Financial Code — Part 11 | FIN — United States — California law | Esheria

Financial Code

Part 11 of 17 · provisions 2,001–2,200

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. 253.

    ## 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 FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2.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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    If a subject institution’s board adopted an assessment resolution before January 1, 1979, the later treatment depends on whether the assessment became a lien before that date.

    ## 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 FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2.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. ) ## 253. In case the board of a subject institution has, prior to January 1, 1979, adopted a resolution levying an assessment on the common shares of such subject institution in accordance with an order issued by the commissioner pursuant to Section 661 of the prior Banking Law: (a) If the assessment has, prior to January 1, 1979, become a lien on the common shares in accordance with Section 2704 of the prior General Corporation Law, the assessment shall be collected pursuant to the prior General Corporation Law: (b) Otherwise, the resolution shall be deemed to be rescinded on January 1, 1979. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  2. 254.

    ## 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 says Article 3 of the revised Banking Law applies to certain shareholder distributions by a subject institution, with a grandfathered exception for some pre-1979 share-purchase or redemption contracts.

    ## 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. ) ## 254. Article 3 (commencing with Section 640), Chapter 5 of the revised Banking Law applies to any distribution to its shareholders made after January 1, 1979, by a subject institution existing on January 1, 1979, except that any such distribution effected pursuant to a contract for the purchase or redemption of shares entered into by such subject institution prior to January 1, 1979, may be made if permissible under the applicable provisions of the revised Banking Law and the new General Corporation Law or under the applicable provisions of the prior Banking Law and the prior General Corporation Law in effect at the time such contract was entered into. (Added by Stats. 2011, Ch. 243, Sec. 2. (SB 664) Effective January 1, 2012.)
  3. 27000.

    ## Financial Code - FIN ## DIVISION 11.5. NATIONAL HOUSING ACT LOANS [27000 - 27050] ( Heading of Division 11.5 renumbered from Division 11 by Stats. 1982, Ch. 1082, Sec. 24. ) ## CHAPTER 1. Investments [27000 - 27004] ( Chapter 1 enacted by Stats. 1951, Ch. 364. )

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    Certain financial and fiduciary institutions may invest in or buy specified first liens on real estate, including notes or bonds secured by those liens, if the liens have been accepted for Federal Housing Administrator insurance.

    ## Financial Code - FIN ## DIVISION 11.5. NATIONAL HOUSING ACT LOANS [27000 - 27050] ( Heading of Division 11.5 renumbered from Division 11 by Stats. 1982, Ch. 1082, Sec. 24. ) ## CHAPTER 1. Investments [27000 - 27004] ( Chapter 1 enacted by Stats. 1951, Ch. 364. ) ## 27000. Insurance companies, personal finance companies, mortgage companies, mortgage insurance companies, building and loan associations, trust companies, fiduciaries, or fiduciary institutions may invest in, or purchase such classes of first liens as are commonly given to secure advances on, or the unpaid purchase price of real estate, including any part of an issue of notes or bonds secured by such first liens, which have been accepted for insurance by the Federal Housing Administrator. The investment or purchase may be made with their funds or the money in their custody or possesion, including but not being restricted to, all trust funds or funds the investment of which is regulated by law. (Enacted by Stats. 1951, Ch. 364.)
  4. 27001.

    ## Financial Code - FIN ## DIVISION 11.5. NATIONAL HOUSING ACT LOANS [27000 - 27050] ( Heading of Division 11.5 renumbered from Division 11 by Stats. 1982, Ch. 1082, Sec. 24. ) ## CHAPTER 1. Investments [27000 - 27004] ( Chapter 1 enacted by Stats. 1951, Ch. 364. )

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    Certain listed financial and fiduciary entities may invest in or buy obligations of national mortgage associations, using their own funds or money in their custody.

    ## Financial Code - FIN ## DIVISION 11.5. NATIONAL HOUSING ACT LOANS [27000 - 27050] ( Heading of Division 11.5 renumbered from Division 11 by Stats. 1982, Ch. 1082, Sec. 24. ) ## CHAPTER 1. Investments [27000 - 27004] ( Chapter 1 enacted by Stats. 1951, Ch. 364. ) ## 27001. Insurance companies, personal finance companies, mortgage companies, mortgage insurance companies, building and loan associations, trust companies, fiduciaries, fiduciary institutions, or public or private agencies may invest in, or purchase obligations of national mortgage associations. The investment or purchase may be made with their funds or the money in their custody or possession, including but not being restricted to, all trust funds, or funds the investment of which is regulated by law. (Enacted by Stats. 1951, Ch. 364.)
  5. 27002.

    ## Financial Code - FIN ## DIVISION 11.5. NATIONAL HOUSING ACT LOANS [27000 - 27050] ( Heading of Division 11.5 renumbered from Division 11 by Stats. 1982, Ch. 1082, Sec. 24. ) ## CHAPTER 1. Investments [27000 - 27004] ( Chapter 1 enacted by Stats. 1951, Ch. 364. )

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    Certain specified financial companies may make, invest in, or purchase loans or advances of credit insured by the Federal Housing Administrator.

    ## Financial Code - FIN ## DIVISION 11.5. NATIONAL HOUSING ACT LOANS [27000 - 27050] ( Heading of Division 11.5 renumbered from Division 11 by Stats. 1982, Ch. 1082, Sec. 24. ) ## CHAPTER 1. Investments [27000 - 27004] ( Chapter 1 enacted by Stats. 1951, Ch. 364. ) ## 27002. Insurance companies, personal finance companies, mortgage companies, or mortgage insurance companies may make, invest in, or purchase loans or advances of credit insured by the Federal Housing Administrator. (Enacted by Stats. 1951, Ch. 364.)
  6. 27003.

    ## Financial Code - FIN ## DIVISION 11.5. NATIONAL HOUSING ACT LOANS [27000 - 27050] ( Heading of Division 11.5 renumbered from Division 11 by Stats. 1982, Ch. 1082, Sec. 24. ) ## CHAPTER 1. Investments [27000 - 27004] ( Chapter 1 enacted by Stats. 1951, Ch. 364. )

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    Certain specified financial institutions may make loans secured by real property or leasehold if the Federal Housing Administrator insures, or commits to insure, them, and they may obtain that insurance.

    ## Financial Code - FIN ## DIVISION 11.5. NATIONAL HOUSING ACT LOANS [27000 - 27050] ( Heading of Division 11.5 renumbered from Division 11 by Stats. 1982, Ch. 1082, Sec. 24. ) ## CHAPTER 1. Investments [27000 - 27004] ( Chapter 1 enacted by Stats. 1951, Ch. 364. ) ## 27003. Insurance companies, personal finance companies, mortgage companies, mortgage insurance companies, building and loan associations, or trust companies may make such loans secured by real property or leasehold, as the Federal Housing Administrator insures, or makes a commitment to insure, and may obtain such insurance. (Enacted by Stats. 1951, Ch. 364.)
  7. 27004.

    ## Financial Code - FIN ## DIVISION 11.5. NATIONAL HOUSING ACT LOANS [27000 - 27050] ( Heading of Division 11.5 renumbered from Division 11 by Stats. 1982, Ch. 1082, Sec. 24. ) ## CHAPTER 1. Investments [27000 - 27004] ( Chapter 1 enacted by Stats. 1951, Ch. 364. )

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    For loans or investments made under this chapter, California laws about security requirements, interest-rate limits, and loan or investment periods do not apply.

    ## Financial Code - FIN ## DIVISION 11.5. NATIONAL HOUSING ACT LOANS [27000 - 27050] ( Heading of Division 11.5 renumbered from Division 11 by Stats. 1982, Ch. 1082, Sec. 24. ) ## CHAPTER 1. Investments [27000 - 27004] ( Chapter 1 enacted by Stats. 1951, Ch. 364. ) ## 27004. No law of this State, prescribing the nature, amount or form of security or requiring security upon which loans or investments may be made, or prescribing or limiting interest rates upon loans or advances of credit or prescribing or limiting the period for which loans or investments may be made, applies to loans or investments made pursuant to this chapter. (Enacted by Stats. 1951, Ch. 364.)
  8. 27050.

    ## Financial Code - FIN ## DIVISION 11.5. NATIONAL HOUSING ACT LOANS [27000 - 27050] ( Heading of Division 11.5 renumbered from Division 11 by Stats. 1982, Ch. 1082, Sec. 24. ) ## CHAPTER 2. Securities for Deposit [27050- 27050.] ( Chapter 2 enacted by Stats. 1951, Ch. 364. )

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    Certain federally backed mortgage notes, bonds, debentures, and obligations of national mortgage associations count as eligible securities when the law requires collateral or designated securities for deposits or funds.

    ## Financial Code - FIN ## DIVISION 11.5. NATIONAL HOUSING ACT LOANS [27000 - 27050] ( Heading of Division 11.5 renumbered from Division 11 by Stats. 1982, Ch. 1082, Sec. 24. ) ## CHAPTER 2. Securities for Deposit [27050- 27050.] ( Chapter 2 enacted by Stats. 1951, Ch. 364. ) ## 27050. Wherever, by statute of this State, collateral is required as security for the deposit of public or other funds, or deposits are required to be made with any public official or department, or an investment of capital or surplus, or a reserve or other fund, is required to be maintained consisting of designated securities, the notes, and bonds secured by mortgages insured, and debentures issued, by the Federal Housing Administrator, and obligations of national mortgage associations are eligible securities for such purposes. (Enacted by Stats. 1951, Ch. 364.)
  9. 28000.

    ## Financial Code - FIN ## DIVISION 12. COLLEGE LOANS [28000 - 28001] ( Division 12 added by Stats. 1981, Ch. 176, Sec. 1. )

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    Educational institutions of collegiate grade may make student loans or forbearances for education expenses, but the interest rates are capped and depend on the applicable benchmark rate.

    ## Financial Code - FIN ## DIVISION 12. COLLEGE LOANS [28000 - 28001] ( Division 12 added by Stats. 1981, Ch. 176, Sec. 1. ) ## 28000. (a) Pursuant to the authority contained in Section 1 of Article XV of the State Constitution, and subject to subdivision (b), educational institutions of collegiate grade are authorized to make loans or forbearances to finance student educational expenses including tuition, room, and board, and other costs of attendance or living at the institution, at rates not to exceed the higher of: (1) Ten percent per annum. (2) Five percent per annum plus the rate established by the Federal Reserve Bank of San Francisco on advances to member banks under Sections 13 and 13(a) of the Federal Reserve Act as now in effect or hereafter from time to time amended or, if there is no such single determinable rate of advances, the closest counterpart of this rate as shall be designated by the Commissioner of Financial Institutions of the State of California unless some other person or agency is delegated such authority by the Legislature. The date of determining the applicable rate established by the Federal Reserve bank shall be the 25th day of the month preceding the earlier of the date of execution of the contract to make the loan or forbearance, or the date of making the loan or forbearance. (b) Where the institution has obtained a loan specifically in order to make loans to finance student educational expenses, the rate of interest shall not exceed the lower of: (1) The rate determined pursuant to subdivision (a). (2) One percentage point in excess of the interest rate imposed upon the loan made to the institution, as of the date of execution of the contract to make the student loan to such extent the foregoing creates and authorizes a class of exempt persons pursuant to Section 1 of Article XV of the Constitution. (c) Solely with respect to loans or forbearances made by educational institutions of collegiate grade to their faculty or staff, secured by real property consisting of a residential dwelling, these institutions are hereby declared to be an exempt class of persons as this term is used in Section 1 of Article XV of the Constitution. (Amended by Stats. 1996, Ch. 1064, Sec. 618. Effective January 1, 1997. Operative July 1, 1997.)
  10. 28001.

    ## Financial Code - FIN ## DIVISION 12. COLLEGE LOANS [28000 - 28001] ( Division 12 added by Stats. 1981, Ch. 176, Sec. 1. )

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    This division does not apply to community colleges.

    ## Financial Code - FIN ## DIVISION 12. COLLEGE LOANS [28000 - 28001] ( Division 12 added by Stats. 1981, Ch. 176, Sec. 1. ) ## 28001. This division shall not apply to community colleges. (Added by Stats. 1981, Ch. 176, Sec. 1.)
  11. 28100.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 1. General Provisions [28100 - 28104] ( Chapter 1 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 1. Short Title [28100- 28100.] ( Article 1 added by Stats. 2016, Ch. 824, Sec. 2. )

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    This division may be known and cited as the Student Loan Servicing Act.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 1. General Provisions [28100 - 28104] ( Chapter 1 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 1. Short Title [28100- 28100.] ( Article 1 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28100. This division may be known and cited as the “Student Loan Servicing Act.” (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  12. 28102.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 1. General Provisions [28100 - 28104] ( Chapter 1 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 2. Requirement for License [28102- 28102.] ( Article 2 added by Stats. 2016, Ch. 824, Sec. 2. )

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    A person must get a license before servicing student loans in this state, and licenses cannot be transferred or assigned.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 1. General Provisions [28100 - 28104] ( Chapter 1 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 2. Requirement for License [28102- 28102.] ( Article 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28102. (a) No person shall engage in the business of servicing a student loan in this state without first obtaining a license pursuant to this division. A license shall not be transferable or assignable. (b) This division shall not apply to 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 or any 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. (4) A public postsecondary educational institution or a private nonprofit postsecondary educational institution servicing a student loan it extended to the borrower. (5) A nonprofit community service organization that meets all the criteria of Section 12104. (6) In connection with its responsibilities as a guaranty agency engaged in default aversion, a state or nonprofit private institution or organization having an agreement with the United States Secretary of Education under Section 428(b) of the Higher Education Act of 1965 (20 U.S.C. Sec. 1078(b)). (c) A private postsecondary educational institution not exempted from the requirements of this division pursuant to subdivision (b) shall not be required to comply with this division for the servicing of a student loan it extended to a borrower that a licensee is servicing pursuant to a servicing agreement with the private postsecondary educational institution for that student loan. (Amended by Stats. 2018, Ch. 379, Sec. 2. (AB 38) Effective January 1, 2019.)
  13. 28104.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 1. General Provisions [28100 - 28104] ( Chapter 1 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 3. Definitions [28104- 28104.] ( Article 3 added by Stats. 2016, Ch. 824, Sec. 2. )

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    This section defines key terms used in the Student Loan Servicing Act.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 1. General Provisions [28100 - 28104] ( Chapter 1 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 3. Definitions [28104- 28104.] ( Article 3 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28104. For the purposes of this division, the following terms have the following meanings: (a) “Applicant” means a person applying for a license pursuant to this division. (b) “Borrower” means either of the following: (1) A person who has received or agreed to pay a student loan. (2) A person who shares responsibility for repaying a student loan with a person described in paragraph (1). (c) “Commissioner” means the Commissioner of Financial Protection and Innovation. (d) “Default aversion” means those activities in which guaranty agencies engage to prevent default by a borrower pursuant to the law and regulations of the Federal Family Education Loan Program. (e) “Department” means the Department of Financial Protection and Innovation. (f) “Engage in the business” means, without limitation, servicing student loans. (g) “In this state” means any activity of a person relating to servicing student loans that originates from this state and is directed to persons outside this state, or that originates from outside this state and is directed to persons inside this state, or that originates inside this state and is directed to persons inside this state. (h) “Licensee” means a person licensed pursuant to this division. (i) “Nationwide Multistate Licensing System & Registry” means a system of record, created by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, for nondepository, financial services licensing or registration, including student loan servicers, in participating state agencies, the District of Columbia, Puerto Rico, the United States Virgin Islands, and Guam. (j) “Person” means an individual, a corporation, a partnership, a limited liability company, an association, a trust, an unincorporated organization, a government, or a political subdivision of a government, and any other entity. (k) “Servicing” means any of the following activities related to a student loan of a borrower: (1) Performing both of the following: (A) Receiving any scheduled periodic payments from a borrower or any notification that a borrower made a scheduled periodic payment. (B) Applying payments to the borrower’s account pursuant to the terms of the student loan or the contract governing the servicing. (2) During a period when no payment is required on a student loan, performing both of the following: (A) Maintaining account records for the student loan. (B) Communicating with the borrower regarding the student loan on behalf of the owner of the student loan promissory note. (3) Interacting with a borrower related to that borrower’s student loan, with the goal of helping the borrower avoid default on the borrower’s student loan or facilitating the activities described in paragraph (1) or (2). (l) (1) “Student loan” means any loan made solely for use to finance a postsecondary education and costs of attendance at a postsecondary institution, including, but not limited to, tuition, fees, books and supplies, room and board, transportation, and miscellaneous personal expenses. A “student loan” includes a loan made to refinance a student loan. (2) (A) A “student loan” shall not include an extension of credit under an open-end consumer credit plan, a reverse mortgage transaction, a residential mortgage transaction, or any other loan that is secured by real property or a dwelling. (B) A “student loan” shall not include an extension of credit made by a postsecondary educational institution to a borrower if one of the following applies: (i) The term of the extension of credit is no longer than the borrower’s education program. (ii) The remaining, unpaid principal balance of the extension of credit is less than one thousand five hundred dollars ($1,500) at the time of the borrower’s graduation or completion of the program. (iii) The borrower fails to graduate or successfully complete the borrower’s education program and has a balance due at the time of the borrower’s disenrollment from the postsecondary institution. (m) “Student loan servicer” means any person engaged in the business of servicing student loans. A “student loan servicer” does not include a debt collector, as defined in Section 1788.2 of the Civil Code, whose student loan debt collection business, and business operations, involve collecting, or attempting to collect, on defaulted student loans, that is, federal student loans for which no payment has been received for 270 days or more, or private student loans, in default, according to the terms of the loan documents. Debt collectors who also service nondefaulted student loans, as part of their business, and business operations, are “student loan servicers.” (Amended by Stats. 2022, Ch. 452, Sec. 151. (SB 1498) Effective January 1, 2023.)
  14. 28106.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 1. Commissioner of Financial Protection and Innovation [28106 - 28111] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 152. )

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    The commissioner administers this division and has broad authority to issue licensing rules, orders, and enforcement actions.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 1. Commissioner of Financial Protection and Innovation [28106 - 28111] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 152. ) ## 28106. (a) The commissioner shall administer the provisions of this division and may promulgate rules and regulations and issue orders consistent with that authority. (b) Without limitation, the functions, powers, and duties of the commissioner include all of the following: (1) To issue or refuse to issue a license as provided by this division. (2) To revoke or suspend for cause any license as provided by this division. (3) To keep records of licenses issued under this division. (4) To receive, consider, investigate, and act upon complaints made in connection with a licensee. (5) To prescribe the forms of and receive (A) applications for licenses and (B) reports, books, and records required to be made by a licensee under this division, including annual audited financial statements. (6) To subpoena documents and witnesses and compel their attendance and production, to administer oaths, and to require the production of books, papers, or other materials relevant to any inquiry authorized by this division. (7) To require information with regard to an applicant that the commissioner may deem necessary, with regard for the paramount public interest in ascertaining the experience, background, honesty, truthfulness, integrity, and competency of an applicant for servicing student loans, and if an applicant is an entity other than an individual, in ascertaining the honesty, truthfulness, integrity, and competency of officers, directors, or managing members of the corporation, association, or other entity, or the general partners of a partnership. (8) To enforce by order any provision of this division. (9) To levy fees, fines, and charges in an amount sufficient to cover the cost of the services performed in administering this division. (10) To appoint examiners, attorneys, supervisors, experts, and special assistants as needed to effectively and efficiently administer this division. (Amended by Stats. 2018, Ch. 379, Sec. 4. (AB 38) Effective January 1, 2019.)
  15. 28108.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 1. Commissioner of Financial Protection and Innovation [28106 - 28111] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 152. )

