text:
A program administrator shall not execute an assessment contract, and no work shall commence under a home improvement contract that is financed by that assessment contract nor shall that home improvement contract be executed unless the following criteria are satisfied:

(a) All property taxes for the property that will be subject to the assessment contract are current. The program administrator shall ask a property owner whether there has been no more than one late payment of property taxes on the property for the previous three years or since the current owner acquired the property, whichever period is shorter.

(b) The property that will be subject to the assessment contract has no recorded and outstanding involuntary liens in excess of one thousand dollars ($1,000).

(c) The property that will be subject to the assessment contract has no notices of default currently recorded that have not been rescinded.

(d) The property owner has not been a party to any bankruptcy proceedings within the last four years, except that the property owner may have been party to a bankruptcy proceeding that was discharged or dismissed between two and four years before the application date and the property owner has had no payments more than 30 days past due on any mortgage debt or nonmortgage debt, excluding medical debt, during the 12 months immediately preceding the application date.

(e) The property owner is current on all mortgage debt on the subject property and has no more than one late payment during the six months immediately preceding the application date and if the late payment did not exceed 30 days past due.

(f) The property that will be subject to the assessment contract is within the geographical boundaries of the applicable PACE program.

(g) The measures to be installed pursuant to the assessment contract are eligible under the terms of the applicable PACE program.

(h) The financing is for less than 15 percent of the value of the property, up to the first seven hundred thousand dollars ($700,000) inclusive of the existing assessments, and is for less than 10 percent of the remaining value of the property above seven hundred thousand dollars ($700,000).

(i) The total PACE assessments and the mortgage-related debt on the property subject to the PACE assessment will not exceed 97 percent of the market value of the property as established by the valuation required by Section 22685.

(j) The term of the assessment contract shall not exceed the estimated useful life of the measure to which the greatest portion of funds disbursed under the assessment contract is attributable. The program administrator shall determine useful life for purposes of this subdivision based upon credible third-party standards or certification criteria that have been established by appropriate government agencies or nationally recognized standards and testing organizations.

(k) The program administrator shall verify the existence of recorded PACE assessments and shall ask if the property owner has authorized additional PACE assessments on the same subject property that have not yet been recorded. The failure of a property owner to comply with this subdivision shall not invalidate an assessment contract or any obligations thereunder, notwithstanding if the combined amount of the PACE assessments exceed the criteria set forth in subdivision (h) or (i). The existence of a prior PACE assessment or a prior assessment contract shall not constitute evidence that the assessment contract under consideration is affordable or meets any other program requirements.

(l) The assessment contract does not contain a penalty for early repayment of an amount owed under the contract.

(m) The property that will be subject to the assessment contract is not subject to a reverse mortgage, as defined in Section 1923 of the Civil Code.

(n) The program administrator shall use commercially reasonable and available methods to verify the above.

history: (History: Amended by Stats. 2020, Ch. 156, Sec. 1. (AB 1551) Effective January 1, 2021.)


kind: section

code: FIN

text:
(a) A program administrator shall derive market value using one of the following:

(1) Automated valuation models, using the following criteria:

(A) Each automated valuation model must be provided by a third-party vendor.

(B) Each automated valuation model must have estimation models with confidence scores and regular statistical calibration by the third-party vendor.

(C) The program administrator shall utilize at least three automated valuation models for each property. The estimated value for each model shall be the average between the high and low values, if a range is provided.

(D) The program administrator shall utilize the estimated value with the highest confidence score for a property. If an automated valuation model meeting the criteria of subparagraphs (A), (B), and (C) does not obtain a confidence score for a subject property, the PACE program shall utilize the average of all estimated values.

(2) An appraisal conducted within six months of the application date by a state-licensed or state-certified real estate appraiser licensed pursuant to Part 3 (commencing with Section 11300) of Division 4 of the Business and Professions Code. A program administrator may rely upon an appraisal obtained from a property owner if that appraisal was conducted in accordance with applicable laws and regulations by a state-licensed or state-certified appraiser in connection with a consumer credit transaction secured by the subject property, including the purchase or refinance of the subject property or the extension of an equity line of credit secured by the subject property.

