agree otherwise, collected payments must be kept in a trust account and paid out only as the note owner instructs.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22340. (a) A licensee may sell promissory notes evidencing the obligation to repay loans made by the licensee pursuant to this division or evidencing the obligation to repay loans purchased from and made by another licensee pursuant to this division to institutional investors, and may make agreements with institutional investors for the collection of payments or the performance of services with respect to those notes. (b) For the purpose of this section, “institutional investor” means the following: (1) The United States or any state, district, territory, or commonwealth thereof, or any city, county, city and county, public district, public authority, public corporation, public entity, or political subdivision of a state, district, territory, or commonwealth of the United States, or any agency or other instrumentality of any one or more of the foregoing. (2) A bank, trust company, savings bank or savings and loan association, credit union, industrial bank or industrial loan company, finance lender, residential mortgage lender, or insurance company doing business under the authority of and in accordance with a license, certificate, or charter issued by the United States or any state, district, territory, or commonwealth of the United States. (3) Trustees of pension, profit sharing, or welfare funds, if the pension, profit sharing, or welfare fund has a net worth of not less than fifteen million dollars ($15,000,000), except pension, profit sharing, or welfare funds of a licensee or its affiliate, self-employed individual retirement plans, or individual retirement accounts. (4) A corporation with outstanding securities registered under Section 12 of the Securities Exchange Act of 1934 or any wholly owned subsidiary of that corporation; provided, however, that the purchaser represents that it is purchasing for its own account for investment and not with a view to or for sale in connection with any distribution of the promissory note. (5) A syndication or other combination of any of the foregoing that is organized to purchase the promissory note. (6) A trust or other business entity established by an institutional investor for the purpose of issuing or facilitating the issuance of undivided interests in, the right to receive payments from, or that are payable primarily from, a pool of financial assets held by the trust or business entity if all of the following apply: (A) The business entity is not a sole proprietorship. (B) The pool of assets consists of one or more of the following: (i) Interest bearing obligations. (ii) Other contractual obligations representing the right to receive payments from the assets. (iii) Surety bonds, insurance policies, letters of credit, or other instruments providing credit enhancements for these assets. (C) The interests will be either of the following: (i) Rated investment grade by Standard & Poor’s Corporation or Moody’s Investors Service, Inc. “Investment grade” means that the securities will be rated by Standard & Poor’s Corporation as AAA, AA, A, or BBB, or by Moody’s Investor Service, Inc., as Aaa, Aa, A, or Baa, including a rating with a “+” or “–” designation or other variations that occur within these ratings. (ii) Sold to an institutional investor as otherwise defined in this section. (D) The offer and sale of the securities is qualified under the Corporate Securities Law of 1968 (Division 1 (commencing with Section 25000) of Title 4 of the Corporations Code) or is registered under federal securities laws, or is exempt from qualification or registration. (c) In the absence of agreement to the contrary by the licensee and the institutional investor, all payments received from the collection of payments shall be deposited and maintained in a trust account, and shall be disbursed from the trust account only in accordance with the instructions of the owner of the promissory note. (Amended by Stats. 1996, Ch. 672, Sec. 1. Effective January 1, 1997.)
  15. 22340.1.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    A finance-lender licensee may sell certain mortgage-loan promissory notes to specified institutional buyers and may agree to collect payments and provide services for those notes.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22340.1. (a) A licensee that is a finance lender may sell to (1) an institutional lender, or (2) an institutional investor described in paragraph (6) of subdivision (b) of Section 22340, promissory notes evidencing the obligation to repay federally related mortgage loans, as defined in Section 1024.2 of Title 12 of the Code of Federal Regulations, purchased from and made by an institutional lender, and may make agreements for the collection of payments and performance of services with respect to those notes. For purposes of this section, “institutional lender” means any bank, trust company, savings bank or savings and loan association, credit union, industrial loan company or residential mortgage lender doing business under the authority of and in accordance with a license, certificate or charter issued by the United States or this state. (b) In the absence of agreement to the contrary by the licensee and the institutional investor or institutional lender, all payments received from the collection of payments shall be deposited and maintained in a trust account, and shall be disbursed from the trust account only in accordance with the instructions of the owner of the promissory note. (Amended by Stats. 2014, Ch. 64, Sec. 20. (AB 2742) Effective January 1, 2015.)
  16. 22341.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    This section restricts licensees from making certain refinancing loans unless specified conditions are met, limits some loan terms and sales practices, and gives borrowers a right to a new payment schedule after a balloon-payment default.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22341. (a) No licensee may make a loan to refinance a retail installment contract subject to Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of the Civil Code, that is held by the licensee, its subsidiaries, or affiliates, unless all of the following conditions are met: (1) The buyer has been making installment payments required by the retail installment contract for a period of not less than 90 days. The retail installment contract has a term of not less than 180 days and does not provide for any scheduled installment that is more than twice the amount of any other scheduled installment. (2) The loan provides for additional proceeds other than for insurance in an amount not less than the outstanding principal balance of the retail installment contract and provides for payment in full of the retail installment contract. (3) The licensee shall not take a security interest in real property that is the principal residence of the borrower unless the loan has a principal amount of five thousand dollars ($5,000) or more and the following notice written in the same language, for example, Spanish, as used in the loan documents, is incorporated into the statement used to comply with Section 22338: “WARNING TO BORROWER: IF YOU ACCEPT THIS LOAN YOU WILL BE PUTTING UP YOUR HOME AS SECURITY. THIS MEANS THAT YOUR HOME COULD BE SOLD WITHOUT YOUR PERMISSION AND WITHOUT ANY COURT ACTION IF YOU MISS ANY PAYMENT AS REQUIRED BY THIS LOAN.” This notice shall be printed in not less than 14-point bold type, shall be set apart from the rest of the statement by a border, and shall appear directly above a signature block which shall be signed by the borrower. A security interest described in this paragraph that is taken without prior notice and the borrower’s signature, as required by this paragraph, shall be void and unenforceable. (4) The licensee shall not sell, attempt to sell, or agree to sell any goods or services to the borrower, other than credit insurance as defined in Section 22314 and insurance required by the licensee to protect its security interest, until the loan has been in effect for at least 30 days. The amount of insurance required by the licensee to protect its security interest shall not exceed the lesser of the principal amount of the loan or the replacement value of the security as determined by the insurer. (5) A licensee that is an assignee of the retail installment contract shall continue to be subject under the loan to all equities and defenses of the borrower against the seller arising out of the sale, notwithstanding an agreement to the contrary. (6) The loan shall not provide for any scheduled installment that is more than twice the amount of any other scheduled installment. This paragraph does not apply to a loan of a bona fide principal amount of ten thousand dollars ($10,000) or more. (7) If a loan of a bona fide principal amount of ten thousand dollars ($10,000) or more provides for any scheduled installment that is more than twice the amount of any other scheduled installment, the loan shall contain the following provision: “The payment schedule contained in this loan requires that you make a balloon payment of $____ (amount of balloon payment) which is a payment of more than double the amount of the regular payments. You have an absolute right to obtain a new payment schedule if you default in the payment of any balloon payment.” If the borrower defaults in the payment of any balloon payment, the borrower shall be given an absolute right to obtain a new payment schedule. Unless agreed to by the borrower, the installment amounts under the new schedule shall not be substantially greater than the average of the preceding installments. (b) A loan made pursuant to this section shall be subject to this division and not to Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of the Civil Code. (c) An action by any licensee or borrower on a loan made pursuant to this section shall be tried in the county in which the loan was signed by the borrower, in the county in which the borrower resided at the time the loan was entered into, or in the county in which the borrower resides at the commencement of the action. (d) Paragraphs (6) and (7) of subdivision (a) do not apply to open-end loans. (e) A security interest provided by any retail installment contract in violation of subdivision (b) of Section 1804.3 of the Civil Code shall not serve as consideration in whole or in part for a loan made under this section, notwithstanding any agreement to the contrary. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  17. 22342.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    This section restricts how live checks may be offered and mailed, limits how long they can be negotiated, and sets consumer protections and penalties for violations.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22342. (a) As used in this section, “instant loan check” or “live check” means any loan or extension of credit that is made available in the form of a check, draft, or any other negotiable instrument that can be deposited in a bank or used for third-party payments. “Instant loan check” or “live check” does not include a check, draft, or any other negotiable instrument provided in response to an application for credit or as a means of access to an existing loan or extension of credit, including a home equity or personal line of credit. (b) No person shall produce, advertise, offer, sell, distribute, or otherwise transfer for use in this state any live check unless the document bears the following phrase printed in 12-point type on the front of the document: “THIS IS A LOAN OR AN EXTENSION OF CREDIT. YOU WILL PAY CHARGES.” (c) Live checks shall only be negotiable for a period of 30 days after the date printed on the live check. Printed material accompanying the live check shall advise the consumer to void and destroy the live check if it is not going to be negotiated. (d) Loan solicitations shall be mailed in envelopes with no indication that a negotiable instrument is contained in the mailing. Envelopes shall be marked with “do not forward” instructions to the postal service in the event that the intended addressee is no longer at the location. (e) Any loan solicitation made through a live check shall be honored in the full amount by the issuer unless the account on which the solicitation is made is closed by the consumer prior to the date the check is cashed. (f) In the event that a live check is stolen or incorrectly received by someone other than the intended payee, and the live check is cashed or otherwise negotiated based upon fraud or misrepresentation by someone other than the intended payee, the following safeguards for the consumer shall apply: (1) The creditor, upon receipt of notification that the consumer did not negotiate the live check and is a victim of identity theft as defined in Section 1798.92 of the Civil Code, shall provide, and the consumer may complete, a statement confirming that the consumer did not deposit, cash, or otherwise negotiate the live check. (2) Upon completion of the confirmation statement by the consumer, the consumer who was the intended payee shall have no liability for the loan obligation, absent any fraud by that consumer. (3) Upon receipt of notification that the consumer did not negotiate the live check and is a victim of identity theft as defined in Section 1798.92 of the Civil Code, the creditor shall take appropriate actions set forth in Sections 1785.25 and 1785.26 of the Civil Code. (g) The commissioner may, after appropriate notice and opportunity for hearing, by order levy administrative penalties against a licensee who violates this section, and the licensee shall be liable for administrative penalties of no more than two thousand five hundred dollars ($2,500) for each willful violation. Any hearing shall be held in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and the commissioner shall have all the powers granted under the act. The remedy available under this subdivision is in addition to any other remedies available to the commissioner under this division that may be employed to enforce the provisions of this section. (h) Nothing in this section shall preclude the application of any section or rule under this division. (Added by Stats. 2002, Ch. 772, Sec. 16. Effective January 1, 2003.)
  18. 22345.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    Violating the listed federal military-lending provisions counts as a violation of this chapter. A person who does not market or extend consumer loans to covered borrowers is not in violation of Section 394 of the Military and Veterans Code.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22345. (a) Any person who violates any provision of Section 987 of Title 10 of the United States Code, as amended by 126 Stat. 1785 (Public Law 112-239), or any provision of Part 232 (commencing with Section 232.1) of Subchapter M of Chapter I of Subtitle A of Title 32 of the Code of Federal Regulations, as published on July 22, 2015, on page 43560 in Number 140 of Volume 80 of the Federal Register, violates this chapter. (b) A person that does not market consumer loans to, or does not extend those loans to, covered borrowers, as that term is defined under Part 232 (commencing with Section 232.1) of Subchapter M of Chapter I of Subtitle A of Title 32 of the Code of Federal Regulations, as amended on the date described in subdivision (a), shall not be in violation of Section 394 of the Military and Veterans Code. (Amended by Stats. 2017, Ch. 514, Sec. 3. (SB 266) Effective January 1, 2018.)
  19. 22346.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    A licensee violates this division if it violates any provision of certain listed federal acts or regulations.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22346. Any licensee that violates any provision of any of the following federal acts or regulations violates this division: (a) The federal Real Estate Settlement Procedures Act, as amended (12 U.S.C. Sec. 2601 et seq.). (b) The federal Truth in Lending Act, as amended (15 U.S.C. Sec. 1601 et seq.). (c) The federal Home Ownership Equity Protection Act (15 U.S.C. Sec. 1639). (d) Any regulation promulgated under any of the federal acts in subdivision (a), (b), or (c). (Added by Stats. 2009, Ch. 629, Sec. 6. (AB 260) Effective January 1, 2010.)
  20. 22347.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    A licensed mortgage loan originator must clearly show its unique identifier on residential mortgage loan application forms, solicitations, advertisements, business cards, websites, and other documents set by the commissioner.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22300 - 22347] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22347. The unique identifier of any licensed mortgage loan originator shall be clearly shown on all residential mortgage loan application forms, solicitations, or advertisements, including business cards or Internet Web sites, and any other documents as established by rule, regulation, or order of the commissioner. (Added by Stats. 2009, Ch. 160, Sec. 42. (SB 36) Effective October 11, 2009.)
  21. 22365.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. )

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    This section creates the Pilot Program for Increased Access to Responsible Small Dollar Loans and defines key terms.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. ) ## 22365. (a) The Pilot Program for Increased Access to Responsible Small Dollar Loans is hereby established. (b) For purposes of this article: (1) “Commissioner” means the Commissioner of Financial Protection and Innovation. (2) “Program” means the Pilot Program for Increased Access to Responsible Small Dollar Loans. (3) Pursuant to Section 22380.5, “licensee” also includes a licensee approved to participate in the former Pilot Program for Affordable Credit-Building Opportunities as described in Article 3.5 (commencing with Section 22348). (c) This article does not apply to either of the following: (1) A licensee that has not been accepted to participate in the program. (2) A licensee that has been accepted to participate in the program that chooses to lend pursuant to provisions of this division that are outside of the program. (Amended by Stats. 2022, Ch. 452, Sec. 137. (SB 1498) Effective January 1, 2023. Repealed as of January 1, 2028, pursuant to Section 22381.)
  22. 22366.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. )

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    Entities that want to join the program must apply to the commissioner and pay a fee; eligible licensed entities apply directly, while unlicensed entities may submit a combined application and must pay a fee equal to the separate-application fees.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. ) ## 22366. (a) Any entity licensed under this chapter that wishes to participate in the program, that is in good standing with the commissioner and has no outstanding enforcement actions or deficiencies at the time of its application, shall file an application with the commissioner, in a manner prescribed by the commissioner, and shall pay a fee to the commissioner, in an amount calculated by the commissioner to cover its costs to administer this article. (b) Any entity wishing to participate in the program that is not licensed pursuant to this chapter may submit a combined application to the commissioner, in a manner prescribed by the commissioner, for licensure under this chapter and admission to the program and shall pay a fee to the commissioner in an amount equal to the fees that would have been imposed if the person had submitted separate applications. To be eligible to apply in this manner, an entity must be free of outstanding enforcement or other disciplinary actions taken against it by any of California’s financial regulators or by a financial regulator of another state. (Added by Stats. 2013, Ch. 467, Sec. 2. (SB 318) Effective January 1, 2014. Repealed as of January 1, 2028, pursuant to Section 22381.)
  23. 22367.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. )

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    Entities approved by the commissioner for this program must file an annual report with the commissioner by March 15.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. ) ## 22367. Every entity approved by the commissioner to participate in the program shall file with the commissioner on or before March 15 an annual report consistent with Section 22159, separate from any other annual report the licensee may be required to file. (Added by Stats. 2013, Ch. 467, Sec. 2. (SB 318) Effective January 1, 2014. Repealed as of January 1, 2028, pursuant to Section 22381.)
  24. 22368.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. )

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    This section says a licensee is not exempt from the article’s division provisions or Civil Code Section 1632, unless another provision says otherwise.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. ) ## 22368. Except as otherwise provided, nothing in this article shall exempt any licensee from any of the provisions of this division or Section 1632 of the Civil Code. (Added by Stats. 2013, Ch. 467, Sec. 2. (SB 318) Effective January 1, 2014. Repealed as of January 1, 2028, pursuant to Section 22381.)
  25. 22369.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. )

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    A licensee may not offer or make loans, charge fees, or use a finder for this program unless the commissioner first approves participation.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. ) ## 22369. No licensee may offer or make a loan, nor impose any charges or fees pursuant to Section 22370, nor use a finder pursuant to Section 22371, without prior approval from the commissioner to participate in the program. (Added by Stats. 2013, Ch. 467, Sec. 2. (SB 318) Effective January 1, 2014. Repealed as of January 1, 2028, pursuant to Section 22381.)
  26. 22370.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. )

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    This section sets rules for certain small-dollar loans, including loan terms, interest-rate caps, fee limits, disclosures, underwriting, reporting, and borrower rights.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. ) ## 22370. (a) A loan made pursuant to this section shall comply with the following requirements: (1) The loan shall be unsecured. (2) Interest on the loan shall accrue on a simple-interest basis, through the application of a daily periodic rate to the actual unpaid principal balance each day. (3) The licensee shall disclose the following to the consumer in writing, in a typeface no smaller than 12-point type, at the time of application: (A) The amount borrowed; the total dollar cost of the loan to the consumer if the loan is paid back on time, including the sum of the administrative fee, principal amount borrowed, and interest payments; the corresponding annual percentage rate, calculated in accordance with Federal Reserve Board Regulation Z (12 C.F.R. 226.1 et seq.); the periodic payment amount; the delinquency fee schedule; and the following statement: “Repaying your loan early will lower your borrowing costs by reducing the amount of interest you will pay. This loan has no prepayment penalty.” (B) A statement that the consumer has the right to rescind the loan by notifying the licensee of the consumer’s intent to rescind the loan and returning the principal advanced by the end of the business day following the date the loan is consummated. (4) A licensee may provide the borrower with the disclosures required by paragraph (3) in a mobile or other electronic application, on which the size of the typeface of the disclosure can be manually modified by a prospective borrower, if the prospective borrower is given the option to print the disclosure in a typeface of at least 12-point size or is provided by the licensee with a hardcopy of the disclosure in a typeface of at least 12-point size before the loan is consummated. (5) The loan shall have a minimum principal amount upon origination of three hundred dollars ($300) and a term of not less than the following: (A) Ninety days for loans whose principal balance upon origination is less than five hundred dollars ($500). (B) One hundred twenty days for loans whose principal balance upon origination is at least five hundred dollars ($500), but is less than one thousand five hundred dollars ($1,500). (C) One hundred eighty days for loans whose principal balance upon origination is at least one thousand five hundred dollars ($1,500), but is less than two thousand five hundred dollars ($2,500). (D) One year nor more than five years for loans whose principal balance is more than two thousand five hundred dollars ($2,500). (b) As an alternative to the charges authorized by Section 22303 or 22304, a licensee approved by the commissioner to participate in the program may contract for and receive charges for a loan made pursuant to this section at an annual simple interest rate not to exceed the following: (1) The lesser of 36 percent or the sum of 32.75 percent plus the United States prime lending rate, as of the date of loan origination, on that portion of the unpaid principal balance of the loan up to and including, but not in excess of, one thousand dollars ($1,000). The interest rate calculated as of the date of loan origination shall be fixed for the life of the loan. (2) The lesser of 35 percent or the sum of 28.75 percent plus the United States prime lending rate, as of the date of loan origination, on that portion of the unpaid principal balance of the loan in excess of one thousand dollars ($1,000), but less than seven thousand five hundred dollars ($7,500). The interest rate calculated as of the date of loan origination shall be fixed for the life of the loan. (c) Notwithstanding subdivision (b) and subject to subdivision (d), a licensee approved by the commissioner to participate in the program shall reduce the interest rates specified in subdivision (b) on each subsequent loan to the same borrower by a minimum of one percentage point, as follows: (1) The interest rates shall be reduced by one percentage point for loans with contractual terms of two years or less. (2) In addition to the percentage point in paragraph (1), the interest rates shall be reduced by one additional percentage point for every additional contracted partial or full 12-month term. (3) The interest rates on third and subsequent loans to the same borrower shall be reduced in accordance with paragraphs (1) and (2), but shall represent interest rate reductions relative to the interest rates applicable to the borrower’s prior loan rather than the rates specified in subdivision (b). (4) Notwithstanding paragraphs (1) to (3), inclusive, a licensee shall not be required to reduce the interest rate on a subsequent loan by more than four percentage points relative to the rates specified in subdivision (b). (5) The interest rate calculated as of the date of the loan origination shall be fixed for the life of the loan. (d) The interest rate reductions specified in subdivision (c) shall apply only if all of the following conditions are met: (1) The subsequent loan is originated no more than 180 days after the prior loan is fully repaid. (2) The borrower was never more than 15 days delinquent on the prior loan. (3) The prior loan was outstanding for at least one-half of its original term prior to its repayment. (e) (1) As to any loan made under this section, a licensee approved by the commissioner to participate in the program may contract for and receive an administrative fee, which shall be fully earned immediately upon making the loan, in an amount not to exceed the applicable of the following: (A) Seven percent of the principal amount, exclusive of the administrative fee, or ninety dollars ($90), whichever is less, on the first loan made to a borrower. (B) Six percent of the principal amount, exclusive of the administrative fee, or seventy-five dollars ($75), whichever is less, on the second and subsequent loans made to that borrower. (2) A licensee shall not charge the same borrower an administrative fee more than once in any four-month period. (3) For purposes of this section, “refinance” means the replacement or revision of an existing loan contract with a borrower that results in an extension of additional principal to that borrower. A licensee shall not refinance a loan made under this section, unless all of the following conditions are met at the time the borrower submits an application to refinance: (A) The borrower has repaid at least 60 percent of the outstanding principal remaining on his or her loan. (B) The borrower is current on his or her outstanding loan. (C) The licensee underwrites the new loan in accordance with paragraph (4) of subdivision (i). (D) If the loan proceeds of both the original loan and the refinance loan are to be used for personal, family, or household purposes, the borrower has not previously refinanced the outstanding loan more than once. (4) Notwithstanding paragraph (3), an administrative fee shall not be contracted for or received in connection with the refinancing of a loan unless at least eight months have elapsed since the receipt of a previous administrative fee paid by the borrower. With the exception of a loan that is refinanced, only one administrative fee may be contracted for or received until the loan has been repaid in full. Section 22305 shall not apply to any loan made under this section. (f) Notwithstanding subdivision (a) of Section 22320.5, a licensee approved by the commissioner to participate in the program may require reimbursement from a borrower for the actual insufficient funds fees incurred by that licensee due to actions of the borrower, and may contract for and receive a delinquency fee that is one of the following amounts: (1) For a period of delinquency of not less than seven days, an amount not in excess of fourteen dollars ($14). (2) For a period of delinquency of not less than 14 days, an amount not in excess of twenty dollars ($20). (g) If a licensee opts to impose a delinquency fee, it shall use the delinquency fee schedule described in subdivision (f), subject to all of the following: (1) No more than one delinquency fee may be imposed per delinquent payment. (2) No more than two delinquency fees may be imposed during any period of 30 consecutive days. (3) No delinquency fee may be imposed on a borrower who is 180 days or more past due if that fee would result in the sum of the borrower’s remaining unpaid principal balance, accrued interest, and delinquency fees exceeding 180 percent of the original principal amount of the borrower’s loan. (4) The licensee or any of its wholly owned subsidiaries shall attempt to collect a delinquent payment for a period of at least 30 days following the start of the delinquency before selling or assigning that unpaid debt to an independent party for collection. (h) (1) The licensee shall develop and implement policies and procedures designed to respond to questions raised by applicants and borrowers regarding their loans, including those involving finders, and to address customer complaints as soon as reasonably practicable. (2) The licensee shall perform a reasonable background check on any finders associated with the licensee’s participation in the program. (i) The following applies to a loan made by a licensee pursuant to this section: (1) Before disbursement of loan proceeds, the licensee shall either (A) offer a credit education program or seminar to the borrower that has been previously reviewed and approved by the commissioner for use in complying with this section; or (B) invite the borrower to a credit education program or seminar offered by an independent third party that has been previously reviewed and approved by the commissioner for use in complying with this section. The borrower shall not be required to participate in either of these education programs or seminars. A credit education program or seminar offered pursuant to this paragraph shall be provided at no cost to the borrower. (2) The licensee shall report each borrower’s payment performance to at least one consumer reporting agency that compiles and maintains files on consumers on a nationwide basis, upon acceptance as a data furnisher by that consumer reporting agency. For purposes of this section, a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis is one that meets the definition in Section 603(p) of the federal Fair Credit Reporting Act (15 U.S.C. Sec. 1681a(p)). Any licensee that is accepted as a data furnisher after admittance into the program must report all borrower payment performance since its inception of lending under the program, as soon as practicable after its acceptance into the program, but in no event more than six months after its acceptance into the program. (A) The commissioner may approve a licensee for the program, before that licensee has been accepted as a data furnisher by a consumer reporting agency, if the commissioner has a reasonable expectation, based on information supplied by the licensee, of both of the following: (i) The licensee will be accepted as a data furnisher, once it achieves a lending volume required of data furnishers of its type by a consumer reporting agency. (ii) That lending volume will be achieved within the first six months of the licensee commencing lending. (B) Notwithstanding subparagraph (A), the commissioner shall withdraw approval for pilot program participation from any licensee that fails to become accepted as a data furnisher by a consumer reporting agency within six months of commencing lending under the pilot program. (3) The licensee shall provide each borrower with the name of the consumer reporting agency or agencies to which it will report the borrower’s payment history. A licensee that is accepted as a data furnisher after admittance into the program shall notify its borrowers, as soon as practicable following acceptance as a data furnisher, regarding the name of the consumer reporting agency or agencies to which it will report that borrower’s payment history. (4) (A) The licensee shall underwrite each loan to determine a borrower’s ability and willingness to repay the loan pursuant to the loan terms, and shall not make a loan if it determines, through its underwriting, that the borrower’s total monthly debt service payments, at the time of origination, including the loan for which the borrower is being considered, and across all outstanding forms of credit that can be independently verified by the licensee, exceed 50 percent of the borrower’s gross monthly income for a loan of no more than two thousand five hundred dollars ($2,500) or exceed 36 percent of the borrower’s gross monthly income for a loan in excess of two thousand five hundred dollars ($2,500). (B) (i) The licensee shall seek information and documentation pertaining to all of a borrower’s outstanding debt obligations during the loan application and underwriting process, including loans that are self-reported by the borrower but not available through independent verification. The licensee shall verify that information using a credit report from at least one consumer reporting agency that compiles and maintains files on consumers on a nationwide basis or through other available electronic debt verification services that provide reliable evidence of a borrower’s outstanding debt obligations. (ii) Notwithstanding the verification requirement in subparagraph (A), the licensee shall request from the borrower and include all information obtained from the borrower regarding outstanding deferred deposit transactions in the calculation of the borrower’s outstanding debt obligations. (iii) The licensee shall not be required to consider, for purposes of debt-to-income ratio evaluation, loans from friends or family. (C) The licensee shall also verify the borrower’s income that the licensee relies on to determine the borrower’s debt-to-income ratio using information from either of the following: (i) Electronic means or services that provide reliable evidence of the borrower’s actual income. (ii) Internal Revenue Service Form W-2, tax returns, payroll receipts, bank statements, or other third-party documents that provide reasonably reliable evidence of the borrower’s actual income. (5) The licensee shall notify each borrower, at least two days before each payment due date, informing the borrower of the amount due, and the payment due date. Notification may be provided by any means mutually acceptable to the borrower and the licensee. A borrower shall have the right to opt out of this notification at any time, upon electronic or written request to the licensee. The licensee shall notify each borrower of this right before disbursing loan proceeds. (j) (1) Notwithstanding Sections 22311 to 22315, inclusive, no person, in connection with, or incidental to, the making of any loan made pursuant to this article, may offer, sell, or require the borrower to contract for “credit insurance” as defined in paragraph (1) of subdivision (a) of Section 22314 or insurance on tangible personal or real property of the type specified in Section 22313. (2) Notwithstanding Sections 22311 to 22315, inclusive, no licensee, finder, or any other person that participates in the origination of a loan under this article shall refer a borrower to any other person for the purchase of “credit insurance” as defined in paragraph (1) of subdivision (a) of Section 22314 or insurance on tangible personal or real property of the type specified in Section 22313. (k) (1) A licensee shall not require, as a condition of providing the loan, that the borrower waive any right, penalty, remedy, forum, or procedure provided for in any law applicable to the loan, including the right to file and pursue a civil action or file a complaint with or otherwise communicate with the commissioner or any court or other public entity, or that the borrower agree to resolve disputes in a jurisdiction outside of California or to the application of laws other than those of California, as provided by law. Any waiver by a borrower must be knowing, voluntary, and in writing, and expressly not made a condition of doing business with the licensee. Any waiver that is required as a condition of doing business with the licensee shall be presumed involuntary, unconscionable, against public policy, and unenforceable. The licensee has the burden of proving that a waiver of any rights, penalties, forums, or procedures was knowing, voluntary, and not made a condition of the contract with the borrower. (2) A licensee shall not refuse to do business with or discriminate against a borrower or applicant on the basis that the borrower or applicant refuses to waive any right, penalty, remedy, forum, or procedure, including the right to file and pursue a civil action or complaint with, or otherwise notify, the commissioner or any court or other public entity. The exercise of a person’s right to refuse to waive any right, penalty, remedy, forum, or procedure, including a rejection of a contract requiring a waiver, shall not affect any otherwise legal terms of a contract or an agreement. (3) This subdivision does not apply to any agreement to waive any right, penalty, remedy, forum, or procedure, including any agreement to arbitrate a claim or dispute, after a claim or dispute has arisen. This subdivision does not affect the enforceability or validity of any other provision of the contract. (l) This section does not apply to any loan of a bona fide principal amount of seven thousand five hundred dollars ($7,500) or more as determined in accordance with Section 22251. For purposes of this subdivision, “bona fide principal amount” shall be determined in accordance with Section 22251. (Amended by Stats. 2018, Ch. 1016, Sec. 2. (AB 237) Effective January 1, 2019. Repealed as of January 1, 2028, pursuant to Section 22381.)
  27. 22371.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. )