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    The commissioner may investigate and examine applicants and licensees, access relevant records and information, and control certain documents during an investigation. People generally may not remove those documents while the commissioner has control, unless there is a court order or the commissioner consents.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 1. Commissioner of Financial Protection and Innovation [28106 - 28111] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 152. ) ## 28108. (a) The commissioner shall have the authority to conduct investigations and examinations of an applicant or licensee as follows: (1) For purposes of determining whether an applicant is eligible for a license, or that a licensee is complying with the provisions of this division or any regulation or order of the commissioner, the commissioner may access, receive, and use any books, accounts, records, files, documents, information, or evidence, including, but not limited to, any of the following relating to the intent to, or the practice of, servicing student loans for borrowers: (A) Criminal, civil, and administrative history information. (B) Personal history and experience information, including, but not limited to, independent credit reports obtained from a consumer reporting agency. (C) Any other documents, information, or evidence that the commissioner deems relevant to the inquiry or investigation regardless of the location, possession, control, or custody of those documents, information, or evidence. (2) For the purposes of investigating violations or complaints arising under this division, the commissioner may direct, subpoena, or order the attendance of, and examine under oath, any person whose testimony may be required about the student loan or account of the borrower. (b) In making any examination or investigation authorized by this section, the commissioner may control access to any documents and records of the licensee or person under examination or investigation. The commissioner may take possession of the documents and records or place a person in exclusive charge of the documents and records in the place where they are usually kept. During the period of control, no person shall remove or attempt to remove any of the documents and records except pursuant to a court order or with the consent of the commissioner. Unless the commissioner has reasonable grounds to believe the documents or records of a licensee have been, or are at risk of being, altered or destroyed for purposes of concealing a violation of this division, the licensee or owner of the documents and records shall have access to the documents or records as necessary to conduct its ordinary business affairs. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  16. 28110.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 1. Commissioner of Financial Protection and Innovation [28106 - 28111] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 152. )

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    The commissioner may set, by rule or order, when electronic records or electronic signatures will be accepted, but this section does not require acceptance.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 1. Commissioner of Financial Protection and Innovation [28106 - 28111] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 152. ) ## 28110. (a) Notwithstanding any other law, the commissioner may by rule or order prescribe circumstances under which to accept electronic records or electronic signatures. This section shall not be deemed to require the commissioner to accept electronic records or electronic signatures. (b) 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) A surety bond, rider, or endorsement thereto. (D) An order, license, consent, or other authority. (E) A notice of public hearing, accusation, and statement of issues in connection with any application, license, consent, or other authority. (F) A proposed decision of a hearing officer and a decision of the commissioner. (G) The transcripts of a hearing and correspondence between a party and the commissioner directly relating to the record. (H) A release, newsletter, interpretive opinion, determination, or specific ruling. (I) Correspondence between a party and the commissioner directly relating to any document listed in subparagraphs (A) to (H), 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. (c) 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. 153. (SB 1498) Effective January 1, 2023.)
  17. 28111.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 1. Commissioner of Financial Protection and Innovation [28106 - 28111] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 152. )

    Verify source ↗

    The commissioner may require student loan servicer applicants and licensees to use the Nationwide Multistate Licensing System & Registry for filings, applications, submissions, and assessments.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 1. Commissioner of Financial Protection and Innovation [28106 - 28111] ( Heading of Article 1 amended by Stats. 2022, Ch. 452, Sec. 152. ) ## 28111. (a) The commissioner may require an applicant for a student loan servicer license or a student loan servicer licensee to make some or all of the filings with the commissioner through the Nationwide Multistate Licensing System & Registry. (b) The commissioner may require an application to be made through the Nationwide Multistate Licensing System & Registry, and may require fees, fingerprints, financial statements, supporting documents, changes of address, and any other information, and amendments or modifications thereto, to be submitted by applicants and licensees through the Nationwide Multistate Licensing System & Registry. (c) The commissioner may require licensees to pay assessments through the Nationwide Multistate Licensing System & Registry. (Added by Stats. 2018, Ch. 379, Sec. 6. (AB 38) Effective January 1, 2019.)
  18. 28112.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 2. Application for License [28112 - 28124] ( Article 2 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    An applicant must submit a license application to the commissioner with the required form, fees, and audited financial statements showing at least $250,000 net worth, unless a stated SEC-filed statement alternative applies.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 2. Application for License [28112 - 28124] ( Article 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28112. An applicant shall apply for a license by submitting all of the following to the commissioner: (a) A completed application for a license in a form prescribed by the commissioner and signed under penalty of perjury. (b) The sum of one hundred dollars ($100) as a fee for investigating the application, plus the cost of fingerprint processing and the criminal history record check under Section 28116, and three hundred dollars ($300) as an application fee. The investigation fee, including the amount for the criminal history record check, and the application fee are not refundable if an application is denied or withdrawn. (c) Audited financial statements prepared in accordance with generally accepted accounting principles and acceptable to the commissioner that indicate a net worth of at least two hundred fifty thousand dollars ($250,000). (d) Subject to the commissioner’s discretion, an applicant or licensee that is a wholly owned subsidiary of a public holding company required to comply with the reporting requirements of the Securities and Exchange Commission may satisfy the requirement of subdivision (c) by submitting the annual consolidated audited financial statements filed with the Securities and Exchange Commission, including consolidating financial statements of the subsidiary. (Amended by Stats. 2020, Ch. 154, Sec. 4. (AB 376) Effective January 1, 2021.)
  19. 28114.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 2. Application for License [28112 - 28124] ( Article 2 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    The commissioner must send applicant fingerprint information to the Department of Justice, which must forward it to the FBI, review the FBI result, respond to the commissioner, and charge the applicant a processing fee.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 2. Application for License [28112 - 28124] ( Article 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28114. (a) The commissioner shall submit to the Department of Justice fingerprint images and related information required by the Department of Justice of every applicant for a license for purposes of obtaining information as to the existence and content of a record of state or federal convictions, state or federal arrests, and information as to the existence and content of a record of state or federal arrests for which the Department of Justice establishes that the person is free on bail or on his or her own recognizance pending trial or appeal. (b) When received, the Department of Justice shall transmit fingerprint images and related information received pursuant to this section to the Federal Bureau of Investigation for the purpose of obtaining a federal criminal history records check. The Department of Justice shall review the information returned from the Federal Bureau of Investigation and compile and disseminate a response to the commissioner. (c) The Department of Justice shall provide a response to the commissioner pursuant to paragraph (1) of subdivision (p) of Section 11105 of the Penal Code. (d) The commissioner shall request from the Department of Justice subsequent arrest notification service, as provided pursuant to Section 11105.2 of the Penal Code, for the license applicant described in subdivision (a). (e) The Department of Justice shall charge a fee, payable by the applicant, sufficient to cover the costs of processing the requests pursuant to this section. (Amended by Stats. 2018, Ch. 379, Sec. 7. (AB 38) Effective January 1, 2019.)
  20. 28116.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 2. Application for License [28112 - 28124] ( Article 2 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    The commissioner must investigate certain license applicants and related persons after an application and fees are filed, and must issue a license if the applicant satisfies the division and no denial facts are found.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 2. Application for License [28112 - 28124] ( Article 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28116. (a) Upon the filing of an application for a license pursuant to Section 28112 and the payment of the fees, the commissioner shall investigate the applicant and its general partners and individuals owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or any individual responsible for the conduct of the applicant’s servicing activities in this state, if the applicant is a partnership. If the applicant is a corporation, trust, limited liability company, or association, including an unincorporated organization, the commissioner shall investigate the applicant, its principal officers, directors, trustee, managing members, and individuals owning or controlling, directly or indirectly, 10 percent or more of the outstanding equity securities or any individual responsible for the conduct of the applicant’s servicing activities in this state. (b) Upon the filing of an application for a license pursuant to Section 28128 and the payment of the fees, the commissioner shall investigate the individual responsible for the servicing activity of the licensee at the new location described in the application. The investigation may be limited to information that was not included in prior applications filed pursuant to this division. If the commissioner determines that the applicant has satisfied this division and does not find facts constituting reasons for denial, the commissioner shall issue and deliver a license to the applicant. (c) For the purposes of this section, “principal officers” shall mean president, chief executive officer, treasurer, and chief financial officer, as may be applicable, and any other officer with direct responsibility for the conduct of the applicant’s servicing activities in this state. (Amended by Stats. 2018, Ch. 379, Sec. 8. (AB 38) Effective January 1, 2019.)
  21. 28117.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 2. Application for License [28112 - 28124] ( Article 2 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    Before a license is issued, the applicant must file an appointment naming the commissioner to receive lawful process. If service is attempted by leaving process at the commissioner’s office, extra notice and an affidavit are required for the service to count.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 2. Application for License [28112 - 28124] ( Article 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28117. (a) Before an applicant is issued a license, the applicant shall file with the commissioner, in such form as the commissioner may require, an appointment irrevocably appointing the commissioner to be the applicant’s or licensee’s attorney, to receive service of any lawful process in any noncriminal judicial or administrative proceeding against the applicant or licensee, or any of its successors, that arises under this division or under any regulation or order issued under this division after such appointment has been filed, with the same force and validity as if served personally on the applicant, licensee, or successor. (b) Service may be made by leaving a copy of the process at any office of the commissioner, but that service is not effective unless (1) the party making that service, who may be the commissioner, sends notice of service and a copy of the process by registered or certified mail to the party served at its last address on file with the commissioner, and (2) an affidavit of compliance with this section by the party making service is filed in the case on or before the return date, if any, or within such further time as the court, in the case of a judicial proceeding, or the administrative agency, in the case of an administrative proceeding, allows. (Added by Stats. 2018, Ch. 379, Sec. 9. (AB 38) Effective January 1, 2019.)
  22. 28118.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 2. Application for License [28112 - 28124] ( Article 2 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    When a license application is complete and DOJ information has been received, the commissioner must either issue the license or give a written denial explanation.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 2. Application for License [28112 - 28124] ( Article 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28118. The commissioner shall, when the application is complete, including having received the information from the Department of Justice, either grant a license pursuant to this division or provide a written explanation for the denial. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  23. 28120.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 2. Application for License [28112 - 28124] ( Article 2 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    License-denial proceedings must follow the specified Government Code procedure, and the commissioner may deny a license application for listed reasons.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 2. Application for License [28112 - 28124] ( Article 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28120. (a) The proceedings for a 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. (b) The commissioner may deny an application for a license for any of the following reasons: (1) A false statement of a material fact has been made in the application. (2) The applicant or any principal officer, director, general partner, managing member, or individual owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant, within the last 10 years has (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 principal officer, director, general partner, managing member, or individual owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant, has violated, or is not in material compliance with this division, or an order or rule of the commissioner. (4) A material requirement for issuance of a license has not been met. (5) The applicant or any principal officer, director, general partner, managing member, or individual owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant, has violated this division or the rules thereunder, or any similar regulatory scheme of this or a foreign jurisdiction. (6) The applicant or any principal officer, director, general partner, managing member, or individual owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant, has been held liable in any civil action by final judgment or any administrative judgment by any public agency within the past seven years. (7) The commissioner, based on its investigation of the applicant, is unable to find that the financial responsibility, criminal records, experience, character, and general fitness of the applicant and its general partners, managing members, principal officers and directors, and individuals owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant, support a finding that the business will be operated honestly, fairly, efficiently, and in accordance with the requirements of this division. (Amended by Stats. 2018, Ch. 379, Sec. 10. (AB 38) Effective January 1, 2019.)
  24. 28122.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 2. Application for License [28112 - 28124] ( Article 2 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    The commissioner may treat a license application as abandoned if the applicant does not respond to required information requests, and must give written notice of the 60-day response deadline.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 2. Application for License [28112 - 28124] ( Article 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28122. (a) The commissioner may deem an application for a license abandoned if the applicant fails to respond to any request for information required by the commissioner or department during an investigation of the application. (b) The commissioner shall notify the applicant, in writing, that if the applicant fails to submit responsive information within 60 days from the date the commissioner sent the written request for information, the commissioner shall deem the application abandoned. (c) An application fee paid prior to the date an application is deemed abandoned shall not be refunded. Abandonment of an application pursuant to this subdivision shall not preclude the applicant from submitting a new application and fee for a license. (Amended by Stats. 2018, Ch. 379, Sec. 11. (AB 38) Effective January 1, 2019.)
  25. 28124.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 2. Application for License [28112 - 28124] ( Article 2 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    A license stays effective until the commissioner suspends or revokes it, or the licensee surrenders it.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 2. Application for License [28112 - 28124] ( Article 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28124. A license shall remain effective until the license is either suspended or revoked by the commissioner or surrendered by the licensee. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  26. 28125.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 3. Nationwide Multistate Licensing System and Registry [28125 - 28125.2] ( Article 3 added by Stats. 2018, Ch. 379, Sec. 12. )

    Verify source ↗

    The commissioner may work with the Nationwide Multistate Licensing System & Registry, change certain division requirements for participation, use the system to route information, and must create a process for applicants and licensees to challenge information entered by the commissioner.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 3. Nationwide Multistate Licensing System and Registry [28125 - 28125.2] ( Article 3 added by Stats. 2018, Ch. 379, Sec. 12. ) ## 28125. (a) The commissioner is authorized to establish relationships or contracts with the Nationwide Multistate Licensing System & Registry or other entities designated by the Nationwide Multistate Licensing System & Registry to collect and maintain records and process transaction fees or other fees related to licensees or other persons subject to this division. (b) For the purpose of participating in the Nationwide Multistate Licensing System & Registry, the commissioner is authorized to waive or modify, in whole or in part, by rule, regulation, or order, any or all of the requirements of this division and to establish new requirements as reasonably necessary to participate in the Nationwide Multistate Licensing System & Registry. (c) The commissioner may use the Nationwide Multistate Licensing System & Registry as a channeling agent for requesting information from, and distributing information to, the Department of Justice, any other governmental agency, or any other source, as directed by the commissioner. (d) The commissioner shall establish a process through which applicants and licensees may challenge information entered into the Nationwide Multistate Licensing System & Registry by the commissioner. (Added by Stats. 2018, Ch. 379, Sec. 12. (AB 38) Effective January 1, 2019.)
  27. 28125.1.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 3. Nationwide Multistate Licensing System and Registry [28125 - 28125.2] ( Article 3 added by Stats. 2018, Ch. 379, Sec. 12. )

    Verify source ↗

    Most information disclosed to the Nationwide Multistate Licensing System & Registry keeps its existing privacy, confidentiality, and privilege protections.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 3. Nationwide Multistate Licensing System and Registry [28125 - 28125.2] ( Article 3 added by Stats. 2018, Ch. 379, Sec. 12. ) ## 28125.1. (a) Except as otherwise provided in Section 1512 of the SAFE Act (12 U.S.C. Sec. 5111(a)), the requirements under any federal law or the Information Practices Act of 1977 (Chapter 1 (commencing with Section 1798) of Part 4 of Division 3 of the Civil Code) regarding the privacy or confidentiality of any information or material provided to the Nationwide Multistate Licensing System & Registry, and any privilege arising under federal or state law, including the rules of any state court, with respect to that information or material, shall continue to apply to the information or material after the information or material has been disclosed to the Nationwide Multistate Licensing System & Registry. The information and material may be shared with all state and federal regulatory officials with industry oversight authority without the loss of privilege or the loss of confidentiality protections provided by federal law or the Information Practices Act. (b) Information or material that is subject to a privilege or confidentiality under subdivision (a) shall not be subject to the following: (1) Disclosure under any federal or state law governing the disclosure to the public of information held by an officer or an agency of the federal government or the state. (2) Subpoena or discovery, or admission into evidence, in any private civil action or administrative process, unless with respect to any privilege held by the Nationwide Multistate Licensing System & Registry with respect to the information or material, the person to whom the information or material pertains waives, in whole or in part, in the discretion of that person, that privilege. (c) This section shall not apply with respect to the information or material relating to the employment history of, and publicly adjudicated disciplinary and enforcement actions included in, the Nationwide Multistate Licensing System & Registry for access by the public. (Added by Stats. 2018, Ch. 379, Sec. 12. (AB 38) Effective January 1, 2019.)
  28. 28125.2.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 3. Nationwide Multistate Licensing System and Registry [28125 - 28125.2] ( Article 3 added by Stats. 2018, Ch. 379, Sec. 12. )