(b) The market value determination by the program administrator shall be disclosed to the property owner prior to signing the assessment contract.

history: (History: Amended by Stats. 2018, Ch. 798, Sec. 6. (SB 1087) Effective January 1, 2019.)

division: 9. CALIFORNIA FINANCING LAW

chapter: 3.5. Program Administrators

path: 9. CALIFORNIA FINANCING LAW > 3.5. Program Administrators


text: A program administrator shall not execute an assessment contract, and no work shall commence under a home improvement contract that is financed by that assessment contract nor shall that home improvement contract be executed unless the program administrator makes a reasonable good faith determination that the property owner has a reasonable ability to pay the annual payment obligations for the PACE assessment.

history: (History: Amended by Stats. 2018, Ch. 813, Sec. 9. (AB 2063) Effective January 1, 2019.)


text:
(a) A program administrator shall determine before executing an assessment contract, and no work shall commence under a home improvement contract that is financed by that assessment contract nor shall that home improvement contract be executed until this determination is made, that the property owner has a reasonable ability to pay the annual payment obligations for the PACE assessment based on the property owner’s income, assets, and current debt obligations. The determination process shall be based on the following factors:

(1) The property owner shall submit on their application their monthly income and their monthly housing expenses.

(2) Housing expenses shall include all mortgage principal and interest payments, insurance, property taxes, mortgage guaranty insurance, and other preexisting fees and assessments on the property.

(3) Household income shall include the income of the mortgagor on the subject property and may include the income of any persons 18 years of age or older who are on title to the property. In complying with this paragraph, the program administrator shall do both of the following:

(A) The program administrator may also utilize the income of a property owner’s legal spouse through marriage, as defined by Division 3 (commencing with Section 300) of the Family Code, or domestic partnership, as defined by Division 2.5 (commencing with Section 297) of the Family Code, who is not on title to the property. Any spouse or domestic partner who is not on title to the property shall consent, in writing, to the inclusion of his or her income and to the verification of his or income as required pursuant to this section.

(B) For any person whose income is considered, the program administrator shall also consider their debt obligations pursuant to this section. The program administrator is not required to consider more income than is necessary, nor to verify assets if verified income is sufficient to determine the ability of the property owner to pay the annual payment obligations.

(4) Debt obligations in accordance with subdivision (c).

(5) In evaluating the income, assets, and current debt obligations of the property owner, the program administrator shall not consider the equity of the property that will secure the assessment contract.

(6) Pursuant to Section 5913 of the Streets and Highways Code, the program administrator shall ask the homeowner open-ended questions during the oral confirmation of key terms call, to confirm the income provided on the application and to identify the sources of their income.

(b) (1) The program administrator shall determine and consider the current or reasonably expected income or assets of the property owner that the program administrator relies on in order to determine a property owner’s ability to pay the PACE assessment annual payment obligations using reasonably reliable third-party records of the property owner’s income or assets. The program administrator may use automated verification provided the source of that verification is specific to the income of the property owner and not based on predictive or estimation methodologies, and has been determined sufficient for those verification purposes by a federal mortgage lending authority or regulator. Examples of records the program administrator may use to verify the property owner’s income or assets include:

(A) A pay stub showing the most recent 30-day pay period or financial institution records showing regular deposits consistent with reported income for the most recent 60 days.

(B) Copies of the most recent tax returns the property owner filed with the Internal Revenue Service or the Franchise Tax Board.

(C) Copies of the most recent Internal Revenue Service Form W-2 (Wage and Tax Statement), or other similar Internal Revenue Service forms that are used for reporting wages or tax withholding.

(D) Payroll statements, including the Department of Defense Leave and Earnings Statement (LES).

(E) Financial institution records, such as bank statements or investment account statements reflecting the value of particular assets.

(F) Records from the property owner’s employer or a third party that obtained income information from the employer.

(G) Records from a federal, state, or local government agency stating the property owner’s income from benefits or entitlements. Income from benefits paid by a government entity shall not include any benefits for which the recipient must satisfy a means test or any cash equivalent nonmonetary benefits, such as food stamps.

(2) Income may not be derived from any of the following:

(A) Temporary sources of income.

(B) Nonliquid assets.

(C) Proceeds derived from the equity from the subject property.