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    An approved licensee may use one or more finders. The commissioner may charge a fee tied to oversight costs, and some electronic-access entities are not treated as finders.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. ) ## 22371. (a) A licensee who is approved by the commissioner to participate in the program may use the services of one or more finders as provided in this article. In addition to the fees and costs authorized by subdivision (b) of Section 22375 and subdivision (a) of Section 22377, the commissioner may charge a licensee who uses the services of one or more finders a fee, following the examination of the finder or finders, in an amount not to exceed that necessary to offset the commissioner’s costs to oversee the activities of that licensee’s finder or finders. (b) For purposes of this article, a “finder” means an entity that, at the finder’s physical location for business, brings a licensee and a prospective borrower together for the purpose of negotiating a loan contract. (c) An entity, whose sole means of bringing a licensee and a prospective borrower together at that entity’s physical location for business is via an electronic access point through which a prospective borrower may directly access the Internet Web site of a licensee is not a “finder” for purposes of this article. (Amended by Stats. 2018, Ch. 1016, Sec. 3. (AB 237) Effective January 1, 2019. Repealed as of January 1, 2028, pursuant to Section 22381.)
  28. 22372.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. )

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    A finder may perform listed support services for a licensee, but cannot give counseling or advice or use unapproved loan marketing material.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. ) ## 22372. (a) A finder may perform one or more of the following services for a licensee at the finder’s physical location for business: (1) Distributing, circulating, using, or publishing preprinted brochures, flyers, factsheets, or other written materials relating to loans that the licensee may make or negotiate and that have been reviewed and approved in writing by the licensee prior to their being distributed, circulated, or published. (2) Providing written factual information about loan terms, conditions, or qualification requirements to a prospective borrower that has been either prepared by the licensee or reviewed and approved in writing by the licensee. A finder may discuss that information with a prospective borrower in general terms, but may not provide counseling or advice to a prospective borrower. (3) Notifying a prospective borrower of the information needed in order to complete a loan application without providing counseling or advice to a prospective borrower. (4) Entering information provided by the prospective borrower on a preprinted or electronic application form or onto a preformatted computer database without providing counseling or advice to a prospective borrower. (5) Assembling credit applications and other materials obtained in the course of a credit application transaction for submission to the licensee. (6) Contacting the licensee to determine the status of a loan application. (7) Communicating a response that is returned by the licensee’s automated underwriting system to a borrower or a prospective borrower. (8) Obtaining a borrower’s signature on documents prepared by the licensee and delivering final copies of the documents to the borrower. (b) A finder that is licensed or regulated pursuant to this division, Division 1.1 (commencing with Section 1000), Division 1.2 (commencing with Section 2000), Division 3 (commencing with Section 12000), Division 5 (commencing with Section 14000), Division 6 (commencing with Section 17000), Division 7 (commencing with Section 18000), Division 8 (commencing with Section 21000), Division 10 (commencing with Section 23000), or Division 20 (commencing with Section 50000) of this code; Chapter 5 (commencing with Section 1621) of Part 2 of Division 1 of the Insurance Code; Chapter 1 (commencing with Section 5000) of Division 3 of the Business and Professions Code; is an approved agent of a person licensed pursuant to Division 1.2 (commencing with Section 2000) of this code; or is a federally regulated bank, thrift, or credit union, may additionally provide any of the following services on behalf of the licensee for any loan for which the finder performed finding activities: (1) Disbursing loan proceeds to a borrower, if this method of disbursement is acceptable to the borrower. (A) Any loan disbursement made by a finder under this subdivision shall be deemed made by the licensee on the date the funds are disbursed or otherwise made available by the finder to the borrower. (B) A finder that disburses loan proceeds to a borrower shall deliver or cause to be delivered to the borrower at the time loan proceeds are disbursed a plain and complete receipt showing all of the following: (i) The date of disbursement. (ii) The total amount disbursed. (iii) The corresponding loan account identification. (iv) The following statement, prominently displayed in a type size equal to or greater than the type size used to display the other items on the receipt: “If you have any questions about your loan, now or in the future, you should direct those questions to [name of licensee] by [insert at least two different ways in which a borrower may contact the licensee].” (2) Receiving loan payment or payments from the borrower, if this method of payment is acceptable to the borrower. (A) Any loan payment made by a borrower to a finder under this subdivision shall be applied to the borrower’s loan and deemed received by the licensee as of the date the payment is received by the finder. (B) A finder that receives loan payments under this subdivision shall deliver or cause to be delivered to the borrower at the time that the payment is made by the borrower, a plain and complete receipt showing all of the following: (i) The name of the finder. (ii) The total payment amount received. (iii) The date of payment. (iv) The corresponding loan account identification upon which the payment is being applied. (v) The loan balance prior to and following application of the payment. (vi) The amount of the payment that was applied to principal, interest, and fees. (vii) The type of payment, such as cash, automated clearing house (ACH) transfer, check, money order, or debit card. (viii) The following statement, prominently displayed in a type size equal to or greater than the type size used to display the other items on the receipt: “If you have any questions about your loan, now or in the future, you should direct those questions to [name of licensee] by [insert at least two different ways in which a borrower may contact the licensee].” (C) A borrower who submits a loan payment to a finder under this subdivision shall not be liable for any failure or delay by the finder in transmitting the payment to the licensee. (D) A finder that disburses or receives loan payments pursuant to this subdivision shall maintain records of all disbursements made and loan payments received for a period of at least two years or until one month following the completion of an examination of the licensee by the commissioner, whichever is later. The commissioner shall determine when an examination is complete. (3) Providing any notice or disclosure required to be provided to the borrower by the licensee, other than the notice required to be provided by the licensee to the borrower pursuant to subdivision (d) of Section 22373. A licensee that uses a finder to provide notices or disclosures to borrowers shall maintain a record of which notices and disclosures each finder provides to borrowers on its behalf, for the purpose of facilitating the commissioner’s examination of the licensee. (c) A finder shall not engage in either of the following activities: (1) Providing counseling or advice to a borrower or prospective borrower. (2) Providing loan-related marketing material that has not previously been approved by the licensee to a borrower or a prospective borrower. (d) Any person who performs one or more of the following activities is a broker within the meaning of Section 22004 rather than a finder within the meaning of this section: (1) Negotiating the price, length, or any other loan term between a licensee and a prospective borrower. (2) Advising either a prospective borrower or a licensee as to any loan term. (3) Offering information pertaining to a single prospective borrower to more than one licensee, except that, if a licensee has declined to offer a loan to a prospective borrower and has so notified that prospective borrower in writing, the person may then offer information pertaining to a single prospective borrower to another licensee with which it has a finder’s agreement. (4) Personally contacting or providing services to a borrower or prospective borrower at any place other than the finder’s physical location for business. (e) A finder shall comply with all laws applicable to the licensee that impose requirements upon the licensee for safeguards for information security. (Amended by Stats. 2015, Ch. 505, Sec. 2. (SB 235) Effective January 1, 2016. Repealed as of January 1, 2028, pursuant to Section 22381.)
  29. 22373.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. )

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    The finder must give the applicant a required statement and ask for written acknowledgment, help the applicant contact the lender when the finder cannot answer loan questions, and the licensee must not consummate the loan until a two-way communication with the applicant is completed.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. ) ## 22373. (a) At the time the finder receives or processes an application for a program loan, the finder shall provide the following statement to the applicant, on behalf of the licensee, in no smaller than 10-point type, and shall ask the applicant to acknowledge receipt of the statement in writing: “Your loan application has been referred to us by [Name of Finder]. We may pay a fee to [Name of Finder] for the successful referral of your loan application. IF YOU ARE APPROVED FOR THE LOAN, [NAME OF LICENSEE] WILL BECOME YOUR LENDER, AND YOU WILL BE BUILDING A RELATIONSHIP WITH [NAME OF LICENSEE]. If you have any questions about your loan, now or in the future, you should direct those questions to [name of licensee] by [insert at least two different ways in which a borrower may contact the licensee]. If you wish to report a complaint about [Name of Finder] or [Name of Licensee] regarding this loan transaction, you may contact the Department of Financial Protection and Innovation at 866-275-2677, or file your complaint online at www.dfpi.ca.gov.” (b) If the loan applicant has questions about the loan that the finder is not permitted to answer, the finder shall make a good faith effort to assist the applicant in making direct contact with the lender before the loan is consummated. This good faith effort shall, at a minimum, consist of assisting the applicant in communicating with the licensee as soon as reasonably practicable, which shall at a minimum include a “two-way communication.” For purposes of this section, “two-way communication” includes telephone, electronic mail, or another form of communication that allows the applicant to communicate with the licensee. (c) Using the policies developed pursuant to subdivision (f) of Section 22370, the licensee shall ensure that a loan is not consummated until the licensee has completed a “two-way communication” with the applicant. Sending a voicemail or electronic message to the applicant, without a prior or subsequent response from the applicant, shall not constitute a “two-way communication.” (d) If the loan is consummated, the licensee shall provide the borrower a written copy of the disclosure notice within two weeks following the date of the loan consummation. A licensee may include the disclosure within its loan contract, or may provide it as a separate document to the borrower, via any means acceptable to the borrower. (Amended by Stats. 2022, Ch. 452, Sec. 138. (SB 1498) Effective January 1, 2023. Repealed as of January 1, 2028, pursuant to Section 22381.)
  30. 22374.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. )

    Verify source ↗

    A licensee may pay a finder under a written agreement, but only within strict limits and not in ways that shift the cost to the borrower.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. ) ## 22374. (a) A finder may be compensated by the licensee pursuant to the written agreement between the licensee and the finder, as described in Section 22376. Compensation may be paid in accordance with a compensation schedule that is mutually agreed to by the licensee and the finder. (b) Notwithstanding subdivision (a), the compensation of a finder by a licensee shall be subject to all of the following requirements: (1) No compensation shall be paid to a finder in connection with a loan application unless that loan is consummated. (2) No compensation shall be paid to a finder based upon the principal amount of the loan. (3) The total compensation paid by a licensee to a finder over the life of a loan shall not exceed the sum of the origination fee and interest charges paid by the borrower in connection with that loan. (4) Subject to the limitations set forth in paragraphs (1) to (3), inclusive, the total compensation paid by a licensee to a finder for the services set forth in subdivision (a) of Section 22372 shall not exceed sixty-five dollars ($65) per loan, whether paid at the time of consummation, over installments, or in a manner otherwise agreed upon by the licensee and the finder, plus two dollars ($2) per payment received by the finder on behalf of the licensee for the duration of the loan, when the finder receives borrower loan payments on the licensee’s behalf in accordance with subdivision (b) of Section 22372. (5) The finder’s location for services under this article and other information required by Section 22375 has been reported to the commissioner and the finder has not been barred from providing services at that location by the commissioner. (c) No licensee shall, directly or indirectly, pass on to a borrower any fee or other compensation, or any portion of any fee or other compensation, that the licensee pays to a finder in connection with that borrower’s loan. (Amended by Stats. 2015, Ch. 505, Sec. 4. (SB 235) Effective January 1, 2016. Repealed as of January 1, 2028, pursuant to Section 22381.)
  31. 22375.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. )

    Verify source ↗

    A licensee using a finder must notify the commissioner within 15 days of contracting, pay an annual finder registration fee, and file an annual report with specified finder information.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. ) ## 22375. A licensee that utilizes the service of a finder shall do all of the following: (a) Notify the commissioner within 15 days of entering into a contract with a finder, on a form acceptable to the commissioner, regarding all of the following: (1) The name, business address, and licensing details of the finder and all locations at which the finder will perform services under this article. (2) The name and contact information for an employee of the finder who is knowledgeable about, and has the authority to execute, the contract governing the business relationship between the finder and the licensee. (3) The name and contact information for one or more employees of the finder who are responsible for that finder’s finding activities on behalf of the licensee. (4) A list of the activities the finder shall perform on behalf of the licensee. (5) Any other information requested by the commissioner. (b) Pay an annual finder registration fee to the commissioner in an amount to be established by the commissioner by regulation for each finder utilized by the licensee. (c) Submit an annual report to the commissioner including, for each finder, the information listed in paragraph (12) and subparagraph (A) of paragraph (13) of subdivision (d) of Section 22380, and any other information pertaining to each finder and the licensee’s relationship and business arrangements with each finder as the commissioner may by regulation require. The information disclosed to the commissioner for the report described in this subdivision is exempted from any requirement of public disclosure by subdivision (b) of Section 7929.000 of the Government Code. (Amended by Stats. 2021, Ch. 615, Sec. 112. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615. Repealed as of January 1, 2028, pursuant to Section 22381.)
  32. 22376.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. )

    Verify source ↗

    Licensees and finders must put their arrangements in a written agreement, and that agreement must require the finder to follow commissioner-made regulations and allow the commissioner access to relevant books and records.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. ) ## 22376. All arrangements between a licensee and a finder shall be set forth in a written agreement between the parties. The agreement shall contain a provision establishing that the finder agrees to comply with all regulations that are established by the commissioner pursuant to this article regarding the activities of finders and that the commissioner shall have access to all of the finder’s books and records that pertain to the finder’s operations under the agreement with the licensee. (Added by Stats. 2013, Ch. 467, Sec. 2. (SB 318) Effective January 1, 2014. Repealed as of January 1, 2028, pursuant to Section 22381.)
  33. 22377.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. )

    Verify source ↗

    The commissioner may inspect licensees and finders, and may punish finder violations with actions such as disqualification, location bans, agreement termination, program-wide prohibition, and an administrative penalty of up to $2,500.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. ) ## 22377. (a) The commissioner may examine the operations of each licensee and each finder to ensure that the activities of the licensee and the finder are in compliance with this article. The costs of the commissioner’s examination of each finder shall be attributed to the commissioner’s examination of the licensee. Any violation of this article by a finder or a finder’s employee shall be attributed to the finance lender with whom it has entered into an agreement for purposes of determining the licensee’s compliance with this division. (b) Upon a determination that a finder has acted in violation of this article, or any implementing regulation, or upon a determination that it would be warranted by the data reported to the commissioner pursuant to subdivision (c) of Section 22375 for any finder, the commissioner may disqualify a finder from performing services under this article, bar a finder from performing services at one or more specific locations of that finder, terminate a written agreement between a finder and a licensee, and, if the commissioner deems that action in the public interest, prohibit the use of that finder by all licensees accepted to participate in the pilot program. (c) In addition to any other penalty allowed by law, the commissioner may impose an administrative penalty up to two thousand five hundred dollars ($2,500) for violations of this article committed by a finder. (Amended by Stats. 2015, Ch. 505, Sec. 6. (SB 235) Effective January 1, 2016. Repealed as of January 1, 2028, pursuant to Section 22381.)
  34. 22378.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. )

    Verify source ↗

    A participating licensee may use one or more branch managers for multiple locations if the commissioner approves it.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. ) ## 22378. Notwithstanding the requirements of Section 22102 and its implementing regulations, a licensee accepted to participate in the program may appoint one or more branch managers with responsibility for multiple branch locations, subject to approval by the commissioner, and a finding by the commissioner that the centralized nature of underwriting and other key business activities performed by the licensee does not require a unique manager for each branch location, to ensure the protection of consumers who seek out loans from the licensee. The commissioner may revoke this approval at any time, upon a finding that a unique branch manager at each branch location is required for consumer protection. (Added by Stats. 2013, Ch. 467, Sec. 2. (SB 318) Effective January 1, 2014. Repealed as of January 1, 2028, pursuant to Section 22381.)
  35. 22379.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. )

    Verify source ↗

    The commissioner must examine covered licensees and related finders at least every 24 months, may waive some branch office examinations, and may recover examination costs from the licensee.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. ) ## 22379. (a) Notwithstanding any other law, the commissioner shall examine each licensee that is accepted into the program, and each finder whose services were used by the licensee, at least once every 24 months. (b) Notwithstanding subdivision (a), the commissioner shall have the authority to waive one or more branch office examinations, if the commissioner deems that the branch office examinations are not necessary for the protection of the public, due to the centralized operations of the licensee or other factors acceptable to the commissioner. (c) The cost of each examination of a licensee shall be paid to the commissioner by the licensee examined, and the commissioner may maintain an action for the recovery of the cost in any court of competent jurisdiction. In determining the cost of the examination, the commissioner may use the estimated average hourly cost for all persons performing examinations of licensees or other persons subject to this division for the fiscal year. (Amended by Stats. 2018, Ch. 1016, Sec. 4. (AB 237) Effective January 1, 2019. Repealed as of January 1, 2028, pursuant to Section 22381.)
  36. 22380.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. )

    Verify source ↗

    The commissioner must post annual reports on the website about the pilot loan program, and the 2015 report must also include earlier credit-building program information.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. ) ## 22380. (a) On or before July 1, 2015, and annually on or before July 1, 2017, to July 1, 2026, inclusive, the commissioner shall post a report on the commissioner’s internet website summarizing utilization of the Pilot Program for Increased Access to Responsible Small Dollar Loans. The report required to be submitted on or before July 1, 2015, shall additionally include the information required by former Section 22361, summarizing utilization of the Pilot Program for Affordable Credit-Building Opportunities, which was created by Chapter 640 of the Statutes of 2010. (b) The information disclosed to the commissioner for the commissioner’s use in preparing the reports described in this section is exempted from any requirement of public disclosure by subdivision (b) of Section 7929.000 of the Government Code. (c) If there is more than one licensee approved to participate in the program under this article, the reports required pursuant to subdivision (a) shall state information in aggregate so as not to identify data by specific licensee. The information stated in these reports pursuant to paragraphs (4) and (6) of subdivision (d) shall also be set forth for each specific finder whose services were used by a licensee in connection with the loans or loan applications, along with the specific finder’s identity. (d) Each report required pursuant to this section shall specify the time period to which the report corresponds and shall include, but not be limited to, the following for that time period: (1) The number of entities that applied to participate in the program. (2) The number of entities accepted to participate in the program. (3) The reason or reasons for rejecting applications for participation, if applicable. This information shall be provided in a manner that does not identify the entity or entities rejected. (4) The number of program loan applications received by lenders participating in the program, the number of loans made pursuant to the program, the total amount loaned, the distribution of loan lengths upon origination, and the distribution of interest rates and principal amounts upon origination among those loans. (5) The number of borrowers who obtained more than one program loan and the distribution of the number of loans per borrower. (6) Of the number of borrowers who obtained more than one program loan, the percentage of those borrowers whose credit scores increased between successive loans, based on information from at least one major credit bureau, and the average size of the increase. (7) The income distribution of borrowers upon loan origination, including the number of borrowers who obtained at least one program loan and who resided in a low-to-moderate-income census tract at the time of their loan application. (8) The number of borrowers who obtained loans for the following purposes, based on borrower responses at the time of their loan applications indicating the primary purpose for which the loan was obtained: (A) Medical. (B) Other emergency. (C) Vehicle repair. (D) Vehicle purchase. (E) To pay bills. (F) To consolidate debt. (G) To build or repair credit history. (H) To finance a purchase of goods or services other than a vehicle. (I) For other than personal, family, or household purposes. (J) Other. (9) The number of borrowers who self-report that they had a bank account at the time of their loan application, the number of borrowers who self-report that they had a bank account and used check-cashing services, and the number of borrowers who self-report that they did not have a bank account at the time of their loan application. (10) With respect to refinance loans, each report shall specifically include the following information: (A) The number and percentage of borrowers who applied for a refinance loan. (B) Of those borrowers who applied for a refinance loan, the number and percentage of borrowers who obtained a refinance loan. (C) Of those borrowers who obtained a refinance loan: (i) The percentage of borrowers who refinanced once. (ii) The percentage of borrowers who refinanced twice. (iii) The percentage of borrowers who refinanced more than twice. (D) Of those borrowers who obtained a refinance loan, the average percentage of principal paid down before obtaining a refinance loan. (E) Of those borrowers who obtained a refinance loan, the average amount of additional principal extended. (F) Of those borrowers who obtained a refinance loan, the average number of late payments made on the loan that was refinanced. (11) The number and type of finders used by licensees and the relative performance of loans consummated by finders compared to the performance of loans consummated without a finder. (12) The number and percentage of borrowers who obtained one or more program loans on which late fees were assessed, the total amount of late fees assessed, and the average late fee assessed by dollar amount and as a percentage of the principal amount loaned. (13) (A) The performance of loans under this article, as reflected by all of the following: (i) The number and percentage of program borrowers who experienced at least one delinquency lasting between 7 and 29 days, and the distribution of principal loan amounts corresponding to those delinquencies. (ii) The number and percentage of program borrowers who experienced at least one delinquency lasting between 30 and 59 days, and the distribution of principal loan amounts corresponding to those delinquencies. (iii) The number and percentage of program borrowers who experienced at least one delinquency lasting 60 days or more, and the distribution of principal loan amounts corresponding to those delinquencies. (iv) The number and percentage of program borrowers who experienced at least one delinquency of greater than seven days and who did not subsequently bring their loan current. (v) Among loans that were ever delinquent for seven days or more, the average number of times borrowers experienced a delinquency of seven days or more. (B) To the extent data are readily available to the commissioner, the commissioner shall include in each report comparable delinquency data for unsecured loans made by persons licensed under Chapter 2 (commencing with Section 22365) of Division 9 in principal amounts between two thousand five hundred dollars ($2,500) and four thousand nine hundred ninety-nine dollars ($4,999), and in principal amounts between five thousand dollars ($5,000) and nine thousand nine hundred ninety-nine dollars ($9,999), and for unsecured extensions of credit made by state-chartered banks and credit unions under the commissioner’s jurisdiction, in principal amounts between two thousand five hundred dollars ($2,500) and four thousand nine hundred ninety-nine dollars ($4,999), and in principal amounts between five thousand dollars ($5,000) and nine thousand nine hundred ninety-nine dollars ($9,999). (14) The number and types of violations of this article by finders that were documented by the commissioner. (15) The number and types of violations of this article by licensees that were documented by the commissioner. (16) The number of times that the commissioner disqualified a finder from performing services, barred a finder from performing services at one or more specific locations of the finder, terminated a written agreement between a finder and a licensee, or imposed an administrative penalty. (17) The number of complaints received by the commissioner about a licensee or a finder and the nature of those complaints. (18) Recommendations for improving the program. (19) Recommendations regarding whether the program should continue after January 1, 2028. (Amended by Stats. 2021, Ch. 615, Sec. 113. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615. Repealed as of January 1, 2028, pursuant to Section 22381.)
  37. 22380.5.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. )

    Verify source ↗

    This section abolishes the old pilot program, transfers its related authority to the Commissioner of Financial Protection and Innovation, and moves approved licensees into this article.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. ) ## 22380.5. (a) The Pilot Program for Affordable Credit-Building Opportunities as described in Article 3.5 (commencing with Section 22348) is abolished. (b) All powers, duties, purposes, jurisdiction, responsibilities, and functions of the Commissioner of Corporations with respect to the former Article 3.5 (commencing with Section 22348) are transferred to the Commissioner of Financial Protection and Innovation. (c) Any licensee approved to participate in the Pilot Program for Affordable Credit-Building Opportunities as described in the former Article 3.5 (commencing with Section 22348) shall be transferred to, and subject to, the provisions of this article. (d) Any outstanding loans made under the former Pilot Program for Affordable Credit-Building Opportunities as described in Article 3.5 (commencing with Section 22348) shall continue in existence and be valid on and after January 1, 2014, subject to those terms and conditions that existed at the time the loan was made pursuant to the former Article 3.5 (commencing with Section 22348). (e) Data submitted to the commissioner by licensees accepted to the former Pilot Program for Affordable Credit-Building Opportunities shall be summarized by the commissioner in the report due to the Legislature on or before July 1, 2015, pursuant to subdivision (a) of Section 22380. (Amended by Stats. 2022, Ch. 452, Sec. 139. (SB 1498) Effective January 1, 2023. Repealed as of January 1, 2028, pursuant to Section 22381.)
  38. 22381.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. )