    Verify source ↗

    The commissioner must regularly report violations, enforcement actions, and other relevant information to the Nationwide Multistate Licensing System & Registry, but only when the information is a public record.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 2. Licensing [28106 - 28125.2] ( Chapter 2 added by Stats. 2016, Ch. 824, Sec. 2. ) ## ARTICLE 3. Nationwide Multistate Licensing System and Registry [28125 - 28125.2] ( Article 3 added by Stats. 2018, Ch. 379, Sec. 12. ) ## 28125.2. The commissioner shall report regularly violations of this division, as well as enforcement actions and other relevant information, to the Nationwide Multistate Licensing System & Registry, to the extent that the information is a public record. (Added by Stats. 2018, Ch. 379, Sec. 12. (AB 38) Effective January 1, 2019.)
  29. 28126.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    A licensee must notify the commissioner in writing about certain application-information changes within 10 business days, and must give 10 days’ advance notice before changing its business address. The commissioner must respond to an address-change request within 10 days, and late notice can trigger a civil or administrative penalty of up to $500.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28126. (a) A licensee shall notify the commissioner, in writing, of any change in the information provided in the application for a license, as applicable, not later than 10 business days after the occurrence of the event that results in the information becoming inaccurate or incomplete. (b) (1) If a licensee seeks to change its place of business to a street address other than that designated in its license, the licensee shall provide notice to the commissioner at least 10 days prior to the change. The commissioner shall notify the licensee within 10 days if the commissioner disapproves the change, and if the commissioner does not notify the licensee of disapproval within 10 days, the change in address shall be deemed approved. (2) If notice is not given at least 10 days prior to the change of a street address of a place of business, as required by subdivision (b), or notice is not given at least 10 days prior to engaging in the business of servicing student loans at a new location, the commissioner may assess a civil or administrative penalty on the licensee not to exceed five hundred dollars ($500). (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  30. 28128.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    A licensee must apply for a branch office license and pay the required fee before starting student loan servicing at a new location; the licensee may start 10 days after submission, subject to commissioner approval rules.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28128. (a) A licensee seeking to engage in the business of servicing student loans at a new location shall submit an application for a branch office license to the commissioner at least 10 days before engaging in the business of servicing student loans at a new location and pay the fee required by Section 28112. (b) The licensee may engage in the business of servicing student loans at the new location 10 days after the date of submission of a branch office application. (c) (1) The commissioner shall approve or deny the individual responsible for the servicing activity of the licensee at the new location in accordance with Article 2 of Chapter 2 (commencing with Section 28112), and shall notify the licensee of this decision within 90 days of the date of receipt of the application. (2) If the commissioner denies the application, the licensee shall, within 10 days of the date of receipt of notification of the commissioner’s denial, submit a new application to the commissioner designating a different individual responsible for the servicing activity of the licensee at the new location. The commissioner shall approve or deny the different individual as provided in paragraph (1). (d) A licensee shall not engage in the business of servicing student loans at a new location in a name other than a name approved by the commissioner. (e) A branch office license to engage in the business of servicing at a new location shall be issued in accordance with this section. A change of street address of a place of business designated in a license shall be made in accordance with Section 28126 and shall not constitute a new location subject to the requirements of this section. (Amended by Stats. 2018, Ch. 379, Sec. 13. (AB 38) Effective January 1, 2019.)
  31. 28130.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    A licensee must take compliance steps, report to the commissioner when required, follow the division and commissioner orders, accept periodic examination, notify the commissioner of bankruptcy within five days, and provide borrower repayment and loan-forgiveness information on its website and by mail or email at least once a year.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28130. A licensee shall do all of the following: (a) Develop policies and procedures reasonably intended to promote compliance with this division. (b) File with the commissioner any report required by the commissioner. (c) Comply with the provisions of this division and any regulation or order of the commissioner. (d) Submit to periodic examination by the commissioner as required by this division and any regulation or order of the commissioner. (e) Advise the commissioner of filing a petition for bankruptcy within five days of the filing. (f) Provide, free of charge on its internet website information or links to information regarding repayment and loan forgiveness options that may be available to borrowers and provide this information or these links to borrowers via written correspondence or email at least once per calendar year. (Amended by Stats. 2020, Ch. 154, Sec. 5. (AB 376) Effective January 1, 2021.)
  32. 28132.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    A licensee does not have to follow Section 28130(g) for certain qualified written requests, but must notify the borrower in writing within 5 business days when it makes that determination.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28132. (a) A licensee shall not be required to comply with the requirements of subdivision (g) of Section 28130, if the licensee reasonably determines that any of the following apply: (1) A qualified written request is substantially the same as a qualified written request previously made by the borrower, for which the licensee has previously complied with its obligation to respond pursuant to subdivision (g) of Section 28130, unless the borrower provides new and material information to support the more recent qualified written request. New and material information means information that was not reviewed by the licensee in connection with a prior qualified written request submitted by the same borrower and that is reasonably likely to change the licensee’s prior response related to that request. (2) A qualified written request is overbroad. A qualified written request is overbroad if the licensee cannot reasonably determine from the qualified written request the specific error that the borrower asserts has occurred on his or her account or the specific information the borrower is requesting related to his or her account. To the extent a licensee can reasonably identify a valid assertion of an error or valid request for information in a qualified written request that is otherwise overbroad, the licensee shall comply with the requirements of subdivision (g) of Section 28130 with respect to that valid asserted error or request for information. (3) A qualified written request is delivered to the licensee more than one year after the licensee sells, assigns, or transfers the servicing of the student loan that is the subject of the qualified written request to another servicer. (b) If, pursuant to subdivision (a), a licensee determines that it is not required to comply with the requirements of subdivision (g) of Section 28130, the licensee shall notify the borrower of the determination, and the basis for its determination, in writing not later than five business days after making such determination. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  33. 28138.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    A licensee must keep servicing records for a borrower’s student loan for at least three years after the loan is sold, assigned, transferred, or paid in full, unless federal law prohibits it.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28138. Notwithstanding subdivision (b) of Section 28134 and unless prohibited by federal law, a licensee shall retain and maintain its records of servicing a borrower’s student loan for a minimum of three years after the student loan has been sold, assigned, transferred, or paid in full. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  34. 28140.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    A licensee must continuously keep net worth at or above $250,000. Some wholly owned subsidiaries of public holding companies may use SEC-filed audited financial statements to show compliance, subject to the commissioner’s sole discretion.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28140. (a) A licensee shall continuously maintain a minimum net worth of at least two hundred fifty thousand dollars ($250,000). (b) Subject to the commissioner’s sole discretion, an applicant or licensee that is a wholly owned subsidiary of a public holding company required to comply with the reporting requirements of the Securities and Exchange Commission may satisfy the requirement of subdivision (a) by submitting the annual consolidated audited financial statements filed with the Securities and Exchange Commission, including consolidating financial statements of the subsidiary, which evidence to the commissioner’s satisfaction that the subsidiary meets the continuous minimum net worth requirements of at least two hundred fifty thousand dollars ($250,000). (Amended by Stats. 2020, Ch. 154, Sec. 8. (AB 376) Effective January 1, 2021.)
  35. 28142.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    Licensees must keep a $25,000 surety bond on file and update it when required.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28142. (a) A licensee shall maintain a surety bond in accordance with this section in a minimum 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. The surety bond, including any and all riders and endorsements executed subsequent to the effective date of the bond, shall be filed with the commissioner within 10 days of execution. For licensees with multiple licensed locations, only one surety bond 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 borrowers as the result of a licensee’s noncompliance with the requirements of this division. The commissioner may require licensees to submit bonds, riders, and endorsements electronically through the Nationwide Multistate Licensing System & Registry’s electronic surety bond function. (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. (c) The commissioner may require a higher bond amount for a licensee based on the dollar amount of servicing of student loans by that licensee. (Amended by Stats. 2018, Ch. 379, Sec. 17. (AB 38) Effective January 1, 2019.)
  36. 28144.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    Licensees must pay annual assessments to the commissioner, follow a minimum payment floor, and may lose their license if they do not pay by October 31.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28144. (a) 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 division in the year in which the assessment is made. The pro rata share shall be the proportion that a licensee’s servicing activities in this state bears to the costs and expenses remaining after the amount assessed pursuant to subdivision (c). (b) On or before the 30th day of September in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid by October 31. If payment is not made by October 31, the commissioner shall 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) In the levying and collection of the assessment, a licensee shall neither be assessed for nor be permitted to pay less than two hundred fifty dollars ($250) per licensed location per year. (d) If a licensee fails to pay the assessment on or before the 31st day of October, the commissioner may by order summarily suspend or revoke the license 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 the license is revoked or suspended, a licensee shall not engage in the business of servicing student loans in this state pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a license shall not affect the powers of the commissioner as provided in this division. (e) Notwithstanding subdivisions (a) to (d), inclusive, the commissioner may by rule require licensees to pay assessments through the Nationwide Multistate Licensing System & Registry. (Amended by Stats. 2018, Ch. 379, Sec. 18. (AB 38) Effective January 1, 2019.)
  37. 28146.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    A licensee must file an annual report with the commissioner by March 15 and may also have to file special reports requested by the commissioner.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28146. (a) A licensee shall file an annual report with the commissioner, on or before the 15th day of March, giving the relevant information that the commissioner reasonably requires concerning the business and operations conducted by the licensee in the state during the preceding calendar year, including information regarding the number of loans that are sold, assigned, or transferred to another party. The individual annual reports filed pursuant to this section shall be made available to the public for inspection. The report shall be made under oath and in the form prescribed by the commissioner. (b) A licensee shall make other special reports that may be required by the commissioner. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  38. 28148.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    Licensees must have their books and accounts audited by an independent CPA, file the audit report with the commissioner, and fix any rejected filing deficiencies within 30 days.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28148. (a) At the end of the licensee’s fiscal year, but in no case more than 12 months after the last audit conducted pursuant to this section, each licensee shall cause its books and accounts to be audited by an independent certified public accountant. The audit shall be sufficiently comprehensive in scope to permit the expression of an opinion on the financial statements prepared in accordance with generally accepted accounting principles and shall be performed in accordance with generally accepted auditing standards. The audit shall include a reconciliation of the licensee’s trust accounts as of the audit date. (b) “Expression of an opinion” includes (1) an unqualified opinion, (2) a qualified opinion, (3) a disclaimer of opinion, or (4) an adverse opinion. If a financial statement, report, certificate, or opinion of the independent certified public accountant is in any way qualified, the commissioner may require the licensee to take any action that the commissioner deems appropriate to address the qualification. The commissioner may reject any financial statement, report, certificate, or opinion by notifying the licensee or other person required to make the filing of the rejection and the reason therefor. Within 30 days after the receipt of the notice, the licensee or other person shall correct the deficiencies. Failure to correct the deficiencies is a violation of this division. The commissioner shall retain a copy of all financial statements, reports, certificates, or opinions so rejected. (c) If a qualified or adverse opinion is expressed or if an opinion is disclaimed, the reasons therefor shall be fully explained. (d) The audit report shall be filed with the commissioner within 105 days of the end of the licensee’s fiscal year. The report filed with the commissioner shall be certified by the certified public accountant conducting the audit. (e) If a licensee required to make an audit fails to cause an audit to be made, the commissioner may cause the audit to be made by an independent certified public accountant at the licensee’s expense. The commissioner shall select the independent certified public accountant by advertising for bids or by other fair and impartial means. The commissioner may summarily revoke the license of a licensee who fails to file a certified financial statement prepared by an independent certified public accountant as required by this division or at the request of the commissioner. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  39. 28150.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    If a licensee stops servicing student loans, it must notify the commissioner in writing and surrender the license and other license indicia. The commissioner may also require a disposition plan and must send written notice when accepting a surrendered license.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 3. Licensee Duties [28126 - 28150] ( Chapter 3 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28150. A licensee that ceases to service student loans to borrowers shall inform the commissioner in writing and surrender the license and all other indicia of license to the commissioner. The commissioner may require a licensee to file a plan for the disposition of the servicing business that includes, but is not limited to, a closing audit. Upon receipt of the written notice and plan, if required, the commissioner shall determine whether the licensee has violated this division. The commissioner shall give a licensee notice of accepting a surrendered license, and a license shall not be deemed surrendered until the commissioner accepts its tender in writing. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  40. 28152.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 4. Administration and Power of the Commissioner [28152 - 28153.5] ( Chapter 4 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    The commissioner must examine each licensee regularly, at least every 36 months, may inspect records and interview people under oath, and must provide findings to the licensee and correct violations.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 4. Administration and Power of the Commissioner [28152 - 28153.5] ( Chapter 4 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28152. (a) As often as the commissioner deems necessary and appropriate, but at least once every 36 months, the commissioner shall examine the affairs of each licensee for compliance with this division. The commissioner shall appoint suitable persons to perform the examination. The commissioner and his or her appointees may examine the books, records, and documents of the licensee, and may examine the licensee’s officers, directors, employees, or agents under oath regarding the licensee’s operations. The commissioner may cooperate with any agency of the state, the federal government, or other states. (b) Unless otherwise exempt pursuant to Section 28102, affiliates of a licensee are subject to examination by the commissioner on the same terms as the licensee, but only when reports from, or examination of, a licensee provides documented evidence of unlawful activity between a licensee and affiliate benefitting, affecting, or arising from the activities regulated by this division. (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. (d) The statement of the findings of an examination shall belong to the commissioner and shall not be disclosed to anyone other than the licensee, law enforcement officials, or other state or federal regulatory agencies for further investigation and enforcement. Reports required of licensees by the commissioner under this division and results of examinations performed by the commissioner under this division are the property of the commissioner. (e) The commissioner shall provide a written statement of the findings of the examination, issue a copy of that statement to the licensee and take appropriate steps to ensure correction of any violations of this division. (f) Notwithstanding any provision of this division, 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. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  41. 28153.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 4. Administration and Power of the Commissioner [28152 - 28153.5] ( Chapter 4 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    The commissioner may require certain non-excluded persons to submit special reports or written answers, under oath or otherwise, in the form and time the commissioner sets.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 4. Administration and Power of the Commissioner [28152 - 28153.5] ( Chapter 4 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28153. The commissioner may require persons who are not expressly excluded from this division under subdivision (b) of Section 28102 to file with the commissioner, under oath or otherwise, in the form and within a reasonable period of time as prescribed by the commissioner by special reports, or answers in writing to specific questions or requests for information. (Added by Stats. 2018, Ch. 379, Sec. 19. (AB 38) Effective January 1, 2019.)
  42. 28153.5.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 4. Administration and Power of the Commissioner [28152 - 28153.5] ( Chapter 4 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

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

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 4. Administration and Power of the Commissioner [28152 - 28153.5] ( Chapter 4 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28153.5. In any proceeding under this division, the burden of proving an exemption or an exception from a definition is upon the person claiming it. (Added by Stats. 2018, Ch. 379, Sec. 20. (AB 38) Effective January 1, 2019.)
  43. 28154.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    A licensee must file required reports on time and include all required information, or the commissioner can fine the licensee and may suspend or revoke the license.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28154. (a) If a licensee fails to do either of the following, the commissioner shall impose a penalty in a sum of up to one hundred dollars ($100) for every day late: (1) To make any report required by law or by the commissioner within 10 days from the day designated for the making of the report, or within any extension of time granted by the commissioner. (2) To include therein any matter required by law or by the commissioner. (b) The commissioner may by order summarily suspend or revoke the license if a licensee fails to file any report required by this division. (Amended by Stats. 2018, Ch. 379, Sec. 21. (AB 38) Effective January 1, 2019.)
  44. 28156.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    The commissioner may censure, suspend, or bar certain people after notice and a hearing opportunity. A person subject to a proposed order may request a hearing within 15 days, and the hearing must start within 30 days unless the person agrees to a later date.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28156. (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 of any licensee, 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 licensee 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 specified in subdivision (b) of Section 50317, 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 5 (commencing with Section 11500) 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 servicing. (d) Persons suspended or barred under this section are prohibited from participating in any business activity of a licensee and from engaging in any business activity on the premises where a licensee is servicing. (e) This section shall apply to any violation, conviction, plea, or judgment occurring at any time prior to and after the enactment of this section. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  45. 28158.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    If the commissioner finds a licensee is conducting business in an unsafe or injurious way, the commissioner must issue a written order telling the licensee to stop those practices.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28158. If, after investigation, the commissioner has reasonable grounds to believe that a licensee is conducting or has conducted business in an unsafe or injurious manner, the commissioner shall, by written order addressed to the licensee, 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 28164. (Amended by Stats. 2022, Ch. 188, Sec. 16. (AB 2433) Effective January 1, 2023.)
  46. 28160.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    The commissioner may order a person to stop servicing student loans without a license, unless an exemption applies.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28160. Whenever, in the opinion of the commissioner, a person is engaged in the business of servicing student loans in this state, either actually or through subterfuge, without a license from the commissioner, the commissioner may order that person to desist and refrain. If, within 30 days after an order is served, a request for a hearing is filed in writing and the hearing is not held within 60 days of the filing, the order is rescinded. This section does not apply to persons exempted under subdivision (b) of Section 28102. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  47. 28162.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    If the commissioner investigates and has reasonable grounds to think a licensee is not complying, the commissioner must issue a written order telling the licensee to stop the noncompliance.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28162. If, after investigation, the commissioner has reasonable grounds to believe that a licensee is failing to comply with this division or any regulation or order of the commissioner, the commissioner shall, by written order addressed to the licensee, direct the discontinuance of the failure to comply. The order shall be effective immediately, but shall not become final except in accordance with the provisions of Section 28164. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  48. 28164.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    This section sets the process for making a discontinuance order final, giving the licensee notice, a chance to request a hearing, and deadlines for court action or compliance.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28164. (a) No order issued pursuant to this chapter may become final except after notice to the affected licensee of the commissioner’s intention to make the order final and of the reasons for the finding. The commissioner shall also notify the licensee that upon receiving a request, the matter will be set for hearing to commence within 15 business days after receipt. The licensee may consent to have the hearing commence at a later date. If no hearing is requested within 30 days after the mailing or service of the required notice, and none is ordered by the commissioner, the order may become final without hearing and the licensee shall immediately discontinue the practices named in the order. If a hearing is requested or ordered, it shall be held in accordance with the provisions of 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 of the powers granted under that act. If, upon the hearing, it appears to the commissioner that the licensee is conducting business in an unsafe and injurious manner or is failing or has failed to comply with this division or any regulation or order of the commissioner, the commissioner shall make the order of discontinuance final and the licensee shall immediately discontinue the practices named in the order. (b) The licensee has 10 days after an order is made final to commence an action to restrain enforcement of the order. If the enforcement of the order is not enjoined within 10 days by the court in which the action is brought, the licensee shall comply with the order. (c) The commissioner may immediately revoke the licensee’s license if the licensee fails to comply with any order issued under this division. The commissioner shall not revoke the license if, within 10 days from the effective date of the revocation order, the licensee secures a court order restraining the enforcement of the commissioner’s revocation order. (Amended by Stats. 2022, Ch. 188, Sec. 17. (AB 2433) Effective January 1, 2023.)
  49. 28166.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    The commissioner may suspend or revoke a license after notice and a hearing if specific grounds are found.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28166. The commissioner may issue an order suspending or revoking a license if, after notice and an opportunity for hearing, the commissioner finds any of the following: (a) The licensee is violating this division or a regulation adopted or an order issued under this division. (b) The licensee does not cooperate with an examination or investigation by the commissioner. (c) The licensee engages in fraud, intentional misrepresentation, or gross negligence in servicing a student loan. (d) The competence, experience, character, or general fitness of the licensee, an individual specified in Section 28116, or any person responsible for servicing a student loan for the licensee indicates that it is not in the public interest to permit the licensee to continue servicing student loans. (e) The licensee engages in unsafe or injurious practice. (f) The licensee is insolvent, suspends payment of its obligations, or makes a general assignment for the benefit of its creditors. (g) Any fact or condition exists that, if it had existed at the time the licensee applied for the license, would have been grounds for denying the application. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  50. 28168.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. )

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    The commissioner may sue in superior court to stop or enforce compliance with violations of this division, and the court may grant injunctions and other relief.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28168. (a) If, after investigation, the commissioner has reasonable grounds to believe that a person has engaged or is about to engage in any act or practice constituting a violation of any provision of this division or any rule or order hereunder, the commissioner may bring an action to enjoin the acts or practices or to enforce compliance with this division or any rule or order adopted under this division. The action shall be brought in the name of the people of the State of California in the superior court. Upon a proper showing, a permanent or preliminary injunction, restraining order, or writ of mandate shall be granted. A receiver, monitor, conservator, or other designated fiduciary or officer of the court, which may include the commissioner, may be appointed for the defendant or the defendant’s assets. Any other ancillary relief may be granted as appropriate. A receiver, monitor, conservator, or other designated fiduciary or officer of the court appointed by the superior court pursuant to this section may, with the approval of the court, exercise any or all of the powers of the defendant’s officers, directors, partners, trustees, or persons who exercise similar powers and perform similar duties. The powers include the filing of a petition for bankruptcy. No action at law or in equity may be maintained by any party against the commissioner, or a receiver, monitor, conservator, or other designated fiduciary or officer of the court, by reason of their exercising these powers or performing these duties pursuant to the order of, or with the approval of, the superior court. (b) If the commissioner determines it is in the public interest, the commissioner may include in any action authorized by subdivision (a) a claim for ancillary relief. The ancillary relief may include, but not be limited to, restitution or 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. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  51. 28170.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. )

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    The department may issue written citations for student loan servicing violations or unlicensed servicing, and may include an order to stop and an administrative penalty up to $2,500.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28170. (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 servicing student loans 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 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. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  52. 28172.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. )

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    A person who violates this division or any rule or order under it can be fined up to $2,500 per violation, and the commissioner can bring a civil action to recover the penalty.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28172. (a) Any person who violates a provision of this division, or any rule or order under this division, shall be liable for a civil penalty not to exceed two thousand five hundred dollars ($2,500) for each violation. This penalty 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. (b) 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. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  53. 28174.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    The commissioner may refer evidence of violations to the county district attorney, who may start criminal proceedings with or without that referral.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28174. (a) The commissioner may refer the evidence that is available concerning any violation of this division or of any rule or order adopted under this division to the district attorney of the county in which the violation occurred. The district attorney may, with or without the commissioner’s referral, institute criminal proceedings under this division. The commissioner and his or her counsel, deputies, or assistants may, upon request of the district attorney, assist the district attorney in presenting the law or facts at the trial. (b) 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 county or city in which the act complained of, examined, or investigated occurred. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  54. 28176.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

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

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 5. Enforcement [28154 - 28176] ( Chapter 5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28176. All hearings provided for in this division shall be conducted in accordance with the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. The commissioner has all the powers granted therein. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  55. 28178.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 6. Miscellaneous [28178 - 28182] ( Chapter 6 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    If part of this division is invalid, illegal, or unenforceable, the rest still applies.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 6. Miscellaneous [28178 - 28182] ( Chapter 6 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28178. If any provision of this division or the application thereof to any person or circumstances is held invalid, illegal, or unenforceable, such invalidity, illegality, or unenforceability shall not affect other provisions or applications of this division that can be given effect without the invalid, illegal, or unenforceable provision or application, and, to this end, the provisions of this division are declared to be severable. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  56. 28180.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 6. Miscellaneous [28178 - 28182] ( Chapter 6 added by Stats. 2016, Ch. 824, Sec. 2. )

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    Rights and remedies under this division are added to any other rights and remedies available under law.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 6. Miscellaneous [28178 - 28182] ( Chapter 6 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28180. The rights and remedies provided in this division are in addition to any other rights and remedies provided by law. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.)
  57. 28182.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 6. Miscellaneous [28178 - 28182] ( Chapter 6 added by Stats. 2016, Ch. 824, Sec. 2. )

    Verify source ↗

    This section says Division 12.5 becomes operative on July 1, 2018, and the commissioner may take necessary actions from January 1, 2017 to prepare for that date.