(c) A program administrator shall consider the monthly debt obligations of the property owner to determine a property owner’s ability to pay the annual payment PACE assessment obligations using reasonably reliable third-party records, including one or more consumer credit reports from agencies that meet the requirements of Section 1681a(p) of Title 15 of the United States Code. Program administrators shall use at least a two-file Merged Credit Report (MCR) or a Residential Mortgage Credit Report (RMCR). For purposes of this subdivision, monthly debt obligations include, but are not limited to, the following:

(1) All secured and unsecured debt.

(2) Alimony.

(3) Child support.

(4) Monthly housing expenses. If property tax and insurance obligations are not included in a property owner’s escrow, a program administrator shall use reasonably reliable methods to determine these obligations.

(d) In calculating the ability of the property owner to pay the annual payment obligations, the program administrator shall determine that the property owner’s income is sufficient to meet:

(1) The PACE payment, including all interest and fees.

(2) Any mortgage payments, as defined by the higher of the borrower’s self-reported housing payment or housing expenses determined in accordance with paragraphs (1) and (2) of subdivision (a).

(3) All existing debts and obligations as identified in subdivision (c).

(4) Sufficient residual income to meet basic household living expenses, defined as expected expenses which may be variable based on circumstances and consumption patterns of the household. A program administrator may make reasonable estimation of basic living expenses based on the number of persons in the household. Examples of basic living expenses include, but are not limited to, the following:

(A) Food and other necessary household consumables.

(B) Transportation costs to work or school, including fuel costs, auto insurance and maintenance costs, and public transit costs.

(C) Utilities expenses for telecommunication, water, sewage, electricity, and gas.

(e) In the case of emergency or immediate necessity, the requirements of paragraph (1) of subdivision (b) may be waived, in accordance with the requirements of Section 5940 of the Streets and Highways Code, for the funding and recordation of a PACE assessment to finance a heating, ventilation, and air conditioning (HVAC) system, boiler, or other system whose primary function is temperature regulation in a home if all of the following are met:

(1) The program administrator first attempted to use an automated means of verification as described in paragraph (1) of subdivision (b).

(2) If the program administrator was unable to verify the property owner’s income pursuant to paragraph (1) of subdivision (b), pursuant to Section 5913 of the Streets and Highways Code, the program administrator shall ask the property owner open-ended questions during the oral confirmation of key terms call to identify their income and the sources of their income. The program administrator shall comply with the requirements of subdivision (a), paragraph (2) of subdivision (b), and subdivisions (c) and (d).

(3) The funding is limited to the emergency or immediate necessity improvement and any required improvements directly necessary to the installation and safe operation of the improvement.

(4) Any efficiency improvement funded is eligible for PACE financing.

(5) The property owner executes a waiver of their right to cancel pursuant to subdivision (d) of Section 5940 of the Streets and Highways Code, and confirms, pursuant to Section 5913 of the Streets and Highways Code, the emergency or immediate necessity of the improvement.

(6) The amount of the assessment contract does not exceed fifteen thousand dollars ($15,000) or a monthly equivalent payment on the PACE assessment of one hundred twenty-five dollars ($125), as adjusted by any annual increase in the California Consumer Price Index as determined pursuant to Section 2212 of the Revenue and Taxation Code, whichever is greater.

(f) The program administrator shall report annually all PACE assessments that were funded and recorded pursuant to subdivision (e) in a form acceptable to the commissioner. The commissioner shall include this information in the annual composite report prepared in accordance with Section 22160.

(g) (1) If there is a difference between the determination of the property owner’s ability to pay the annual PACE obligations and the actual amount financed for the property owner, and the property owner is obligated on the underlying home improvement contract, the program administrator shall be responsible for that difference. This subdivision does not apply in a case of intentional misrepresentation by the property owner. If the program administrator is responsible to pay the difference under this subdivision, the program administrator shall provide to the property owner a written disclosure of the methodology that the program administrator used to determine whether that there was a difference between the property owner’s ability to pay the annual PACE obligation and the actual amount financed for the property owner for purposes of this subdivision.