    Verify source ↗

    This article stays in force only until January 1, 2028, when it is repealed.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3.6. Pilot Program for Increased Access to Responsible Small Dollar Loans [22365 - 22381] ( Article 3.6 added by Stats. 2013, Ch. 467, Sec. 2. ) ## 22381. This article shall remain in effect only until January 1, 2028, and as of that date is repealed. (Amended by Stats. 2020, Ch. 174, Sec. 2. (AB 2196) Effective January 1, 2021. Repealed as of January 1, 2028, by its own provisions. Repeal affects Article 3.6, commencing with Section 22365.)
  39. 22400.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 4. Charges On Scheduled Balances [22400 - 22402] ( Article 4 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    This section lets a licensee use precomputed charges for certain monthly installment loan contracts and sets rules for rebates, deferment charges, default charges, disclosures, and payment application.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 4. Charges On Scheduled Balances [22400 - 22402] ( Article 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22400. This article applies only to loan contracts payable in substantially equal and consecutive monthly installments of principal and charges combined, the first of which is due not less than 15 days nor more than one month and 15 days from the date the loan is made. In lieu of computing charges and applying payments as provided in Section 22307, a licensee may precompute charges and apply payments as follows: (a) The total charges which would be earned if the contract were repaid exactly according to its terms, at the monthly rate stated in the contract, may be precomputed when the loan is made and added to the principal of the loan. For the purpose of computation, a month shall be that period of time from any date in one month to the corresponding date in the next month, and if there is no corresponding date, then to the last day of the next month. The principal amount of the loan shall be its face value as referred to in Section 22309. Every payment may be applied to the combined total of principal and precomputed charges until the contract is fully paid. The acceptance of payment of charges on loans made under the provisions of this article shall not be deemed to constitute payment deduction or receipt thereof in advance nor compounding under Section 22309. Precomputed charges shall be subject to the following adjustments: (1) The portion of the precomputed charge applicable to any particular monthly installment period shall bear the same ratio to the total precomputed charge, excluding any adjustment made for a first period of more than one month, as the balance scheduled to be outstanding during that monthly period bears to the sum of all monthly balances scheduled originally by the loan contract. (2) If the loan contract is paid in full by cash, a new loan, refinancing, or otherwise, the borrower shall receive a rebate of that portion of the precomputed charge that is the difference between the total precomputed charge and the charges at the contract rate computed in accordance with the provisions of Section 22307 or 22308. The tender, by the borrower or at his or her request, of an amount equal to the unpaid balance, less the required rebate, must be accepted by the licensee in full payment of the contract. (3) If three or more, but not all, installments are prepaid in full at any one time, all of the prior charges for the loan shall be recalculated and all subsequent charges for the remaining term of the loan shall be recalculated by applying each payment first to charges and the remainder to principal in accordance with the provisions of Section 22307 or 22308. (4) If the payment date of all wholly unpaid installments on which no default charge has been collected is deferred one or more full months and the contract so provides, the licensee may charge and collect a deferment charge. The deferment charge shall not exceed the portion of the precomputed charge applicable prior to deferment, to the first deferred monthly installment period multiplied by the number of months the maturity of the contract is deferred. The number of months shall not exceed the number of full installments that are in default on the date of deferment or that may become due within 15 days of that date. When a deferment charge is made, no portion of the precomputed charge shall apply to the installment periods in which no installment payment is required by reason of the deferment. In computing any default charge or required rebate, the portion of the precomputed charge applicable to each deferred balance and installment period following the deferment period and prior to the deferred maturity shall remain the same as that applicable to the balances and periods under the original loan contract. The charge may be collected at the time of deferment or at any time thereafter. Any payment received at the time of deferment may be applied first to the deferment charge and the remainder, if any, applied to the unpaid balance of the contract. However, if the payment is sufficient to pay, in addition to the appropriate deferment charge, any installment that is in default and the applicable default charge, it shall be first so applied and any such installment shall not be deferred nor subject to the deferment charge. (5) In the event of default of more than 10 days in the payment of one-half or more of any scheduled installment, the licensee may charge and collect a default charge not exceeding an amount equal to the portion of the precomputed charge applicable to the final installment period. The charge may not be collected more than once for the same default and may be collected at the time of the default or at any time thereafter. If the default charge is deducted from any payment received after default occurs, and the deduction results in the default of a subsequent installment, no charge may be made for the resulting default. (6) A borrower and licensee may agree that the first installment due date may be not more than 15 days more than one month and the amount of the installment may be increased by one-thirtieth of the portion of the precomputed charge applicable to a first installment of one month for each extra day. (b) The statement to be given to the borrower as provided in subdivision (a) of Section 22337 and the contract shall disclose in addition to other required information the principal amount of the loan exclusive of charges and the basis for computing the refund of precomputed charges in case of prepayment in full or acceleration of maturity and for computing default and deferment charges. The delivery of a receipt of each payment showing the total amount of each payment complies with subdivision (d) of Section 22337. (c) If the maturity of the contract when the charges are precomputed is accelerated for any reason, the licensee shall make the same refund or credit as would be required if the contract was paid in full on the date of acceleration. The unpaid balance shall be treated as the unpaid principal balance, and thereafter the unpaid balance of the contract shall bear charges at the agreed rate of charge if the loan contract so provides. (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  40. 22401.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 4. Charges On Scheduled Balances [22400 - 22402] ( Article 4 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    For precomputed loans, licensees must follow only Sections 22400 and 22402 and may rely on authority only from those sections.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 4. Charges On Scheduled Balances [22400 - 22402] ( Article 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22401. With respect to precomputed loans, licensees shall be subject only to, comply only with, and derive authority only from Sections 22400 and 22402, notwithstanding any other provision of law that is not within this division. (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  41. 22402.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 4. Charges On Scheduled Balances [22400 - 22402] ( Article 4 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    For qualifying loans of $5,000 or more, the borrower is entitled to a rebate or credit when the loan is prepaid or accelerated, subject to stated exceptions.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 4. Charges On Scheduled Balances [22400 - 22402] ( Article 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22402. When charges on a loan of an original bona fide principal amount of five thousand ($5,000) or more have been precomputed in a manner similar to that provided in Section 22400, and the loan is prepaid in full by cash, a new loan, refinancing, or otherwise, or the maturity of the loan contract is accelerated for any reason, the borrower shall receive a rebate or credit of that portion of the precomputed charge that is the difference between the total precomputed charge and the charges at the contract rate computed in accordance with the provisions of Section 22307 or 22308, or on the basis of 12 equal months of 30 days each, on the assumption that all payments were received by the licensee on their respective due dates. This section does not apply to charges paid by the borrower to the lender or others, such as charges computed as a percentage of the loan, that are fully earned upon making the loan, or to charges agreed to be paid by the borrower upon prepayment of a loan secured by a lien upon real property. (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  42. 22450.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    This section defines an “open-end credit program” and says a borrower may use it for certain credit purchases and may pay the account in full at any time.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22450. As used in this division, “open-end credit program” means a licensee’s plan for making open-end loans pursuant to a loan agreement that sets forth the terms and conditions governing the use of the open-end credit program, expressly states that the loan is made pursuant to this article, and provides that: (a) The borrower may use the open-end credit program to obtain money, goods, labor, or services on credit. The licensee makes open-end loans to the borrower for the purpose of paying money to or at the direction of the borrower or paying obligations that the borrower creates through use of the open-end credit program. (b) The amount of each advance and the charges and other permitted costs are debited to an account. (c) The charges are computed from time to time on the unpaid balances of the borrower’s account, excluding from the computation any unpaid charges other than permitted fees, costs, and expenses. (d) The borrower has the privilege of paying the account in full at any time. (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  43. 22451.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    If an open-end credit program is not mainly for buying or leasing goods or services from the licensee, all credit extended through the program is subject to this division.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22451. If an open-end credit program is not primarily for the purpose of purchasing or leasing goods or services from the licensee, then all credit extended through use of the program, including transactions that involve the purchase or lease of goods or services from the licensee, shall be subject to this division. (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  44. 22452.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    A licensee may make open-end loans and charge the listed fees, but only with the commissioner’s written approval and subject to regulations; the section does not apply to open-end loans of $10,000 or more.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22452. Subject to the written approval of the commissioner of the licensee’s plan of business for making open-end loans as not being misleading or deceptive and subject to regulations the commissioner may adopt with respect to open-end loans under Section 22150, a licensee may make open-end loans pursuant to this article and may contract for and receive thereon charges as set forth in Sections 22303, 22304, 22304.5, and 22308. These charges may be calculated on an amount not exceeding the greater of: (a) The actual daily unpaid balances of the open-end account in the billing cycle for which the charge is made, in which case one-thirtieth of the monthly rate may be charged for each day the unpaid balance is outstanding. (b) The average daily unpaid balance of the open-end account in the billing cycle for which the charge is made, which is the sum of the amount unpaid each day during that cycle divided by the number of days in that cycle. The amount unpaid on a day is determined by adding to any balance unpaid as of the beginning of that day all advances and other debits and deducting all payments and other credits made or received as of that day. The billing cycle shall be monthly. A billing cycle is monthly if the closing date of the cycle is the same date each month or does not vary by more than four days from the regular date. This section does not apply to any open-end loan of a bona fide principal amount of ten thousand dollars ($10,000) or more as determined in accordance with Section 22467. (Amended by Stats. 2019, Ch. 708, Sec. 9. (AB 539) Effective January 1, 2020.)
  45. 22453.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    For open-end loan programs, the minimum monthly payment must be set using one of three stated formulas, including minimum percentage floors of 2.5% or 5%, unless the loan is at least $10,000 in bona fide principal amount.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22453. The minimum monthly payment shall be determined by any of the following: (a) The amount calculated by multiplying the unpaid principal balance, after an advance and including the advance, by a percent agreed upon by the borrower and the licensee, which shall be no less than 21/2 percent. The minimum payment shall continue at the amount determined pursuant to this paragraph until a subsequent loan advance is made. (b) The amount calculated by multiplying the unpaid balance at the end of each billing cycle by a percent agreed upon by the borrower and the licensee, which shall be no less than 5 percent. (c) Any other bona fide amount agreed upon by the borrower and the licensee which would be sufficient to pay all charges and some principal, originally scheduled to be due by the borrower as of each scheduled due date. This section does not apply to any open-end loan of a bona fide principal amount of ten thousand dollars ($10,000) or more as determined in accordance with Section 22467. (Amended by Stats. 2019, Ch. 708, Sec. 10. (AB 539) Effective January 1, 2020.)
  46. 22454.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    For open-end loans, the licensee may charge and receive fees, costs, and expenses allowed on other loans, but credit insurance charges must be monthly and match the premium rate for the same coverage. The section does not apply to open-end loans with a bona fide principal amount of $10,000 or more.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22454. On open-end loans, the licensee may contract for and receive the fees, costs, and expenses permitted on other loans, including those permitted by subdivisions (a), (b), (c), and (d) of Section 22313 and subdivision (d) of Section 22314, except that the charge for credit insurance under Section 22314 shall be on a monthly basis and shall be actuarially consistent with the premium rate for the same coverage. This section does not apply to any open-end loan of a bona fide principal amount of ten thousand dollars ($10,000) or more as determined in accordance with Section 22467. (Amended by Stats. 2019, Ch. 708, Sec. 11. (AB 539) Effective January 1, 2020.)
  47. 22455.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    A licensee may offer credit insurance on open-end loans if the borrower consents and the Insurance Commissioner approves the form, and the coverage cannot exceed the debt. The lender must keep the insurance in force and generally cannot cancel it for delinquency until a payment is 90 days past due.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22455. (a) In lieu of subdivisions (b), (c), (d), (e), and (f) of Section 22314, with respect to open-end loans, a licensee may provide credit insurance with the borrower’s consent, in a form to be approved by the Insurance Commissioner, in an amount not in excess of the amount of the indebtedness. For credit life or disability insurance, the licensee may collect from the borrower an amount established pursuant to Section 779.36 of the Insurance Code. (b) If life insurance is provided, and if the insured borrower dies during the term of the loan contract, the insurance shall be sufficient to pay the total amount due on the loan outstanding on the date of his or her death, without any exception, reservation, or limitation. (c) If disability insurance is provided, and if the insured borrower becomes disabled during the term of the loan contract, the insurance shall be sufficient to pay all amounts attributable to the loan balance at the time of commencement of disability that subsequently become due on the loan thereafter during the period of disability, in accordance with subdivision (d) of Section 22315, without any exception, reservation, or limitation. (d) If loss-of-income insurance is provided, and if the insured borrower becomes unemployed during the term of the loan contract, the insurance shall be sufficient to pay all amounts attributable to the loan balance at the time of commencement of unemployment in accordance with subdivision (d) of Section 22321 without any exception, reservation, or limitation. (e) Any credit insurance that is provided shall be in force as soon as the loan is made or coverage is agreed upon, whichever is later. No credit insurance written in connection with an open-end loan shall be canceled by the lender because of delinquency of the borrower in the making of the minimum payments thereon unless one or more of the payments is past due for a period of 90 days or more, and the lender shall advance to the insurer the amounts required to keep the insurance in force during that period, which amounts may be debited to the borrower’s account. This section does not apply to any open-end loan of a bona fide principal amount of ten thousand dollars ($10,000) or more as determined in accordance with Section 22467. (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  48. 22456.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    Open-end loan rules require the licensee to deliver the loan amount or the amount needed to pay the third party, and the section does not apply to open-end loans with a bona fide principal amount of $10,000 or more.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22456. Section 22309 shall apply to open-end loans with the following variations: (a) To comply with Section 22309, in the case of open-end loan advances directly to the borrower, the licensee shall deliver to the borrower, at the time of each loan advance, an amount equal to the face value of the advance. (b) To comply with Section 22309, in the case of an open-end loan advance in the form of a payment by the licensee to a person from whom a borrower obtained money, goods, labor, or services, the licensee shall deliver to that person the amounts necessary to fulfill the borrower’s obligation to that person under the transaction. This section does not apply to any open-end loan of a bona fide principal amount of ten thousand dollars ($10,000) or more as determined in accordance with Section 22467. (Amended by Stats. 2019, Ch. 708, Sec. 12. (AB 539) Effective January 1, 2020.)
  49. 22457.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    An open-end loan agreement must include the finance lender’s name, address, and license number, and disclose the security taken, how minimum payments are calculated, and the agreed rate of charge.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22457. In lieu of Section 22332, the open-end loan agreement shall contain the name, address, and license number of the finance lender and shall disclose the nature of the security taken, the method of determining the minimum payments that will be required to repay the initial advance and any subsequent advances on the loan, and the agreed rate of charge. (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  50. 22458.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    For open-end loans, the licensee must provide the borrower a billing-cycle statement when there is an outstanding balance or a finance charge, unless the account is deemed uncollectible or delinquency collection procedures have been started.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22458. In lieu of subdivision (a) of Section 22337, with respect to open-end loans, except in the case of an account that the licensee deems to be uncollectible, or for which delinquency collection procedures have been instituted, the licensee shall deliver or cause to be delivered to the borrower, or any one thereof, for each billing cycle at the end of which there is an outstanding balance in the account, or to which a finance charge is imposed, a statement setting forth the outstanding balance in the account at the beginning of the billing cycle, the date and amount of any subsequent loan advance during the period, the amounts and dates of crediting to the account during the billing cycle that payments are credited, the amount of any finance charge debited to the account during the billing cycle, the annual percentage rate of finance charge determined under Regulation Z promulgated by the Board of Governors of the Federal Reserve System (12 C.F.R. 226), the balance on which the finance charge was computed, the closing date of the billing cycle, the outstanding balance on that date, and the minimum monthly payment required in the absence of any additional advance. If there has been any change in the nature of the security for the loan since the next preceding advance, the statement shall contain or be accompanied by a statement of the nature of the security for the loan after that change. (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  51. 22459.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    Section 22459 says the rule in subdivision (e) of Section 22337 does not apply to an open-end loan with no outstanding balance, as long as the loan agreement remains in effect.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22459. Subdivision (e) of Section 22337 shall not apply to an open-end loan that has no balance outstanding if the open-end loan agreement continues in effect. (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  52. 22460.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    Section 22333 does not apply to a change in terms of an open-end loan if the borrower is notified under Regulation Z section 226.9(c).

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22460. Section 22333 shall not apply to a change in terms of an open-end loan if notice is given to the borrower in accordance with subsection (c) of Section 226.9 of Regulation Z promulgated by the Board of Governors of the Federal Reserve System (12 C.F.R. 226). (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  53. 22461.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    Certain listed sections do not apply to a licensee for advances made through an open-end credit program.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22461. Subdivision (a) of Section 22151, Sections 22154 and 22325, and subdivision (b) of Section 22337 shall not apply to a licensee with respect to advances made through an open-end credit program. (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  54. 22462.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    Certain fees, acceptance of the program form, and the borrower’s agreement for an open-end credit program are not treated as a collateral sale, purchase, or agreement under the cited sections.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22462. The payment of fees for participation in an open-end credit program, the acceptance by a borrower of the form of the licensee’s program, and the borrower’s agreement to the licensee’s program shall not be deemed to be a collateral sale, purchase, or agreement within the terms of Section 22201, 22311, or 22312. (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  55. 22463.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    This section says the article does not limit the commissioner’s power to disapprove advertising for open-end loans under Section 22165.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22463. Nothing in this article limits the authority of the commissioner to disapprove advertising with respect to open-end loans pursuant to Section 22165. (Amended by Stats. 2019, Ch. 708, Sec. 13. (AB 539) Effective January 1, 2020.)
  56. 22464.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    This article does not apply to loans that are not open-end loans.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22464. This article does not apply to loans other than open-end loans. (Amended by Stats. 2019, Ch. 708, Sec. 14. (AB 539) Effective January 1, 2020.)
  57. 22465.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    Section 22400 does not apply to open-end loans.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22465. Section 22400 does not apply to open-end loans. (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  58. 22466.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    An open-end loan complies with Section 22330 if it is a bona fide principal amount of at least $5,000, determined under Section 22467.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22466. An open-end loan is in compliance with Section 22330 if it is an open-end loan of a bona fide principal amount of five thousand dollars ($5,000) or more as determined in accordance with Section 22467. (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  59. 22467.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    This section says certain open-end loans are treated as meeting the specified loan amount rules if listed size criteria are met, and it limits when related provisions apply.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 5. Open-End Loan Programs [22450 - 22467] ( Article 5 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22467. (a) Any section that refers to this section or that is subject to Section 22251 does not apply to any open-end loan of the bona fide principal amount specified in the regulatory ceiling provision of that section or more, or to a duly licensed finance lender in connection with any such loan if that provision is not used for the purpose of evading this division. (b) In determining whether an open-end loan is an open-end loan of a bona fide principal amount specified in any section in this division or more and whether the regulatory ceiling provision of that section is used for the purpose of evading this division, the open-end loan shall be deemed to be for that amount or more if both the following criteria are met: (1) The line of credit is equal to or more than the bona fide principal amount of the specified amount. (2) The initial advance was equal to or more than the bona fide principal amount of the specified amount. (c) A subsequent advance of money of less than the specified amount pursuant to the open-end loan agreement between a borrower and a licensed finance lender shall be deemed to be a loan of a bona fide principal amount of the specified amount if the criteria of paragraphs (1) and (2) of subdivision (b) have been met, even though the actual unpaid balance after the advance or at any other time is less than the bona fide principal amount of the specified amount. (d) Notwithstanding subdivisions (b) and (c), the amount of the line of credit of an unsecured open-end loan shall be the criterion to determine whether an unsecured open-end loan is of a bona fide principal amount or more specified in any section in this division. (e) For the purposes of determining whether the loan amount exceeds a regulatory ceiling, the provisions of subdivision (c) of Section 22251 shall apply to open-end loans. (Amended by Stats. 1999, Ch. 347, Sec. 5. Effective January 1, 2000.)
  60. 22470.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 6. Disclosure of Loan Applications [22470- 22470.] ( Article 6 added by Stats. 2001, Ch. 493, Sec. 3. )

    Verify source ↗

    A finance lender must provide certain application records without charge to a requesting person who has a qualifying police report, and may require a signed statement before sharing with a law enforcement officer.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 2. Consumer Loans [22200 - 22470] ( Chapter 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 6. Disclosure of Loan Applications [22470- 22470.] ( Article 6 added by Stats. 2001, Ch. 493, Sec. 3. ) ## 22470. (a) (1) Upon the request of a person who has obtained a police report pursuant to Section 530.6 of the Penal Code, a finance lender engaged in the business of making consumer loans shall provide to the person, or to a law enforcement officer specified by the person, copies of all application forms or application information containing the person’s name, address, or other identifying information pertaining to the application filed with the finance lender by an unauthorized person in violation of Section 530.5 of the Penal Code. (2) Before providing copies pursuant to paragraph (1), the finance lender shall inform the requesting person of the categories of identifying information that the unauthorized person used to complete the application, and shall require the requesting person to provide identifying information in those categories and a copy of the police report. (3) The finance lender shall provide copies of all forms and information required by this section, without charge, within 10 business days of receipt of the person’s request and submission of the required copy of the police report and identifying information. (b) (1) Before a finance lender provides copies to a law enforcement officer pursuant to paragraph (1) of subdivision (a), the finance lender may require the requesting person to provide them with a signed and dated statement by which the person does all of the following: (A) Authorizes disclosure for a stated period. (B) Specifies the name of the agency or department to which the disclosure is authorized. (C) Identifies the type of records that the person authorizes to be disclosed. (2) The finance lender shall include in the statement to be signed by the requesting person a notice that the person has the right at any time to revoke the authorization. (c) As used in this section, “law enforcement officer” means a peace officer as defined by Section 830.1 of the Penal Code. (Added by Stats. 2001, Ch. 493, Sec. 3. Effective January 1, 2002.)
  61. 22500.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Definitions [22500 - 22502] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    “Charges” includes interest, fees, commissions, brokerage, discounts, expenses, and other costs connected with certain loan-related services.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Definitions [22500 - 22502] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22500. “Charges” include the aggregate interest, fees, bonuses, commissions, brokerage, discounts, expenses, and other forms of costs charged, contracted for, or received by a licensee or any other person in connection with the investigating, arranging, negotiating, procuring, guaranteeing, making, servicing, collecting, and enforcing of a loan or forbearance of money, credit, goods, or things in action, or any other service rendered. (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  62. 22501.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Definitions [22500 - 22502] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    “Charges” does not include commissions received as a licensed insurance agent or broker.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Definitions [22500 - 22502] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22501. “Charges” do not include commissions received as a licensed insurance agent or broker. (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  63. 22502.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Definitions [22500 - 22502] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    This section defines “commercial loan” and lets a lender rely on a borrower’s signed written statement of intended purposes when deciding whether a loan is commercial.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Definitions [22500 - 22502] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22502. “Commercial loan” means a loan of a principal amount of five thousand dollars ($5,000) or more, or any loan under an open-end credit program, whether secured by either real or personal property, or both, or unsecured, the proceeds of which are intended by the borrower for use primarily for other than personal, family, or household purposes. For purposes of determining whether a loan is a commercial loan, the lender may rely on any written statement of intended purposes signed by the borrower. The statement may be a separate statement signed by the borrower or may be contained in a loan application or other document signed by the borrower. The lender shall not be required to ascertain that the proceeds of the loan are used in accordance with the statement of intended purposes. (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  64. 22550.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Exemptions [22550 - 22552] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    Certain loan provisions do not apply to commercial loans with a bona fide principal amount of $5,000 or more, or to a duly licensed finance lender connected with those loans, unless the section is used to evade the division.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Exemptions [22550 - 22552] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22550. Sections 22152, 22154, 22155, 22163, and 22164 do not apply to any commercial loan of a bona fide principal amount of five thousand dollars ($5,000) or more, or to a duly licensed finance lender in connection with any such loan or loans, if the provisions of this section are not used for the purpose of evading this division. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  65. 22551.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Exemptions [22550 - 22552] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    This section explains how to count a loan’s principal amount for purposes of the $5,000 specified amount and regulatory ceiling tests.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Exemptions [22550 - 22552] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22551. In determining whether a loan is a loan of a bona fide principal amount of the specified amount or more, the following principles shall apply: (a) If a borrower applies for a loan in a bona fide principal amount of less than the specified amount and a loan to that borrower of a bona fide principal amount of the specified amount or more is made by a licensed finance lender, no adequate economic reason for the increase in the size of the loan exists, and by prearrangement or understanding between the borrower and the licensee a substantial payment is to be made upon the loan with the effect of reducing the bona fide principal amount of the loan to less than the specified amount within a short time after the making of the loan other than by reason of a requirement that the loan be paid in substantially equal periodical installments, then the loan shall not be deemed to be a loan of the bona fide principal amount of the specified amount or more. (b) A subsequent advance of money of less than a bona fide principal amount of the specified amount pursuant to a revolving or open-end loan agreement or similar agreement between a borrower and a licensed finance lender which gives the borrower the right to draw upon all or any part of the line of credit, or a loan agreement providing for the making of advances to the borrower from time to time up to an aggregate maximum amount which gives the borrower the right to draw all or any part of the total amount, shall be deemed to be a loan of a bona fide principal amount of the specified amount or more if the line of credit or the aggregate maximum amount is a bona fide principal amount of the specified amount or more and the initial advance was a bona fide principal amount of the specified amount or more even though the actual unpaid balance after the advance or at any other time is less than a bona fide principal amount of the specified amount. (c) If a loan made by a licensed finance lender has a bona fide principal amount of the specified amount or more, the fact that the transaction is in the form of a sale of accounts, chattel paper, goods, or instruments, or a lease of goods, or in the form of an advance on the purchase price of any of the foregoing, shall not be deemed to affect the bona fides of the amount thereof. (d) For the purposes of this section, “the specified amount” means five thousand dollars ($5,000). (e) For the purposes of determining whether the loan amount exceeds a regulatory ceiling, the “bona fide principal amount” shall not be comprised of any charges or any other fees or recompense specified in Sections 22500, 22501, and 22601. Nothing in this subdivision shall be construed to prevent those specified charges, fees, and recompense that have been earned and remain unpaid in an existing loan from being considered as part of the bona fide principal amount of a new loan to refinance that existing loan, provided the new loan is not made for the purpose of circumventing a regulatory ceiling provision. This subdivision is intended to define the meaning of “bona fide principal amount” as used in this division solely for the purposes of determining whether the loan amount exceeds a regulatory ceiling, and is not intended to affect the meaning of “principal” for any other purpose. (Amended by Stats. 1999, Ch. 347, Sec. 6. Effective January 1, 2000.)
  66. 22552.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Exemptions [22550 - 22552] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    This chapter does not apply to a program administrator or a PACE solicitor.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Exemptions [22550 - 22552] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22552. This chapter does not apply to a program administrator or a PACE solicitor. (Added by Stats. 2017, Ch. 475, Sec. 70. (AB 1284) Effective October 4, 2017.)
  67. 22600.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22600 - 22604] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    A licensee may sell certain promissory notes to institutional investors and may enter agreements with them about collecting payments or servicing the notes.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22600 - 22604] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22600. (a) A licensee may sell promissory notes evidencing the obligation to repay loans made by the licensee pursuant to this division or evidencing the obligation to repay loans purchased from and made by another licensee pursuant to this division to institutional investors, and may make agreements with institutional investors for the collection of payments or the performance of services with respect to those notes. (b) For the purposes of this section, “institutional investor” means the following: (1) The United States or any state, district, territory, or commonwealth thereof, or any city, county, city and county, public district, public authority, public corporation, public entity, or political subdivision of a state, district, territory, or commonwealth of the United States, or any agency or other instrumentality of any one or more of the foregoing. (2) Any bank, trust company, savings bank or savings and loan association, credit union, industrial bank or industrial loan company, finance lender, or insurance company doing business under the authority of and in accordance with a license, certificate, or charter issued by the United States or any state, district, territory, or commonwealth of the United States. (3) Trustees of pension, profit sharing, or welfare funds, if the pension, profit sharing, or welfare fund has a net worth of not less than fifteen million dollars ($15,000,000), except pension, profit sharing, or welfare funds of a licensee or its affiliate, self-employed individual retirement plans, or individual retirement accounts. (4) Any corporation with outstanding securities registered under Section 12 of the Securities Exchange Act of 1934 or any wholly owned subsidiary of that corporation; provided, however, that the purchaser represents that it is purchasing for its own account for investment and not with a view to or for sale in connection with any distribution of the promissory note. (5) Any syndication or other combination of any of the foregoing that is organized to purchase the promissory note. (6) A trust or other business entity established by an institutional investor for the purpose of issuing or facilitating the issuance of undivided interests in, the right to receive payments from, or that are payable primarily from, a pool of financial assets held by the trust or business entity if all of the following apply: (A) The business entity is not a sole proprietorship. (B) The pool of assets consists of one or more of the following: (i) Interest bearing obligations. (ii) Other contractual obligations representing the right to receive payments from the assets. (iii) Surety bonds, insurance policies, letters of credit, or other instruments providing credit enhancements for these assets. (C) The interests will be either of the following: (i) Rated investment grade by Standard & Poor’s Corporation or Moody’s Investors Service, Inc. “Investment grade” means that the securities will be rated by Standard & Poor’s Corporation as AAA, AA, A, or BBB, or by Moody’s Investor Service, Inc., as Aaa, Aa, A, or Baa, including a rating with a “+” or “–” designation or other variations that occur within these ratings. (ii) Sold to an institutional investor as otherwise defined in this section. (D) The offer and sale of the securities is qualified under the Corporate Securities Law of 1968 (Division 1 (commencing with Section 25000) of Title 4 of the Corporations Code) or is registered under federal securities laws, or is exempt from qualification or registration. (c) In the absence of agreement to the contrary by the licensee and the institutional investor, all payments received from the collection of payments shall be deposited and maintained in a trust account, and shall be disbursed from the trust account only in accordance with the instructions of the owner of the promissory note. (Amended by Stats. 1996, Ch. 672, Sec. 3. Effective January 1, 1997.)
  68. 22600.1.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22600 - 22604] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    A finance lender licensee may sell certain promissory notes to specified institutional buyers and may arrange collection and servicing. Unless the parties agree otherwise, collected payments must go into a trust account and be paid out only as the note owner instructs.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22600 - 22604] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22600.1. (a) A licensee that is a finance lender may sell to (1) an institutional lender, or (2) an institutional investor described in paragraph (6) of subdivision (b) of Section 22600, promissory notes evidencing the obligation to repay real estate secured business purpose loans, as defined in Section 3500.5 of Title 24 of the Code of Federal Regulations, purchased from and made by an institutional lender, and may make agreements for the collection of payments and performance of services with respect to those notes. For purposes of this section, “institutional lender” means any bank, trust company, savings bank or savings and loan association, credit union, or industrial loan company doing business under the authority of and in accordance with a license, certificate or charter issued by the United States or this state. (b) In the absence of agreement to the contrary by the licensee and the institutional investor or institutional lender, all payments received from the collection of payments shall be deposited and maintained in a trust account, and shall be disbursed from the trust account only in accordance with the instructions of the owner of the promissory note. (Amended by Stats. 1998, Ch. 428, Sec. 3. Effective January 1, 1999.)
  69. 22601.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22600 - 22604] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    A licensee may charge and collect a fee of up to $15 for returning a dishonored check, negotiable order of withdrawal, or share draft, when the loan is under this division.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22600 - 22604] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22601. With respect to a loan under this division, a fee not to exceed fifteen dollars ($15) for the return by a depository institution of a dishonored check, negotiable order of withdrawal, or share draft may be charged and collected by the licensee. The fee is not included in charges as defined in this division. (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  70. 22602.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22600 - 22604] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    A finance lender may pay compensation to an unlicensed person for referring prospective borrowers for a commercial loan only if several conditions are met, including a 36% APR cap and borrower-verification steps.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22600 - 22604] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22602. (a) A licensee that is a finance lender may pay compensation to a person that is not licensed pursuant to this division in connection with the referral of one or more prospective borrowers to the licensee, when all of the following conditions are met: (1) The referral by the unlicensed person leads to the consummation of a commercial loan, as defined in Section 22502, between the licensee and the prospective borrower referred by the unlicensed person. (2) The loan contract provides for an annual percentage rate that does not exceed 36 percent. (3) Before approving the loan, the licensee does both of the following: (A) Obtains documentation from the prospective borrower documenting the borrower’s commercial status. Examples of acceptable forms of documentation include, but are not limited to, a seller’s permit, business license, articles of incorporation, income tax returns showing business income, or bank account statements showing business income. (B) Performs underwriting and obtains documentation to ensure that the prospective borrower will have sufficient monthly gross revenue with which to repay the loan pursuant to the loan terms, and does not make a loan if it determines through its underwriting that the prospective borrower’s total monthly expenses, including debt service payments on the loan for which the prospective borrower is being considered, will exceed the prospective borrower’s monthly gross revenue. Examples of acceptable forms of documentation for verifying current and projected gross monthly revenue and monthly expenses include, but are not limited to, tax returns, bank statements, merchant financial statements, business plans, business history, and industry-specific knowledge and experience. If the prospective borrower is a sole proprietor or a corporation and the loan will be secured by a personal guarantee provided by the owner of the corporation, a credit report from at least one consumer credit reporting agency that compiles and maintains files on consumers on a nationwide basis shall also be considered. (4) The licensee maintains records of all compensation paid to unlicensed persons in connection with the referral of borrowers for a period of at least four years. (5) The licensee annually submits information requested by the commissioner regarding the payment of compensation in the report required pursuant to Section 22159. (b) A licensee that pays compensation to a person that is not licensed pursuant to this division in connection with a referral for a commercial loan made by that licensee to a borrower shall be liable for any misrepresentation made to that borrower in connection with that loan. (c) The following activities by an unlicensed person are not authorized by this section: (1) Participating in any loan negotiation. (2) Counseling or advising the borrower about a loan. (3) Participating in the preparation of any loan documents, including credit applications. (4) Contacting the licensee on behalf of the borrower other than to refer the borrower. (5) Gathering loan documentation from the borrower or delivering the documentation to the licensee. (6) Communicating lending decisions or inquiries to the borrower. (7) Participating in establishing any sales literature or marketing materials. (8) Obtaining the borrower’s signature on documents. (d) The prohibitions in subdivision (c) do not apply if the unlicensed person meets one or more of the following criteria: (1) Is exempt from licensure under this division. (2) Is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code. (3) Is a business assistance organization recognized by the United States Small Business Administration. (4) Is engaged in one or more of the activities described in paragraphs (1) to (8), inclusive, of subdivision (c) in connection with five or fewer commercial loans in a 12-month period made by persons licensed under this division. (e) The commissioner may adopt regulations under this section to impose conditions on the referral activity authorized under this section. The commissioner may classify persons, loans, loan terms, referral methods, and other matters within his or her jurisdiction, and may prescribe different requirements for different classes of loans. (f) Nothing in this section shall authorize the payment of a referral fee to an unlicensed person for a residential mortgage loan, nor the payment of a referral fee to a person required to be licensed under Section 10131 or 10131.1 of the Business and Professions Code, unless such person is licensed by the Bureau of Real Estate pursuant to Division 4 (commencing with Section 10000) of the Business and Professions Code. (g) For the purposes of this section, “referral” means either the introduction of the borrower and the finance lender or the delivery to the finance lender of the borrower’s contact information. (Added by Stats. 2015, Ch. 761, Sec. 1. (SB 197) Effective January 1, 2016.)
  71. 22603.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22600 - 22604] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    A finance lender licensee must give certain referred commercial-loan applicants a written disclosure and must get written acknowledgment of receipt.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22600 - 22604] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22603. A licensee that is a finance lender shall provide a prospective borrower who has been referred by an unlicensed person the following written statement, in 10-point font or larger, at the time the licensee receives an application for a commercial loan, and shall require the prospective borrower to acknowledge receipt of the statement in writing: “You have been referred to us by [Name of Unlicensed Person]. If you are approved for the loan, we may pay a fee to [Name of Unlicensed Person] for the successful referral. [Licensee], and not [Name of Unlicensed Person] is the sole party authorized to offer a loan to you. You should ensure that you understand any loan offer we may extend to you before agreeing to the loan terms. If you wish to report a complaint about this loan transaction, you may contact the Department of Financial Protection and Innovation at 1-866-ASK-CORP (1-866-275-2677), or file your complaint online at www.dfpi.ca.gov. (Amended by Stats. 2022, Ch. 452, Sec. 140. (SB 1498) Effective January 1, 2023.)
  72. 22604.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22600 - 22604] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    Certain compensated referral recipients in commercial loans must not make false or misleading statements, deceptive advertising, violate Section 17200, commit fraud or dishonest dealings, or fail to safeguard a prospective borrower’s personally identifiable information.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Loan Regulations [22600 - 22604] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22604. (a) Any person that receives compensation in connection with a referral, as described in Section 22602, that leads to the consummation of a commercial loan under this division may not do any of the following: (1) Make a materially false or misleading statement or representation to a prospective borrower about the terms or conditions of a prospective loan. (2) Advertise, print, display, publish, distribute, or broadcast any statement or representation with regard to the conditions for making or negotiating a loan that is false, misleading, or deceptive, or that omits material information that is necessary to make the statements made not false, misleading, or deceptive. (3) Engage in any act in violation of Section 17200 of the Business and Professions Code. (4) Commit an act that constitutes fraud or dishonest dealings. (5) Fail to safeguard a prospective borrower’s personally identifiable information. (b) For purposes of this section, “personally identifiable information” means information that is not publicly available, that a prospective borrower provides for the purpose of obtaining a loan or other financial product. Personally identifiable information includes information a prospective borrower provides on an application to obtain a loan, credit card, or other financial product or service. (c) Whenever, in the opinion of the commissioner, any person is engaged in the business of soliciting borrowers for a loan to be made by a licensee under this division, and the person is not in compliance with this section, Section 22602, Section 22603, or any other provision of this division authorizing such activity or exempting the person from this division, the commissioner may order the person to desist and to refrain from engaging in the business or further violating this division. (Added by Stats. 2015, Ch. 761, Sec. 3. (SB 197) Effective January 1, 2016.)
  73. 22650.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 4. Open-End Credit Programs [22650- 22650.] ( Article 4 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    This section defines an “open-end credit program” and describes what the borrower may do under it.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3. Commercial Loans [22500 - 22650] ( Chapter 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 4. Open-End Credit Programs [22650- 22650.] ( Article 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22650. As used in this division, “open-end credit program” means a licensee’s plan for making open-end loans pursuant to a loan agreement that sets forth the terms and conditions governing the use of the open-end credit program, expressly states that the loan is made pursuant to this article, and provides that: (a) The borrower may use the open-end credit program to obtain money, goods, labor, or services or credit, and the licensee makes open-end loans to the borrower for the purpose of paying money to, or at the direction of, the borrower or paying obligations that the borrower creates through use of the open-end credit program. (b) The amount of each advance and the charges and other permitted costs are debited to an account. (c) The charges are computed from time to time on the unpaid balances of the borrower’s account excluding from the computation any unpaid charges other than permitted fees, costs, and expenses. (d) The borrower has the privilege of paying the account in full at any time. (Repealed and added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  74. 22680.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