    ## Financial Code - FIN ## DIVISION 12.5. Student Loan Servicing Act [28100 - 28182] ( Division 12.5 added by Stats. 2016, Ch. 824, Sec. 2. ) ## CHAPTER 6. Miscellaneous [28178 - 28182] ( Chapter 6 added by Stats. 2016, Ch. 824, Sec. 2. ) ## 28182. This division shall become operative on July 1, 2018. The commissioner may take any necessary actions to exercise the authority pursuant to this division to prepare for the July 1, 2018, operative date on and after January 1, 2017. (Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Note: This section prescribes a delayed operative date for Division 12.5, commencing with Section 28100.)
  58. 29000.

    ## Financial Code - FIN ## DIVISION 13. PREMIUM FINANCING [29000 - 29003] ( Division 13 added by Stats. 1971, Ch. 1103. )

    Verify source ↗

    This section defines “premium financing.”

    ## Financial Code - FIN ## DIVISION 13. PREMIUM FINANCING [29000 - 29003] ( Division 13 added by Stats. 1971, Ch. 1103. ) ## 29000. As used in this division, “premium financing” means engaging in the business of advancing money, directly or indirectly, to an insurer or producer at the request of an insured pursuant to the terms of a premium finance agreement, wherein the insured has assigned the unearned premiums, accrued dividends, or loss payments as security for such advancement in payment of premiums on insurance contracts only, and does not include the financing of insurance contract premiums purchased in connection with the financing of goods and services. (Added by Stats. 1971, Ch. 1103.)
  59. 29001.

    ## Financial Code - FIN ## DIVISION 13. PREMIUM FINANCING [29000 - 29003] ( Division 13 added by Stats. 1971, Ch. 1103. )

    Verify source ↗

    This section defines “finance charge” for this division.

    ## Financial Code - FIN ## DIVISION 13. PREMIUM FINANCING [29000 - 29003] ( Division 13 added by Stats. 1971, Ch. 1103. ) ## 29001. As used in this division, “finance charge” means any amount which the insured agrees to pay in excess of the premium and fees charged by the insurer or producer, and exclusive of the cost of credit life insurance and attorney fees. (Added by Stats. 1971, Ch. 1103.)
  60. 29002.

    ## Financial Code - FIN ## DIVISION 13. PREMIUM FINANCING [29000 - 29003] ( Division 13 added by Stats. 1971, Ch. 1103. )

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    This section defines “premium finance agreement.”

    ## Financial Code - FIN ## DIVISION 13. PREMIUM FINANCING [29000 - 29003] ( Division 13 added by Stats. 1971, Ch. 1103. ) ## 29002. As used in this division, “premium finance agreement” means a loan contract, note, agreement, or obligation by which an insured agrees to pay to a lender in installments the principal amount advanced by the lender to an insurer or producer in payment of premium on an insurance contract or contracts, plus charges, with the assignment, as security therefor, of the unearned premiums, accrued dividends, or loss payments. (Added by Stats. 1971, Ch. 1103.)
  61. 29003.

    ## Financial Code - FIN ## DIVISION 13. PREMIUM FINANCING [29000 - 29003] ( Division 13 added by Stats. 1971, Ch. 1103. )

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    A person engaged in premium financing may pay compensation to a licensed insurance agent or broker, and the premium financer must keep a fee statement available for regulatory inspection for three years.

    ## Financial Code - FIN ## DIVISION 13. PREMIUM FINANCING [29000 - 29003] ( Division 13 added by Stats. 1971, Ch. 1103. ) ## 29003. Any person engaged in premium financing may pay compensation to a licensed insurance agent or broker for arranging, directing or performing services in connection with a premium financing agreement; provided, that the premium financer shall maintain for inspection by the appropriate regulatory authority for a period of three years a statement, in a manner and form approved by the regulatory authority, setting forth the fees paid to individual insurance agents and brokers who are paid for services in connection with premium financing. (Added by Stats. 1971, Ch. 1103.)
  62. 3.

    ## Financial Code - FIN ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1951, Ch. 364. )

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    Actions or proceedings started before this code takes effect, and accrued rights, are not affected; however, any procedure already taken must conform to the code as far as possible.

    ## Financial Code - FIN ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1951, Ch. 364. ) ## 3. Any action or proceeding commenced before this code takes effect, or any right accrued, is not affected by this code, but all procedure taken shall conform to the provisions of this code as far as possible. (Enacted by Stats. 1951, Ch. 364.)
  63. 300.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 3. Department of Financial Protection and Innovation [300 - 414] ( Heading of Chapter 3 amended by Stats. 2022, Ch. 452, Sec. 98. ) ## ARTICLE 1. General Provisions [300 - 301] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 2. )

    Verify source ↗

    This section defines certain financial terms and states that the Department of Financial Protection and Innovation is responsible for carrying out listed state laws.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 3. Department of Financial Protection and Innovation [300 - 414] ( Heading of Chapter 3 amended by Stats. 2022, Ch. 452, Sec. 98. ) ## ARTICLE 1. General Provisions [300 - 301] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 300. (a) In this section: (1) “Business and industrial development corporation” means a corporation licensed under Division 15 (commencing with Section 31000). (2) “Payment instrument” has the same meaning as set forth in Section 2003. (3) “Stored Value” has the same meaning as set forth in subdivision (x) of Section 2003. (b) There is in the state government, in the Business and Consumer Services Agency, a Department of Financial Protection and Innovation, which has charge of the execution of, among other laws, the laws of this state relating to any of the following: (1) banks or trust companies or the banking or trust business; (2) savings associations or the savings association business; (3) credit unions or the credit union business; (4) persons who engage in the business of receiving money for transmission or such business; (5) issuers of stored value or such business; (6) issuers of payment instruments or the payment instrument business; (7) business and industrial development corporations or the business and industrial development corporation business; (8) insurance premium finance agencies or the insurance premium finance business; (9) persons offering or making any contract constituting bucketing; (10) persons offering or selling off-exchange commodities; (11) deferred deposit originators; (12) finance lenders and brokers; (13) residential mortgage lenders and servicers; (14) capital access companies; (15) check sellers, bill payers, and proraters; (16) securities issuers, broker-dealers, agents, investment advisers, and investment adviser representatives; (17) mortgage loan originators employed or supervised by finance lenders or residential mortgage lenders; (18) escrow agents; (19) franchisors; (20) persons holding securities as custodians on behalf of securities owners; (21) persons offering or providing consumer financial products or services in this state; and (22) PACE program administrators. (c) The amendments made to this section by the act adding this subdivision shall become operative on July 1, 2026. (Amended by Stats. 2026, Ch. 28, Sec. 15. (SB 170) Effective June 29, 2026. Operative July 1, 2026, by its own provisions.)
  64. 30000.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 1. Application of This Division [30000 - 30006] ( Chapter 1 added by Stats. 1972, Ch. 1057. )

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    This division may be cited as the “Securities Depository Law.”

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 1. Application of This Division [30000 - 30006] ( Chapter 1 added by Stats. 1972, Ch. 1057. ) ## 30000. This division is known and may be cited as the “Securities Depository Law.” (Added by Stats. 1972, Ch. 1057.)
  65. 30001.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 1. Application of This Division [30000 - 30006] ( Chapter 1 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    This section says the chapter’s definitions control how this division is read, unless the context requires otherwise.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 1. Application of This Division [30000 - 30006] ( Chapter 1 added by Stats. 1972, Ch. 1057. ) ## 30001. Unless the context otherwise requires, the definitions set forth in this chapter govern the construction of this division. (Added by Stats. 1972, Ch. 1057.)
  66. 30002.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 1. Application of This Division [30000 - 30006] ( Chapter 1 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    This section defines “Commissioner” as the Commissioner of Financial Protection and Innovation.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 1. Application of This Division [30000 - 30006] ( Chapter 1 added by Stats. 1972, Ch. 1057. ) ## 30002. “Commissioner” means the Commissioner of Financial Protection and Innovation. (Amended by Stats. 2022, Ch. 452, Sec. 154. (SB 1498) Effective January 1, 2023.)
  67. 30003.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 1. Application of This Division [30000 - 30006] ( Chapter 1 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    This section defines “person” broadly to include many kinds of entities, not just a single individual.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 1. Application of This Division [30000 - 30006] ( Chapter 1 added by Stats. 1972, Ch. 1057. ) ## 30003. “Person” means, in addition to the singular, persons, group of persons, cooperative, association, company, firm, partnership, corporation, limited liability company, or other legal entity. (Amended by Stats. 1994, Ch. 1010, Sec. 118. Effective January 1, 1995.)
  68. 30004.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 1. Application of This Division [30000 - 30006] ( Chapter 1 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    This section defines “securities depository” as a person or group that holds securities under a central handling system and can transfer or pledge them by bookkeeping entries instead of physical delivery.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 1. Application of This Division [30000 - 30006] ( Chapter 1 added by Stats. 1972, Ch. 1057. ) ## 30004. “Securities depository” means any person or group of persons who acts as the custodian of securities in accordance with a system for the central handling of securities whereby all securities of a particular class or series of any issues deposited within the system are treated as fungible and may be transferred or pledged by bookkeeping entries effected by that person without physical delivery of such securities. (Added by Stats. 1972, Ch. 1057.)
  69. 30005.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 1. Application of This Division [30000 - 30006] ( Chapter 1 added by Stats. 1972, Ch. 1057. )

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    This division does not apply to certain securities depositories that are tied to a registered national securities exchange or that are registered or regulated by specified federal or state financial regulators.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 1. Application of This Division [30000 - 30006] ( Chapter 1 added by Stats. 1972, Ch. 1057. ) ## 30005. This division does not apply to: (a) A securities depository which is operated by a corporation, all of the capital stock (other than directors’ qualifying shares, if any) of which is held by or for a national securities exchange or association registered under a statute of the United States such as the Securities Exchange Act of 1934, or by a corporation all of the capital stock (other than directors’ qualifying shares, if any) of which is held by or for such a wholly owned subsidiary of a registered national securities exchange. (b) A securities depository which is registered with the Securities and Exchange Commission pursuant to any provision of federal law or which is regulated by the Comptroller of the Currency, the Federal Reserve Board, or the Federal Deposit Insurance Corporation pursuant to any provision of federal law, or which is regulated by the Commissioner of Financial Protection and Innovation under Division 1.1 (commencing with Section 1000) of the Financial Code. (Amended by Stats. 2022, Ch. 452, Sec. 155. (SB 1498) Effective January 1, 2023.)
  70. 30006.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 1. Application of This Division [30000 - 30006] ( Chapter 1 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    The commissioner may make reasonable or necessary rules for this division and may exempt a securities depository from some or all of the division’s provisions if it is already adequately supervised by another regulator.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 1. Application of This Division [30000 - 30006] ( Chapter 1 added by Stats. 1972, Ch. 1057. ) ## 30006. The commissioner may establish such rules and regulations as are reasonable or necessary to carry out the purposes and provisions of this division. The commissioner may, by rule, exempt from any or all of the provisions of this division any securities depository which the commissioner determines is subject to adequate regulatory supervision by an agency, office, or commission of the federal government or by any agency, office, or commission, other than the commissioner, of the State of California. (Added by Stats. 1972, Ch. 1057.)
  71. 301.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 3. Department of Financial Protection and Innovation [300 - 414] ( Heading of Chapter 3 amended by Stats. 2022, Ch. 452, Sec. 98. ) ## ARTICLE 1. General Provisions [300 - 301] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 2. )

    Verify source ↗

    This section says which parts of the Financial Code chapter and related articles apply to various divisions, and which listed sections do not apply to the Division of Corporations.

    ## Financial Code - FIN ## DIVISION 1. FINANCIAL INSTITUTIONS [99 - 900] ( Division 1 repealed and added by Stats. 2011, Ch. 243, Sec. 2. ) ## CHAPTER 3. Department of Financial Protection and Innovation [300 - 414] ( Heading of Chapter 3 amended by Stats. 2022, Ch. 452, Sec. 98. ) ## ARTICLE 1. General Provisions [300 - 301] ( Article 1 added by Stats. 2011, Ch. 243, Sec. 2. ) ## 301. (a) This chapter is applicable to this division, Division 1.1 (commencing with Section 1000), Division 1.2 (commencing with Section 2000), Division 1.6 (commencing with Section 4800), Division 5 (commencing with Section 14000), Division 7 (commencing with Section 18000), and Division 15 (commencing with Section 31000). (b) Except as provided in subdivision (c), this article, and Articles 2 (commencing with Section 320) and 3 (commencing with Section 350) are applicable to the administration of laws by the Division of Corporations. (c) Sections 329, 330, 332, 335, 336, 357, 378, 379, and 381 are not applicable to the Division of Corporations. (Amended by Stats. 2013, Ch. 353, Sec. 47. (SB 820) Effective September 26, 2013. Operative July 1, 2013, by Sec. 129 of Ch. 353.)
  72. 30200.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    A person may not operate a securities depository in the state or solicit securities holders to use one unless it is done through a corporation licensed by the commissioner.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30200. It shall be unlawful for any person to operate a securities depository within this state, or to solicit holders of securities within this state to place their securities into a securities depository located within this state or outside this state, except by means of a corporation licensed by the commissioner as a securities depository. (Added by Stats. 1972, Ch. 1057.)
  73. 30201.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    A securities depository may be operated only by a corporation that meets specified ownership limits.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30201. A securities depository shall only be operated by a corportion: (a) At least 90 percent of the capital stock of which is held by or for one or more persons (other than individuals), each of whom, (i) is subject to supervision or regulation pursuant to the provisions of federal or state banking laws or state insurance laws, or (ii) is a broker or dealer or investment company registered under the Securities Exchange Act of 1934 or the Investment Company Act of 1940, or (iii) is a national securities exchange or association registered under the Securities Exchange Act of 1934, and none of whom, other than a national securities exchange or association, holds in excess of 20 percent of the capital stock of such corporation; and (b) Any remaining capital stock of which is held by individuals who have purchased such capital stock at or prior to the time of their taking office as directors of such corporation and who have purchased only so much of such capital stock as may be necessary to permit them to qualify as such directors. (Added by Stats. 1972, Ch. 1057.)
  74. 30202.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