(2) This subdivision only applies to an assessment contract that was executed between April 1, 2018, and January 1, 2019.

history: (History: Amended by Stats. 2018, Ch. 813, Sec. 10. (AB 2063) Effective January 1, 2019.)


text: A program administrator shall be subject to all provisions of the California Financial Information Privacy Act (Division 1.4 (commencing with Section 4050)) that are applicable to financial institutions.

history: (History: Amended by Stats. 2018, Ch. 798, Sec. 8. (SB 1087) Effective January 1, 2019.)


text:
(a) A program administrator shall not permit a PACE solicitor to do any of the following:

(1) Solicit a property owner to enter into an assessment contract with a program administrator, unless the PACE solicitor and the program administrator comply with the requirements of this chapter and any rules adopted by the commissioner.

(2) Engage in any act in violation of Section 5898.16 or 5898.17 of the Streets and Highways Code or Chapter 29.1 (commencing with Section 5900) of Part 3 of Division 7 of the Streets and Highways Code, including offering an assessment contract with terms, conditions, or disclosures that are not in compliance with applicable laws or that omits terms, conditions, or disclosures required by applicable law, excepting the reporting requirements of Section 5954 of the Streets and Highways Code.

(b) A program administrator shall be subject to the enforcement authority of the commissioner for any violations of this division, to the extent those violations have been committed by the program administrator or by a PACE solicitor authorized by that program administrator, in connection with activity related to that program administrator.

(c) A violation of any provision of Section 5898.16 or 5898.17 of the Streets and Highways Code or of any provision of Chapter 29.1 (commencing with Section 5900) of Part 3 of Division 7 of the Streets and Highways Code by a program administrator, excepting the reporting requirements of Section 5954 of the Streets and Highways Code, or by a PACE solicitor authorized by that program administrator in connection with activity related to that program administrator, shall be a violation of this division.

history: (History: Amended by Stats. 2018, Ch. 813, Sec. 11. (AB 2063) Effective January 1, 2019.)


text:
(a) A program administrator is subject to an inspection, examination, or investigation in accordance with Section 22701.

(b) If, in the course of an inspection, examination, or investigation of a program administrator, the commissioner has cause to believe that the program administrator, the PACE solicitor, or the PACE solicitor agent may have committed a violation of this division or any rule or order thereunder, or the commissioner seeks to obtain or provide information necessary to the commissioner in the administration of the division, with respect to a matter related to a PACE solicitor or PACE solicitor agent, and either this information is not available directly from the program administrator or the commissioner seeks to validate the information obtained from the program administrator, the commissioner may do the following:

(1) Inspect, examine, or investigate any and all documents, records, files, and communications of the PACE solicitor or PACE solicitor agent that are relevant to the violation or the matter. For purposes of the inspection, examination, or investigation, the commissioner and their representatives shall have access to the records of the PACE solicitor or PACE solicitor agent related to assessment contracts associated with the violation or matter.

(2) Require the attendance of witnesses and examine under oath all persons whose testimony is required relative to the violation or matter.

(c) If, upon inspection, examination, or investigation, the commissioner has cause to believe that a PACE solicitor or PACE solicitor agent is violating or has violated any provision of this division or any rule or order thereunder, the commissioner or their designee shall exhaust the procedure set forth in paragraph (1) before bringing any action authorized under paragraph (2).

(1) (A) The commissioner shall issue a report to the program administrator, the PACE solicitor, and, if applicable, the PACE solicitor agent, documenting the commissioner’s findings and, if applicable, requesting corrective action or a cessation of any violation of this division or any rule or order thereunder.

(B) The program administrator, PACE solicitor, and, if applicable, PACE solicitor agent, or any combination thereof, shall have the opportunity to provide a written answer to the report submitted pursuant to subparagraph (A) within a reasonable period and shall document in its written answer any voluntary corrective action or other actions taken or planned to address the commissioner’s request. The commissioner shall shorten the period of time to provide a written answer to no greater than five business days if the commissioner has reasonable grounds to believe that a person is conducting business as a PACE solicitor or PACE solicitor agent, or both, in an unsafe or injurious manner.

(C) If following the process outlined in subparagraphs (A) and (B), the commissioner believes further action is necessary or appropriate, the commissioner may do any of the following, in any combination:

(i) Demand a corrective action by the program administrator, PACE solicitor, PACE solicitor agent, or any combination thereof.