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    A person may not work as a PACE solicitor unless enrolled with a program administrator, and program administrators must run approved enrollment, monitoring, and cancellation processes.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22680. (a) A person shall not engage in the business of a PACE solicitor unless that person is enrolled with a program administrator pursuant to the requirements of this section. (b) A program administrator shall establish and maintain a process for enrolling PACE solicitors that is acceptable to the commissioner. That process shall include both of the following: (1) A written agreement between the program administrator and the PACE solicitor that shall set forth the obligations of the PACE solicitor and its PACE solicitor agents. (2) A review of readily and publicly available information regarding each PACE solicitor. (c) A program administrator shall establish and maintain a process for enrolling PACE solicitor agents that is acceptable to the commissioner. That process shall include a background check of each PACE solicitor agent. A program administrator may rely on a background check conducted by the Contractors’ State License Board to comply with this requirement. (d) A program administrator shall not enroll a PACE solicitor or a PACE solicitor agent that does not satisfy at least one of the following criteria: (1) Maintain in good standing a license from the Contractors’ State License Board. (2) Maintain a registration in good standing with the Contractors’ State License Board as a home improvement salesperson. (3) Be exempt from, or not subject to, licensure or registration under the Contractors’ State License Law (Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code). (e) A program administrator shall not enroll a PACE solicitor if, as a result of the review conducted as part of the program administrator’s enrollment process, the program administrator finds any of the following: (1) A clear pattern of consumer complaints about the PACE solicitor regarding dishonesty, misrepresentations, or omissions. (2) A high likelihood that the PACE solicitor will solicit assessment contracts in a manner that does not comply with applicable law. (3) A clear pattern on the part of the PACE solicitor of failing to timely receive and respond to property owner complaints regarding the PACE solicitor. (f) A program administrator shall establish and maintain a process to promote and evaluate the compliance of PACE solicitors and PACE solicitor agents with the requirements of applicable law that is acceptable to the commissioner. That process shall include all of the following, at a minimum: (1) A risk-based, commercially reasonable procedure to monitor and test the compliance of PACE solicitors and PACE solicitor agents with the requirements of subdivision (a) of Section 22689. (2) A procedure to regularly monitor the license or registration status of PACE solicitors and PACE solicitor agents. (3) A periodic review of the solicitation activities of PACE solicitors enrolled with the program administrator, to be conducted at least once every two years. (g) A program administrator shall establish and implement a process, which is acceptable to the commissioner, for canceling the enrollment of PACE solicitors and PACE solicitor agents who fail to maintain the minimum qualifications required by this section, or who violate any provision of this division. (Amended by Stats. 2018, Ch. 813, Sec. 5. (AB 2063) Effective January 1, 2019.)
  75. 22681.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

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    Program administrators must run a commissioner-acceptable training program for PACE solicitor agents and require specified training and education.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22681. (a) A program administrator shall establish and maintain a training program for PACE solicitor agents that is acceptable to the commissioner. (b) A program administrator shall require each PACE solicitor agent to complete an introductory training that addresses the topics listed in subdivision (c) as part of the program administrator’s enrollment process for PACE solicitor agents. The introductory training shall require that the PACE solicitor agent pass a test that measures the PACE solicitor agent’s knowledge and comprehension of the training material. The introductory training shall not be subject to any minimum duration requirements. (c) In addition to the introductory training, a program administrator shall require that each PACE solicitor agent complete six hours of education provided by the program administrator within three months of completing the program administrator’s enrollment process. The training shall include the following topics: (1) PACE programs and assessment contracts. (2) PACE disclosures. (3) Ethics. (4) Fraud prevention. (5) Consumer protection. (6) Nondiscrimination. (7) Senior financial abuse. (Amended by Stats. 2018, Ch. 813, Sec. 6. (AB 2063) Effective January 1, 2019.)
  76. 22682.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

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    A program administrator must timely notify the commissioner about each enrolled PACE solicitor and PACE solicitor agent, and about each enrollment cancellation or withdrawal.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22682. (a) A program administrator shall, in the manner prescribed by the commissioner, timely notify the commissioner of each PACE solicitor and PACE solicitor agent enrolled by the program administrator. (b) A program administrator shall, in the manner prescribed by the commissioner, timely notify the commissioner of each enrollment cancellation and withdrawal of a PACE solicitor or a PACE solicitor agent pursuant to subdivision (g) of Section 22680. (Amended by Stats. 2018, Ch. 813, Sec. 7. (AB 2063) Effective January 1, 2019.)
  77. 22683.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

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    A program administrator must develop and implement policies and procedures for handling questions and complaints as soon as reasonably practicable.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22683. A program administrator shall develop and implement policies and procedures for responding to questions and addressing complaints as soon as reasonably practicable. (Added by Stats. 2017, Ch. 475, Sec. 71. (AB 1284) Effective October 4, 2017. Section operative January 1, 2019, pursuant to Section 22696.)
  78. 22684.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

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    A program administrator may not execute a PACE assessment contract, or start or execute the financed home improvement contract, unless the listed property, debt, and program criteria are met.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22684. A program administrator shall not execute an assessment contract, and no work shall commence under a home improvement contract that is financed by that assessment contract nor shall that home improvement contract be executed unless the following criteria are satisfied: (a) All property taxes for the property that will be subject to the assessment contract are current. The program administrator shall ask a property owner whether there has been no more than one late payment of property taxes on the property for the previous three years or since the current owner acquired the property, whichever period is shorter. (b) The property that will be subject to the assessment contract has no recorded and outstanding involuntary liens in excess of one thousand dollars ($1,000). (c) The property that will be subject to the assessment contract has no notices of default currently recorded that have not been rescinded. (d) The property owner has not been a party to any bankruptcy proceedings within the last four years, except that the property owner may have been party to a bankruptcy proceeding that was discharged or dismissed between two and four years before the application date and the property owner has had no payments more than 30 days past due on any mortgage debt or nonmortgage debt, excluding medical debt, during the 12 months immediately preceding the application date. (e) The property owner is current on all mortgage debt on the subject property and has no more than one late payment during the six months immediately preceding the application date and if the late payment did not exceed 30 days past due. (f) The property that will be subject to the assessment contract is within the geographical boundaries of the applicable PACE program. (g) The measures to be installed pursuant to the assessment contract are eligible under the terms of the applicable PACE program. (h) The financing is for less than 15 percent of the value of the property, up to the first seven hundred thousand dollars ($700,000) inclusive of the existing assessments, and is for less than 10 percent of the remaining value of the property above seven hundred thousand dollars ($700,000). (i) The total PACE assessments and the mortgage-related debt on the property subject to the PACE assessment will not exceed 97 percent of the market value of the property as established by the valuation required by Section 22685. (j) The term of the assessment contract shall not exceed the estimated useful life of the measure to which the greatest portion of funds disbursed under the assessment contract is attributable. The program administrator shall determine useful life for purposes of this subdivision based upon credible third-party standards or certification criteria that have been established by appropriate government agencies or nationally recognized standards and testing organizations. (k) The program administrator shall verify the existence of recorded PACE assessments and shall ask if the property owner has authorized additional PACE assessments on the same subject property that have not yet been recorded. The failure of a property owner to comply with this subdivision shall not invalidate an assessment contract or any obligations thereunder, notwithstanding if the combined amount of the PACE assessments exceed the criteria set forth in subdivision (h) or (i). The existence of a prior PACE assessment or a prior assessment contract shall not constitute evidence that the assessment contract under consideration is affordable or meets any other program requirements. (l) The assessment contract does not contain a penalty for early repayment of an amount owed under the contract. (m) The property that will be subject to the assessment contract is not subject to a reverse mortgage, as defined in Section 1923 of the Civil Code. (n) The program administrator shall use commercially reasonable and available methods to verify the above. (Amended by Stats. 2020, Ch. 156, Sec. 1. (AB 1551) Effective January 1, 2021.)
  79. 22685.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

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    A program administrator must determine market value using one of the listed methods and disclose the determination to the property owner before the assessment contract is signed.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22685. (a) A program administrator shall derive market value using one of the following: (1) Automated valuation models, using the following criteria: (A) Each automated valuation model must be provided by a third-party vendor. (B) Each automated valuation model must have estimation models with confidence scores and regular statistical calibration by the third-party vendor. (C) The program administrator shall utilize at least three automated valuation models for each property. The estimated value for each model shall be the average between the high and low values, if a range is provided. (D) The program administrator shall utilize the estimated value with the highest confidence score for a property. If an automated valuation model meeting the criteria of subparagraphs (A), (B), and (C) does not obtain a confidence score for a subject property, the PACE program shall utilize the average of all estimated values. (2) An appraisal conducted within six months of the application date by a state-licensed or state-certified real estate appraiser licensed pursuant to Part 3 (commencing with Section 11300) of Division 4 of the Business and Professions Code. A program administrator may rely upon an appraisal obtained from a property owner if that appraisal was conducted in accordance with applicable laws and regulations by a state-licensed or state-certified appraiser in connection with a consumer credit transaction secured by the subject property, including the purchase or refinance of the subject property or the extension of an equity line of credit secured by the subject property. (b) The market value determination by the program administrator shall be disclosed to the property owner prior to signing the assessment contract. (Amended by Stats. 2018, Ch. 798, Sec. 6. (SB 1087) Effective January 1, 2019.)
  80. 22686.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

    Verify source ↗

    A program administrator may not execute an assessment contract, or allow related home-improvement work or the contract itself to begin, unless it has first made a reasonable good-faith determination that the property owner can pay the annual PACE assessment obligations.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22686. A program administrator shall not execute an assessment contract, and no work shall commence under a home improvement contract that is financed by that assessment contract nor shall that home improvement contract be executed unless the program administrator makes a reasonable good faith determination that the property owner has a reasonable ability to pay the annual payment obligations for the PACE assessment. (Amended by Stats. 2018, Ch. 813, Sec. 9. (AB 2063) Effective January 1, 2019.)
  81. 22687.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

    Verify source ↗

    A program administrator must check that a property owner can afford the PACE assessment before the financing and work start, and must use income, assets, debt, and related records to do so.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22687. (a) A program administrator shall determine before executing an assessment contract, and no work shall commence under a home improvement contract that is financed by that assessment contract nor shall that home improvement contract be executed until this determination is made, that the property owner has a reasonable ability to pay the annual payment obligations for the PACE assessment based on the property owner’s income, assets, and current debt obligations. The determination process shall be based on the following factors: (1) The property owner shall submit on their application their monthly income and their monthly housing expenses. (2) Housing expenses shall include all mortgage principal and interest payments, insurance, property taxes, mortgage guaranty insurance, and other preexisting fees and assessments on the property. (3) Household income shall include the income of the mortgagor on the subject property and may include the income of any persons 18 years of age or older who are on title to the property. In complying with this paragraph, the program administrator shall do both of the following: (A) The program administrator may also utilize the income of a property owner’s legal spouse through marriage, as defined by Division 3 (commencing with Section 300) of the Family Code, or domestic partnership, as defined by Division 2.5 (commencing with Section 297) of the Family Code, who is not on title to the property. Any spouse or domestic partner who is not on title to the property shall consent, in writing, to the inclusion of his or her income and to the verification of his or income as required pursuant to this section. (B) For any person whose income is considered, the program administrator shall also consider their debt obligations pursuant to this section. The program administrator is not required to consider more income than is necessary, nor to verify assets if verified income is sufficient to determine the ability of the property owner to pay the annual payment obligations. (4) Debt obligations in accordance with subdivision (c). (5) In evaluating the income, assets, and current debt obligations of the property owner, the program administrator shall not consider the equity of the property that will secure the assessment contract. (6) Pursuant to Section 5913 of the Streets and Highways Code, the program administrator shall ask the homeowner open-ended questions during the oral confirmation of key terms call, to confirm the income provided on the application and to identify the sources of their income. (b) (1) The program administrator shall determine and consider the current or reasonably expected income or assets of the property owner that the program administrator relies on in order to determine a property owner’s ability to pay the PACE assessment annual payment obligations using reasonably reliable third-party records of the property owner’s income or assets. The program administrator may use automated verification provided the source of that verification is specific to the income of the property owner and not based on predictive or estimation methodologies, and has been determined sufficient for those verification purposes by a federal mortgage lending authority or regulator. Examples of records the program administrator may use to verify the property owner’s income or assets include: (A) A pay stub showing the most recent 30-day pay period or financial institution records showing regular deposits consistent with reported income for the most recent 60 days. (B) Copies of the most recent tax returns the property owner filed with the Internal Revenue Service or the Franchise Tax Board. (C) Copies of the most recent Internal Revenue Service Form W-2 (Wage and Tax Statement), or other similar Internal Revenue Service forms that are used for reporting wages or tax withholding. (D) Payroll statements, including the Department of Defense Leave and Earnings Statement (LES). (E) Financial institution records, such as bank statements or investment account statements reflecting the value of particular assets. (F) Records from the property owner’s employer or a third party that obtained income information from the employer. (G) Records from a federal, state, or local government agency stating the property owner’s income from benefits or entitlements. Income from benefits paid by a government entity shall not include any benefits for which the recipient must satisfy a means test or any cash equivalent nonmonetary benefits, such as food stamps. (2) Income may not be derived from any of the following: (A) Temporary sources of income. (B) Nonliquid assets. (C) Proceeds derived from the equity from the subject property. (c) A program administrator shall consider the monthly debt obligations of the property owner to determine a property owner’s ability to pay the annual payment PACE assessment obligations using reasonably reliable third-party records, including one or more consumer credit reports from agencies that meet the requirements of Section 1681a(p) of Title 15 of the United States Code. Program administrators shall use at least a two-file Merged Credit Report (MCR) or a Residential Mortgage Credit Report (RMCR). For purposes of this subdivision, monthly debt obligations include, but are not limited to, the following: (1) All secured and unsecured debt. (2) Alimony. (3) Child support. (4) Monthly housing expenses. If property tax and insurance obligations are not included in a property owner’s escrow, a program administrator shall use reasonably reliable methods to determine these obligations. (d) In calculating the ability of the property owner to pay the annual payment obligations, the program administrator shall determine that the property owner’s income is sufficient to meet: (1) The PACE payment, including all interest and fees. (2) Any mortgage payments, as defined by the higher of the borrower’s self-reported housing payment or housing expenses determined in accordance with paragraphs (1) and (2) of subdivision (a). (3) All existing debts and obligations as identified in subdivision (c). (4) Sufficient residual income to meet basic household living expenses, defined as expected expenses which may be variable based on circumstances and consumption patterns of the household. A program administrator may make reasonable estimation of basic living expenses based on the number of persons in the household. Examples of basic living expenses include, but are not limited to, the following: (A) Food and other necessary household consumables. (B) Transportation costs to work or school, including fuel costs, auto insurance and maintenance costs, and public transit costs. (C) Utilities expenses for telecommunication, water, sewage, electricity, and gas. (e) In the case of emergency or immediate necessity, the requirements of paragraph (1) of subdivision (b) may be waived, in accordance with the requirements of Section 5940 of the Streets and Highways Code, for the funding and recordation of a PACE assessment to finance a heating, ventilation, and air conditioning (HVAC) system, boiler, or other system whose primary function is temperature regulation in a home if all of the following are met: (1) The program administrator first attempted to use an automated means of verification as described in paragraph (1) of subdivision (b). (2) If the program administrator was unable to verify the property owner’s income pursuant to paragraph (1) of subdivision (b), pursuant to Section 5913 of the Streets and Highways Code, the program administrator shall ask the property owner open-ended questions during the oral confirmation of key terms call to identify their income and the sources of their income. The program administrator shall comply with the requirements of subdivision (a), paragraph (2) of subdivision (b), and subdivisions (c) and (d). (3) The funding is limited to the emergency or immediate necessity improvement and any required improvements directly necessary to the installation and safe operation of the improvement. (4) Any efficiency improvement funded is eligible for PACE financing. (5) The property owner executes a waiver of their right to cancel pursuant to subdivision (d) of Section 5940 of the Streets and Highways Code, and confirms, pursuant to Section 5913 of the Streets and Highways Code, the emergency or immediate necessity of the improvement. (6) The amount of the assessment contract does not exceed fifteen thousand dollars ($15,000) or a monthly equivalent payment on the PACE assessment of one hundred twenty-five dollars ($125), as adjusted by any annual increase in the California Consumer Price Index as determined pursuant to Section 2212 of the Revenue and Taxation Code, whichever is greater. (f) The program administrator shall report annually all PACE assessments that were funded and recorded pursuant to subdivision (e) in a form acceptable to the commissioner. The commissioner shall include this information in the annual composite report prepared in accordance with Section 22160. (g) (1) If there is a difference between the determination of the property owner’s ability to pay the annual PACE obligations and the actual amount financed for the property owner, and the property owner is obligated on the underlying home improvement contract, the program administrator shall be responsible for that difference. This subdivision does not apply in a case of intentional misrepresentation by the property owner. If the program administrator is responsible to pay the difference under this subdivision, the program administrator shall provide to the property owner a written disclosure of the methodology that the program administrator used to determine whether that there was a difference between the property owner’s ability to pay the annual PACE obligation and the actual amount financed for the property owner for purposes of this subdivision. (2) This subdivision only applies to an assessment contract that was executed between April 1, 2018, and January 1, 2019. (Amended by Stats. 2018, Ch. 813, Sec. 10. (AB 2063) Effective January 1, 2019.)
  82. 22688.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

    Verify source ↗

    A program administrator is subject to the California Financial Information Privacy Act provisions that apply to financial institutions.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22688. A program administrator shall be subject to all provisions of the California Financial Information Privacy Act (Division 1.4 (commencing with Section 4050)) that are applicable to financial institutions. (Amended by Stats. 2018, Ch. 798, Sec. 8. (SB 1087) Effective January 1, 2019.)
  83. 22689.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

    Verify source ↗

    A program administrator must not let a PACE solicitor solicit a property owner or engage in unlawful contract-related conduct, and the commissioner may enforce violations.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22689. (a) A program administrator shall not permit a PACE solicitor to do any of the following: (1) Solicit a property owner to enter into an assessment contract with a program administrator, unless the PACE solicitor and the program administrator comply with the requirements of this chapter and any rules adopted by the commissioner. (2) Engage in any act in violation of Section 5898.16 or 5898.17 of the Streets and Highways Code or Chapter 29.1 (commencing with Section 5900) of Part 3 of Division 7 of the Streets and Highways Code, including offering an assessment contract with terms, conditions, or disclosures that are not in compliance with applicable laws or that omits terms, conditions, or disclosures required by applicable law, excepting the reporting requirements of Section 5954 of the Streets and Highways Code. (b) A program administrator shall be subject to the enforcement authority of the commissioner for any violations of this division, to the extent those violations have been committed by the program administrator or by a PACE solicitor authorized by that program administrator, in connection with activity related to that program administrator. (c) A violation of any provision of Section 5898.16 or 5898.17 of the Streets and Highways Code or of any provision of Chapter 29.1 (commencing with Section 5900) of Part 3 of Division 7 of the Streets and Highways Code by a program administrator, excepting the reporting requirements of Section 5954 of the Streets and Highways Code, or by a PACE solicitor authorized by that program administrator in connection with activity related to that program administrator, shall be a violation of this division. (Amended by Stats. 2018, Ch. 813, Sec. 11. (AB 2063) Effective January 1, 2019.)
  84. 22690.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