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    The commissioner must charge specified fees for a securities depository license application, a related hearing, and continuing the license.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30202. The commisioner shall charge and collect the following fees: (a) For filing an application for a securities depository license, two thousand five hundred dollars ($2,500). (b) For holding a hearing in connection with the application, as set forth under Section 30205, the actual costs experienced in each particular instance. (c) For continuing a license as a securities depository in effect, a fee of two thousand five hundred dollars ($2,500) per annum, payable biennially on the 15th day of December of each odd-numbered calendar year. If a license is issued during an even-numbered calendar year, the securities depository shall pay to the commissioner, within 60 days after the issuance of its license, an additional annual fee of two thousand five hundred dollars ($2,500). (Added by Stats. 1972, Ch. 1057.)
  75. 30203.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    The commissioner must pay all money received into the State Treasury for the State Corporations Fund.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30203. All money received by the commissioner shall be paid by him or her into the State Treasury to the credit of the State Corporations Fund. (Amended by Stats. 1992, Ch. 427, Sec. 41. Effective January 1, 1993.)
  76. 30204.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    A securities depository license application must be signed and verified, and must include the information and exhibits required by the commissioner.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30204. An application for a securities depository license shall be signed and verified by an authorized officer of the applicant, and shall set forth in such form as the commissioner may prescribe: (a) The names and addresses of the incorporators, directors, and officers, with a statement of their character, experience, and general fitness to operate a securities depository. (b) A showing that the proposed method of operation of such securities depository will be adequate for the protection of investors. (c) The names of every person who holds or is to hold capital stock in the securities depository corporation together with a statement of the percentage interest attributable to each. The commissioner may require disclosure of such additional information as may be necessary to determine the individuals controlling such corporation. (d) The addresses at which facilities of the applicant will be located and a description of each such facility and the functions there performed, and a description of any other business or operations which will be conducted on such premises. (e) By way of exhibits, a copy of the articles of incorporation and a copy of the bylaws of the applicant. (f) By way of exhibits, financial statements of the applicant, which shall include at least a balance sheet and profit and loss statement certified by an independent public accountant or certified public accountant, and if such certified statements are prepared as of a date more than 60 days prior to the filing of the application, a balance sheet and profit and loss statement, which need not be certified, prepared as of a date within such 60-day period, together with profit and loss statements covering at least three years of its operations, or such lesser period as the applicant may have operated, to the date of such certified balance sheet. (g) Such additional information as the commissioner may by rule prescribe. (Added by Stats. 1972, Ch. 1057.)
  77. 30205.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    When a proper and complete license application and fees are received, the commissioner must immediately investigate the application, may require a hearing, and interested persons may speak for or against it at that hearing.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30205. Upon the receipt of a proper and complete application for license, and all required fees, the commissioner shall immediately examine and investigate all facts connected with the proposed licensee, including but not limited to its stockholders, directors, officers and managers, and its proposed safeguards with respect to custody, handling, recordkeeping, insurance, and auditing of securities on deposit. The commissioner may or may not require the applicant to submit to an appropriate hearing. At such hearing any interested person may show cause either in favor of, or opposed to, the application. (Added by Stats. 1972, Ch. 1057.)
  78. 30206.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    The commissioner may, and in listed cases must, refuse a license application after examination, investigation, and a hearing.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30206. The commissioner may refuse to issue any license being applied for, and shall refuse to issue any license being applied for if upon his examination and investigation, and after appropriate hearing, he finds any of the following: (a) That the incorporators, directors, officers, or stockholders lack the character, experience, or general fitness to engage in such a business. (b) That the proposed licensee’s program of safeguards with respect to custody, handling, recordkeeping, insurance, and auditing of securities on deposit is inadequate for the protection of investors. (c) That the requirements with respect to ownership of capital stock of Section 30201 are not met. (d) That the applicant is, or is in danger of becoming, insolvent. (Added by Stats. 1972, Ch. 1057.)
  79. 30207.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    A licensee or any other person must not use false, misleading, deceptive, or incomplete statements when soliciting securities deposits or doing a licensee’s business. The commissioner may order a person to stop violating conduct.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30207. No licensee, or any other person, shall solicit deposits of securities or otherwise conduct the business of a licensee, by means of any statement or representation which is false, misleading, or deceptive, or which omits to state material information, or which infers that such licensee has been sponsored, recommended or approved or that his abilities or qualifications have in any respect been passed upon by the commisioner. The commissioner may order a licensee or other person to desist from any conduct which he shall find to be a violation of this section. (Added by Stats. 1972, Ch. 1057.)
  80. 30208.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    A securities depository license cannot be transferred or assigned, and it cannot be acquired in whole or part through stock purchase or similar devices without the commissioner’s consent.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30208. A securities depository license is not transferable or assignable. Further, no license may be acquired, either in whole or in part, through stock purchase or other devices without the consent of the commissioner. (Added by Stats. 1972, Ch. 1057.)
  81. 30209.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    A person may not operate a securities depository or solicit holders of securities in this state to use one unless the depository has applied for and received the required license.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30209. Any person who operates a securities depository, or solicits holders of securities within this state to place securities in a securities depository, either directly as principal or indirectly as agent, employee, manager, fiduciary representative, or in any other capacity, unless such securities depository has applied for and received the license required by this division, is guilty of a misdemeanor punishable by imprisonment in a county jail for not less than three months and not exceeding 12 months, or by a fine of not less than two hundred fifty dollars ($250) and not exceeding one thousand dollars ($1,000), or by both such fine and imprisonment. (Added by Stats. 1972, Ch. 1057.)
  82. 30210.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    People subject to this division must keep and use business books, accounts, and records that let the commissioner check compliance.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30210. Every person subject to this division shall keep and use in its business, books, accounts, and records which will properly enable the commissioner to determine whether the operation of a securities depository by such person complies with the provisions of this division and with all rules and regulations made by the commissioner under this division. (Added by Stats. 1972, Ch. 1057.)
  83. 30211.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    The commissioner may inspect and examine the business, accounts, and records of any person licensed under this division at any time, without prior notice.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30211. The business, accounts and records of every person licensed under this division are subject to inspection and examination by the commissioner at any time without prior notice. (Added by Stats. 1972, Ch. 1057.)
  84. 30212.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    A person examined must pay the commissioner the actual cost of each inspection and examination. The commissioner may sue to recover those costs.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30212. The actual cost of every inspection and examination shall be paid to the commissioner by the person examined and the commissioner may maintain an action for the recovery of such costs in any court of competent jurisdiction. (Added by Stats. 1972, Ch. 1057.)
  85. 30213.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    Covered persons must file GAAP financial statements with the commissioner within 105 days after year-end or fiscal-year end, and also file a concurrent month-end statement. They must also provide a commissioner-required report within at least 10 days of the prescribed period.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30213. (a) Every person subject to this division shall submit to the commissioner, at such person’s own expense, financial statements prepared in accordance with generally accepted accounting principles covering the calendar year or, if such person has an established fiscal year, then for such fiscal year, within 105 days after the close of the calendar year or fiscal year. Such financial statements shall be covered by a report or certificate of an independent certified public accountant or independent public accountant. In addition financial statements, which may be unaudited, as of the end of the calendar month next preceding the date of submission of the audited financial statements shall also be filed concurrently with such audited financial statements. All audits referred to in this section shall be by independent certified public accountants or independent public accountants acceptable to the commissioner. The audits shall be conducted in accordance with generally accepted auditing standards. The audited financial statements shall include at least an audited balance sheet showing the person’s net worth and a statement of income and expenses for the year ended on the balance sheet date. The commissioner may by rule prescribe the matters to be covered in the report or certification of the auditor. (b) Within such period as the commissioner shall prescribe, which shall not be less than 10 days, a person subject to this division shall submit to the commissioner, at such person’s own expense, a report containing such information regarding its financial condition, operations, or the ownership of its outstanding securities as the commissioner may require. (Added by Stats. 1972, Ch. 1057.)
  86. 30214.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    If a person subject to this division fails to make a required report, the commissioner must immediately examine that person’s books and records and may hire an independent accountant at that person’s expense.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30214. If any person subject to this division fails to make any report required by law or by the commissioner, the commissioner shall immediately cause the books, records, papers, and affairs of said person to be thoroughly examined. The commissioner may, in carrying out his responsibilities under this section, employ an independent public accountant or certified public accountant the cost of whose services shall be borne by such person in accordance with Section 30212. (Added by Stats. 1972, Ch. 1057.)
  87. 30215.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    If the commissioner finds a covered person insolvent or operating a securities depository unsafely, the commissioner may order operations or solicitation to stop, or otherwise limit the business for security-holder safety.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30215. If the commissioner, as a result of any examination or from any report made to him, shall find that any person subject to this division is in an insolvent condition, or is operating a securities depository in such an unsafe or injurious manner as to render further operations hazardous to the public or to depositors the commissioner may forthwith, by an order addressed to and served by registered mail on such person, direct discontinuance of the operation of a securities depository within the State of California or direct discontinuance of the solicitation of security holders within the State of California by such securities depository, or otherwise limit the conduct of the business of such depository as may be necessary for the safety of security holders. The order shall remain in effect until set aside by the commissioner in whole or in part. (Added by Stats. 1972, Ch. 1057.)
  88. 30216.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    The commissioner may order an unlicensed person to stop operating a securities depository or soliciting securities holders in this state, and the order is rescinded if a written hearing request is filed and no hearing is held within 60 days.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30216. Whenever in the opinion of the commissioner any person required by this division to be licensed is engaged in operating a securities depository or in soliciting securities holders within this state to place securities in a securities depository, without a license from the commissioner, the commissioner may order said person to desist and to refrain from engaging in such business. If, after such an order is made, a request for a hearing is filed in writing and the hearing is not held within 60 days thereafter, the order is rescinded. (Added by Stats. 1972, Ch. 1057.)
  89. 30217.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    The commissioner may issue, change, and cancel rules, forms, and orders needed to carry out this law, and may waive requirements in some cases.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30217. The commissioner may from time to time make, amend, and rescind such rules, forms, and orders as are necessary to carry out the provisions of this law, including rules defining any terms, whether or not used in this law, insofar as the definitions are not inconsistent with the provisions of this law. For the purposes of rules and forms, the commissioner may classify persons and matters within the commissioner’s jurisdiction and may prescribe different requirements for different classes. The commissioner may in the commissioner’s discretion waive any requirement of any rule or form in situations where in the commissioner’s opinion such requirement is not necessary in the public interest or for the protection of investors. All rules of the commissioner other than those relating solely to the internal administration of the Department of Financial Protection and Innovation shall be made, amended, or rescinded in accordance with the provisions of Chapter 4.5 (commencing with Section 11371) of Part 1 of Division 3 of Title 2 of the Government Code. (Amended by Stats. 2022, Ch. 452, Sec. 156. (SB 1498) Effective January 1, 2023.)
  90. 30218.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    It is unlawful for any person to tamper with records or make false statements to the commissioner in licensing, investigation, or examination matters.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 2. License [30200 - 30218] ( Chapter 2 added by Stats. 1972, Ch. 1057. ) ## 30218. (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 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 Stats. 2007, Ch. 101, Sec. 26. Effective January 1, 2008.)
  91. 30600.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    A security depository license stays in effect until it is surrendered, revoked, or suspended.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. ) ## 30600. A security depository license remains in effect until surrendered, revoked or suspended. (Added by Stats. 1972, Ch. 1057.)
  92. 30601.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    If the commissioner believes a licensed securities depository has violated its articles, laws, or binding rules, the commissioner must issue a written order directing the violation to stop.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. ) ## 30601. If the commissioner has reason to believe that a licensed securities depository has violated its articles of incorporation, or any law or rule binding upon it, he shall, by written order addressed to the agent direct the discontinuance of such violation. (Added by Stats. 1972, Ch. 1057.)
  93. 30602.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    A licensed securities depository can face license suspension or revocation if it misses required reporting deadlines or does not pay due fees or charges on time.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. ) ## 30602. If any licensed securities depository fails to make any report required by law or by the commissioner within 10 days from the day designated for the making of the report, or within any extension of time granted by the commissioner, or has failed to pay any fee or charge payable under this division within 10 days after notice by the commissioner that such fee is due and unpaid, such failure shall constitute grounds for the suspension or revocation of the license held by such securities depository or for the issuance of an order by the commissioner under the provisions of Section 30215. (Added by Stats. 1972, Ch. 1057.)
  94. 30603.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    If a licensed securities depository is operating unsafely or injuriously, the commissioner must order it to stop those practices; if an out-of-state depository is soliciting California holders, the commissioner must order it to stop those solicitations until the unsafe practices are corrected.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. ) ## 30603. If it appears to the commissioner that any licensed securities depository located within this state is conducting business in an unsafe or injurious manner, he shall, by written order addressed to the securities depository direct the discontinuance of such unsafe or injurious practices, or if the licensed securities depository is one which is located outside this state but is soliciting holders of securities in California to place their securities in such securities depository, the commissioner shall direct such securities depository to discontinue all such solicitations until all such unsafe and unsound practices have been corrected. (Added by Stats. 1972, Ch. 1057.)
  95. 30604.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    A licensed securities depository must show cause before the commissioner, and may have to stop the named practices if the commissioner finds unsafe, injurious, or unlawful conduct.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. ) ## 30604. An order issued pursuant to Section 30601 or 30603 shall require the licensed securities depository to show cause before the commissioner, at a time fixed by the commissioner, why the order should not be observed. If upon the hearing, it appears to the commissioner that the licensed securities depository is conducting business in an unsafe or injurious manner or is violating its articles of incorporation or any law of this state, or any rule binding upon it, the commissioner shall make the order of discontinuance final and the licensed securities depository shall immediately discontinue the practices named in the order. (Added by Stats. 1972, Ch. 1057.)
  96. 30605.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    A licensed securities depository has 10 days after an order becomes final to sue to stop enforcement, and must comply with the order unless enforcement is enjoined within that time.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. ) ## 30605. The licensed securities depository has 10 days after an order is made final in which to commence action to restrain enforcement of such order, and unless such action is commenced, and the enforcement of such order is enjoined within 10 days by the court in which the suit is brought, the licensed securities depository shall comply with the order. (Added by Stats. 1972, Ch. 1057.)
  97. 30606.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    The commissioner may revoke a securities depository’s license for noncompliance with a final order, or sue in superior court to stop violations and enforce compliance.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. ) ## 30606. (a) If a securities depository fails to comply with a final order and has not secured a court order restraining the enforcement of the final order, the commissioner may revoke the license of the securities depository or may institute proceedings under subdivision (b) to enforce the final order. (b) Whenever it appears to the commissioner that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of this law or any rule or order under this law, the commissioner may in the commissioner’s discretion bring an action in the superior court to enjoin the acts or practices or to enforce compliance with this law or any rule or order under this law. Upon a proper showing, a permanent or preliminary injunction, restraining order, or writ of mandate shall be granted and a receiver or conservator may be appointed for the defendant or the defendant’s assets. (Amended by Stats. 1982, Ch. 517, Sec. 229.)
  98. 30607.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    The commissioner may bring and prosecute actions to stop violations of this division, related orders or decisions, and to enforce civil penalties under this division.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. ) ## 30607. The commissioner may commence and prosecute actions and proceedings to enjoin violations of this division or violations of orders or decisions of the commissioner rendered pursuant to this division, and for the enforcement of any and all civil penalties provided for by this division. (Added by Stats. 1972, Ch. 1057.)
  99. 30608.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    The commissioner may suspend, revoke, or refuse to renew a license after notice and a reasonable opportunity to be heard, if specified violations or disqualifying facts are found.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. ) ## 30608. The commissioner may, after notice and a reasonable opportunity to be heard, suspend, revoke, or decline to renew any license if he finds that: (a) The licensee has violated any provision of this division or any rule or order made by the commissioner under and within the authority of this division. (b) Any fact or condition exists which, if it had existed at the time of the original application for such license, reasonably would have warranted the commissioner in refusing originally to issue such license. (Added by Stats. 1972, Ch. 1057.)
  100. 30609.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    The commissioner may discipline certain people connected to a securities depository, and a person subject to an order may request a hearing within 15 days.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 3. Revocation of License [30600 - 30609] ( Chapter 3 added by Stats. 1972, Ch. 1057. ) ## 30609. (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 person who operates a securities depository, 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 securities depository, 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 securities depository and from engaging in any business activity on the premises where a securities depository is conducting business. (Added by Stats. 2007, Ch. 101, Sec. 27. Effective January 1, 2008.)
  101. 30700.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 4. Hearings [30700 - 30704] ( Chapter 4 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    The commissioner and designated persons may administer oaths, take witness testimony, and issue subpoenas.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 4. Hearings [30700 - 30704] ( Chapter 4 added by Stats. 1972, Ch. 1057. ) ## 30700. The commissioner, and all persons designated by him, may administer oaths, take the testimony of witnesses, and issue subpoenas requiring the attendance of witnesses and the production of books, documents, and other things under their control, at any examination, investigation, or hearing in any part of the state. (Added by Stats. 1972, Ch. 1057.)
  102. 30701.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 4. Hearings [30700 - 30704] ( Chapter 4 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    Rules on producing evidence out of court in Chapter 2 of the Code of Civil Procedure apply to examinations, investigations, and hearings under this division.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 4. Hearings [30700 - 30704] ( Chapter 4 added by Stats. 1972, Ch. 1057. ) ## 30701. All of the provisions of Chapter 2 (commencing with Section 1985), Title 3, Part 4 of the Code of Civil Procedure relating to the means of production of evidence out of court are applicable to any examination, investigation, or hearing under this division. (Added by Stats. 1972, Ch. 1057.)
  103. 30702.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 4. Hearings [30700 - 30704] ( Chapter 4 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    The commissioner may delegate examination, investigation, and hearing powers to a properly appointed deputy, investigator, or auditor, but the appointment must be in writing and signed by the commissioner.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 4. Hearings [30700 - 30704] ( Chapter 4 added by Stats. 1972, Ch. 1057. ) ## 30702. The authority to make or conduct any examination, investigation, or hearing, including the authority to administer oaths and to subpoena witnesses, and to take their testimony may be delegated by the commissioner to any deputy, investigator, or auditor appointed by him for that purpose. The appointment shall be made by an instrument in writing, signed by the Commissioner. Upon any examination, investigation, or hearing, the instrument shall be produced by the deputy, investigator, or auditor at any time upon demand. (Added by Stats. 1972, Ch. 1057.)
  104. 30703.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 4. Hearings [30700 - 30704] ( Chapter 4 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    Hearings under this division must follow the cited Government Code hearing procedures, and the commissioner has the powers granted by that chapter.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 4. Hearings [30700 - 30704] ( Chapter 4 added by Stats. 1972, Ch. 1057. ) ## 30703. All hearings provided for in this division shall be conducted in accordance with the provisions of Chapter 5 (commencing with Section 11500), Part 1, Division 3, Title 2, of the Government Code, and the commissioner has all the powers granted therein, except that a hearing held in accordance with Section 30604 may be presided over by a hearing officer qualified under Section 11502 of the Government Code, or by any deputy designated by the commissioner. (Added by Stats. 1972, Ch. 1057.)
  105. 30704.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 4. Hearings [30700 - 30704] ( Chapter 4 added by Stats. 1972, Ch. 1057. )

    Verify source ↗

    The commissioner’s orders, decisions, licenses, and other official acts are subject to review under the law.

    ## Financial Code - FIN ## DIVISION 14. SECURITIES DEPOSITORIES [30000 - 30704] ( Division 14 added by Stats. 1972, Ch. 1057. ) ## CHAPTER 4. Hearings [30700 - 30704] ( Chapter 4 added by Stats. 1972, Ch. 1057. ) ## 30704. Every order, decision, license or other official act of the commissioner is subject to review, in accordance with law. (Added by Stats. 1972, Ch. 1057.)
  106. 31000.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. Short Title, Construction, and Severability [31000 - 31006] ( Article 1 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This division may be cited as the “Business and Industrial Development Corporations Law”.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. Short Title, Construction, and Severability [31000 - 31006] ( Article 1 added by Stats. 1977, Ch. 1164. ) ## 31000. This division shall be known and may be cited as the “Business and Industrial Development Corporations Law”. (Added by Stats. 1977, Ch. 1164.)
  107. 31001.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. Short Title, Construction, and Severability [31000 - 31006] ( Article 1 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This division must be interpreted liberally to carry out its purposes.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. Short Title, Construction, and Severability [31000 - 31006] ( Article 1 added by Stats. 1977, Ch. 1164. ) ## 31001. This division shall be liberally construed to accomplish its purposes. (Added by Stats. 1977, Ch. 1164.)
  108. 31002.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. Short Title, Construction, and Severability [31000 - 31006] ( Article 1 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    Liability provisions in this division do not apply to acts done in good faith that follow a commissioner regulation, order, or written interpretive opinion, or an Attorney General interpretive opinion.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. Short Title, Construction, and Severability [31000 - 31006] ( Article 1 added by Stats. 1977, Ch. 1164. ) ## 31002. No provision of this division imposing any liability applies to any act committed in good faith in conformity with any regulation, order, or written interpretive opinion of the commissioner or any such opinion of the Attorney General, notwithstanding that such regulation, order, or written interpretive opinion may later be amended, rescinded, or repealed or be determined by judicial or other authority to be invalid for any reason. (Amended by Stats. 1996, Ch. 1064, Sec. 623. Effective January 1, 1997. Operative July 1, 1997.)
  109. 31003.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. Short Title, Construction, and Severability [31000 - 31006] ( Article 1 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section explains how references in the division should be read: references to statutes or regulations include later amendments and replacement laws, and references to agencies or public officers include successors performing substantially the same functions.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. Short Title, Construction, and Severability [31000 - 31006] ( Article 1 added by Stats. 1977, Ch. 1164. ) ## 31003. In this division, unless otherwise expressly provided: (a) A reference to a statute or to a regulation includes such statute or regulation as amended, whether before or after the effective date of this division, as well as any new statute or regulation substituted for such statute or regulation after the effective date of this division. (b) A reference to a governmental agency or to a public officer includes any governmental agency or public officer which succeeds after the effective date of this division to substantially the same functions as those performed by such governmental agency or public officer on the effective date of this division. (Added by Stats. 1977, Ch. 1164.)
  110. 31004.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. Short Title, Construction, and Severability [31000 - 31006] ( Article 1 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section says which corporation law applies to licensees, depending on whether the licensee is a California nonprofit corporation or not, and it yields to Chapter 14 and to this division when there is a conflict.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. Short Title, Construction, and Severability [31000 - 31006] ( Article 1 added by Stats. 1977, Ch. 1164. ) ## 31004. Except as otherwise provided in Chapter 14 (commencing with Section 31950) of this division: (a) The provisions of the Nonprofit Corporation Law (Division 2 (commencing with Section 5000) of Title 1 of the Corporations Code) shall apply to any licensee which is a California nonprofit corporation; provided, however, that, whenever any provision of the Nonprofit Corporation Law conflicts with any provision of this division or of any regulation or order issued under this division, such provision of the Nonprofit Corporation Law shall not apply and such provision of this division or of such regulation or order issued under this division shall apply. (b) The provisions of the General Corporation Law (Division 1 (commencing with Section 100), Title 1 of the Corporations Code) shall apply to any licensee other than a licensee which is a California nonprofit corporation; provided, however, that, whenever any provision of the General Corporation Law conflicts with any provision of this division or of any regulation or order issued under this division, such provision of the General Corporation Law shall not apply and such provision of this division or of such regulation or order issued under this division shall apply. (Amended by Stats. 1980, Ch. 1155, Sec. 32.)
  111. 31006.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. Short Title, Construction, and Severability [31000 - 31006] ( Article 1 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section says the division is severable: if one provision or its application is invalid, illegal, or unenforceable, the rest still stands.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. Short Title, Construction, and Severability [31000 - 31006] ( Article 1 added by Stats. 1977, Ch. 1164. ) ## 31006. If any provision of this division or the application thereof to any person or circumstances is held invalid, illegal, or unenforceable, such invalidity, illegality, or unenforceability shall not affect other provisions or applications of this division which can be given effect without the invalid, illegal, or unenforceable provision or application, and to this end, the provisions of this division are declared to be severable. (Added by Stats. 1977, Ch. 1164.)
  112. 31020.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 2. Legislative Findings and Purposes [31020 - 31021] ( Article 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    The Legislature states findings supporting licensing and regulation of business and industrial development corporations in California.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 2. Legislative Findings and Purposes [31020 - 31021] ( Article 2 added by Stats. 1977, Ch. 1164. ) ## 31020. The Legislature finds all of the following: (a) That it is necessary to increase job opportunities in this state. (b) That promoting the establishment, growth, and expansion of business firms in this state is an efficient way to increase job opportunities in this state. (c) That it is appropriate to provide for the licensing and regulation of business and industrial development corporations which will provide financing assistance and management assistance primarily to business firms in this state. (d) That the federal government, through the Small Business Administration and other federal agencies, offers programs for providing, through such intermediaries as business and industrial development corporations, financing assistance and management assistance to business firms in this state. (e) That, in order that this state may obtain the full benefits of such programs, it is necessary that this state provide for the licensing and regulation of business and industrial development corporations. (f) That only California corporations should be licensed to transact business as business and industrial development corporations because, compared with other types of persons, California corporations can be more effectively regulated and supervised, have greater permanency of existence, and can give better assurance of uninterrupted service. (Amended by Stats. 1987, Ch. 867, Sec. 2.)
  113. 31021.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 2. Legislative Findings and Purposes [31020 - 31021] ( Article 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section states the purposes of the division and requires the commissioner to follow those purposes when administering it.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 2. Legislative Findings and Purposes [31020 - 31021] ( Article 2 added by Stats. 1977, Ch. 1164. ) ## 31021. (a) The purposes of this division are: (1) To provide for the licensing and regulation of business and industrial development corporations which will provide financing assistance and management assistance primarily to business firms in this state. (2) To provide for the licensing and regulation of business and industrial development corporations so that such corporations will constitute state development companies for purposes of Sections 501 and 502 of the Small Business Investment Act of 1958 and eligible lending institutions for purposes of Section 7(a) of the Small Business Act. (3) To provide for the safe and sound conduct of the business of licensees. (4) To maintain the confidence of the Small Business Administration and other governmental agencies in licensees. (b) The purposes of this division, as set forth in subdivision (a), constitute standards which the commissioner shall observe in administering the provisions of this division. (Amended by Stats. 1996, Ch. 1064, Sec. 624. Effective January 1, 1997. Operative July 1, 1997.)
  114. 31030.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section says the article’s definitions apply throughout the division, unless the context requires otherwise or a more specific definition in the division applies.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31030. Subject to additional definitions contained in this division which are applicable to specific provisions of this division and unless the context otherwise requires, the definitions in this article apply throughout this division. (Added by Stats. 1977, Ch. 1164.)
  115. 31031.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    “Act” includes omission.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31031. “Act” includes omission. (Added by Stats. 1977, Ch. 1164.)
  116. 31032.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section defines “affiliate” for this code provision.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31032. “Affiliate”, when used with respect to a specified person, means any person (other than a natural person) controlling, controlled by, or under common control with, such specified person, directly or indirectly through one or more intermediaries. (Added by Stats. 1977, Ch. 1164.)
  117. 31033.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    “Business day” means any day except Saturday, Sunday, and holidays specified or provided for in the Government Code.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31033. “Business day” means any day other than (a) Saturday, (b) Sunday, and(c) any other day which is specified or provided for as a holiday in the Government Code. (Added by Stats. 1977, Ch. 1164.)
  118. 31034.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    “Business firm” means a person that transacts business on a regular and continual basis.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31034. “Business firm” means any person which transacts business on a regular and continual basis, with respect to the transacting of such business. (Added by Stats. 1977, Ch. 1164.)
  119. 31034.5.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section defines “business firm in another state.”

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31034.5. “Business firm in another state” means both of the following: (a) Any person which transacts business on a regular and continual basis at one or more places of business in another state of the United States or the District of Columbia, with respect to the transacting of that business at those places of business. (b) Any person which proposes to establish one or more places of business in another state of the United States or in the District of Columbia and to transact business on a regular and continual basis at those places of business, with respect to the establishment of those places of business and the transacting of that business at those places of business. (Added by Stats. 1987, Ch. 867, Sec. 4.)
  120. 31035.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section defines “Business firm in this state.”

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31035. “Business firm in this state” means: (a) Any person which transacts business on a regular and continual basis at one or more places of business in this state, with respect to the transacting of such business at such places of business; or (b) Any person which proposes to establish one or more places of business in this state and to transact business on a regular and continual basis at such places of business, with respect to the establishment of such places of business and the transacting of such business at such places of business. (Added by Stats. 1977, Ch. 1164.)
  121. 31036.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section defines “California corporation.”

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31036. “California corporation” means: (a) Any corporation organized under the General Corporation Law (Division 1 (commencing with Section 100), Title 1 of the Corporations Code) or any predecessor statute; provided, however, that “California corporation” does not include any corporation which is a close corporation, as defined in Section 158 of the Corporations Code; or (b) Any corporation organized under Part 6 (commencing with Section 14200), Division 3, Title 1 of the Corporations Code, as added by Chapter 985 of the Statutes of 1975; or (c) Any California nonprofit corporation. (Added by Stats. 1977, Ch. 1164.)
  122. 31037.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section defines “California nonprofit corporation.”

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31037. “California nonprofit corporation” means any corporation organized under the Nonprofit Corporation Law (Division 2 (commencing with Section 5000) of Title 1 of the Corporations Code) or any predecessor statute. (Amended by Stats. 1980, Ch. 1155, Sec. 33.)
  123. 31038.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section defines “control” for a specified person and sets voting and management-based tests, including a rebuttable 20% ownership presumption.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31038. “Control”, when used with respect to a specified person, means possession, direct or indirect, of the power to do either of the following: (a) To vote 35 percent or more of any class of the voting securities issued by the specified person. (b) To direct or cause the direction of the management and policies of such specified person, whether through the ownership of voting securities, by contract (other than a commercial contract for goods or nonmanagement services), or otherwise; provided, however, that no natural person shall be deemed to control a person solely on account of being a director, officer, or employee of such person. For purposes of this subdivision, any person who, directly or indirectly, owns of record or beneficially, holds with power to vote, or holds proxies with discretionary authority to vote, 20 percent or more of any class of the then outstanding voting securities issued by a corporation shall be rebuttably presumed to control such corporation. This presumption is a presumption affecting the burden of proof. (Amended by Stats. 1987, Ch. 867, Sec. 5.)
  124. 31039.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section defines “controlling person” as a person who controls another person, directly or through intermediaries.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31039. “Controlling person”, when used with respect to a specified person, means any person who controls such specified person, directly or indirectly through one or more intermediaries. (Added by Stats. 1977, Ch. 1164.)
  125. 31040.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This provision defines “corporate name” as the name of a corporation stated in its articles of incorporation.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31040. “Corporate name” means the name of a corporation as set forth in the articles of incorporation of such corporation. (Added by Stats. 1977, Ch. 1164.)
  126. 31041.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section defines “financial institution.”

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31041. “Financial institution” means any commercial bank, trust company, savings and loan association, credit union, industrial loan company, insurance company, or person engaged in the business of lending money. (Added by Stats. 1977, Ch. 1164.)
  127. 31042.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    “Insolvent” means a person who has stopped paying debts in the ordinary course of business, cannot pay debts when due, or whose liabilities exceed assets.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31042. “Insolvent”, when used with respect to any person, means a person who has ceased to pay his debts in the ordinary course of business, who cannot pay his debts as they become due, or whose liabilities exceed his assets. (Added by Stats. 1977, Ch. 1164.)
  128. 31043.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    For regulations or orders, “issue” also means to adopt, amend, repeal, or rescind.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31043. To “issue”, when used with respect to any regulation or order, includes to adopt, amend, repeal, or rescind. (Added by Stats. 1977, Ch. 1164.)
  129. 31044.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    “License” means a license issued under this division that authorizes a California corporation to operate as a business and industrial development corporation.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31044. “License” means a license issued under this division authorizing a California corporation to transact business as a business and industrial development corporation. (Added by Stats. 1977, Ch. 1164.)
  130. 31045.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    “Licensee” means a California corporation licensed under this division.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31045. “Licensee” means a California corporation which is licensed under this division. (Added by Stats. 1977, Ch. 1164.)
  131. 31046.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section defines “officer.”