    Verify source ↗

    This section lets the commissioner inspect and investigate program administrators and related PACE solicitors or agents, and it allows reports, corrective demands, orders, hearings, and suspension or bar orders in some cases.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22690. (a) A program administrator is subject to an inspection, examination, or investigation in accordance with Section 22701. (b) If, in the course of an inspection, examination, or investigation of a program administrator, the commissioner has cause to believe that the program administrator, the PACE solicitor, or the PACE solicitor agent may have committed a violation of this division or any rule or order thereunder, or the commissioner seeks to obtain or provide information necessary to the commissioner in the administration of the division, with respect to a matter related to a PACE solicitor or PACE solicitor agent, and either this information is not available directly from the program administrator or the commissioner seeks to validate the information obtained from the program administrator, the commissioner may do the following: (1) Inspect, examine, or investigate any and all documents, records, files, and communications of the PACE solicitor or PACE solicitor agent that are relevant to the violation or the matter. For purposes of the inspection, examination, or investigation, the commissioner and their representatives shall have access to the records of the PACE solicitor or PACE solicitor agent related to assessment contracts associated with the violation or matter. (2) Require the attendance of witnesses and examine under oath all persons whose testimony is required relative to the violation or matter. (c) If, upon inspection, examination, or investigation, the commissioner has cause to believe that a PACE solicitor or PACE solicitor agent is violating or has violated any provision of this division or any rule or order thereunder, the commissioner or their designee shall exhaust the procedure set forth in paragraph (1) before bringing any action authorized under paragraph (2). (1) (A) The commissioner shall issue a report to the program administrator, the PACE solicitor, and, if applicable, the PACE solicitor agent, documenting the commissioner’s findings and, if applicable, requesting corrective action or a cessation of any violation of this division or any rule or order thereunder. (B) The program administrator, PACE solicitor, and, if applicable, PACE solicitor agent, or any combination thereof, shall have the opportunity to provide a written answer to the report submitted pursuant to subparagraph (A) within a reasonable period and shall document in its written answer any voluntary corrective action or other actions taken or planned to address the commissioner’s request. The commissioner shall shorten the period of time to provide a written answer to no greater than five business days if the commissioner has reasonable grounds to believe that a person is conducting business as a PACE solicitor or PACE solicitor agent, or both, in an unsafe or injurious manner. (C) If following the process outlined in subparagraphs (A) and (B), the commissioner believes further action is necessary or appropriate, the commissioner may do any of the following, in any combination: (i) Demand a corrective action by the program administrator, PACE solicitor, PACE solicitor agent, or any combination thereof. (ii) Demand the program administrator, PACE solicitor, PACE solicitor agent, or any combination thereof, stop violating the division, rule, or order. (iii) Demand the PACE solicitor or PACE solicitor agent, or both, discontinue engaging in the business of soliciting property owners to enter into assessment contracts related to any or all program administrators, or demand the program administrator deauthorize the PACE solicitor or PACE solicitor agent, or both, for a defined period not exceeding 12 months, or indefinitely. (2) (A) The commissioner may, upon exhaustion of the procedure in paragraph (1), bring an order against a PACE solicitor, PACE solicitor agent, or both, as provided in this paragraph. However, the commissioner shall, upon exhaustion of the procedure in paragraph (1), bring an order against a PACE solicitor, PACE solicitor agent, or both, as provided in this paragraph, following either of the following: (i) The issuance of a demand pursuant to clause (iii) of subparagraph (C) of paragraph (1). (ii) The issuance of a demand pursuant to clause (i) or (ii) of subparagraph (C) of paragraph (1) involving a violation of Section 22161, when the commissioner believes that the public’s interest will be served by the public nature of the order. (B) The commissioner may order a PACE solicitor or PACE solicitor agent, or both, to desist and refrain from engaging in business as a PACE solicitor or PACE solicitor agent, or further violating this division, or the rules thereunder, in accordance with clause (i) and (ii) of this subparagraph. This paragraph does not authorize the commissioner to restrict the ability of a PACE solicitor or PACE solicitor agent to engage in any business that does not involve soliciting a property owner to enter into an assessment contract. (i) If the order addresses unsafe or injurious behavior by a PACE solicitor or PACE solicitor agent, or both, the order shall be effective immediately. All other orders shall be effective once final. (ii) If, within 30 days of the receipt of the order, the PACE solicitor or PACE solicitor agent, or both, fails to request a hearing, the order shall become final. (iii) If, within 30 days of the receipt of the order, the PACE solicitor or PACE solicitor agent, or both, requests a hearing, the hearing shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (C) The commissioner may, after appropriate notice and opportunity for a hearing, by order, censure or suspend for a period not exceeding 12 months, or bar any natural person from directly or indirectly soliciting a property owner to enter into an assessment contract, in accordance with clause (i) to (iv), inclusive, of this subparagraph. This paragraph does not authorize the commissioner to restrict the ability of a natural person to engage in any business that does not involve soliciting a property owner to enter into an assessment contract, or being employed by a PACE solicitor in a capacity that does not involve soliciting a property owner to enter into an assessment contract. (i) Within 15 days from the date of a notice of intention to issue an order pursuant to this subparagraph, the person may request a hearing under the Administrative Procedure Act (Chapter 4.5 (commencing with Section 11400) of Division 3 of Title 2 of the Government Code). (ii) Upon receipt of a request submitted pursuant to clause (i), the matter shall be set for hearing to commence within 30 days after the commissioner receives the request pursuant to clause (i), unless the person subject to the notice consents to a later date. (iii) If no hearing is requested within 15 days after the mailing or service of the notice of intention as described in clause (i), and the commissioner does not order a hearing, the right to a hearing shall be deemed to be waived. (iv) Upon receipt of a notice of intention to issue an order pursuant to this subparagraph, the person who is the subject of the proposed order is immediately prohibited from directly or indirectly soliciting a property owner to enter into an assessment contract. (d) An order brought under paragraph (2) of subdivision (c) shall be public. (e) A PACE solicitor or PACE solicitor agent subject to this section shall not be subject to Chapter 4 (commencing with Section 22700). (f) The commissioner shall not be bound to the provisions of this section in connection with enforcement of this division with respect to a program administrator. (Amended by Stats. 2022, Ch. 188, Sec. 13. (AB 2433) Effective January 1, 2023.)
  85. 22690.5.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

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    The department must keep certain PACE solicitor identities on its website and show when the list was last updated and how often it is updated.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22690.5. (a) The department shall maintain, on its Internet Web site, the identities of enrolled PACE solicitors and PACE solicitor agents. The Internet Web site shall identify the date of the most recent update, and the frequency with which the list is updated. This subdivision shall become operative on January 1, 2020. (b) The department shall maintain on its Internet Web site the identities of PACE solicitors and PACE solicitor agents ordered to discontinue engaging in the business of soliciting property owners to enter into assessment contracts. The Internet Web site shall identify the date of the most recent update. (Added by Stats. 2018, Ch. 798, Sec. 11. (SB 1087) Effective January 1, 2019.)
  86. 22691.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

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    The commissioner may make rules to exempt specified classes of persons from Sections 22680, 22681, and 22682.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22691. The commissioner may by any rules he or she deems necessary or appropriate in the public interest or for the protection of property owners, either unconditionally or upon specified terms and conditions or for specified periods, exempt any class of persons specified in those rules from the provisions of Sections 22680, 22681, and 22682. (Amended by Stats. 2018, Ch. 813, Sec. 12. (AB 2063) Effective January 1, 2019.)
  87. 22692.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

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    The commissioner must require program administrators to include specified impact-related information in the annual report under Section 22159.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22692. (a) The commissioner shall require a program administrator to submit the following information in the annual report filed under Section 22159: (1) Information beneficial to an evaluation of the overall impact on property owners caused by the 97 percent cap on total PACE and mortgage-related debt. (2) Information beneficial to an evaluation of the overall impact on property owners caused by the use of an automated valuation model in determining the market value of property subject to a PACE assessment. (3) Information beneficial to an evaluation of the overall impact on property owners caused by the emergency HVAC provisions. (4) Information relevant to determining the overall impact on property owners of the absence of a minimum residual income threshold. (b) The information received under this section shall appear in a separate section within the composite of the annual reports required to be prepared by the commissioner pursuant to Section 22160. (c) This section does not limit the authority of the commissioner to require additional information from a program administrator under Section 22159. (Added by Stats. 2017, Ch. 475, Sec. 71. (AB 1284) Effective October 4, 2017. Section operative January 1, 2019, pursuant to Section 22696.)
  88. 22693.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

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    The commissioner may require program administrators to use a real-time registry or database system for PACE assessments, and may arrange for an independent third party to develop and support it.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22693. (a) The commissioner may, by rule, require a program administrator to use a real-time registry or database system for tracking PACE assessments in order to carry out his or her regulatory duties and to support enforcement. That registry or database system shall enable the program administrator to trace PACE assessments and shall include, but not be limited to, features for providing or obtaining information about a property’s status with regard to PACE assessments placed on the property, whether recorded or not. All costs associated with the real-time registry or database system shall be apportioned among licensed program administrators based on the volume and amount of PACE assessments by each program administrator, or any other method that fairly apportions the costs, as required by rule. The commissioner may contract with an independent third party for the development and ongoing maintenance and support of the real-time registry or database system, and may require the program administrators to pay for the cost of development and ongoing maintenance and support directly to the independent third party. In no event shall the costs apportioned to a program administrator exceed a reasonable regulatory cost. (b) On or before January 1, 2020, the commissioner shall determine whether to proceed with a rulemaking action. This subdivision shall not restrict the ability of the commissioner to proceed with a rule under this section at any time. (Amended by Stats. 2018, Ch. 813, Sec. 13. (AB 2063) Effective January 1, 2019.)
  89. 22694.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

    Verify source ↗

    This chapter does not apply to finance lenders, mortgage loan originators, or broker licensees unless they act as a program administrator, PACE solicitor, or PACE solicitor agent.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22694. This chapter does not apply to a finance lender, mortgage loan originator, or broker licensee, unless they engage in the business of a program administrator, PACE solicitor, or PACE solicitor agent. (Amended by Stats. 2018, Ch. 798, Sec. 13. (SB 1087) Effective January 1, 2019.)
  90. 22695.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

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    A violation of this chapter is not subject to the criminal penalties in Sections 22753 and 22780, and this section becomes operative on the act’s effective date.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22695. (a) A violation of this chapter by any person is not subject to the criminal penalties established pursuant to Sections 22753 and 22780. (b) Notwithstanding Section 22696, this section shall become operative on the effective date of this act. (Added by Stats. 2017, Ch. 475, Sec. 71. (AB 1284) Effective October 4, 2017. Section operative October 4, 2017, by its own provisions.)
  91. 22696.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

    Verify source ↗

    This chapter becomes operative on January 1, 2019, except for the listed sections.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22696. Except as provided in Sections 22684, 22685, 22686, 22687, 22688, and 22695, this chapter shall become operative on January 1, 2019. (Added by Stats. 2017, Ch. 475, Sec. 71. (AB 1284) Effective October 4, 2017. Note: Operative date provision applies, with specified exceptions, to Chapter 3.5, comprising Sections 22680 to 22697.)
  92. 22697.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. )

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    This chapter does not limit any rights or remedies available under other laws.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 3.5. Program Administrators [22680 - 22697] ( Chapter 3.5 added by Stats. 2017, Ch. 475, Sec. 71. ) ## 22697. This chapter does not preclude or reduce any rights and remedies established under any other laws. (Added by Stats. 2017, Ch. 475, Sec. 71. (AB 1284) Effective October 4, 2017. Section operative January 1, 2019, pursuant to Section 22696.)
  93. 22700.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    Certain finance-related licenses stay in force until surrendered, revoked, or suspended; mortgage loan originator licenses must be renewed annually with an annual assessment.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22700. (a) Finance lender, broker, and program administrator licenses issued under this division shall remain in effect until they are surrendered, revoked, or suspended. (b) Mortgage loan originator licenses issued under this division shall be renewed annually upon the payment of an annual assessment, and, if renewed by the licensee, shall remain in effect until they are surrendered, revoked, or suspended. (c) Surrender of a license becomes effective 30 days after receipt of an application to surrender the license or within a shorter period of time that the commissioner may determine, unless a revocation or suspension proceeding is pending when the application is filed or a proceeding to revoke or suspend or to impose conditions upon the surrender is instituted within 30 days after the application is filed. If a proceeding is pending or instituted, surrender of a license becomes effective at the time and upon the conditions that the commissioner determines. (d) This section shall become operative on January 1, 2019. (Repealed (in Sec. 72) and added by Stats. 2017, Ch. 475, Sec. 73. (AB 1284) Effective October 4, 2017. Section operative January 1, 2019, by its own provisions.)
  94. 22701.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    The commissioner may investigate and examine the business and records of finance lenders, brokers, and program administrators, and the commissioner and representatives have free access to their business premises and records.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22701. (a) For the purpose of discovering violations of this division or securing information required by him or her in the administration and enforcement of this division, the commissioner may at any time investigate the loans, assessment contracts, and business, and examine the books, accounts, records, and files used in the business, of every person engaged in the business of a finance lender, broker, or program administrator, whether the person acts or claims to act as principal or agent, or under or without the authority of this division. For the purpose of examination, the commissioner and his or her representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of all these persons. (b) This section shall become operative on January 1, 2019. (Repealed (in Sec. 74) and added by Stats. 2017, Ch. 475, Sec. 75. (AB 1284) Effective October 4, 2017. Section operative January 1, 2019, by its own provisions.)
  95. 22702.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    The commissioner may temporarily take possession of business records during an examination or investigation, and no one may remove those records while they are in possession except under a court order or with the commissioner’s written consent.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22702. In making any examination or investigation, the commissioner may, for a reasonable time not to exceed 30 days, take possession of the books, records, accounts, and other papers pertaining to the business. The commissioner may place a keeper in exclusive charge and custody of the books, records, accounts, and other papers in the office or place where they are usually kept. During possession, no person shall remove or attempt to remove any of the books, accounts, papers, records, files, safes, and vaults, or any part thereof, except in compliance with a court order or written consent of the commissioner. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  96. 22703.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    Specified insiders may inspect and examine certain business records while they are in the commissioner’s custody, and employees may add entries showing current operations or transactions.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22703. The officers, employees, partners, directors, and stockholders may inspect and examine the books, accounts, papers, records, files, safes, and vaults while they are in the custody of the commissioner. Employees may make entries in these documents reflecting current operations or transactions. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  97. 22704.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    The commissioner’s power to investigate and examine continues even if a license is surrendered, suspended, or revoked.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22704. The power of investigation and examination by the commissioner is not terminated by the surrender, suspension, or revocation of any license issued by him or her. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  98. 22705.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    If the commissioner thinks it is necessary for the public welfare, the commissioner may continuously use the powers given in this division, even if no license application has been filed or if a license has been issued, surrendered, suspended, or revoked.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22705. Whenever the commissioner deems it necessary for the general welfare of the public, he or she has continuous authority to exercise the powers set forth in this division whether or not an application for a license has been filed with the commissioner, any license has been issued, or if issued, has been surrendered, suspended, or revoked. (Amended by Stats. 2002, Ch. 772, Sec. 17. Effective January 1, 2003.)
  99. 22705.1.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    A licensee may face discipline from the commissioner if another government or agency has disciplined the licensee for related conduct.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22705.1. (a) For any licensee, a disciplinary action taken by the State of California, another state, an agency of the federal government, or another country for an action substantially related to the activity regulated under this division may be grounds for disciplinary action by the commissioner. A certified copy of the record of the disciplinary action taken against the licensee by the State of California, other state, agency of the federal government, or other country shall be conclusive evidence of the events related therein. (b) Nothing in this section shall preclude the commissioner from applying a specific statutory provision in this division providing for discipline against a licensee as a result of disciplinary action taken against a licensee by the State of California, another state, an agency of the federal government, or another country. (Added by Stats. 2003, Ch. 473, Sec. 21. Effective January 1, 2004.)
  100. 22706.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    The commissioner may require witnesses to attend and may examine under oath people whose testimony relates to regulated activities, businesses, or an examination, investigation, or hearing.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22706. The commissioner may require the attendance of witnesses and examine under oath all persons whose testimony relates to activities and businesses regulated by this division or to the subject matter of any examination, investigation, or hearing. (Amended by Stats. 2020, Ch. 160, Sec. 1. (AB 2559) Effective January 1, 2021.)
  101. 22707.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    Licensees or persons examined must pay the examination cost to the commissioner. The commissioner may also sue to recover that cost and may use an estimated average hourly cost to determine it.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22707. (a) The cost of each examination of a licensee or a person subject to this division shall be paid to the commissioner by the licensee or person examined, and the commissioner may maintain an action for the recovery of the cost in any court of competent jurisdiction. In determining the cost of an examination, the commissioner may use the estimated average hourly cost for all persons performing examinations of licensees or other persons subject to this division for the fiscal year. (b) For the purpose of this section only, no person other than a licensee shall be deemed to be a person subject to this division until the person is determined to be a person subject to this division by an administrative hearing in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code or by a judicial hearing in any court of competent jurisdiction. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  102. 22707.5.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    The commissioner may issue written citations for violations, require correction, assess a fine up to $2,500, and seek court enforcement.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22707.5. (a) If, upon inspection, examination, or investigation, the commissioner has cause to believe that a licensee or other person is violating or has violated any provision of this division or any rule or order thereunder, the commissioner or their designee, may issue a citation to the licensee or person in writing, describing with particularity the basis of the citation. Each citation may contain an order to correct the violation or violations identified and provide a reasonable time period or periods by which the violation or violations must be corrected. In addition, each citation may assess an administrative fine not to exceed two thousand five hundred dollars ($2,500) that shall be deposited in the Financial Protection Fund. In assessing a fine, the commissioner shall give due consideration to the appropriateness of the amount of the fine with respect to factors including the gravity of the violation, the good faith of the person or licensees cited, and the history of previous violations. In addition, the commissioner may include a claim for ancillary relief. The ancillary relief may include, but not be limited to, refunds, restitution or disgorgement, or damages on behalf of the persons injured by the act or practice constituting the subject matter of the action. A citation issued or a fine assessed pursuant to this section, while constituting punishment for a violation of law, shall be in lieu of other administrative discipline by the commissioner for the offense or offenses cited. (b) Notwithstanding subdivision (a), nothing in this section shall prevent the commissioner from issuing an order to desist and refrain from engaging in a specific business or activity or activities, or an order to suspend all business operations to a person or licensee who is engaged in or who has engaged in continued or repeated violations of this division. In any of these circumstances, the sanctions authorized under this section shall be separate from, and in addition to, all other administrative, civil, or criminal remedies. (c) If, within 30 days from the receipt of the citation, the licensee or person cited fails to notify the department that they intend to request a hearing as described in subdivision (d), the citation shall be deemed final. (d) Any hearing under this section shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (e) After the exhaustion of the review procedures provided for in this section, the commissioner may apply to the appropriate superior court for a judgment in the amount of the administrative fine and an order compelling the cited licensee or person to comply with the order of the commissioner. (1) The application shall include a certified copy of the final order of the commissioner. (2) Upon the filing of the application, the superior court shall set a date for a hearing for an order to show cause why judgment should not be entered, which shall be set not less than 60 calendar days from the date the application is filed. (3) The commissioner shall serve a copy of the application and order along with notice of the hearing to all entities or persons cited in the order against whom a civil judgment is sought not less than 15 calendar days before the date set for the hearing. Service of the application shall be pursuant to the methods specified by Article 3 (commencing with Section 415.10) of Chapter 4 of Title 5 of Part 2 of the Code of Civil Procedure for service of summons. (4) The court shall consider the filing of a certified copy of the final order of the commissioner and the proof of service of the application and notice of the hearing on the persons or entities against whom the judgment is sought, a sufficient prima facie showing to warrant the issuance of the civil judgment at the hearing. The respondent then has the burden of showing by affirmative evidence at the hearing why the order of the commissioner is not final, or why the timely notice of application and hearing was not provided to avoid judgment being entered. Any method of service authorized by laws under which the order was issued is considered valid service for the purposes of determining whether the order is final. Absent this showing by the respondent, the superior court shall issue a final civil judgment compelling compliance with the order. (5) The judgment issued pursuant to paragraph (4) may be for injunctive relief or payment of ancillary relief or penalties. The judgment may be enforced by the court pursuant to the procedures authorized for any other civil judgment. (6) This subdivision shall not be construed to limit judicial review of any order of the commissioner in accordance with the law. (Amended by Stats. 2022, Ch. 188, Sec. 14. (AB 2433) Effective January 1, 2023.)
  103. 22708.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    The commissioner may send a record to the proper local prosecuting official after an examination, investigation, or hearing, if the commissioner thinks doing so is in the public interest or advantage.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22708. After an examination, investigation, or hearing under this division, if the commissioner deems it of public interest or advantage, he or she may certify a record to the proper prosecuting official of the city, county, or city and county in which the act complained of, examined, or investigated occurred. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  104. 22709.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    The commissioner may require a licensee to produce certain books, records, and supporting data for examination in California, and the materials must be made available within 10 days after a written demand.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22709. The commissioner may require the production for examination in this state of all books, records, and supporting data used by the licensee in the preparation of reports to the commissioner. The books, records, and supporting data shall be made available for examination by the commissioner in this state within 10 days after a written demand. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  105. 22710.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    The commissioner may suspend any license for up to 30 days after three days’ notice and a hearing, while an investigation is pending.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22710. The commissioner may upon three days’ notice and a hearing, suspend any license for a period not exceeding 30 days, pending investigation. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  106. 22711.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    A licensee may surrender a license by giving the commissioner written notice.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22711. Any licensee may surrender any license by delivering to the commissioner written notice that the licensee surrenders that license. Surrender of the license does not affect the licensee’s civil or criminal liability for acts committed prior to surrender of the license. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  107. 22712.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    The commissioner may order unlicensed or violating persons or licensees to stop the conduct, may seek ancillary relief, and must order unsafe or injurious practices to stop after an investigation and reasonable grounds.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22712. (a) Whenever, in the opinion of the commissioner, any person is engaged or has engaged in business as a finance lender, broker, program administrator, or mortgage loan originator, as defined in this division, without a license from the commissioner, or any licensee is violating or has violated any provision of this division, any provision of an order, or any regulation adopted pursuant to this division, the commissioner may order that person or licensee to desist and to refrain from engaging in the business or further continuing that violation. In addition, the commissioner may include a claim for ancillary relief. The ancillary relief may include, but not be limited to, refunds, restitution or disgorgement, or damages on behalf of the persons injured by the act or practice constituting the subject matter of the action. If, within 30 days after the order is served, a written request for a hearing is filed and no hearing is held within 30 days thereafter, the order is rescinded. For purposes of this section, “licensee” includes a mortgage loan originator. (b) Notwithstanding subdivision (a), if, after an investigation, the commissioner has reasonable grounds to believe that a person is conducting or has conducted business in an unsafe or injurious manner, the commissioner shall, by written order addressed to that person, direct the discontinuance of the unsafe or injurious practices. The order shall be effective immediately, but shall not become final except in accordance with the provisions of Section 22717. (Amended by Stats. 2022, Ch. 188, Sec. 15. (AB 2433) Effective January 1, 2023.)
  108. 22713.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    The commissioner may sue or ask the Attorney General to sue to stop violations, and willful violators can face a civil penalty up to $2,500 per violation.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22713. (a) Whenever the commissioner believes from evidence satisfactory to the commissioner that any person has violated or is about to violate a provision of this division, or a provision of any order, license, decision, demand, requirement, or any regulation adopted pursuant to this division, the commissioner may, in the commissioner’s discretion, bring an action, or the commissioner may request the Attorney General to bring an action in the name of the people of the State of California, against that person to enjoin that person from continuing that violation or doing any act in furtherance of the violation. Upon a proper showing, a permanent or preliminary injunction, restraining order, or writ of mandate shall be granted and other ancillary relief may be granted as appropriate. (b) If the commissioner determines that it is in the public interest, the commissioner may include in any action authorized by subdivision (a) a claim for ancillary relief, including, but not limited to, a claim for restitution, disgorgement, or damages on behalf of the persons injured by the act or practice constituting the subject matter of the action. The court shall have jurisdiction to award additional relief. (c) Any person who willfully violates any provisions of this division, or who willfully violates any rule or order adopted pursuant to this division, shall be liable for a civil penalty not to exceed two thousand five hundred dollars ($2,500) for each violation, which shall be assessed and recovered in a civil action brought in the name of the people of the State of California by the commissioner in any court of competent jurisdiction. (d) As applied to the penalties for acts in violation of this division, the remedies provided by this section and by other sections of this division are not exclusive, and may be sought and employed in any combination to enforce the provisions of this division. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  109. 22714.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    The commissioner may suspend or revoke a license after notice and a chance to be heard if listed grounds are found.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22714. (a) The commissioner shall suspend or revoke any license, upon notice and reasonable opportunity to be heard, if the commissioner finds any of the following: (1) The licensee has failed to comply with any demand, ruling, or requirement of the commissioner made pursuant to and within the authority of this division. (2) The licensee has violated any provision of this division or any rule or regulation made by the commissioner under and within the authority of this division. (3) A fact or condition exists that, if it had existed at the time of the original application for the license, reasonably would have warranted the commissioner in refusing to issue the license originally. (4) There has been repeated failure by the finance lender, when making or negotiating loans, to take into consideration in determining the size and duration of loans, the financial ability of the borrower to repay the loan in the time and manner provided in the loan contract, or to refinance the loan at maturity. (5) There has been repeated failure by the program administrator, when administering assessment contracts, to take into consideration in determining the size and duration of the assessment contracts, the property owner’s ability to meet the annual PACE obligations in the time and manner provided in the contract. (b) A master license shall not be suspended or revoked pursuant to this section as a result of any action or failure to act by a subsidiary licensee unless grounds exist for the suspension or revocation of the master license pursuant to this section. An order suspending or revoking a license or imposing sanctions against a licensee shall not affect other licensed locations unless expressly stated in the order. (c) This section shall become operative on January 1, 2019. (Repealed (in Sec. 80) and added by Stats. 2017, Ch. 475, Sec. 81. (AB 1284) Effective October 4, 2017. Section operative January 1, 2019, by its own provisions.)
  110. 22715.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    The commissioner may suspend or revoke a license, or impose penalties, when a licensee misses required reporting or information deadlines.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22715. (a) The commissioner may by order summarily suspend or revoke the license of any licensee if that person fails to file the report required by Section 22159 within 10 days after notice by the commissioner that the report is due and not filed. If, after an order is made, a request for hearing is filed in writing within 30 days and the hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. (b) (1) Subject to paragraph (2), the commissioner may impose, by order, a penalty on any licensee who does not do, within the time specified in any written demand of the commissioner, either of the following: (A) Make and file with the commissioner any report required by law. (B) Furnish any material information required by the commissioner to be included in any report required by law. (2) A penalty may not be imposed on a licensee pursuant to this subdivision in connection with a report or information required to be submitted by a licensee if either: (A) The commissioner requires information from the licensee pursuant to subdivision (a) of Section 22159 that was not required the prior year and the licensee is notified about the requirement to submit that new information less than 90 days before the information is due to the commissioner. (B) The commissioner requires the licensee to submit information pursuant to subdivision (b) of Section 22159 and the licensee is notified about the requirement to submit that information less than 90 days before the information is due to the commissioner. (3) The amount of the penalty imposed pursuant to this subdivision shall not exceed one hundred dollars ($100) for each business day for the first five business days the report or information is overdue, and thereafter shall not exceed five hundred dollars ($500) for each business day the report or information is overdue, not to exceed twenty-five thousand dollars ($25,000) in the aggregate. (c) If an order has been made under subdivision (b), and a request for a hearing is filed in writing within 30 days of the date of service of the order by the licensee to whom the order was directed, a hearing shall be held in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. At the hearing, the commissioner shall have all the powers granted under that chapter. (d) If the licensee fails to file a written request for a hearing within 30 days of the date of service of the order, the order imposing the penalty shall be deemed a final order of the commissioner, and the penalty shall be paid within five business days. (e) If a hearing is requested, the penalty shall be paid within five business days after the effective date of any decision in the case ordering payment to be made. (Amended by Stats. 2017, Ch. 329, Sec. 1. (AB 1636) Effective January 1, 2018.)
  111. 22716.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    License revocation, suspension, expiration, or surrender does not change certain preexisting contract and bond obligations, and the section becomes operative on January 1, 2019.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22716. (a) The revocation, suspension, expiration, or surrender of any license does not impair or affect the obligation of any preexisting lawful contract between the licensee and any borrower or property owner, nor the validity and enforceability of any bonds issued and secured by those contracts. This division does not affect the validity and enforceability of any PACE assessment contracts entered into or bonds issued and secured by those contracts. (b) This section shall become operative on January 1, 2019. (Amended (as added by Stats. 2017, Ch. 475, Sec. 83) by Stats. 2018, Ch. 813, Sec. 14. (AB 2063) Effective January 1, 2019.)
  112. 22717.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    Hearings under this article generally must follow Government Code Chapter 5 procedures, and the commissioner has all powers granted by that chapter.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22717. Except in cases in which the time for setting the hearing is shortened as provided in this division, the proceedings under this article shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and in all cases the commissioner has all the powers granted therein. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  113. 22718.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    The commissioner’s orders, decisions, licenses, and other official acts may be reviewed by a court under the law.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 1. Revocation and Suspension of License [22700 - 22718] ( Article 1 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22718. Every order, decision, license, or other official act of the commissioner is subject to judicial review in accordance with law. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  114. 22750.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Consumer Loan Penalties [22750 - 22758] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    If someone willfully charges, contracts for, or receives more than the charges allowed by this division, the loan contract is void and no one may collect or receive principal, charges, or recompense for the transaction.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Consumer Loan Penalties [22750 - 22758] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22750. (a) If any amount other than, or in excess of, the charges permitted by this division is willfully charged, contracted for, or received, the contract of loan is void, and no person has any right to collect or receive any principal, charges, or recompense in connection with the transaction. (b) If any provision of this division is willfully violated in the making or collection of a loan, whether by a licensee or by an unlicensed person subject to this division, the contract of loan is void, and no person has any right to collect or receive any principal, charges, or recompense in connection with the transaction. (Amended by Stats. 2013, Ch. 467, Sec. 3. (SB 318) Effective January 1, 2014.)
  115. 22751.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Consumer Loan Penalties [22750 - 22758] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    If a licensee charges or receives more than allowed, the licensee must forfeit all interest and charges and may collect only the loan principal, unless the overcharge was an unintentional computation error that is corrected and noticed within 60 days.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Consumer Loan Penalties [22750 - 22758] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22751. (a) If any amount other than or in excess of the charges permitted by this division is charged or contracted for, or received, for any reason other than a willful act of the licensee, the licensee shall forfeit all interest and charges on the loan and may collect or receive only the principal amount of the loan. (b) Subdivision (a) shall not apply to an error in computation if (1) the licensee shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error, and (2) within 60 days of discovering the error the licensee notifies the borrower of the error and makes whatever adjustments in the account are necessary to correct the error. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  116. 22752.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Consumer Loan Penalties [22750 - 22758] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    If a loan-law violation occurs during making or collecting a loan, the licensee must forfeit all interest and charges and may keep only the principal, unless a stated bona fide error exception applies.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Consumer Loan Penalties [22750 - 22758] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22752. (a) If any provision of this division is violated in the making or collection of a loan, for any reason other than a willful act of the licensee, the licensee shall forfeit all interest and charges on the loan and may collect or receive only the principal amount of the loan. (b) Subdivision (a) shall not apply to a violation if (1) the licensee shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error, and (2) within 30 days of discovering the error the licensee notifies the borrower of the error and rectifies the error by making the appropriate changes in the documents or account and by taking other action necessary to correct the error. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  117. 22753.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Consumer Loan Penalties [22750 - 22758] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    A person who willfully violates this division or related rules/orders can be fined, jailed, or both, unless Section 22696 applies.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Consumer Loan Penalties [22750 - 22758] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22753. Except as provided in Section 22696, any person who willfully violates any provision of this division or who willfully violates any rule or order adopted pursuant to this division, shall, upon conviction, be punished by a fine of not more than ten thousand dollars ($10,000), by imprisonment in a county jail for not more than one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment. However, no person may be imprisoned for the violation of any rule or order unless he or she had knowledge of the rule or order. Conviction under this section shall not preclude the commissioner from exercising the authority in Section 22713. (Amended by Stats. 2017, Ch. 475, Sec. 84. (AB 1284) Effective October 4, 2017.)
  118. 22754.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Consumer Loan Penalties [22750 - 22758] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    Liability under this division does not apply to acts or omissions done in good faith while following a written general rule, regulation, or specific ruling of the commissioner.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Consumer Loan Penalties [22750 - 22758] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22754. No provision imposing liability under this division, including the provisions of subdivision (a) of Section 22751 and subdivision (a) of Section 22752, shall apply to any act done or omitted in good faith in conformity with any written general rule, regulation, or specific ruling of the commissioner, notwithstanding that after the act or omission has occurred, the written general rule, regulation, or specific ruling is amended, rescinded, or determined by judicial or other authority to be invalid for any reason. (Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)
  119. 22755.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Consumer Loan Penalties [22750 - 22758] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    A mortgage loan originator must not use fraud, deception, unlicensed activity, false statements, prohibited fees, or improper pressure in residential mortgage lending.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Consumer Loan Penalties [22750 - 22758] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22755. It is a violation of this division for a mortgage loan originator to do any of the following: (a) Directly or indirectly employ any scheme, device, or artifice to defraud or mislead borrowers or lenders or to defraud any person. (b) Engage in any unfair or deceptive practice toward any person. (c) Obtain property by fraud or misrepresentation. (d) Solicit or enter into a contract with a borrower that provides in substance that the mortgage loan originator may earn a fee or commission through best efforts to obtain a loan even though no loan is actually obtained for the borrower. (e) Solicit, advertise, or enter into a contract for specific interest rates, points, or other financing terms unless the terms are actually available at the time of soliciting, advertising, or contracting. (f) Conduct any business covered by this division without holding a valid license as required under this division, or assist or aide and abet any person in the conduct of business under this division without a valid license as required under this division. (g) Fail to make disclosures as required by this division and any other applicable state or federal law, including regulations thereunder. (h) Fail to comply with this division or rules or regulations promulgated under this division, or fail to comply with any other state or federal law, including the rules and regulations thereunder, applicable to any business authorized or conducted under this division. (i) Make, in any manner, any false or deceptive statement or representation including, with regard to the rates, points, or other financing terms or conditions for a residential mortgage loan, or engage in bait and switch advertising. (j) Negligently make any false statement or knowingly and willfully make any omission of material fact in connection with any information or reports filed with a governmental agency or the Nationwide Mortgage Licensing System and Registry or in connection with any investigation conducted by the commissioner or another governmental agency. (k) Make any payment, threat, or promise, directly or indirectly, to any person for the purposes of influencing the independent judgment of the person in connection with a residential mortgage loan, or make any payment, threat, or promise, directly or indirectly, to any appraiser of a property, for the purposes of influencing the independent judgment of the appraiser with respect to the value of the property. (l) Collect, charge, attempt to collect or charge, or use or propose any agreement purporting to collect or charge any fee prohibited by this division. (m) Cause or require a borrower to obtain property insurance coverage in an amount that exceeds the replacement cost of the improvements as established by the property insurer. (n) Fail to truthfully account for moneys belonging to a party of a residential mortgage loan transaction. (Added by Stats. 2009, Ch. 160, Sec. 44. (SB 36) Effective October 11, 2009.)
  120. 22756.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Consumer Loan Penalties [22750 - 22758] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    The Department of Financial Protection and Innovation may treat certain covered filings and electronic records as valid original documents when it reproduces them to paper form.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Consumer Loan Penalties [22750 - 22758] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22756. Notwithstanding any other law, any application for licensure, amendment to the application or registration document or notice filed under any of the laws administered by the Department of Financial Protection and Innovation, or record otherwise required to be filed in this state as an electronic record pursuant to a nationwide central depository for information regarding licensees, including mortgage loan originators, or any electronic record filed through the Nationwide Mortgage Licensing System and Registry, shall be deemed to be a valid original document upon reproduction to paper form by the Department of Financial Protection and Innovation. (Amended by Stats. 2022, Ch. 452, Sec. 141. (SB 1498) Effective January 1, 2023.)
  121. 22757.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Consumer Loan Penalties [22750 - 22758] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    Licensed finance lenders, brokers, and mortgage loan originators may not pay commissions, fees, or other compensation to unlicensed individuals for work that requires a license, unless the individual is exempt from licensure.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Consumer Loan Penalties [22750 - 22758] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22757. A finance lender, broker, or mortgage loan originator licensed under this division shall not pay any commission, fee, or other compensation to an unlicensed individual for conducting activities that require a license, unless that unlicensed individual is exempt from licensure pursuant to this division. (Added by Stats. 2012, Ch. 264, Sec. 7. (AB 2666) Effective January 1, 2013.)
  122. 22758.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Consumer Loan Penalties [22750 - 22758] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. )