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31046. “Officer” means: (a) When used with respect to a corporation, any person appointed or designated as an officer of such corporation by or pursuant to applicable law or the articles of incorporation or bylaws of such corporation or any person who performs with respect to such corporation functions usually performed by an officer of a corporation; and (b) When used with respect to a specified person other than a natural person or a corporation, any person who performs with respect to such specified person functions usually performed by an officer of a corporation with respect to such corporation. (Added by Stats. 1977, Ch. 1164.)
  132. 31047.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section defines “Order” as certain case-specific approvals, consents, authorizations, exemptions, denials, prohibitions, or requirements issued by the commissioner.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31047. “Order” means any approval, consent, authorization, exemption, denial, prohibition, or requirement applicable to a specific case issued by the commissioner. “Order” includes any condition of a license and any agreement made by any person with the commissioner under this division. (Amended by Stats. 1996, Ch. 1064, Sec. 625. Effective January 1, 1997. Operative July 1, 1997.)
  133. 31047.5.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section defines “Parent” as a non-natural person that controls the specified person, directly or indirectly, including through intermediaries.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31047.5. “Parent,” when used with respect to a specified person other than a natural person, means any person other than a natural person which controls the specified person, directly or indirectly through one or more intermediaries. (Added by Stats. 1987, Ch. 867, Sec. 6.)
  134. 31048.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section defines “person” broadly to include many kinds of individuals, business entities, and governments, and in control-acquisition contexts it also includes two or more persons acting together.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31048. “Person” means any natural person, proprietorship, joint venture, partnership, trust, business trust, syndicate, association, joint stock company, corporation, limited liability company, government, agency of any government, or any other organization; provided, however, that “person”, when used with respect to acquiring control of or controlling a specified person, includes any combination of two or more persons acting in concert. (Amended by Stats. 1994, Ch. 1010, Sec. 119. Effective January 1, 1995.)
  135. 31049.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section defines “principal shareholder” as a person who owns 10% or more of a corporation’s voting power, directly or indirectly, whether by record or beneficial ownership.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31049. “Principal shareholder”, when used with respect to a corporation, means any person who owns, directly or indirectly, of record or beneficially, securities representing 10 percent or more of the voting power of such corporation. (Added by renumbering Section 31047 by Stats. 1982, Ch. 1570, Sec. 5.)
  136. 31050.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section defines “provide financing assistance” to include lending money or extending credit, buying the person’s securities, or leasing property to that person.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31050. To “provide financing assistance” to a person includes: (a) To lend money or otherwise extend credit to such person; (b) To purchase securities issued by such person, either directly or indirectly through an underwriter; and (c) To lease property to such person. (Added by renumbering Section 31048 by Stats. 1982, Ch. 1570, Sec. 6.)
  137. 31051.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section defines “provide management assistance” to include management or technical advice, and management or technical services, given to a person.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31051. To “provide management assistance” to a person includes: (a) To provide management or technical advice to such person; and (b) To provide management or technical services to such person. (Added by renumbering Section 31049 by Stats. 1982, Ch. 1570, Sec. 7.)
  138. 31052.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    “Regulation” means a published regulation, rule, or standard of general application issued by the commissioner.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31052. “Regulation” means any published regulation, rule, or standard of general application issued by the commissioner. (Amended by Stats. 1996, Ch. 1064, Sec. 626. Effective January 1, 1997. Operative July 1, 1997.)
  139. 31053.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    “Security” is defined by reference to Section 25019 of the Corporations Code.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31053. “Security” has the meaning set forth in Section 25019 of the Corporations Code. (Added by Stats. 1977, Ch. 1164.)
  140. 31054.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    “Subsidiary” means a non-natural person controlled, directly or indirectly through intermediaries, by the specified non-natural person.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31054. “Subsidiary”, when used with respect to a specified person other than a natural person, means any person other than a natural person controlled by such specified person, directly or indirectly through one or more intermediaries. (Added by Stats. 1977, Ch. 1164.)
  141. 31055.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    “Commissioner” means the Commissioner of Financial Protection and Innovation, or a person delegated to act for the commissioner in the particular matter.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31055. “Commissioner” means the Commissioner of Financial Protection and Innovation, or other person to whom the commissioner delegates the authority to act for the commissioner in the particular matter. (Amended by Stats. 2022, Ch. 452, Sec. 157. (SB 1498) Effective January 1, 2023.)
  142. 31056.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section defines “voting power” by referring to Corporations Code Section 194.5.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 1. General Provisions [31000 - 31056] ( Chapter 1 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Definitions [31030 - 31056] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31056. “Voting power” has the meaning set forth in Corporations Code Section 194.5. (Added by Stats. 1977, Ch. 1164.)
  143. 31100.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    The commissioner must administer the provisions of this division.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. ) ## 31100. The commissioner shall administer the provisions of this division. (Amended by Stats. 1996, Ch. 1064, Sec. 628. Effective January 1, 1997. Operative July 1, 1997.)
  144. 31101.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    The commissioner may issue regulations and orders, define terms, classify matters within jurisdiction, prescribe different rules for different classes, and waive regulations or orders when not necessary in the public interest.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. ) ## 31101. (a) The commissioner may from time to time issue such regulations and orders as are in his or her opinion necessary to carry out the provisions and purposes of this division. (b) Regulations and orders issued under this division may, among other things, define any term used in this division, including (but not limited to) the term “unsafe or unsound act”, as well as any term not used in this division. (c) For purposes of regulations and orders issued under this division, the commissioner may classify persons, transactions, and other matters within his or her jurisdiction, and may prescribe different regulations or orders for different classes. (d) The commissioner may waive any provision of any regulation or order issued under this division in any case where in his or her opinion such provision is not necessary in the public interest. (Amended by Stats. 1996, Ch. 1064, Sec. 629. Effective January 1, 1997. Operative July 1, 1997.)
  145. 31102.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    The commissioner may attach conditions to an order or license issued under this division.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. ) ## 31102. Whenever the commissioner issues an order or license under this division, he or she may impose such conditions as are in his or her opinion necessary to carry out the provisions and purposes of this division. (Amended by Stats. 1996, Ch. 1064, Sec. 630. Effective January 1, 1997. Operative July 1, 1997.)
  146. 31103.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    Final orders, decisions, licenses, and other official acts of the commissioner under this division may be reviewed by a court according to law.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. ) ## 31103. Every final order, decision, license, or other official act of the commissioner under this division is subject to judicial review in accordance with law. (Amended by Stats. 1996, Ch. 1064, Sec. 631. Effective January 1, 1997. Operative July 1, 1997.)
  147. 31104.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    In proceedings under this division, the applicant must prove an application should be approved, and a person claiming an exemption or exception from a definition must prove it.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. ) ## 31104. In any proceeding under this division: (a) The burden of proving that an application should be approved is upon the applicant. (b) The burden of proving an exemption or an exception from a definition is upon the person claiming such exemption or such exception from a definition. (Added by Stats. 1977, Ch. 1164.)
  148. 31105.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section says the division must not be read to imply that the commissioner has to hold a hearing on any matter.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. ) ## 31105. No provision of this division shall be construed to require by implication that the commissioner hold a hearing on any matter. (Amended by Stats. 1996, Ch. 1064, Sec. 632. Effective January 1, 1997. Operative July 1, 1997.)
  149. 31106.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section says the division does not, by implication, require the commissioner to make written findings on any matter.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. ) ## 31106. No provision of this division shall be construed to require by implication that the commissioner make written findings on any matter. (Amended by Stats. 1996, Ch. 1064, Sec. 633. Effective January 1, 1997. Operative July 1, 1997.)
  150. 31107.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    Applications filed under this division or related regulations/orders must follow the form, content, signature, and verification requirements the commissioner sets.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. ) ## 31107. Any application filed with the commissioner under this division or under any regulation or order issued under this division shall be in such form, shall contain such information, shall be signed in such manner, and shall (if the commissioner so requires by regulation or order) be verified in such manner, as the commissioner may by regulation or order require. (Amended by Stats. 1996, Ch. 1064, Sec. 634. Effective January 1, 1997. Operative July 1, 1997.)
  151. 31108.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    The commissioner may consider an applicant’s proposals when deciding whether to approve an application, and may base findings on those proposals if implementation seems probable. If approval is based in whole or in part on a proposal, the commissioner must attach conditions requiring implementation within a time the commissioner specifies.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. ) ## 31108. In determining whether to approve any application filed under this division or under any regulation or order issued under this division, the commissioner may consider proposals made by the applicant, including (but not limited to) proposals to appoint officers, sell securities, or obtain financing; and, if in the opinion of the commissioner it is probable that such applicant will be able to implement any such proposal, the commissioner may make findings on the basis of such proposal; provided, however, that, whenever the commissioner approves an application on the basis, in whole or in part, of a proposal made by the applicant, the commissioner shall impose upon such approval appropriate conditions requiring that such applicant implement such proposal within such period of time as the commissioner may specify. (Amended by Stats. 1996, Ch. 1064, Sec. 635. Effective January 1, 1997. Operative July 1, 1997.)
  152. 31109.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    The commissioner may honor applications from interested persons for interpretive opinions about this division or regulations or orders under it.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. ) ## 31109. The commissioner may honor applications from interested persons for interpretive opinions regarding any provision of this division or of any regulation or order issued under this division. (Amended by Stats. 1996, Ch. 1064, Sec. 636. Effective January 1, 1997. Operative July 1, 1997.)
  153. 31110.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    The commissioner may investigate, subpoena evidence, and publish violation information, and the superior court may compel compliance with subpoenas through orders and contempt.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. ) ## 31110. (a) The commissioner may (1) make such public or private investigations within or outside this state as he or she deems necessary to determine whether to approve any application filed with him or her under this division or under any regulation or order issued under this division, to determine whether any person has violated or is about to violate any provision of this division or of any regulation or order issued under this division, to aid in the enforcement of any provision of this division or of any regulation or order issued under this division, or to aid in the issuing of regulations or orders under this division, and (2) publish information concerning any violation of any provision of this division or of any regulation or order issued under this division. (b) For purposes of any investigation, examination, or other proceeding under this division, the commissioner may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the commissioner deems relevant or material to the inquiry. (c) In case of contumacy by, or refusal to obey a subpoena issued to, any person, the superior court, upon application by the commissioner, may issue to such person an order requiring him to appear before the commissioner, there to produce documentary evidence, if so ordered, or to give evidence touching the matter under investigation or in question. Failure to obey such order of the court may be punished by the court as a contempt. (Amended by Stats. 1996, Ch. 1064, Sec. 637. Effective January 1, 1997. Operative July 1, 1997.)
  154. 31110.5.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    The commissioner may share information about a licensee with the Small Business Administration or with a government agency that licenses or regulates the licensee, or its parent or subsidiary.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. ) ## 31110.5. The commissioner may provide information relating to a licensee to the Small Business Administration or to any governmental agency which licenses or regulates the licensee or any parent or subsidiary of the licensee. (Amended by Stats. 1996, Ch. 1064, Sec. 638. Effective January 1, 1997. Operative July 1, 1997.)
  155. 31111.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    If the commissioner allows certain records to be inspected, copied, or provided, the related Government Code confidentiality provisions still apply to those records.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. ) ## 31111. Notwithstanding the fact that the commissioner permits any licensee, any affiliate of a licensee, or any governmental agency to inspect or make copies of any record relating to a licensee or to any director, officer, employee, or affiliate of a licensee, or that the commissioner provides any record of this type, or a copy thereof, to any person described above, any provision of Section 7922.000 of the Government Code and any provision listed in Section 7920.505 of the Government Code that would, but for that fact, apply to that record, shall continue to apply to the record. (Amended by Stats. 2021, Ch. 615, Sec. 115. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)
  156. 31112.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    The commissioner may refer evidence of a qualifying crime-related violation to the county district attorney, who may start criminal proceedings with or without that referral.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. ) ## 31112. The commissioner may refer such evidence as is available concerning any violation of this division or of any regulation or order issued under this division which constitutes a crime to the district attorney of the county in which such violation occurred, who may, with or without such a reference, institute appropriate criminal proceedings. (Amended by Stats. 1996, Ch. 1064, Sec. 640. Effective January 1, 1997. Operative July 1, 1997.)
  157. 31113.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    License applicants, their parents and subsidiaries, and later-added parents or subsidiaries must file an irrevocable consent naming the commissioner to receive service of process.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. ) ## 31113. Before any applicant for a license is issued a license, such applicant and each parent and subsidiary of such applicant shall file, and each person who becomes a parent or subsidiary of a licensee shall, not less than 30 days after becoming a parent or subsidiary of such licensee, file, with the commissioner, in such form as the commissioner may by regulation or order require, an irrevocable consent appointing the commissioner and his or her successor from time to time in office to be such person’s attorney to receive service of any lawful process in any noncriminal judicial or administrative proceeding against such person, or his or her successor, executor, or administrator, which arises under this division or under any regulation or order issued under this division after such consent has been filed, with the same force and validity as if served personally on such person. Service may be made by leaving a copy of the process at any office of the commissioner, but such service is not effective unless (a) the party making such service, who may be the commissioner, forthwith sends notice of such service and a copy of the process by registered or certified mail to the party served at his or her last address on file with the commissioner, and (b) an affidavit of compliance with this section by the party making service is filed in the case on or before the return date, if any, or within such further time as the court, in the case of a judicial proceeding, or the administrative agency, in the case of an administrative proceeding, allows. (Amended by Stats. 1996, Ch. 1064, Sec. 641. Effective January 1, 1997. Operative July 1, 1997.)
  158. 31114.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    If a person covered by this section cannot otherwise be reached in California, service of process can be treated as appointing the commissioner to receive it, but only if notice and an affidavit are filed.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. ) ## 31114. Whenever any person, including any nonresident of this state, engages in conduct prohibited or made actionable by this division or by any regulation or order issued under this division, whether or not the person has filed a consent to service of process under Section 31113, and if personal jurisdiction over the person cannot otherwise be obtained in this state, that conduct shall be considered equivalent to the person’s appointment of the commissioner and the commissioner’s successor from time to time in office to be the person’s attorney to receive service of any lawful process in any noncriminal judicial or administrative proceeding against him or her, or his or her successor, executor, or administrator, which grows out of that conduct and which is brought under this division or under any regulation or order issued under this division, with the same force and validity as if served on him or her personally. Service may be made by leaving a copy of the process in any office of the commissioner, but the service is not effective unless (a) the party making the service, who may be the commissioner, forthwith sends notice of the service and a copy of the process by registered or certified mail to the party served at his or her last known address or takes other steps which are reasonably calculated to give actual notice, and (b) an affidavit of compliance with this section by the party making service is filed in the case on or before the return date, if any, or within such further time as the court, in the case of a judicial proceeding, or the administrative agency, in the case of an administrative proceeding, allows. (Amended by Stats. 1996, Ch. 1064, Sec. 642. Effective January 1, 1997. Operative July 1, 1997.)
  159. 31115.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section requires fees to be paid to the commissioner for listed license applications, annual licensing, and examinations, and says application filing fees are not refundable.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 2. Administration [31100 - 31115] ( Chapter 2 added by Stats. 1977, Ch. 1164. ) ## 31115. (a) Fees shall be paid to, and collected by, the commissioner, as follows: (1) The fee for filing with the commissioner an application for a license shall be two thousand dollars ($2,000). (2) The fee for filing with the commissioner an application for approval to acquire control of a licensee shall be one thousand dollars ($1,000). (3) The fee for filing with the commissioner an application for approval for a licensee to merge with another corporation; an application for approval for a licensee to purchase all or substantially all of the business of another person, or an application for approval for a licensee to sell all or substantially all of its business or of the business of any of its offices to another licensee, shall be one thousand dollars ($1,000). However, whenever two or more applications relating to the same merger, purchase, or sale are filed with the commissioner, the fee for filing each application shall be the quotient determined by dividing one thousand dollars ($1,000) by the number of the applications. (4) The fee for filing with the commissioner an application for approval to relocate the head office of a licensee shall be one hundred dollars ($100). (5) The fee for issuing a license shall be twenty-five dollars ($25). (6) Each person that is licensed under this division on June 1 of any year shall pay, on or before the following July 1, a fee of two thousand dollars ($2,000). (7) Whenever the commissioner examines any licensee or any affiliate of a licensee, that licensee shall pay, within 10 days after receipt of a statement from the commissioner, a fee of seventy-five dollars ($75) per hour for each examiner engaged in the examination plus, in case it is necessary for any examiner engaged in the examination to travel outside this state, the travel expenses of the examiner. (b) (1) Each fee for filing an application with the commissioner shall be paid at the time when the application is filed with the commissioner. (2) No fee for filing an application with the commissioner shall be refundable, regardless of whether the application is approved, denied, withdrawn, or abandoned. (Amended by Stats. 1997, Ch. 375, Sec. 16. Effective January 1, 1998.)
  160. 31150.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    Most people doing business in the state, unless they are licensees, may not use a name or title that suggests they are a business and industrial development corporation or a licensee. A California corporation that has applied for or plans to apply for a license may use that name before the license is issued if it adds an approved “proposed”/similar designation and limits its actions to license-related preparation.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. ) ## 31150. (a) Except as otherwise provided in subdivision (b), no person transacting business in this state, other than a licensee, shall use any name or title which indicates that it is a business and industrial development corporation or otherwise represent that it is a business and industrial development corporation or that it is a licensee. (b) Any California corporation which proposes to apply for a license or which has applied for a license, may, before being issued a license, use a name or title which indicates that it is a business and industrial development corporation if it meets all of the following requirements: (1) The corporation shall append to the name the designation “proposed,” “in organization,” or “in formation,” or any similar designation which the commissioner may approve. The designation shall be set forth at least as conspicuously as the name or title. (2) The corporation may perform only such acts as may be necessary (A) to apply for and obtain such license and (B) otherwise to prepare to commence transacting business as a licensee. (3) The corporation shall not represent that it is a licensee. (Amended by Stats. 1996, Ch. 1064, Sec. 644. Effective January 1, 1997. Operative July 1, 1997.)
  161. 31151.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    Only a California corporation may apply for or receive a license.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. ) ## 31151. No person other than a California corporation may apply for or be issued a license. (Added by Stats. 1977, Ch. 1164.)
  162. 31152.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    The commissioner must approve a license application if the listed financial and management requirements are met; otherwise, after notice and a hearing, the commissioner must deny it.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. ) ## 31152. If the commissioner finds all of the following with respect to an application for a license, the commissioner shall approve the application: (a) That the applicant has net worth in an amount which is not less than one million five hundred thousand dollars ($1,500,000) and which is adequate for the applicant to transact business as a business and industrial development corporation. (b) That the applicant has lendable funds in an amount which is not less than one million five hundred thousand dollars ($1,500,000) and which is adequate for the applicant to transact business as a business and industrial development corporation. (c) That the applicant has, in addition to the requirements of subdivision (b), financial resources in an amount which is adequate for the applicant to pay its expenses in transacting business as a business and industrial development corporation for a period of not less than three years. (d) That the directors, officers, and controlling persons of the applicant are each of good character and sound financial standing, that the directors and officers of the applicant are each competent to perform their functions with respect to the applicant, and that the directors and officers of the applicant are collectively adequate to manage the business of the applicant as a business and industrial development corporation. For purposes of this subdivision, the commissioner shall accord weight to the prior or current successful operation of a commercial enterprise. (e) That it is reasonable to believe that the applicant, if licensed, will comply with all applicable provisions of this division and of any regulation or order issued under this division. (f) That the applicant has reasonable promise of successful operation as a business and industrial development corporation. (g) That the licensing of the applicant will promote the public convenience and advantage. If, after notice and a hearing, the commissioner finds otherwise, he or she shall deny the application. (Amended by Stats. 1996, Ch. 1064, Sec. 645. Effective January 1, 1997. Operative July 1, 1997.)
  163. 31152.5.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    The commissioner may treat certain fraud- or dishonesty-related convictions or nolo contendere pleas as grounds to find an applicant or related person lacks good character or is unlikely to comply with licensing requirements.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. ) ## 31152.5. (a) For purposes of Section 31152, the commissioner may find: (1) That a director, officer, or controlling person of an applicant is not of good character if the director, officer, or controlling person or any director or officer of the controlling person has been convicted of, or has pleaded nolo contendere to, a crime involving fraud or dishonesty. (2) That it is not reasonable to believe that an applicant, if licensed, will comply with all applicable provisions of this division and of any regulation or order issued under this division if the applicant has been convicted of, or has pleaded nolo contendere to, a crime involving fraud or dishonesty. (b) Subdivision (a) shall not be deemed to be the only grounds upon which the commissioner may find, for purposes of Section 31152, that a director, officer, or controlling person of an applicant is not of good character or that it is not reasonable to believe that an applicant, if licensed, will comply with all applicable provisions of this division and of any regulation or order issued under this division. (Amended by Stats. 1996, Ch. 1064, Sec. 646. Effective January 1, 1997. Operative July 1, 1997.)
  164. 31153.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    Certain parent or subsidiary entities must file an agreement with the commissioner promising compliance with the division and related regulations or orders.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. ) ## 31153. Before any applicant for a license is issued a license, each person which is a parent or subsidiary of such applicant shall file, and each person who becomes a parent or subsidiary of a licensee shall, not less than 30 days after becoming a parent or subsidiary of such licensee, file, with the commissioner, in such form as the commissioner may by regulation or order require, an agreement that such person shall comply with all applicable provisions of this division and of any regulation or order issued under this division. (Amended by Stats. 1996, Ch. 1064, Sec. 647. Effective January 1, 1997. Operative July 1, 1997.)
  165. 31154.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    If a license application is approved and all required conditions are met, the commissioner must issue the license to the applicant.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. ) ## 31154. Whenever any application for a license has been approved and all conditions precedent to the issuance of such license have been fulfilled, the commissioner shall issue a license to the applicant. (Amended by Stats. 1996, Ch. 1064, Sec. 648. Effective January 1, 1997. Operative July 1, 1997.)
  166. 31155.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    A license may not be transferred or assigned.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. ) ## 31155. No license shall be transferable or assignable. (Added by Stats. 1977, Ch. 1164.)
  167. 31156.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    Each licensee must post its license in a conspicuous place at its head office.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. ) ## 31156. Each licensee shall post its license in a conspicuous place at its head office. (Added by Stats. 1977, Ch. 1164.)
  168. 31157.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    A licensee must not claim it is sponsored, recommended, approved, or vetted by the commissioner. A licensee may say it is licensed only if that does not misrepresent the effect of the license.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. ) ## 31157. No licensee shall represent that it is sponsored, recommended, or approved by, or that its abilities or qualifications have in any respect been passed upon by, the commissioner. Nothing in this section shall be deemed to prohibit a licensee from stating that it is licensed if the effect of such license is not misrepresented. (Amended by Stats. 1996, Ch. 1064, Sec. 649. Effective January 1, 1997. Operative July 1, 1997.)
  169. 31158.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    A California corporation’s license under one law does not stop it from applying for or getting a license under another law, unless doing so would conflict with this division, related regulations or orders, or the division’s purposes.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 3. Licensing [31150 - 31158] ( Chapter 3 added by Stats. 1977, Ch. 1164. ) ## 31158. (a) The fact that a California corporation is licensed under any law other than this division shall not preclude such corporation from applying for or being issued a license under this division unless the transaction of business by such corporation as a licensee under such other law would violate any provision of this division or of any regulation or order issued under this division or would be contrary to the purposes of this division. (b) The fact that a California corporation is licensed under this division shall not preclude such corporation from applying for or being issued a license under any other law unless the transaction of business by such corporation as a licensee under such other law would violate any provision of this division or of any regulation or order issued under this division or would be contrary to the purposes of this division. (Amended by Stats. 1987, Ch. 867, Sec. 13.)
  170. 31200.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 4. Corporate Matters [31200 - 31233] ( Chapter 4 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. Name [31200 - 31201] ( Article 1 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    Each licensee must include “California business and industrial development corporation” in its corporate name.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 4. Corporate Matters [31200 - 31233] ( Chapter 4 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. Name [31200 - 31201] ( Article 1 added by Stats. 1977, Ch. 1164. ) ## 31200. The corporate name of each licensee shall include the phrase “California business and industrial development corporation”. (Added by Stats. 1977, Ch. 1164.)
  171. 31201.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 4. Corporate Matters [31200 - 31233] ( Chapter 4 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. Name [31200 - 31201] ( Article 1 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    A licensee may not do business under a name other than its corporate name unless the commissioner gives prior approval.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 4. Corporate Matters [31200 - 31233] ( Chapter 4 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. Name [31200 - 31201] ( Article 1 added by Stats. 1977, Ch. 1164. ) ## 31201. No licensee shall, except with the prior approval of the commissioner, transact business under any name other than its corporate name. (Amended by Stats. 1996, Ch. 1064, Sec. 650. Effective January 1, 1997. Operative July 1, 1997.)
  172. 31210.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 4. Corporate Matters [31200 - 31233] ( Chapter 4 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 2. Board of Directors [31210 - 31211] ( Article 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    Each licensee must have a board of directors with at least five directors.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 4. Corporate Matters [31200 - 31233] ( Chapter 4 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 2. Board of Directors [31210 - 31211] ( Article 2 added by Stats. 1977, Ch. 1164. ) ## 31210. The board of directors of each licensee shall consist of not less than five directors. (Amended by Stats. 1987, Ch. 867, Sec. 14.)
  173. 31211.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 4. Corporate Matters [31200 - 31233] ( Chapter 4 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 2. Board of Directors [31210 - 31211] ( Article 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    Each licensee’s board of directors must meet at least once every calendar quarter.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 4. Corporate Matters [31200 - 31233] ( Chapter 4 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 2. Board of Directors [31210 - 31211] ( Article 2 added by Stats. 1977, Ch. 1164. ) ## 31211. The board of directors of each licensee shall hold a meeting not less frequently than once each calendar quarter. (Added by Stats. 1977, Ch. 1164.)
  174. 31220.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 4. Corporate Matters [31200 - 31233] ( Chapter 4 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Securities [31220- 31220.] ( Article 3 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    Certain California financial institutions may buy and hold securities issued by a licensee if they get the required approval and stay within percentage limits.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 4. Corporate Matters [31200 - 31233] ( Chapter 4 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 3. Securities [31220- 31220.] ( Article 3 added by Stats. 1977, Ch. 1164. ) ## 31220. Notwithstanding any other law of this state, but subject to the provisions of Section 31550: (a) Any commercial bank, industrial bank, or trust company organized under the laws of this state may, with the prior approval of the commissioner, acquire and hold securities issued by a licensee; provided, however, that the aggregate amount of securities issued by licensees which are held by the commercial bank, industrial bank, or trust company shall not at any time exceed 21/2 percent of the shareholders’ equity of the commercial bank, industrial bank, or trust company. This subdivision shall not apply to any loan or other extension of credit made by a commercial bank or industrial bank organized under the laws of this state to a licensee in accordance with the Banking Law (Division 1 (commencing with Section 99)). (b) Any savings association organized under the laws of this state may, with the prior approval of the commissioner, acquire and hold securities issued by a licensee; provided, however, that the aggregate amount of securities issued by licensees which are held by such savings association shall not at any time exceed 1/2 percent of the total outstanding loans of such savings association. (c) Any insurance company admitted to transact insurance business in this state may, with the approval of the Insurance Commissioner, acquire and hold securities issued by a licensee; provided, however, that the aggregate amount of securities issued by licensees which are held by such insurance company shall not at any time exceed 21/2 percent of the unassigned surplus of such insurance company. (d) Any public utility licensed or regulated by the Public Utilities Commission may, with the approval of the Public Utilities Commission, acquire and hold securities issued by a licensee; provided, however, that the aggregate amount of securities issued by licensees which are held by such public utility company shall not at any time exceed 1/2 percent of the total assets of such public utility company. (Amended by Stats. 2000, Ch. 1015, Sec. 55. Effective September 30, 2000.)
  175. 31230.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 4. Corporate Matters [31200 - 31233] ( Chapter 4 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 4. Distributions to Shareholders [31230 - 31233] ( Article 4 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    This section defines “distribution to its shareholders” by referring to Corporations Code Section 166.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 4. Corporate Matters [31200 - 31233] ( Chapter 4 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 4. Distributions to Shareholders [31230 - 31233] ( Article 4 added by Stats. 1977, Ch. 1164. ) ## 31230. In this article, “distribution to its shareholders” has the meaning set forth in Corporations Code Section 166. (Added by Stats. 1977, Ch. 1164.)
  176. 31231.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 4. Corporate Matters [31200 - 31233] ( Chapter 4 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 4. Distributions to Shareholders [31230 - 31233] ( Article 4 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    A licensee must not make or commit to make any distribution to shareholders unless the commissioner gives prior approval.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 4. Corporate Matters [31200 - 31233] ( Chapter 4 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 4. Distributions to Shareholders [31230 - 31233] ( Article 4 added by Stats. 1977, Ch. 1164. ) ## 31231. No licensee shall, except with the prior approval of the commissioner, make, or obligate itself to make, any distribution to its shareholders. (Amended by Stats. 1996, Ch. 1064, Sec. 652. Effective January 1, 1997. Operative July 1, 1997.)
  177. 31232.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 4. Corporate Matters [31200 - 31233] ( Chapter 4 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 4. Distributions to Shareholders [31230 - 31233] ( Article 4 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    The commissioner must approve a licensee’s distribution-to-shareholders application if certain findings are made; otherwise, after notice and a hearing, the commissioner must deny it.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 4. Corporate Matters [31200 - 31233] ( Chapter 4 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 4. Distributions to Shareholders [31230 - 31233] ( Article 4 added by Stats. 1977, Ch. 1164. ) ## 31232. If the commissioner finds, with respect to an application for approval for a licensee to make, or to obligate itself to make, a distribution to its shareholders: (a) That for the applicant to make, or to obligate itself to make, the distribution will not endanger the applicant’s ability to provide financing assistance and management assistance to business firms in this state; and (b) That for the applicant to make, or to obligate itself to make, the distribution will not be unsafe or unsound; the commissioner shall approve the application. If, after notice and a hearing, the commissioner finds otherwise, he or she shall deny the application. (Amended by Stats. 1996, Ch. 1064, Sec. 653. Effective January 1, 1997. Operative July 1, 1997.)
  178. 31233.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 4. Corporate Matters [31200 - 31233] ( Chapter 4 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 4. Distributions to Shareholders [31230 - 31233] ( Article 4 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    An application for approval to make, or commit to make, a distribution to shareholders is deemed approved if the commissioner does not approve, deny, withdraw, or abandon it within 45 days after filing, or within any extended period the applicant agrees to.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 4. Corporate Matters [31200 - 31233] ( Chapter 4 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 4. Distributions to Shareholders [31230 - 31233] ( Article 4 added by Stats. 1977, Ch. 1164. ) ## 31233. Notwithstanding the provisions of Section 31232, unless an application for approval for a licensee to make, or to obligate itself to make, a distribution to its shareholders is approved, denied, withdrawn, or abandoned within a period of 45 days after such application is filed with the commissioner or, if the applicant consents to an extension of the period, within such extended period, such application shall be deemed to be approved by the commissioner as of the first day after such period of 45 days or such extended period, as the case may be. For purposes of this section, an application for approval for a licensee to make, or to obligate itself to make, a distribution to its shareholders shall be deemed to be filed with the commissioner when such application, containing all the information required by the commissioner and otherwise complying with Section 31107, is received by the commissioner. (Amended by Stats. 1996, Ch. 1064, Sec. 654. Effective January 1, 1997. Operative July 1, 1997.)
  179. 31300.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 5. Offices [31300 - 31322] ( Chapter 5 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. General Provisions [31300 - 31305] ( Article 1 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    Each licensee must keep its head office in this state.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 5. Offices [31300 - 31322] ( Chapter 5 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. General Provisions [31300 - 31305] ( Article 1 added by Stats. 1977, Ch. 1164. ) ## 31300. Each licensee shall maintain its head office in this state. (Amended by Stats. 1987, Ch. 867, Sec. 16.)
  180. 31301.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 5. Offices [31300 - 31322] ( Chapter 5 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. General Provisions [31300 - 31305] ( Article 1 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    A licensee must not maintain an office outside this state.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 5. Offices [31300 - 31322] ( Chapter 5 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. General Provisions [31300 - 31305] ( Article 1 added by Stats. 1977, Ch. 1164. ) ## 31301. No licensee shall maintain an office at any place outside this state. (Added by Stats. 1977, Ch. 1164.)
  181. 31302.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 5. Offices [31300 - 31322] ( Chapter 5 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. General Provisions [31300 - 31305] ( Article 1 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    A licensee must keep each office in a place reasonably accessible to the public and, unless the commissioner approves otherwise, keep it open for business during normal business hours on each business day.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 5. Offices [31300 - 31322] ( Chapter 5 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. General Provisions [31300 - 31305] ( Article 1 added by Stats. 1977, Ch. 1164. ) ## 31302. Each office of a licensee shall be located in a place which is reasonably accessible to the public and shall, unless the commissioner approves otherwise, be open for the transaction of business during normal business hours on each business day. (Amended by Stats. 1996, Ch. 1064, Sec. 655. Effective January 1, 1997. Operative July 1, 1997.)
  182. 31303.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 5. Offices [31300 - 31322] ( Chapter 5 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. General Provisions [31300 - 31305] ( Article 1 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    Each licensee must post a sign showing its corporate name at each office, in a conspicuous place.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 5. Offices [31300 - 31322] ( Chapter 5 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. General Provisions [31300 - 31305] ( Article 1 added by Stats. 1977, Ch. 1164. ) ## 31303. Each licensee shall post in a conspicuous place at each of its offices a sign which bears the corporate name of such licensee. (Added by Stats. 1977, Ch. 1164.)
  183. 31304.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 5. Offices [31300 - 31322] ( Chapter 5 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. General Provisions [31300 - 31305] ( Article 1 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    Each licensee must maintain telephone service and a telephone listing for each of its offices.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 5. Offices [31300 - 31322] ( Chapter 5 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. General Provisions [31300 - 31305] ( Article 1 added by Stats. 1977, Ch. 1164. ) ## 31304. Each licensee shall maintain telephone service at each of its offices and shall maintain a telephone listing under its corporate name for each of its offices. (Added by Stats. 1977, Ch. 1164.)
  184. 31305.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 5. Offices [31300 - 31322] ( Chapter 5 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. General Provisions [31300 - 31305] ( Article 1 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    Each licensee must keep competent personnel at each of its offices.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 5. Offices [31300 - 31322] ( Chapter 5 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 1. General Provisions [31300 - 31305] ( Article 1 added by Stats. 1977, Ch. 1164. ) ## 31305. Each licensee shall maintain at each of its offices personnel who are competent to conduct the business of such office. (Added by Stats. 1977, Ch. 1164.)
  185. 31320.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 5. Offices [31300 - 31322] ( Chapter 5 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 2. Establishing, Relocating, and Closing Offices [31320 - 31322] ( Article 2 added by Stats. 1977, Ch. 1164. )