    Verify source ↗

    This article does not apply to a program administrator or a PACE solicitor.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 2. Consumer Loan Penalties [22750 - 22758] ( Article 2 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22758. This article does not apply to a program administrator or a PACE solicitor. (Added by Stats. 2017, Ch. 475, Sec. 85. (AB 1284) Effective October 4, 2017.)
  123. 22780.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Commercial Loan Penalties [22780 - 22780.1] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    A person who willfully violates this division or rules/orders adopted under it may be fined up to $10,000, jailed for up to one year, or both, unless Section 22696 applies.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Commercial Loan Penalties [22780 - 22780.1] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22780. Except as provided in Section 22696, any person who willfully violates any provision of this division, or who willfully violates any rule or order adopted pursuant to this division, shall, upon conviction, be punished by a fine of not more than ten thousand dollars ($10,000), by imprisonment in a county jail for not more than one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment. However, no person may be imprisoned for the violation of any rule or order unless he or she had knowledge of the rule or order. Conviction under this section shall not preclude the commissioner from exercising the authority provided in Section 22713. This article does not apply to a program administrator or PACE solicitor. (Amended by Stats. 2017, Ch. 475, Sec. 86. (AB 1284) Effective October 4, 2017.)
  124. 22780.1.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Commercial Loan Penalties [22780 - 22780.1] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. )

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    If a licensee violates Division 9.5, that violation is treated as a violation of this division.

    ## Financial Code - FIN ## DIVISION 9. CALIFORNIA FINANCING LAW [22000 - 22780.1] ( Heading of Division 9 amended by Stats. 2017, Ch. 475, Sec. 3. ) ## CHAPTER 4. Revocation and Penalties [22700 - 22780.1] ( Chapter 4 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## ARTICLE 3. Commercial Loan Penalties [22780 - 22780.1] ( Article 3 added by Stats. 1994, Ch. 1115, Sec. 2. ) ## 22780.1. A violation of Division 9.5 (commencing with Section 22800) by a licensee shall constitute a violation of this division. (Added by Stats. 2018, Ch. 1011, Sec. 1. (SB 1235) Effective January 1, 2019.)
  125. 22800.

    ## Financial Code - FIN ## DIVISION 9.5. Commercial Financing Disclosures [22800 - 22807] ( Division 9.5 added by Stats. 2018, Ch. 1011, Sec. 2. )

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    This section defines key terms for commercial financing disclosures and gives the provider limited reliance and verification rules.

    ## Financial Code - FIN ## DIVISION 9.5. Commercial Financing Disclosures [22800 - 22807] ( Division 9.5 added by Stats. 2018, Ch. 1011, Sec. 2. ) ## 22800. For purposes of this division: (a) “Account” means a right to a payment of a monetary obligation. (b) “Accounts receivable purchase transaction” means a transaction as part of an agreement requiring a recipient to forward or otherwise sell to the provider all or a portion of accounts, payment intangibles, or cash receipts that are owed to the recipient or are collected by the recipient during a specified period or in a specified amount. (c) “Asset-based lending transaction” means a transaction in which advances are made from time to time contingent on a recipient forwarding payments received from one or more third parties for goods the recipient has supplied or services the recipient has rendered to that third party or parties. (d) (1) “Commercial financing” means an accounts receivable purchase transaction, including factoring, asset-based lending transaction, commercial loan, commercial open-end credit plan, or lease financing transaction intended by the recipient for use primarily for other than personal, family, or household purposes. (2) For purposes of determining whether financing is commercial financing within the meaning of this subdivision, the provider may rely on any written statement of intended purposes signed by the recipient. The statement may be a separate statement signed by the recipient or may be contained in a loan application or other document signed by the recipient. The provider shall not be required to ascertain that the proceeds of the commercial financing are used in accordance with the statement of intended purposes. (e) “Commercial loan” means a loan of a principal amount of five thousand dollars ($5,000) or more, or any loan under an open-end credit plan, the proceeds of which are intended by the recipient for use primarily for other than personal, family, or household purposes. (f) “Commercial open-end credit plan” means a provider’s plan for making open-end loans pursuant to a loan agreement that sets forth the terms and conditions governing the use of the open-end credit program, and provides that: (1) The recipient may use the open-end credit program to obtain money, goods, labor, or services or credit, and the provider makes open-end loans to the recipient for the purpose of paying money to, or at the direction of, the recipient or paying obligations that the recipient creates through use of the open-end credit program. (2) The amount of each advance and the charges and other permitted costs are debited to an account. (3) The charges are computed from time to time on the unpaid balances of the recipient’s account, excluding from the computation any unpaid charges other than permitted fees, costs, and expenses. (4) The recipient has the privilege of paying the account in full at any time. (g) “Commissioner” means the Commissioner of Financial Protection and Innovation. (h) “Depository institution” means any of the following: (1) A bank, trust company, or industrial loan company doing business under the authority of, or in accordance with, a license, certificate, or charter issued by the United States, this state, or any other state, district, territory, or commonwealth of the United States that is authorized to transact business in this state. (2) A federally chartered savings and loan association, federal savings bank, or federal credit union that is authorized to transact business in this state. (3) A savings and loan association, savings bank, or credit union organized under the laws of this or any other state that is authorized to transact business in this state. (i) “Factoring” means an accounts receivable purchase transaction that includes an agreement to purchase, transfer, or sell a legally enforceable claim for payment held by a recipient for goods the recipient has supplied or services the recipient has rendered that have been ordered but for which payment has not yet been made. (j) (1) “Lease financing” means providing a lease for goods if the lease includes a purchase option that creates a security interest in the goods leased, as defined in paragraph (35) of subdivision (b) of Section 1201 and Section 1203 of the Commercial Code. (2) The definition of lease financing in this Division shall not be construed to repeal or otherwise amend existing law related to the definition of leases and security interests under the Commercial Code. (k) “Payment intangible” means a general intangible under which the account debtor’s principal obligation is a monetary obligation. (l) “Person” means an individual, a corporation, a partnership, a limited liability company, a joint venture, an association, a joint stock company, a trust, or an unincorporated organization. (m) “Provider” means a person who extends a specific offer of commercial financing to a recipient. “Provider” also includes a nondepository institution, which enters into a written agreement with a depository institution to arrange for the extension of commercial financing by the depository institution to a recipient via an online lending platform administered by the nondepository institution. The fact that a provider extends a specific offer of commercial financing or lending on behalf of a depository institution shall not be construed to mean that the provider engaged in lending or originated that loan or financing. (n) “Recipient” means a person who is presented a specific commercial financing offer by a provider that is equal to or less than five hundred thousand dollars ($500,000). (Amended by Stats. 2022, Ch. 452, Sec. 142. (SB 1498) Effective January 1, 2023.)
  126. 22801.

    ## Financial Code - FIN ## DIVISION 9.5. Commercial Financing Disclosures [22800 - 22807] ( Division 9.5 added by Stats. 2018, Ch. 1011, Sec. 2. )

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    This division does not apply to several specified transactions and providers, including depository institutions, certain Farm Credit Act lenders, real-property-secured commercial financing, some dealer or vehicle rental company transactions over $50,000, and certain low-volume lenders.

    ## Financial Code - FIN ## DIVISION 9.5. Commercial Financing Disclosures [22800 - 22807] ( Division 9.5 added by Stats. 2018, Ch. 1011, Sec. 2. ) ## 22801. This division does not apply to any of the following: (a) A provider that is a depository institution. (b) A provider that is a lender regulated under the federal Farm Credit Act (12 U.S.C. Sec. 2001 et seq.). (c) A commercial financing transaction secured by real property. (d) A commercial financing transaction in which the recipient is a dealer, as defined by Section 285 of the Vehicle Code, or an affiliate of such a dealer, or a vehicle rental company, or an affiliate of such a company, pursuant to a specific commercial financing offer or commercial open-end credit plan of at least fifty thousand dollars ($50,000), including any commercial loan made pursuant to such a commercial financing transaction. (e) Any person who makes no more than one commercial financing transaction in California in a 12-month period or any person who makes five or fewer commercial financing transactions in California in a 12-month period that are incidental to the business of the person relying upon the exemption. (Added by Stats. 2018, Ch. 1011, Sec. 2. (SB 1235) Effective January 1, 2019.)
  127. 22802.

    ## Financial Code - FIN ## DIVISION 9.5. Commercial Financing Disclosures [22800 - 22807] ( Division 9.5 added by Stats. 2018, Ch. 1011, Sec. 2. )

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    A provider covered by this division must disclose required financing information to the recipient when making a specific commercial financing offer, and must get the recipient’s signature before the transaction is completed.

    ## Financial Code - FIN ## DIVISION 9.5. Commercial Financing Disclosures [22800 - 22807] ( Division 9.5 added by Stats. 2018, Ch. 1011, Sec. 2. ) ## 22802. (a) A provider subject to this division shall disclose all of the information in subdivision (b) or in Section 22803, if applicable, to a recipient at the time of extending a specific commercial financing offer to that recipient, and shall obtain the recipient’s signature on the disclosure before consummating the commercial financing transaction. (b) Except as provided in Section 22803, a provider subject to this division shall disclose all of the following: (1) The total amount of funds provided. (2) The total dollar cost of the financing. (3) The term or estimated term. (4) The method, frequency, and amount of payments. (5) A description of prepayment policies. (6) The total cost of the financing expressed as an annualized rate. (Amended (as added by Stats. 2018, Ch. 1011, Sec. 2, 1st text) by Stats. 2023, Ch. 376, Sec. 1. (SB 33) Effective January 1, 2024.)
  128. 22803.

    ## Financial Code - FIN ## DIVISION 9.5. Commercial Financing Disclosures [22800 - 22807] ( Division 9.5 added by Stats. 2018, Ch. 1011, Sec. 2. )

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    A provider of factoring or asset-based lending may, instead of the disclosures in Section 22802(b), give the listed example disclosures if it offers the recipient a general agreement describing the financing terms.

    ## Financial Code - FIN ## DIVISION 9.5. Commercial Financing Disclosures [22800 - 22807] ( Division 9.5 added by Stats. 2018, Ch. 1011, Sec. 2. ) ## 22803. As an alternative to the disclosures required in subdivision (b) of Section 22802, a provider who offers commercial financing that is factoring or asset-based lending and that offers the recipient an agreement that describes the general terms and conditions of the commercial financing transaction that will occur under the agreement, may provide the following disclosures as an example of a transaction that could occur under the general agreement for a given amount of accounts receivables: (a) An amount financed. (b) The total dollar cost. (c) The term or estimated term. (d) The method, frequency, and amount of payments. (e) A description of prepayment policies. (f) The total cost of the financing expressed as an annualized rate. (Amended (as added by Stats. 2018, Ch. 1011, Sec. 2, 1st text) by Stats. 2023, Ch. 376, Sec. 3. (SB 33) Effective January 1, 2024.)
  129. 22804.

    ## Financial Code - FIN ## DIVISION 9.5. Commercial Financing Disclosures [22800 - 22807] ( Division 9.5 added by Stats. 2018, Ch. 1011, Sec. 2. )

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    The commissioner must adopt regulations for commercial financing disclosures, including annualized rate disclosure rules. A provider does not have to comply with the disclosure requirements until final regulations are adopted and take effect.

    ## Financial Code - FIN ## DIVISION 9.5. Commercial Financing Disclosures [22800 - 22807] ( Division 9.5 added by Stats. 2018, Ch. 1011, Sec. 2. ) ## 22804. (a) The commissioner shall adopt regulations governing the disclosures described in paragraphs (1) to (5), inclusive, of subdivision (b) of Section 22802 and subdivisions (a) to (e), inclusive, of Section 22803. Those regulations shall include all of the following: (1) Definitions, contents, or methods of calculations for each of the disclosure items set forth in each applicable paragraph of subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803. (2) Requirements concerning the time, manner, and format of the applicable disclosures described in subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803. (b) The commissioner shall adopt regulations concerning the annualized rate disclosure described in paragraph (6) of subdivision (b) of Section 22802 and subdivision (f) of Section 22803. Those regulations shall include all of the following: (1) A determination of the appropriate method to express the annualized rate disclosure and the types of fees and charges to be included in that calculation. (2) When providers shall be permitted to disclose an estimated annualized rate, and how that estimate shall be calculated. The method of calculation determined by this paragraph shall specify the accuracy requirements and tolerance allowances for the calculation, and the types of fees and charges to be included in the calculation. (3) Requirements concerning the time, manner, and format of the disclosure. (c) A provider shall not be required to comply with the disclosure requirements of this division until the final regulations are adopted by the commissioner pursuant to this section and become effective on the applicable date described in Section 11343.4 of the Government Code. (Amended by Stats. 2023, Ch. 376, Sec. 5. (SB 33) Effective January 1, 2024.)
  130. 22805.

    ## Financial Code - FIN ## DIVISION 9.5. Commercial Financing Disclosures [22800 - 22807] ( Division 9.5 added by Stats. 2018, Ch. 1011, Sec. 2. )

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    A provider is not liable just because the actual APR charged differs from an Estimated APR disclosed under specified commissioner or Attorney General guidance.

    ## Financial Code - FIN ## DIVISION 9.5. Commercial Financing Disclosures [22800 - 22807] ( Division 9.5 added by Stats. 2018, Ch. 1011, Sec. 2. ) ## 22805. No provision of this division imposes any liability on a provider as a result of the actual Annual Percentage Rate (APR) charged by a provider differing from the Estimated APR disclosed in conformity with any regulation, order, or written interpretive opinion of the commissioner or any such opinion of the Attorney General, whether or not such regulation, order, or written interpretive opinion is later amended, rescinded, or repealed or determined by judicial or other authority to be invalid for any reason. (Added by renumbering Section 22806 by Stats. 2025, Ch. 352, Sec. 3. (SB 362) Effective January 1, 2026.)
  131. 22806.

    ## Financial Code - FIN ## DIVISION 9.5. Commercial Financing Disclosures [22800 - 22807] ( Division 9.5 added by Stats. 2018, Ch. 1011, Sec. 2. )

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    A provider must not use “interest” or “rate” deceptively, and must disclose APR when stating certain charges, pricing metrics, or financing amounts for a specific commercial financing offer during an application process.

    ## Financial Code - FIN ## DIVISION 9.5. Commercial Financing Disclosures [22800 - 22807] ( Division 9.5 added by Stats. 2018, Ch. 1011, Sec. 2. ) ## 22806. (a) A provider shall not use the term “interest” or “rate” in a deceptive way that could reasonably result in the recipient being misled. (b) After extending a specific offer to a potential recipient, whenever a provider states a charge, pricing metric, or financing amount to the potential recipient for that specific offer during an application process for commercial financing, the provider shall also state the annual percentage rate of that commercial financing offer by using the term “annual percentage rate” or the acronym “APR.” (c) Use of the term “interest” or “rate” is not deceptive or likely to mislead for purposes of this division if the metric of financing cost is an annual interest rate or annual percentage rate that is either fixed or floating for the period of the financing and that is expressed as a margin over an index rate. (Added by Stats. 2025, Ch. 352, Sec. 4. (SB 362) Effective January 1, 2026.)
  132. 22807.

    ## Financial Code - FIN ## DIVISION 9.5. Commercial Financing Disclosures [22800 - 22807] ( Division 9.5 added by Stats. 2018, Ch. 1011, Sec. 2. )

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    If a covered violation occurs, it is treated as a violation of the California Financing Law in some cases, or as an unfair, deceptive, or abusive act or practice in other cases.

    ## Financial Code - FIN ## DIVISION 9.5. Commercial Financing Disclosures [22800 - 22807] ( Division 9.5 added by Stats. 2018, Ch. 1011, Sec. 2. ) ## 22807. (a) A violation of this division by a person licensed under the California Financing Law (Division 9 (commencing with Section 22000)) shall be deemed a violation of the California Financing Law if the violation relates to a commercial financing transaction that is subject to the California Financing Law. (b) A violation of this provision shall be deemed an unfair, deceptive, or abusive act or practice under the California Consumer Financial Protection Law (Division 24 (commencing with Section 90000)) if the violation relates to a commercial financing transaction that is not subject to the California Financing Law (Division 9 (commencing with Section 22000)). (Added by Stats. 2025, Ch. 352, Sec. 5. (SB 362) Effective January 1, 2026.)
  133. 23000.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Construction and Definitions [23000 - 23001] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. )

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    This section says the division is called the California Deferred Deposit Transaction Law and may be cited by that name.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Construction and Definitions [23000 - 23001] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23000. This division shall be known and may be cited as the “California Deferred Deposit Transaction Law.” (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  134. 23001.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Construction and Definitions [23000 - 23001] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. )

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    This section defines key terms for the deferred deposit transaction law.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Construction and Definitions [23000 - 23001] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23001. As used in this division, the following terms have the following meanings: (a) “Deferred deposit transaction” means a transaction whereby a person defers depositing a customer’s personal check until a specific date, pursuant to a written agreement for a fee or other charge, as provided in Section 23035. (b) “Commissioner” means the Commissioner of Financial Protection and Innovation. (c) “Department” means the Department of Financial Protection and Innovation. (d) “Licensee” means any person who offers, originates, or makes a deferred deposit transaction, who arranges a deferred deposit transaction for a deferred deposit originator, who acts as an agent for a deferred deposit originator, or who assists a deferred deposit originator in the origination of a deferred deposit transaction. However, “licensee” does not include a state or federally chartered bank, thrift, savings association, industrial loan company, or credit union. “Licensee” also does not include a retail seller engaged primarily in the business of selling consumer goods, including consumables, to retail buyers that cashes checks or issues money orders for a minimum fee not exceeding two dollars ($2) as a service to its customers that is incidental to its main purpose or business. “Licensee” also does not include an employee regularly employed by a licensee at the licensee’s place of business. An employee, when acting under the scope of the employee’s employment, shall be exempt from any other law from which the employee’s employer is exempt. (e) “Person” means an individual, a corporation, a partnership, a limited liability company, a joint venture, an association, a joint stock company, a trust, an unincorporated organization, a government entity, or a political subdivision of a government entity. (f) “Deferred deposit originator” means a person who offers, originates, or makes a deferred deposit transaction. (Amended by Stats. 2022, Ch. 452, Sec. 143. (SB 1498) Effective January 1, 2023.)
  135. 23005.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. )

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    A person may not make, arrange, or help originate a deferred deposit transaction without first getting a license from the commissioner and following this division.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23005. (a) A person shall not offer, originate, or make a deferred deposit transaction, arrange a deferred deposit transaction for a deferred deposit originator, act as an agent for a deferred deposit originator, or assist a deferred deposit originator in the origination of a deferred deposit transaction without first obtaining a license from the commissioner and complying with the provisions of this division. The requirements of this subdivision shall not apply to persons or entities that are excluded from the definition of “licensee” as set forth in Section 23001. This division shall not be construed to require the commissioner to create separate classes of licenses. (b) An application for a license under this division shall be in the form and contain the information that the commissioner may by rule require and shall be filed upon payment of the fee specified in Section 23006. (c) A licensee with one or more licensed locations seeking an additional location license may file a short form license application as may be established by the commissioner pursuant to subdivision (b) of this section. (d) Notwithstanding any other law, the commissioner may by rule or order prescribe circumstances under which to accept electronic records or electronic signatures. This section does not require the commissioner to accept electronic records or electronic signatures. (e) For purposes of this section, the following terms have the following meanings: (1) “Electronic record” means an initial license application, or material modification of that license application, and any other record created, generated, sent, communicated, received, or stored by electronic means. “Electronic records” also includes, but is not limited to, all of the following: (A) An application, amendment, supplement, and exhibit, filed for any license, consent, or other authority. (B) A financial statement, report, or advertising. (C) An order, license, consent, or other authority. (D) A notice of public hearing, accusation, and statement of issues in connection with any application, license, consent, or other authority. (E) A proposed decision of a hearing officer and a decision of the commissioner. (F) The transcripts of a hearing. (G) A release, newsletter, interpretive opinion, determination, or specific ruling. (H) Correspondence between a party and the commissioner directly relating to any document listed in subparagraphs (A) to (G), inclusive. (2) “Electronic signature” means an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record. (f) The Legislature finds and declares that the Department of Financial Protection and Innovation has continuously implemented methods to accept records filed electronically, and is encouraged to continue to expand its use of electronic filings to the extent feasible, as budget, resources, and equipment are made available to accomplish that goal. (Amended by Stats. 2022, Ch. 452, Sec. 144. (SB 1498) Effective January 1, 2023.)
  136. 23006.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. )

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    An applicant must pay a $100 investigation fee, a $200 application fee, and fingerprint processing costs when filing the application.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23006. At the time of filing the application, the applicant shall pay to the commissioner the sum of one hundred dollars ($100) as a fee for investigating the application, the sum of two hundred dollars ($200) as an application fee, and the cost of fingerprint processing. The investigation fee and application fee are not refundable if an application is denied or withdrawn. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  137. 23007.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. )

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    Applicants must submit GAAP financial statements showing at least $25,000 net worth, and licensees must keep at least $25,000 net worth at all times.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23007. The applicant shall file with the application financial statements prepared in accordance with generally accepted accounting principles and acceptable to the commissioner that indicate a net worth of at least twenty-five thousand dollars ($25,000). A licensee, regardless of the number of licensed locations, shall maintain a net worth of at least twenty-five thousand dollars ($25,000) at all times. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  138. 23008.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. )

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    After an application and required fees are filed, the commissioner must investigate the applicant and certain owners or officers, and must issue a license if the applicant meets the division’s requirements and no denial grounds exist.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23008. Upon the filing of an application pursuant to Section 23005 and the payment of fees pursuant to Section 23006, the commissioner shall investigate the applicant, and its general partners and persons owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests if the applicant is a partnership. If the applicant is a corporation, trust, or association, including an unincorporated organization, the commissioner shall investigate its officers, directors, and persons owning or controlling, directly or indirectly, 10 percent or more of the outstanding equity securities. If the commissioner determines that the applicant has satisfied this division and does not find facts constituting reasons for denial under Section 23011, the commissioner shall issue and deliver a license to the applicant. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  139. 23009.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    A license must state specified identifying information about the licensee, and the commissioner must issue an original license endorsed with the address of the authorized location after a location is approved and licensed under Section 23008.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23009. The license shall state the name of the licensee, and if the licensee is a partnership, the names of its general partners, and if a corporation or an association, the date and place of its incorporation or organization, and the address of the licensee’s principal business location. On the approval and licensing of a location pursuant to Section 23008, the commissioner shall issue an original license endorsed to show the address of the authorized location. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  140. 23010.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    The commissioner may require licensees to file updated information about changes in their application details, at times the commissioner specifies.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23010. The commissioner may by regulation require licensees to file, at the times that the commissioner may specify, the information that the commissioner may reasonably require regarding any changes in the information provided in any application filed pursuant to this division. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  141. 23011.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    The commissioner may deny a license application for stated reasons, and must act within 60 days after a complete application and fees are filed. If the applicant does not respond to a deficiency notice within 90 days, the application is treated as withdrawn.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23011. (a) Upon reasonable notice and the opportunity to be heard, the commissioner may deny the application for any of the following reasons: (1) Any false statement of material fact has been made in the application. (2) Any officer, director, general partner, or person owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant has, within the last 10 years (A) been convicted of or pleaded nolo contendere to a crime, or (B) committed any act involving dishonesty, fraud, or deceit, if the crime or act is substantially related to the qualifications, functions, or duties of a person engaged in business in accordance with this division. (3) The applicant or any officer, director, or general partner, or person owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant has violated any provision of this division or the rules thereunder or any similar regulatory scheme of the State of California or a foreign jurisdiction. (b) The application shall be considered withdrawn within the meaning of this section if the applicant fails to respond to a written notification of a deficiency in the application within 90 days of the date of the notification. (c) The commissioner shall, within 60 days from the filing of a full and complete application for a license and the payment of required fees, either issue a license or file a statement of issues prepared in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  142. 23011.5.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    The commissioner may discipline a deferred deposit originator or other person, and a person subject to a proposed order is immediately barred from licensed activities.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23011.5. (a) The commissioner may, after appropriate notice and opportunity for hearing, by order, censure or suspend for a period not exceeding 12 months, or bar from any position of employment, management, or control any deferred deposit originator, or any other person, if the commissioner finds either of the following: (1) That the censure, suspension, or bar is in the public interest and that the person has committed or caused a violation of this division or rule or order of the commissioner, which violation was either known or should have been known by the person committing or causing it or has caused material damage to the deferred deposit originator, or to the public. (2) That the person has been convicted of or pleaded nolo contendere to any crime, or has been held liable in any civil action by final judgment, or any administrative judgment by any public agency, if that crime or civil or administrative judgment involved any offense involving dishonesty, fraud, or deceit, or any other offense reasonably related to the qualifications, functions, or duties of a person engaged in the business in accordance with the provisions of this division. (b) Within 15 days from the date of a notice of intention to issue an order pursuant to subdivision (a), the person may request a hearing under the Administrative Procedure Act (Chapter 4.5 (commencing with Section 11400) of Division 3 of Title 2 of the Government Code). Upon receipt of a request, the matter shall be set for hearing to commence within 30 days after such receipt unless the person subject to this division consents to a later date. If no hearing is requested within 15 days after the mailing or service of such notice and none is ordered by the commissioner, the failure to request a hearing shall constitute a waiver of the right to a hearing. (c) Upon receipt of a notice of intention to issue an order pursuant to this section, the person who is the subject of the proposed order is immediately prohibited from engaging in any activities subject to licensure under the law. (d) Persons suspended or barred under this section are prohibited from participating in any business activity of a deferred deposit originator and from engaging in any business activity on the premises where a deferred deposit originator is conducting business. (Added by Stats. 2007, Ch. 101, Sec. 24. Effective January 1, 2008.)
  143. 23012.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    License-denial proceedings must follow the Government Code chapter specified here, and the commissioner gets all powers granted by that chapter.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23012. The proceedings for denial of a license shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner has all the powers granted therein. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  144. 23013.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    Licensees must keep a $25,000 surety bond, file a copy with the commissioner within 10 days, and replace the bond when required.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23013. (a) A licensee shall maintain a surety bond in accordance with this subdivision in the amount of twenty-five thousand dollars ($25,000). The bond shall be payable to the commissioner and issued by an insurer authorized to do business in this state. A copy of the bond, including any and all riders and endorsements executed subsequent to the effective date of the bond, shall be filed with the commissioner for review and approval within 10 days of execution. For licensees with multiple licensed locations, only one surety bond in the amount of twenty-five thousand dollars ($25,000) is required. The bond shall be used for the recovery of expenses, fines, and fees levied by the commissioner in accordance with this division or for losses or damages incurred by consumers as the result of a licensee’s noncompliance with the requirements of this division. (b) When an action is commenced on a licensee’s bond, the commissioner may require the filing of a new bond. Immediately upon recovery of any action on the bond, the licensee shall file a new bond. Failure to file a new bond within 10 days of the recovery on a bond, or within 10 days after notification by the commissioner that a new bond is required, constitutes sufficient grounds for the suspension or revocation of the license. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  145. 23014.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    A person claiming an exemption or exception in a proceeding under this division must prove it.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Licensing and Exemptions [23005 - 23014] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23014. In any proceeding under this division, the burden of proving an exemption or exception is upon the person claiming it. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  146. 23015.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    The commissioner may issue general rules, regulations, rulings, demands, and findings to enforce this division.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23015. The commissioner may make general rules and regulations and specific rulings, demands, and findings for the enforcement of this division, in addition to, and within the general purposes of, this division. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  147. 23015.5.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    A person must not tamper with records or make false statements to the commissioner to interfere with administration or enforcement of this division.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23015.5. (a) It is unlawful for any person to knowingly alter, destroy, mutilate, conceal, cover up, falsify, or make a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the administration or enforcement of any provision of this division. (b) It is unlawful for any person to knowingly make an untrue statement to the commissioner during the course of licensing, investigation, or examination, with the intent to impede, obstruct, or influence the administration or enforcement of any provision of this division. (Added by renumbering Section 23015 (as added by Stats. 2007, Ch. 101, Sec. 25) by Stats. 2015, Ch. 303, Sec. 159. (AB 731) Effective January 1, 2016.)
  148. 23016.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    Licensees must pay the commissioner’s assessment share, with a minimum of $500 per licensed location per year, and late payment can trigger a 1% monthly penalty and suspension or revocation of the certificate.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23016. (a) (1) Each licensee shall pay to the commissioner its pro rata share of all costs and expenses reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made. (2) The pro rata share shall be the proportion that a licensee’s total dollar amount of deferred deposit transactions made bears to the aggregate total dollar amount of deferred deposit transactions made by all licensees as shown by the annual reports to the commissioner pursuant to Section 23026. (3) Notwithstanding paragraph (2), a licensee shall neither be assessed for nor be permitted to pay less than five hundred dollars ($500) per licensed location per year. (b) On or before the 20th day of May in each year, the commissioner shall notify each licensee by mail of the amount assessed and levied against it and that amount shall be paid within 30 days thereafter. If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld. (c) If a licensee fails to pay the assessment on or before the 30th day of June following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the licensee. If, after an order is made, a request for hearing is filed in writing within 30 days, and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division. (Amended by Stats. 2024, Ch. 252, Sec. 1. (AB 3148) Effective January 1, 2025.)
  149. 23017.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    Money paid or collected under this division must be deposited in the State Treasury to the credit of the State Corporations Fund.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23017. All money paid or collected under this division shall be deposited in the State Treasury to the credit of the State Corporations Fund. The administration of this division shall be supported out of the State Corporations Fund upon appropriation by the Legislature. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  150. 23018.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    The licensee must conspicuously post the license and any current commissioner-approved name order at the business location, and the license cannot be transferred or assigned.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23018. (a) A license, along with any currently effective order of the commissioner approving a different name pursuant to Section 23023, shall be conspicuously posted in the place of business authorized by the licensee. (b) A license is not transferable or assignable. A license issued to a partnership or limited partnership is not transferred or assigned within the meaning of this section by the death, withdrawal, or admission of a partner, general partner, or limited partner, unless the death, withdrawal, or admission dissolves the partnership to which the license was issued. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  151. 23019.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    Every licensee must post a complete, detailed, and unambiguous fee schedule at the licensee’s location, in a conspicuous place visible to the public, with the required text in clear, legible letters at least one-half inch high.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23019. Every licensee shall post a complete, detailed, and unambiguous schedule of fees. The information required by this section shall be clear, legible, and in letters not less than one-half inch in height. The information shall be posted in a conspicuous location in the unobstructed view of the public within the licensee’s location. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  152. 23020.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    A licensee must keep only one place of business under an original or amended license. The commissioner may issue more than one license to the same licensee if all requirements for an original license are met.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23020. A licensee shall maintain only one place of business under an original or amended license issued pursuant to Section 23008. The commissioner may issue more than one license to the same licensee upon compliance with all the provisions of this division governing an original issuance of a license. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  153. 23021.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    A licensee changing its business address must give the commissioner written notice at least 10 days before the change, and the commissioner must then give written approval.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23021. (a) If a licensee desires to change its place of business to a street address other than that designated in its license, the licensee shall give written notice to the commissioner at least 10 days prior to the change. The commissioner shall then provide written approval of the change and the date of the approval. A new application shall not be required for a change in the address of an existing business location previously licensed pursuant to this division. (b) If notice is not given at least 10 days prior to the change, as required by subdivision (a), the commissioner may assess a civil penalty on the licensee not to exceed five hundred dollars ($500). (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  154. 23023.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    A licensee may not do licensed business under a different name or at a different place of business unless the commissioner has issued a currently effective written order allowing it.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23023. No licensee shall transact the business licensed or make any transaction provided for by this division under any other name or at any other place of business than that named in the license except pursuant to a currently effective written order of the commissioner authorizing the other name or other place of business. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  155. 23024.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    Each licensee must keep records that let the commissioner check compliance, keep any additional records the commissioner requires, file a disclosure authorization on request, and retain records for two years after the last deferred deposit transaction entry.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23024. Each licensee shall keep and use books, accounts, and records that will enable the commissioner to determine if the licensee is complying with the provisions of this division and with the rules and regulations promulgated by the commissioner. Each licensee shall maintain any other records as required by the commissioner. The commissioner or a designee of the commissioner may examine those records at any reasonable time. Upon the request of the commissioner, a licensee shall file an authorization for disclosure of financial records of the licensed businesses pursuant to Section 7473 of the Government Code. All records shall be kept for two years following the last entry on a deferred deposit transaction and shall enable an examiner to review the recordkeeping and reconcile each consumer deferred deposit transaction with documentation maintained in the consumer’s deferred deposit transaction file records. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  156. 23025.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    The department must maintain a toll-free phone number for deferred deposit transaction customers to file complaints and raise concerns.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23025. The department shall maintain a toll-free telephone number for deferred deposit transaction customers to make complaints and express concerns regarding the product or a specific licensee. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  157. 23026.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. )

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    Licensees must file an annual report with the commissioner by March 15 each year, and the commissioner must make the report public, with a limited exception for certain balance sheets.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23026. On or before March 15 of each year, beginning March 2006, each licensee shall file an annual report with the commissioner pursuant to procedures that the commissioner shall establish, giving the relevant information that the commissioner reasonably requires concerning the business and operations conducted by the licensee within the state during the preceding calendar year for each licensed place of business. The licensee’s annual reports filed pursuant to this section shall be made available to the public for inspection, except, upon request in the annual report to the commissioner, the balance sheet contained in the annual report of a sole proprietor or any other nonpublicly traded persons. “Nonpublicly traded person,” for purposes of this section, means persons with securities owned by 35 or fewer individuals. The annual consolidated report shall be prepared by the commissioner and made available to the public. For the previous calendar year, these reports shall include the following and any other information the commissioner reasonably requires: (a) The total number and dollar amount of deferred deposit transactions made by the licensee. (b) The total number of individual customers who entered into deferred deposit transactions. (c) The minimum, maximum, and average amount of deferred deposit transactions. (d) The average annual percentage rate of deferred deposits. (e) The average number of days of deferred deposit transactions. (f) The total number and dollar amount of returned checks. (g) The total number and dollar amount of checks recovered. (h) The total number and dollar amount of checks charged off. (Amended by Stats. 2017, Ch. 329, Sec. 2. (AB 1636) Effective January 1, 2018.)
  158. 23027.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. )

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    Licensees may not use false, misleading, or deceptive advertising, must disclose their license in certain ads, and may have to keep advertising-copy files for 90 days if the commissioner requires it.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 1. General Provisions [23000 - 23027] ( Chapter 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Administration and Operations [23015 - 23027] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23027. (a) No licensee shall advertise, print, display, publish, distribute, or broadcast, or cause or permit to be advertised, printed, displayed, published, distributed or broadcast, in any manner, any statement or representation with regard to the business subject to the provisions of this division, including the rates, terms, or conditions for making or negotiating deferred deposit transactions, that is false, misleading, or deceptive, or that omits material information that is necessary to make the statements not false, misleading, or deceptive. (b) No licensee shall place an advertisement disseminated primarily in this state for a deferred deposit transaction unless the licensee discloses in the printed text of the advertisement, or the oral text in the case of a radio or television advertisement, that the licensee is licensed by the department pursuant to this division. (c) The commissioner may require that rates of charges or fees, if stated by the licensee, be stated fully and clearly in the manner that the commissioner deems necessary to give adequate information to, or to prevent misunderstanding by, prospective customers. (d) No advertising copy shall be used after its use has been disapproved by the commissioner and the licensee is notified in writing of the disapproval. (e) The commissioner may require licensees to maintain a file of all advertising copy for a period of 90 days from the date of its use. The file shall be available to the commissioner upon request. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  159. 23035.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 2. Deferred Deposit Transactions [23035 - 23038] ( Chapter 2 added by Stats. 2002, Ch. 777, Sec. 10. )

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    Licensees may defer a customer’s personal check for up to 31 days, but only with a signed written agreement and required notices; the check amount cannot exceed $300.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 2. Deferred Deposit Transactions [23035 - 23038] ( Chapter 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23035. (a) A licensee may defer the deposit of a customer’s personal check for up to 31 days, pursuant to the provisions of this section. The face amount of the check shall not exceed three hundred dollars ($300). Each deferred deposit transaction shall be made pursuant to a written agreement as described in subdivision (e) that has been signed by the customer and by the licensee or an authorized representative of the licensee. (b) A customer who enters into a deferred deposit transaction and offers a personal check to a licensee pursuant to an agreement shall not be subject to any criminal penalty for the failure to comply with the terms of that agreement. (c) Before entering into a deferred deposit transaction, licensees shall distribute to customers a notice that shall include, but not be limited to, the following: (1) Information about charges for deferred deposit transactions. (2) That if the customer’s check is returned unpaid, the customer may be charged an additional fee of up to fifteen dollars ($15). (3) That the customer cannot be prosecuted in a criminal action in conjunction with a deferred deposit transaction for a returned check or be threatened with prosecution. (4) The department’s toll-free telephone number for receiving calls regarding customer complaints and concerns. (5) That the licensee may not accept any collateral in conjunction with a deferred deposit transaction. (6) That the check is being negotiated as part of a deferred deposit transaction made pursuant to Section 23035 of the Financial Code and is not subject to the provisions of Section 1719 of the Civil Code. No customer may be required to pay treble damages if this check does not clear. (d) The following notices shall be clearly and conspicuously posted in the unobstructed view of the public by all licensees in each location of a business providing deferred deposit transactions in letters not less than one-half inch in height: (1) The licensee cannot use the criminal process against a consumer to collect any deferred deposit transaction. (2) The schedule of all charges and fees to be charged on those deferred deposit transactions with an example of all charges and fees that would be charged on at least a one-hundred-dollar ($100) and a two-hundred-dollar ($200) deferred deposit transaction, payable in 14 days and 30 days, respectively, giving the corresponding annual percentage rate. The information may be provided in a chart as follows: Amount Provided Fee Amount of Check 14-day APR 30-day APR $100 XX XXX XXX XXX $200 XX XXX XXX XXX (e) An agreement to enter into a deferred deposit transaction shall be in writing and shall be provided by the licensee to the customer. The written agreement shall authorize the licensee to defer deposit of the personal check, shall be signed by the customer, and shall include all of the following: (1) A full disclosure of the total amount of any fees charged for the deferred deposit transaction, expressed both in United States currency and as an APR as required under the Federal Truth In Lending Act and its regulations. (2) A clear description of the customer’s payment obligations as required under the Federal Truth In Lending Act and its regulations. (3) The name, address, and telephone number of the licensee. (4) The customer’s name and address. (5) The date to which deposit of check has been deferred (due date). (6) The payment plan, or extension, if applicable as allowed under subdivision (c) of Section 23036. (7) An itemization of the amount financed as required under the Federal Truth In Lending Act and its regulations. (8) Disclosure of any returned check charges. (9) That the customer cannot be prosecuted or threatened with prosecution to collect. (10) That the licensee cannot accept collateral in connection with the transaction. (11) That the licensee cannot make a deferred deposit transaction contingent on the purchase of another product or service. (12) Signature space for the customer and signature of the licensee or authorized representative of the licensee and date of the transaction. (13) Any other information that the commissioner shall deem necessary by regulation. (f) The notice required by subdivision (c) shall be written and available in the same language principally used in any oral discussions or negotiations leading to execution of the deferred deposit agreement and shall be in at least 10-point type. (g) The written agreement required by subdivision (e) shall be written in the same language principally used in any oral discussions or negotiations leading to execution of the deferred deposit agreement; shall not be vague, unclear, or misleading and shall be in at least 10-point type. (h) Under no circumstances shall a deferred deposit transaction agreement include any of the following: (1) A hold harmless clause. (2) A confession of judgment clause or power of attorney. (3) Any assignment of or order for payment of wages or other compensation for services. (4) Any acceleration provision. (5) Any unconscionable provision. (i) If the licensee sells or otherwise transfers the debt at a later date, the licensee shall clearly disclose in a written agreement that any debt or checks held or transferred pursuant to a deferred deposit transaction made pursuant to Section 23035 are not subject to the provisions of Section 1719 of the Civil Code and that no customer may be required to pay treble damages if the check or checks are dishonored. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  160. 23036.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 2. Deferred Deposit Transactions [23035 - 23038] ( Chapter 2 added by Stats. 2002, Ch. 777, Sec. 10. )

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    This section limits fees and restricts when licensees may make deferred deposit transactions.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 2. Deferred Deposit Transactions [23035 - 23038] ( Chapter 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23036. (a) A fee for a deferred deposit transaction shall not exceed 15 percent of the face amount of the check. (b) A licensee may allow an extension of time, or a payment plan, for repayment of an existing deferred deposit transaction but may not charge any additional fee or charge of any kind in conjunction with the extension or payment plan. A licensee that complies with the provisions of this subdivision shall not be deemed to be in violation of subdivision (g) of Section 23037. (c) A licensee shall not enter into an agreement for a deferred deposit transaction with a customer during the period of time that an earlier written agreement for a deferred deposit transaction for the same customer is in effect. (d) A licensee who enters into a deferred deposit transaction agreement, or any assignee of that licensee, shall not be entitled to recover damages for that transaction in any action brought pursuant to, or governed by, Section 1719 of the Civil Code. (e) A fee not to exceed fifteen dollars ($15) may be charged for the return of a dishonored check by a depositary institution in a deferred deposit transaction. A single fee charged pursuant to this subdivision is the exclusive charge for a dishonored check. No fee may be added for late payment. (f) No amount in excess of the amounts authorized by this section shall be directly or indirectly charged by a licensee pursuant to a deferred deposit transaction. (g) A licensee shall be subject to the provisions of Title 1.6C (commencing with Section 1788) of Part 4 of Division 3 of the Civil Code. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  161. 23037.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 2. Deferred Deposit Transactions [23035 - 23038] ( Chapter 2 added by Stats. 2002, Ch. 777, Sec. 10. )

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    A licensee is barred from using common deferred-deposit transaction practices like reusing checks, taking collateral, tying the transaction to other purchases, dealing with unqualified persons, altering checks, misleading conduct, taking multiple checks, or accepting incomplete instruments.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 2. Deferred Deposit Transactions [23035 - 23038] ( Chapter 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23037. In no case shall a licensee do any of the following: (a) Accept or use the same check for a subsequent transaction, or permit a customer to pay off all or a portion of one deferred deposit transaction with the proceeds of another. (b) Accept any collateral for a deferred deposit transaction. (c) Make any deferred deposit transaction contingent on the purchase of insurance or any other goods or services. (d) Enter into a deferred deposit transaction with a person lacking the capacity to contract. (e) Alter the date or any other information on a check. (f) Engage in any unfair, unlawful, or deceptive conduct, or make any statement that is likely to mislead in connection with the business of deferred deposit transactions. (g) Accept more than one check for a single deferred deposit transaction. (h) Take any check, instrument, or form in which blanks are left to be filled in after execution. (i) Offer, arrange, act as an agent for, or assist a deferred deposit originator in any way in the making of a deferred deposit transaction unless the deferred deposit originator complies with all applicable federal and state laws and regulations, including the provisions of this division. (1) The prohibition specified in this subdivision does not apply to the arranger, agent, or assistant to a state or federally chartered bank, thrift, savings association, or industrial loan company where the state or federally chartered bank, thrift, savings association, or industrial loan company satisfies all of the following: (A) It initially advances the loan proceeds to the customer. (B) It does not sell, assign, or transfer a preponderant economic interest in the deferred deposit transaction to the arranger, agent, or assistant, or an affiliate or subsidiary of the state or federally chartered bank, thrift, savings association, or industrial loan company, unless selling, assigning, or transferring a preponderant economic interest is expressly permitted by the primary regulator of the state or federally chartered bank, thrift, savings association, or industrial loan company. (C) It develops the deferred deposit transaction product or products on its own. (2) If a licensee offers, arranges, acts as an agent for, or assists a state or federally chartered bank, thrift, savings association, or industrial loan company in any way in the making of a deferred deposit transaction and the state or federally chartered bank, thrift, savings association, or industrial loan company meets the standards set forth in paragraph (1), the licensee shall comply with all other provisions in this division to the extent they are not preempted by other state and federal laws. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  162. 23038.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 2. Deferred Deposit Transactions [23035 - 23038] ( Chapter 2 added by Stats. 2002, Ch. 777, Sec. 10. )

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    Violating certain cited federal military lending rules counts as a violation of this division. A person that does not market deferred deposit transactions to, or enter into them with, covered borrowers is not in violation of Section 394 of the Military and Veterans Code.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 2. Deferred Deposit Transactions [23035 - 23038] ( Chapter 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23038. (a) Any person who violates any provision of Section 987 of Title 10 of the United States Code, as amended by 126 Stat. 1785 (Public Law 112-239), or any provision of Part 232 (commencing with Section 232.1) of Subchapter M of Chapter I of Subtitle A of Title 32 of the Code of Federal Regulations, as published on July 22, 2015, on page 43560 in Number 140 of Volume 80 of the Federal Register, violates this division. (b) A person that does not market deferred deposit transactions to, or does not enter into those transactions with, covered borrowers, as that term is defined under Part 232 (commencing with Section 232.1) of Subchapter M of Chapter I of Subtitle A of Title 32 of the Code of Federal Regulations, as amended on the date described in subdivision (a), shall not be in violation of Section 394 of the Military and Veterans Code. (Amended by Stats. 2017, Ch. 514, Sec. 4. (SB 266) Effective January 1, 2018.)
  163. 23045.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. )

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    Licenses stay valid until surrendered, revoked, or suspended, and the commissioner can suspend a license with notice and a hearing.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23045. (a) Licenses issued under this division remain in effect until they are surrendered, revoked, or suspended. (b) The surrender of a license becomes effective 30 days after receipt of an application to surrender the license or within a shorter period of time that the commissioner may determine, unless a revocation or suspension proceeding is pending when the application is filed or a proceeding to revoke or suspend or to impose conditions upon the surrender is instituted within 30 days after the application is filed. If a proceeding is pending or instituted, the surrender of a license becomes effective at the time and upon the conditions that the commissioner determines. (c) The power of investigation and examination by the commissioner is not terminated by the surrender, suspension, or revocation of any license issued by the commissioner. (d) Whenever the commissioner deems it necessary for the general welfare of the public, the commissioner shall have continuous authority to exercise the powers set forth in this division whether or not an application for a license has been filed with the commissioner, any license has been issued, or if issued, has been surrendered, suspended, or revoked. (e) The commissioner may, upon three days’ notice and a hearing, suspend any license for a period not exceeding 30 days, pending investigation, where the commissioner believes that a person subject to this division is conducting business in an unsafe or injurious manner. (f) Any licensee may surrender any license by delivering to the commissioner written notice that the licensee surrenders that license pursuant to subdivision (b). The surrender of the license does not affect the licensee’s civil or criminal liability for acts committed prior to the surrender of the license. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  164. 23046.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. )

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    The commissioner may investigate and examine deferred deposit businesses, and covered persons must pay the cost of each examination.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23046. (a) For the purpose of discovering violations of this division or securing information required by the commissioner in the administration and enforcement of this division, the commissioner may at any time, but not less than once every two years, investigate the business of deferred deposits, and examine the books, accounts, records, and files used in the business of deferred deposit transactions, of every person engaged in the business of deferred deposit transactions, whether the person acts or claims to act as a principal or an agent, or under or without the authority of this division. For the purpose of examination, the commissioner and the commissioner’s representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of all these persons. (b) The cost of each examination of a licensee or a person subject to this division shall be paid to the commissioner by the licensee or person examined, and the commissioner may maintain an action for the recovery of the cost in any court of competent jurisdiction. In determining the cost of an examination, the commissioner may use the estimated average hourly cost for all persons performing examinations of licensees or other persons subject to this division for the fiscal year. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  165. 23047.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. )

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    The commissioner may take and keep business records during an examination or investigation, and other people generally may not remove them while a keeper has custody unless a court order or the commissioner’s written consent allows it.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23047. (a) In making any examination or investigation, the commissioner may, for a reasonable time not to exceed 30 days, take possession of the books, records, accounts, and other papers pertaining to the business. The commissioner may place a keeper in exclusive charge and custody of the books, records, accounts, and other papers in the office or place where they are usually kept. During possession by the keeper, no person shall remove or attempt to remove any of the books, accounts, papers, records, files, safes, and vaults, or any part thereof, except in compliance with a court order or written consent of the commissioner. (b) The officers, employees, partners, directors, and stockholders may inspect and examine the books, accounts, papers, records, files, safes, and vaults while they are in the custody of the commissioner. Employees may make entries in these documents reflecting current operations or transactions. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  166. 23048.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. )

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    The commissioner may require witnesses to attend, question people under oath, and demand books, records, and supporting data for examination. Licensees must make those materials available in this state within 10 days after a written demand.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23048. (a) The commissioner may require the attendance of witnesses and examine under oath all persons whose testimony the commissioner requires relative to transactions or business regulated by this division or to the subject matter of any examination, investigation, or hearing. (b) The commissioner may require the production for examination in this state of all books, records, and supporting data used by the licensee in the preparation of reports to the commissioner. The books, records, and supporting data shall be made available for examination by the commissioner in this state within 10 days after a written demand. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  167. 23049.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. )

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    The commissioner may certify a record to the proper local prosecuting official after an examination, investigation, or hearing if the commissioner thinks it is in the public interest or advantage.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23049. After an examination, investigation, or hearing under this division, if the commissioner deems it of public interest or advantage, the commissioner may certify a record to the proper prosecuting official of the city, county, or city and county in which the act complained of, examined, or investigated occurred. The data and records shall be kept confidential pursuant to Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code and any regulations adopted thereunder. (Amended by Stats. 2021, Ch. 615, Sec. 114. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)
  168. 23050.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. )