    Verify source ↗

    A licensee must get the commissioner’s prior approval before relocating its head office, and must file a report with the commissioner at least 30 days before establishing, relocating, or closing any other office unless a shorter period is approved.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 5. Offices [31300 - 31322] ( Chapter 5 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 2. Establishing, Relocating, and Closing Offices [31320 - 31322] ( Article 2 added by Stats. 1977, Ch. 1164. ) ## 31320. (a) No licensee shall relocate its head office without the prior approval of the commissioner. (b) No licensee shall establish, relocate, or close any office (other than its head office) unless it files a report on the action with the commissioner not less than 30 days (or such shorter period as the commissioner may approve) before taking the action. (Amended by Stats. 1996, Ch. 1064, Sec. 656. Effective January 1, 1997. Operative July 1, 1997.)
  186. 31322.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 5. Offices [31300 - 31322] ( Chapter 5 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 2. Establishing, Relocating, and Closing Offices [31320 - 31322] ( Article 2 added by Stats. 1977, Ch. 1164. )

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    The commissioner must approve a licensee’s head-office relocation application if specified safety, compliance, accessibility, and public-interest conditions are met; otherwise, after notice and a hearing, the commissioner must deny it.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 5. Offices [31300 - 31322] ( Chapter 5 added by Stats. 1977, Ch. 1164. ) ## ARTICLE 2. Establishing, Relocating, and Closing Offices [31320 - 31322] ( Article 2 added by Stats. 1977, Ch. 1164. ) ## 31322. If the commissioner finds, with respect to an application by a licensee for approval to relocate its head office: (a) That the office at its proposed location will be reasonably accessible to the public; (b) That it is reasonable to believe that the applicant will operate the office at its proposed location in compliance with all applicable provisions of this division and of any regulation or order issued under this division; (c) That it will not be unsafe or unsound for the applicant to relocate the office; and (d) That the relocation of the office will not be detrimental to the public convenience and advantage, or, if the relocation of the office would be detrimental to the public convenience and advantage, that the relocation of the office is necessary in the interests of the safety and soundness of the applicant; the commissioner shall approve the application. If, after notice and a hearing, the commissioner finds otherwise, the commissioner shall deny the application. (Amended by Stats. 1996, Ch. 1064, Sec. 657. Effective January 1, 1997. Operative July 1, 1997.)
  187. 31400.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. )

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    Licensees must run their business safely and soundly, keep themselves in safe and sound condition, and avoid unsafe or unsound acts.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. ) ## 31400. (a) Each licensee shall transact its business in a safe and sound manner and shall maintain itself in a safe and sound condition. (b) No licensee shall commit any unsafe or unsound act. (Added by Stats. 1977, Ch. 1164.)
  188. 31401.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. )

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    A licensee may not conduct businesses outside the specific business categories listed in this section.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. ) ## 31401. No licensee shall engage in any business other than one or more of the following: (a) The business of providing financing assistance and management assistance to business firms. (b) The business of a state development company in accordance with all applicable provisions of the Small Business Investment Act of 1958 and of the regulations of the Small Business Administration. (c) The business of a local development company in accordance with all applicable provisions of the Small Business Investment Act of 1958 and of the regulations of the Small Business Administration. (d) The business of a small business investment company in accordance with all applicable provisions of the Small Business Investment Act of 1958 and of the regulations of the Small Business Administration. (Amended by Stats. 1987, Ch. 867, Sec. 21.)
  189. 31402.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. )

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    Each licensee must use best efforts to help provide financing and management assistance to business firms in this state, including cooperating with the Small Business Administration and seeking SBA loans.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. ) ## 31402. Each licensee shall use its best efforts: (a) To provide financing assistance to business firms in this state in cooperation with the Small Business Administration pursuant to Section 7(a) of the Small Business Act; (b) To obtain loans from the Small Business Administration pursuant to Sections 501 and 502 of the Small Business Investment Act of 1958; and (c) Otherwise to cooperate with, and meet the requirements of, the Small Business Administration for the purpose of providing financing assistance and management assistance to business firms in this state. (Added by Stats. 1977, Ch. 1164.)
  190. 31403.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. )

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    A licensee generally may not provide financing or management assistance to anyone other than a business firm in California, except as allowed in subdivision (b).

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. ) ## 31403. (a) Except as provided in subdivision (b), no licensee shall provide financing assistance or management assistance to any person other than a business firm in this state. (b) (1) If a licensee provides financing assistance to a business firm in this state, the licensee may also provide financing assistance and management assistance to the business firm with respect to business transacted in any other state of the United States or the District of Columbia. (2) If a licensee provides financing assistance to a business firm in this state which is a franchisor, the licensee may also provide financing assistance and management assistance to any business firm in another state which is a franchisee of the franchisor. (3) If a licensee provides financing assistance to a business firm in this state which is a franchisee of a franchisor, the licensee may also provide financing assistance and management assistance to any business firm in another state which is a franchisee of the franchisor. (Amended by Stats. 1987, Ch. 867, Sec. 22.)
  191. 31404.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. )

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    A licensee generally must not provide financing assistance or management assistance for use outside California, except as allowed by subdivision (b) of Section 31403.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. ) ## 31404. Except as otherwise provided in subdivision (b) of Section 31403, no licensee shall provide financing assistance or management assistance for use outside this state. (Amended by Stats. 1987, Ch. 867, Sec. 23.)
  192. 31405.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. )

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    A licensee generally may not provide financing or management assistance to certain business firms, subject to exceptions in Section 31406.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. ) ## 31405. Except as otherwise provided in subdivisions (b), (c), and (d) of Section 31406: (a) No licensee shall provide financing assistance or management assistance to any business firm the primary business of which is to provide financing assistance or management assistance. (b) No licensee shall provide financing assistance to any business firm for the purpose of providing financing assistance to other persons or discharging, in whole or in part, any obligation incurred for such purpose. (Amended by Stats. 1987, Ch. 867, Sec. 24.)
  193. 31406.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. )

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    A licensee generally may not acquire or hold control of a business firm, but several exceptions apply.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. ) ## 31406. No licensee shall, either by itself or in concert with any of its directors, officers, principal shareholders, or affiliates, any other licensee, or any of the directors, officers, principal shareholders, or affiliates of any other licensee, acquire or hold control of any business firm, except as follows: (a) Any licensee which has provided financing assistance to a business firm may, if and to the extent necessary to protect its interests as a creditor of, or investor in, such business firm, acquire and hold control of such business firm; provided, however, that such licensee shall divest itself of such control as soon as practicable and in any event within three years after acquiring such control or such longer period as the commissioner may approve. (b) Any licensee may, with the prior approval of the commissioner, acquire and hold control of a corporation which is licensed as a small business investment company under the Small Business Investment Act of 1958. (c) Any licensee may, with the prior approval of the commissioner, acquire and hold control of a corporation which is licensed as a personal property broker under Division 9 (commencing with Section 22000). (d) Any licensee may, with the prior approval of the commissioner, acquire and hold control of a corporation which transacts business as a local development company in accordance with all applicable provisions of the Small Business Investment Act of 1958 and of the regulations of the Small Business Administration. (Amended by Stats. 1996, Ch. 1064, Sec. 658. Effective January 1, 1997. Operative July 1, 1997.)
  194. 31408.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. )

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    A licensee may not guarantee another person’s debt or lend its credit to another person unless the commissioner gives prior approval. There is an exception when the licensee sells an obligation it owns; in that case, it may guarantee payment of that obligation.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. ) ## 31408. No licensee shall, except with the prior approval of the commissioner, guarantee the debt of any other person or otherwise lend its credit to any other person; provided, however, that, whenever a licensee sells to another person an obligation to pay money, which obligation is owned by such licensee, such licensee may guarantee the payment of such obligation. (Amended by Stats. 1996, Ch. 1064, Sec. 659. Effective January 1, 1997. Operative July 1, 1997.)
  195. 31409.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. )

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    A licensee may not give a lien or security interest in its property to secure another person’s obligation unless the commissioner first approves it.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. ) ## 31409. No licensee shall, except with the prior approval of the commissioner, provide a lien or security interest in any of its property for the purpose of securing an obligation of, or an obligation incurred for the benefit of, any other person. (Amended by Stats. 1996, Ch. 1064, Sec. 660. Effective January 1, 1997. Operative July 1, 1997.)
  196. 31410.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. )

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    This section creates an exempt class of persons. For any loans made by, or forbearances of, a licensee, the constitutional interest-rate restrictions do not apply.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 6. Transaction of Business [31400 - 31410] ( Chapter 6 added by Stats. 1977, Ch. 1164. ) ## 31410. This section creates and authorizes an exempt class of persons pursuant to Section 1 of Article XV of the State Constitution. The restrictions upon rates of interest contained in Section 1 of Article XV of the State Constitution shall not apply to any loans made by, or forbearances of, any licensee. This section shall apply retroactively to any such loans or forbearances. (Added by renumbering Section 31953 by Stats. 1987, Ch. 867, Sec. 31.)
  197. 31500.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 7. Records, Reports, and Examinations [31500 - 31509] ( Chapter 7 added by Stats. 1977, Ch. 1164. )

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    Each licensee must use a fiscal year running from July 1 through June 30.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 7. Records, Reports, and Examinations [31500 - 31509] ( Chapter 7 added by Stats. 1977, Ch. 1164. ) ## 31500. Each licensee shall adopt as its fiscal year the period from July 1st to and including the following June 30th. (Added by Stats. 1977, Ch. 1164.)
  198. 31501.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 7. Records, Reports, and Examinations [31500 - 31509] ( Chapter 7 added by Stats. 1977, Ch. 1164. )

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    Each licensee must keep books, accounts, and other records in the form and manner the commissioner requires, and must keep and preserve required records at the place and for the time the commissioner specifies.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 7. Records, Reports, and Examinations [31500 - 31509] ( Chapter 7 added by Stats. 1977, Ch. 1164. ) ## 31501. Each licensee shall make and keep such books, accounts, and other records in such form and in such manner as the commissioner may by regulation or order require. All records so required shall be kept at such place and shall be preserved for such time as the commissioner may by regulation or order specify. (Amended by Stats. 1996, Ch. 1064, Sec. 661. Effective January 1, 1997. Operative July 1, 1997.)
  199. 31502.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 7. Records, Reports, and Examinations [31500 - 31509] ( Chapter 7 added by Stats. 1977, Ch. 1164. )

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    A licensee may not record an asset above its actual cost unless it first gets the commissioner’s approval.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 7. Records, Reports, and Examinations [31500 - 31509] ( Chapter 7 added by Stats. 1977, Ch. 1164. ) ## 31502. No licensee shall, except with the prior approval of the commissioner, enter or carry on its books or records any asset at a valuation exceeding the actual cost of such asset to such licensee. (Amended by Stats. 1996, Ch. 1064, Sec. 662. Effective January 1, 1997. Operative July 1, 1997.)
  200. 31503.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 7. Records, Reports, and Examinations [31500 - 31509] ( Chapter 7 added by Stats. 1977, Ch. 1164. )

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    The commissioner may order a licensee to write down an asset to its then value on the books and records.

    ## Financial Code - FIN ## DIVISION 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS [31000 - 31952] ( Division 15 added by Stats. 1977, Ch. 1164. ) ## CHAPTER 7. Records, Reports, and Examinations [31500 - 31509] ( Chapter 7 added by Stats. 1977, Ch. 1164. ) ## 31503. The commissioner may by order require a licensee to write down any asset on its books and records to a valuation which represents its then value. (Amended by Stats. 1996, Ch. 1064, Sec. 663. Effective January 1, 1997. Operative July 1, 1997.)

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