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    The commissioner may order an unlicensed deferred deposit business or a violating licensee to stop and not continue the conduct.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23050. Whenever, in the opinion of the commissioner, any person is engaged in the business of deferred deposit transactions, as defined in this division, without a license from the commissioner, or any licensee is violating any provision of this division, the commissioner may order that person or licensee to desist and to refrain from engaging in the business or further violating this division. If within 30 days, after the order is served, a written request for a hearing is filed and no hearing is held within 30 days thereafter, the order is rescinded. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  169. 23051.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    The commissioner may sue to stop violations of this division, seek related relief, and violators may face civil penalties up to $2,500 per violation.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23051. (a) Whenever the commissioner believes from evidence satisfactory to the commissioner that any person has violated or is about to violate a provision of this division, or a provision of any order, license, decision, demand, requirement, or any regulation adopted pursuant to this division, the commissioner may, in the commissioner’s discretion, bring an action in the name of the people of the State of California against that person to enjoin that person from continuing that violation or doing any act in furtherance of the violation. Upon a proper showing, a permanent or preliminary injunction, restraining order, or writ of mandate shall be granted and other ancillary relief may be granted as appropriate. (b) If the commissioner determines that it is in the public interest, the commissioner may include in any action authorized by subdivision (a) a claim for ancillary relief, including, but not limited to, a claim for restitution, disgorgement, or damages on behalf of the persons injured by the act or practice constituting the subject matter of the action. The court shall have jurisdiction to award additional relief. (c) Any person who violates any provision of this division, or who violates any rule or order adopted pursuant to this division, shall be liable for a civil penalty not to exceed two thousand five hundred dollars ($2,500) for each violation, which shall be assessed and recovered in a civil action brought in the name of the people of the State of California by the commissioner in any court of competent jurisdiction. (d) As applied to the penalties for acts in violation of this division, the remedies provided by this section and by other sections of this division are not exclusive, and may be sought and employed in any combination to enforce the provisions of this division. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  170. 23052.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    The commissioner may suspend or revoke a license after notice and a reasonable opportunity to be heard if listed grounds are found.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23052. The commissioner may suspend or revoke any license, upon notice and reasonable opportunity to be heard, if the commissioner finds any of the following: (a) The licensee has failed to comply with any demand, ruling, or requirement of the commissioner made pursuant to and within the authority of this division. (b) The licensee has violated any provision of this division or any rule or regulation made by the commissioner under and within the authority of this division. (c) A fact or condition exists that, if it had existed at the time of the original application for the license, reasonably would have warranted the commissioner in refusing to issue the license originally. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  171. 23053.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    The commissioner may summarily suspend or revoke a license if a licensee does not file a required report on time after notice.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23053. The commissioner may by order summarily suspend or revoke the license of any licensee if that person fails to file the report required by Section 23026 within 10 days after notice by the commissioner that the report is due and not filed. If, after an order is made, a request for hearing is filed in writing within 30 days and the hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  172. 23054.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    If a license is revoked, suspended, expires, or is surrendered, that change does not affect obligations under any preexisting lawful contract between the licensee and a borrower.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23054. The revocation, suspension, expiration, or surrender of any license does not impair or affect the obligation of any preexisting lawful contract between the licensee and any borrower. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  173. 23055.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    Proceedings under this article must follow the cited Government Code chapter, and the commissioner has all powers granted there.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23055. The proceedings under this article shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and in all cases the commissioner has all the powers granted therein. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  174. 23056.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    The commissioner’s orders, decisions, licenses, and other official acts can be reviewed by a court under the law.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23056. Every order, decision, license, or other official act of the commissioner is subject to judicial review in accordance with law. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  175. 23058.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    The department may issue a written citation, order the person to desist and refrain, and assess an administrative penalty up to $2,500.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 1. Administrative Actions [23045 - 23058] ( Article 1 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23058. (a) If, upon inspection, examination or investigation, based upon a complaint or otherwise, the department has cause to believe that a person is engaged in the business of deferred deposit transactions without a license, or a licensee or person is violating any provision of this division or any rule or order thereunder, the department may issue a citation to that person in writing, describing with particularity the basis of the citation. Each citation may contain an order to desist and refrain and an assessment of an administrative penalty not to exceed two thousand five hundred dollars ($2,500). All penalties collected under this section shall be deposited in the State Corporations Fund. (b) The sanctions authorized under this section shall be separate from, and in addition to, all other administrative, civil, or criminal remedies. (c) If within 30 days from the receipt of the citation of the person cited fails to notify the department that the person intends to request a hearing as described in subdivision (d), the citation shall be deemed final. (d) Any hearing under this section shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and in all states the commissioner has all the powers granted therein. (e) After the exhaustion of the review procedures provided for in this section, the department may apply to the appropriate superior court for a judgment in the amount of the administrative penalty and order compelling the cited person to comply with the order of the department. The application, which shall include a certified copy of the final order of the department, shall constitute a sufficient showing to warrant the issuance of the judgment and order. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  176. 23060.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Penalties for Misconduct [23060 - 23063] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    If prohibited or excessive charges are willfully taken in a deferred deposit transaction, the contract is void and no one may collect the principal, charges, or fees.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Penalties for Misconduct [23060 - 23063] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23060. (a) If any amount other than, or in excess of, the charges or fees permitted by this division is willfully charged, contracted for, or received, a deferred deposit transaction contract shall be void, and no person shall have any right to collect or receive the principal amount provided in the deferred deposit transaction, any charges, or fees in connection with the transaction. (b) If any provision of this division is willfully violated in the making or collection of a deferred deposit transaction, the deferred deposit transaction contract shall be void, and no person shall have any right to collect or receive any amount provided in the deferred deposit transaction, any charges, or fees in connection with the transaction. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  177. 23061.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Penalties for Misconduct [23060 - 23063] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    A licensee who charges or receives more than the permitted fees on a deferred deposit transaction must forfeit all charges and fees and may collect only the principal amount, unless the overcharge was an unintentional computation error that meets the stated correction requirements.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Penalties for Misconduct [23060 - 23063] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23061. (a) If any amount other than, or in excess of, the charges permitted by this division is charged, contracted for, or received in connection with a deferred deposit transaction, for any reason other than a willful act of the licensee, the licensee shall forfeit all charges and fees on the deferred deposit transaction and may collect or receive only the principal amount of the transaction. (b) Subdivision (a) shall not apply to an error in computation if (1) the licensee shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error, notwithstanding the maintenance of procedures reasonably adapted to avoid that error, and (2) within 60 days of discovering the error the licensee notifies the customer of the error and makes whatever adjustments in the account are necessary to correct the error. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  178. 23062.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Penalties for Misconduct [23060 - 23063] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    If a deferred deposit transaction law violation occurs in making or collecting the transaction, the licensee must forfeit all charges and fees and may collect only the principal amount, unless the violation was an unintentional bona fide error corrected and noticed within 30 days.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Penalties for Misconduct [23060 - 23063] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23062. (a) If any provision of this division is violated in the making or collection of a deferred deposit transaction, for any reason other than a willful act of the licensee, the licensee shall forfeit all charges and fees on the deferred deposit and may collect or receive only the principal amount. (b) Subdivision (a) shall not apply to a violation if (1) the licensee shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error, and (2) within 30 days of discovering the error the licensee notified the customer of the error and rectified the error by making the appropriate changes in the documents or account and by taking other action necessary to correct the error. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  179. 23063.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Penalties for Misconduct [23060 - 23063] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    Liability under this division does not apply to acts or omissions done in good faith and in line with a written general rule, regulation, or specific ruling of the commissioner.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 2. Penalties for Misconduct [23060 - 23063] ( Article 2 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23063. No provision imposing liability under this division, including the provisions of subdivision (a) of Section 23061 and subdivision (a) of Section 23062, shall apply to any act done or omitted in good faith in conformity with any written general rule, regulation, or specific ruling of the commissioner, notwithstanding that after the act or omission has occurred, the written general rule, regulation, or specific ruling is amended, rescinded, or determined by judicial or other authority to be invalid for any reason. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  180. 23064.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Civil Damages [23064 - 23064.5] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    An injured person may sue for damages or to stop the violation, and a prevailing plaintiff must receive reasonable attorney’s fees and costs.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Civil Damages [23064 - 23064.5] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23064. Any person who is injured by any violation of this division may bring an action for the recovery of damages, an equity proceeding to restrain and enjoin those violations, or both. The amount awarded may be up to three times the damages actually incurred, but in no event less than the amount paid by the aggrieved consumer to a person subject to this section. If the plaintiff prevails, the plaintiff shall be awarded reasonable attorney’s fees and costs. If a court determines by clear and convincing evidence that a breach or violation was willful, the court, in its discretion, may award punitive damages in addition to the amounts set forth above. Upon application, the court may also grant any equitable relief that it deems proper, including, but not limited to, a claim for restitution and disgorgement. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  181. 23064.5.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Civil Damages [23064 - 23064.5] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    The law says the division’s rights, remedies, and penalties are cumulative with other laws, and you do not have to exhaust administrative remedies before pursuing the civil remedies provided here.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 3. Civil Damages [23064 - 23064.5] ( Article 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23064.5. The rights, remedies, and penalties established by this division are cumulative to the rights, remedies, or penalties established under other laws. It is not necessary to exhaust administrative remedies in order to pursue the civil remedies provided for in this act. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  182. 23065.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 4. Crimes [23065- 23065.] ( Article 4 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    A person who willfully violates this division or related rules/orders can be fined up to $10,000, jailed up to one year, or both.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 4. Crimes [23065- 23065.] ( Article 4 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23065. Any person, including a partner or officer of an entity that is a licensee, who willfully violates any provision of this division or who willfully violates any rule or order adopted pursuant to this division, shall, upon conviction, be punished by a fine of not more than ten thousand dollars ($10,000), or by imprisonment in a county jail for not more than one year, or by both that fine and imprisonment. However, no person may be imprisoned for the violation of any rule or order unless he or she had knowledge of the rule or order. Conviction under this section shall not preclude the commissioner from exercising the authority in Article 1 (commencing with Section 23045). (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)
  183. 23070.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 5. Transition Provisions [23070 - 23074] ( Article 5 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    The section says the Department of Financial Protection and Innovation should handle administration and enforcement of this division, and it transfers related responsibilities for check cashers from the Department of Justice.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 5. Transition Provisions [23070 - 23074] ( Article 5 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23070. (a) The Legislature finds and declares that it is in the public interest for the administration and enforcement of this division to be undertaken by the Department of Financial Protection and Innovation. (b) It is therefore the intent of the Legislature to transfer the existing responsibilities relating to administration and enforcement of check cashers that engage in activities subject to this division from the Department of Justice to the Department of Financial Protection and Innovation. (Amended by Stats. 2022, Ch. 452, Sec. 145. (SB 1498) Effective January 1, 2023.)
  184. 23071.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 5. Transition Provisions [23070 - 23074] ( Article 5 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    The Commissioner of Financial Protection and Innovation and the Department of Financial Protection and Innovation take over the Department of Justice’s duties, powers, purposes, responsibilities, and jurisdiction for matters involving check cashers covered by this division.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 5. Transition Provisions [23070 - 23074] ( Article 5 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23071. The Commissioner of Financial Protection and Innovation and the Department of Financial Protection and Innovation shall succeed to, and are vested with, all duties, powers, purposes, responsibilities, and jurisdiction of the Department of Justice as they relate to check cashers who engage in the activities subject to this division. (Amended by Stats. 2022, Ch. 452, Sec. 146. (SB 1498) Effective January 1, 2023.)
  185. 23072.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 5. Transition Provisions [23070 - 23074] ( Article 5 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    The Department of Financial Protection and Innovation may use certain unexpended funds tied to duties it inherits from the Department of Justice.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 5. Transition Provisions [23070 - 23074] ( Article 5 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23072. The Department of Financial Protection and Innovation may use the unexpended balance of funds available for use in connection with the performance of duties of the Department of Justice to which the Department of Financial Protection and Innovation succeeds pursuant to Section 23071. (Amended by Stats. 2022, Ch. 452, Sec. 147. (SB 1498) Effective January 1, 2023.)
  186. 23073.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 5. Transition Provisions [23070 - 23074] ( Article 5 added by Stats. 2002, Ch. 777, Sec. 10. )

    Verify source ↗

    Certain Department of Justice officers and employees must transfer to the Department of Financial Protection and Innovation if they are civil service employees performing duties that move to that department, with temporary and exempt positions excluded.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 5. Transition Provisions [23070 - 23074] ( Article 5 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23073. All officers and employees of the Department of Justice who, on the operative date of this division, are performing any duty, power, purpose, responsibility, or jurisdiction to which the Department of Financial Protection and Innovation succeeds, and who are serving in the civil service, other than as temporary employees or persons in positions exempted from civil service, shall be transferred to the Department of Financial Protection and Innovation. The status, position, and rights of those persons shall not be affected by the transfer and shall be retained by those persons as officers and employees of the Department of Financial Protection and Innovation, pursuant to Part 2 (commencing with Section 18500) of Division 5 of Title 2 of the Government Code. (Amended by Stats. 2022, Ch. 452, Sec. 148. (SB 1498) Effective January 1, 2023.)
  187. 23074.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 5. Transition Provisions [23070 - 23074] ( Article 5 added by Stats. 2002, Ch. 777, Sec. 10. )

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    The Department of Financial Protection and Innovation must have possession and control of specified records and other property connected to the Department of Justice for transferred functions.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 5. Transition Provisions [23070 - 23074] ( Article 5 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23074. The Department of Financial Protection and Innovation shall have possession and control of all records, criminal history information, papers, equipment, supplies, moneys, funds, appropriations, licenses, permits, contracts, claims, judgments, land, and other property, real or personal, connected with the administration of, or held for the benefit or use of, the Department of Justice for the performance of the functions transferred to the Department of Financial Protection and Innovation pursuant to Section 23071. (Amended by Stats. 2022, Ch. 452, Sec. 149. (SB 1498) Effective January 1, 2023.)
  188. 23100.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 6. Miscellaneous [23100 - 23106] ( Article 6 added by Stats. 2002, Ch. 777, Sec. 10. )

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    Certain check cashers and deferred-deposit businesses must file applications and pay fees by the stated deadlines, and some late filers may owe $25 per day.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 6. Miscellaneous [23100 - 23106] ( Article 6 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23100. (a) Check cashers that hold a valid permit prior to January 1, 2003, issued pursuant to Section 1789.37 of the Civil Code, and that have been making deferred deposits prior to January 1, 2003, shall do the following prior to engaging in the business of deferred deposits on or after December 31, 2004: (1) Pay the assessment on or before May 15, 2003, pursuant to the provisions of this division for the 2003–04 fiscal year. The fees and assessments paid pursuant to this subdivision shall be nonrefundable. (2) On or before May 15, 2003, submit a license application and pay a license fee pursuant to Article 2 (commencing with Section 23005). (b) Any person that intends to engage in the business of deferred deposits after December 31, 2004, and that holds a check cashing permit from the Attorney General on or before January 2003 and fails to submit a license application or pay a license fee as provided in this subdivision, shall upon the request of the commissioner and applying for a license forfeit to the people of the state a sum of twenty-five dollars ($25) for every day or part of a day that the submission or payment is delayed or withheld. Applications will be processed in the order of the date received by the commissioner. Applications submitted prior to December 31, 2004, shall not be subject to subdivision (c) of Section 23011. (c) The commissioner shall issue a license to a licensee under this division upon receiving payment of the assessment for the 2003–04 fiscal year, the license application, and fee and any additional information the commissioner may require in the application to demonstrate compliance with provisions of this division. The amount collected shall be deposited in the State Corporations Fund and shall be subject to appropriation by the Legislature for the 2003–04 fiscal year. (Amended by Stats. 2004, Ch. 17, Sec. 16. Effective February 23, 2004. Provisions of this section are operative (no later than Dec. 31, 2004) as prescribed in Section 23104 and by Stats. 2004, Ch. 17, Sec. 20.)
  189. 23101.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 6. Miscellaneous [23100 - 23106] ( Article 6 added by Stats. 2002, Ch. 777, Sec. 10. )

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    The commissioner’s pre-June 30, 2003 regulations for this division must be adopted as emergency regulations, and the Office of Administrative Law must file them with the Secretary of State upon receipt for immediate effectiveness.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 6. Miscellaneous [23100 - 23106] ( Article 6 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23101. Regulations of the commissioner adopted prior to June 30, 2003, to implement this division shall be adopted as emergency regulations. Upon receipt of the regulations, the Office of Administrative Law shall file the regulations with the Secretary of State for immediate effectiveness. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Provisions of this section are operative (no later than Dec. 31, 2004) as prescribed in Section 23104.)
  190. 23102.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 6. Miscellaneous [23100 - 23106] ( Article 6 added by Stats. 2002, Ch. 777, Sec. 10. )

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    This section keeps certain pre-December 31, 2004 deferred deposit transactions subject to the earlier Civil Code provisions, preserves DOJ actions taken for those transactions, and prevents pending lawsuits or proceedings from abating because authority was transferred.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 6. Miscellaneous [23100 - 23106] ( Article 6 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23102. The deferred deposits made pursuant to a permit issued under Section 1789.37 of the Civil Code prior to December 31, 2004, shall be subject to and enforced to the extent valid under Sections 1789.30 to 1789.37, inclusive, of the Civil Code, as if those sections were not repealed. Any regulation, order, or other action adopted, prescribed, taken, or performed by the Department of Justice or by an officer of that department in connection with deferred deposit transactions made prior to December 31, 2004, shall continue to apply to those transactions. No suit, action, or other proceeding lawfully commenced by or against the Department of Justice or any other officer of the state in relation to deferred deposit transactions made prior to December 31, 2004, shall abate by reason of the transfer of authority concerning deferred deposit transactions to the Department of Financial Protection and Innovation pursuant to Section 23071. (Amended by Stats. 2022, Ch. 452, Sec. 150. (SB 1498) Effective January 1, 2023.)
  191. 23103.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 6. Miscellaneous [23100 - 23106] ( Article 6 added by Stats. 2002, Ch. 777, Sec. 10. )

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    The division is to be administered and enforced with enough resources, including staff, and the commissioner may examine licensees as needed but at least every two years.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 6. Miscellaneous [23100 - 23106] ( Article 6 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23103. It is the intent of the Legislature that this division shall be administered and enforced with sufficient program resources and funding including personnel to examine licensees as often as the commissioner deems necessary and appropriate but at least once every two years, and to authorize enforcement actions that are necessary and appropriate to protect the public. This act should be administered and enforced only to the extent funds are appropriated by the Legislature and made available for this purpose. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Provisions of this section are operative (no later than Dec. 31, 2004) as prescribed in Section 23104.)
  192. 23104.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 6. Miscellaneous [23100 - 23106] ( Article 6 added by Stats. 2002, Ch. 777, Sec. 10. )

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    This section sets the effective and operative dates for the division and gives the commissioner power to implement it early.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 6. Miscellaneous [23100 - 23106] ( Article 6 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23104. Except as provided in this article, the provisions of this division shall become effective on January 1, 2003, and shall become operative on December 31, 2004. However, the commissioner shall have the power and authority to implement the provisions of this division prior to December 31, 2004. (Amended by Stats. 2004, Ch. 17, Sec. 18. Effective February 23, 2004. Note: This section prescribes the operative date (no later than Dec. 31, 2004) for provisions of Division 10, commencing with Section 23000. See also Stats. 2004, Ch. 17, Sec. 20.)
  193. 23105.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 6. Miscellaneous [23100 - 23106] ( Article 6 added by Stats. 2002, Ch. 777, Sec. 10. )

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    The division’s provisions are severable: if one provision or its application is invalid, the rest can still be given effect if possible.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 6. Miscellaneous [23100 - 23106] ( Article 6 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23105. The provisions of this division are severable. If any provision of this division or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Provisions of this section are operative (no later than Dec. 31, 2004) as prescribed in Section 23104.)
  194. 23106.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 6. Miscellaneous [23100 - 23106] ( Article 6 added by Stats. 2002, Ch. 777, Sec. 10. )

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    This section creates and authorizes an exempt class of persons.

    ## Financial Code - FIN ## DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW [23000 - 23106] ( Division 10 added by Stats. 2002, Ch. 777, Sec. 10. ) ## CHAPTER 3. Enforcement [23045 - 23106] ( Chapter 3 added by Stats. 2002, Ch. 777, Sec. 10. ) ## ARTICLE 6. Miscellaneous [23100 - 23106] ( Article 6 added by Stats. 2002, Ch. 777, Sec. 10. ) ## 23106. This division creates and authorizes an exempt class of persons pursuant to Section 1 of Article XV of the California Constitution. (Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Provisions of this section are operative (no later than Dec. 31, 2004) as prescribed in Section 23104.)
  195. 24000.

    ## Financial Code - FIN ## DIVISION 10.5. Financial Empowerment Fund [24000 - 24002] ( Division 10.5 added by Stats. 2019, Ch. 478, Sec. 1. )

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    The provision creates the Financial Empowerment Fund, directs a one-time transfer into it, and lets the commissioner use the money for specified programs and administrative costs.

    ## Financial Code - FIN ## DIVISION 10.5. Financial Empowerment Fund [24000 - 24002] ( Division 10.5 added by Stats. 2019, Ch. 478, Sec. 1. ) ## 24000. (a) There is hereby established in the State Treasury the Financial Empowerment Fund. Notwithstanding Section 13340 of the Government Code, moneys in the fund are hereby continuously appropriated without regard to fiscal years to the Commissioner of the Department of Financial Protection and Innovation for purposes of the act. (b) Notwithstanding Section 13340 of the Government Code, the Controller shall, on July 1, 2020, transfer from the State Corporations Fund to the Financial Empowerment Fund the sum of four million dollars ($4,000,000) plus an amount estimated by the department to be the reasonable costs to administer the division. (c) The Commissioner of the Department of Financial Protection and Innovation shall use moneys in the Financial Empowerment Fund for allocation to fund financial education and financial empowerment programs and services for at-risk populations in California, as described in Section 24001. The commissioner may additionally use moneys in the Financial Empowerment Fund to cover its costs to administer this act. (Amended by Stats. 2021, Ch. 77, Sec. 3. (AB 137) Effective July 16, 2021. Repealed as of January 1, 2030, pursuant to Section 24002.)
  196. 24001.

    ## Financial Code - FIN ## DIVISION 10.5. Financial Empowerment Fund [24000 - 24002] ( Division 10.5 added by Stats. 2019, Ch. 478, Sec. 1. )

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    This section sets rules for the Financial Empowerment Fund grant program, including who administers it, who can apply, how grants may be used, and reporting limits.

    ## Financial Code - FIN ## DIVISION 10.5. Financial Empowerment Fund [24000 - 24002] ( Division 10.5 added by Stats. 2019, Ch. 478, Sec. 1. ) ## 24001. (a) The Commissioner of the Department of Financial Protection and Innovation shall administer an application process for grants of up to two hundred thousand dollars ($200,000) per applicant from the Financial Empowerment Fund or shall contract with an independent third party to do so on the department’s behalf. The commissioner, or the independent third party designated by the commissioner, may award up to two million dollars ($2,000,000) in grant moneys per fiscal year. To be eligible for selection by the department to administer the grant program, an independent third party shall cap its administrative fees at no more than 15 percent of the grant moneys it administers on the department’s behalf. (b) An applicant shall apply to the commissioner or to an independent third party designated by the commissioner for a grant in a form and manner prescribed by the commissioner or the independent third party. To be eligible for a grant, an applicant shall meet both of the following criteria: (1) The organization is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code and is organized and operated exclusively for one or more of the purposes described in Section 501(c)(3) of the Internal Revenue Code. (2) No part of the net earnings of the organization shall inure to the benefit of a private shareholder or individual. (c) A grantee shall only use grant moneys for the following financial education and financial empowerment programs and services for at-risk populations: (1) Designing, developing, or offering, free of charge to consumers, classroom- or web-based financial education and empowerment content intended to help unbanked and underbanked consumers achieve, identify, and access lower cost financial products and services, establish or improve their credit, increase their savings, or lower their debt. (2) Providing individualized, free financial coaching to unbanked and underbanked consumers. (3) Designing, developing, or offering, free of charge to consumers, a financial product or service intended to help unbanked and underbanked consumers identify and access responsible financial products and financial services, establish or improve their credit, increase their savings, or lower their debt. (d) A grantee shall use no more than 15 percent of its grant to cover its administrative costs. Failure to comply with this requirement shall render the organization ineligible for grant funding during the subsequent fiscal year. (e) Every project funded with a grant from the Financial Empowerment Fund shall meet all of the following criteria: (1) Promote and enhance the economic security of consumers. (2) Adhere to the five principles of effective financial education described in the June 2017 report, “Effective financial education: Five principles and how to use them,” issued by the federal Consumer Financial Protection Bureau. (3) Include one or more specific outcome targets. (4) Include an evaluation component designed to measure and document the extent to which the project achieves its intended outcomes and increases consumers’ financial well-being. (f) Each grantee shall submit a report, in a form and by a date acceptable to the Commissioner of the Department of Financial Protection and Innovation documenting the specific uses to which grant funds were allocated, documenting the number of individuals aided through use of the funds, providing quantitative results regarding the impact of grant funding, and including any other information requested by the commissioner. Failure to submit a report shall render the organization ineligible for grant funding during the subsequent fiscal year. (g) On or before December 31, 2021, and at least once annually thereafter, the department shall post on its internet website a summary of the information received from grantees pursuant to subdivision (f). (Amended by Stats. 2021, Ch. 77, Sec. 4. (AB 137) Effective July 16, 2021. Repealed as of January 1, 2030, pursuant to Section 24002.)
  197. 24002.

    ## Financial Code - FIN ## DIVISION 10.5. Financial Empowerment Fund [24000 - 24002] ( Division 10.5 added by Stats. 2019, Ch. 478, Sec. 1. )

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    This division ends on January 1, 2030, and is repealed on that date. When that repeal happens, the Controller must transfer any remaining money in the Financial Empowerment Fund to the Financial Protection Fund.

    ## Financial Code - FIN ## DIVISION 10.5. Financial Empowerment Fund [24000 - 24002] ( Division 10.5 added by Stats. 2019, Ch. 478, Sec. 1. ) ## 24002. (a) This division shall remain in effect only until January 1, 2030, and as of that date is repealed. (b) Upon the repeal of this division, the Controller shall transfer any moneys remaining in the Financial Empowerment Fund to the Financial Protection Fund. (Amended by Stats. 2021, Ch. 77, Sec. 5. (AB 137) Effective July 16, 2021. Repealed as of January 1, 2030, by its own provisions. Note: Repeal affects Division 10.5, commencing with Section 24000.)
  198. 250.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 2. Transition Provisions [250 - 254] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 2. )

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    This section defines several terms used in the chapter, including “New General Corporation Law,” “Prior Banking Law,” “Prior General Corporation Law,” “Revised Banking Law,” and “Subject institution.”

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 2. Transition Provisions [250 - 254] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 250. In this chapter, unless the provision or context requires otherwise: (a) “New General Corporation Law” means Division 1 (commencing with Section 100), Title 1 of the Corporations Code, as in effect on and after January 1, 1977. (b) “Prior Banking Law” means this division, as in effect on December 31, 1978. (c) “Prior General Corporation Law” means Division 1 (commencing with Section 100), Title 1 of the Corporations Code, as in effect on December 31, 1976. (d) “Revised Banking Law” means this division, as in effect on and after January 1, 1979, and as repealed and readded as of January 1, 2012. (e) “Subject institution” means: (1) Any corporation incorporated under the laws of this state which is, with the approval of the commissioner, incorporated for the purpose of engaging in, or which is authorized by the commissioner to engage in, the commercial banking business under this division. (2) Any corporation incorporated under the laws of this state which is, with the approval of the commissioner, incorporated for the purpose of engaging in, or which is authorized by the commissioner to engage in, the trust business under this division. (3) Any corporation incorporated under the laws of this state which is, with the approval of the commissioner, incorporated for the purpose of engaging in, or which is authorized by the commissioner to engage in, business under Article 1 (commencing with Section 1850) of Chapter 21 of Division 1.1. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  199. 251.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 2. Transition Provisions [250 - 254] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 2. )

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    This section defines “new law,” “prior law,” and “effective date” for Chapter 23 of the new General Corporation Law, for subject institutions existing on January 1, 1979.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 2. Transition Provisions [250 - 254] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 251. For purposes of Chapter 23 (commencing with Section 2300) of the new General Corporation Law, in the case of any subject institution existing on January 1, 1979: (a) The term “new law” shall mean the new General Corporation Law, subject, however, to the provisions of Section 101 of the revised Banking Law. (b) The term “prior law” shall mean the prior General Corporation Law, subject, however, to the provisions of Section 101 of the prior Banking Law. (c) The term “effective date” shall mean January 1, 1979. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  200. 252.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 2. Transition Provisions [250 - 254] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 2. )

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    For certain subject institutions existing on January 1, 1979, some Banking Law provisions do not apply until the articles are amended and filed with the Secretary of State; a board-alone approval route is allowed for that filing, and certain other provisions do not apply to a qualifying amendment that conforms to Section 600.2.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 2. Transition Provisions [250 - 254] ( Chapter 2 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 252. (a) Sections 600 and 600.2 of the revised Banking Law shall not apply to any subject institution existing on January 1, 1979, unless and until an amendment of the articles of such subject institution is filed with the Secretary of State pursuant to Section 2302 of the new General Corporation Law. (b) An amendment of the articles of a subject institution existing on January 1, 1979, which is filed with the Secretary of State pursuant to Section 2302 of the new General Corporation Law may be adopted by approval of the board alone in accordance with the second sentence of Section 2302 of the new General Corporation Law, notwithstanding the fact that such amendment changes such articles to conform to the provisions of Sections 600 and 600.2 of the revised Banking Law. (c) Neither Article 6 (commencing with Section 690), Chapter 5 of the revised Banking Law nor Section 904 of the new General Corporation Law shall apply to an amendment of the articles of a subject institution existing on January 1, 1979, which is filed with the Secretary of State pursuant to Section 2302 of the new General Corporation Law on account of the fact that such amendment conforms such articles to the provisions of Section 600.2 of the revised Banking Law. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)

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