(ii) Demand the program administrator, PACE solicitor, PACE solicitor agent, or any combination thereof, stop violating the division, rule, or order.

(iii) Demand the PACE solicitor or PACE solicitor agent, or both, discontinue engaging in the business of soliciting property owners to enter into assessment contracts related to any or all program administrators, or demand the program administrator deauthorize the PACE solicitor or PACE solicitor agent, or both, for a defined period not exceeding 12 months, or indefinitely.

(2) (A) The commissioner may, upon exhaustion of the procedure in paragraph (1), bring an order against a PACE solicitor, PACE solicitor agent, or both, as provided in this paragraph. However, the commissioner shall, upon exhaustion of the procedure in paragraph (1), bring an order against a PACE solicitor, PACE solicitor agent, or both, as provided in this paragraph, following either of the following:

(i) The issuance of a demand pursuant to clause (iii) of subparagraph (C) of paragraph (1).

(ii) The issuance of a demand pursuant to clause (i) or (ii) of subparagraph (C) of paragraph (1) involving a violation of Section 22161, when the commissioner believes that the public’s interest will be served by the public nature of the order.

(B) The commissioner may order a PACE solicitor or PACE solicitor agent, or both, to desist and refrain from engaging in business as a PACE solicitor or PACE solicitor agent, or further violating this division, or the rules thereunder, in accordance with clause (i) and (ii) of this subparagraph. This paragraph does not authorize the commissioner to restrict the ability of a PACE solicitor or PACE solicitor agent to engage in any business that does not involve soliciting a property owner to enter into an assessment contract.

(i) If the order addresses unsafe or injurious behavior by a PACE solicitor or PACE solicitor agent, or both, the order shall be effective immediately. All other orders shall be effective once final.

(ii) If, within 30 days of the receipt of the order, the PACE solicitor or PACE solicitor agent, or both, fails to request a hearing, the order shall become final.

(iii) If, within 30 days of the receipt of the order, the PACE solicitor or PACE solicitor agent, or both, requests a hearing, the hearing shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

(C) The commissioner may, after appropriate notice and opportunity for a hearing, by order, censure or suspend for a period not exceeding 12 months, or bar any natural person from directly or indirectly soliciting a property owner to enter into an assessment contract, in accordance with clause (i) to (iv), inclusive, of this subparagraph. This paragraph does not authorize the commissioner to restrict the ability of a natural person to engage in any business that does not involve soliciting a property owner to enter into an assessment contract, or being employed by a PACE solicitor in a capacity that does not involve soliciting a property owner to enter into an assessment contract.

(i) Within 15 days from the date of a notice of intention to issue an order pursuant to this subparagraph, the person may request a hearing under the Administrative Procedure Act (Chapter 4.5 (commencing with Section 11400) of Division 3 of Title 2 of the Government Code).

(ii) Upon receipt of a request submitted pursuant to clause (i), the matter shall be set for hearing to commence within 30 days after the commissioner receives the request pursuant to clause (i), unless the person subject to the notice consents to a later date.

(iii) If no hearing is requested within 15 days after the mailing or service of the notice of intention as described in clause (i), and the commissioner does not order a hearing, the right to a hearing shall be deemed to be waived.

(iv) Upon receipt of a notice of intention to issue an order pursuant to this subparagraph, the person who is the subject of the proposed order is immediately prohibited from directly or indirectly soliciting a property owner to enter into an assessment contract.

(d) An order brought under paragraph (2) of subdivision (c) shall be public.

(e) A PACE solicitor or PACE solicitor agent subject to this section shall not be subject to Chapter 4 (commencing with Section 22700).

(f) The commissioner shall not be bound to the provisions of this section in connection with enforcement of this division with respect to a program administrator.

history: (History: Amended by Stats. 2022, Ch. 188, Sec. 13. (AB 2433) Effective January 1, 2023.)


text:
(a) The department shall maintain, on its Internet Web site, the identities of enrolled PACE solicitors and PACE solicitor agents. The Internet Web site shall identify the date of the most recent update, and the frequency with which the list is updated. This subdivision shall become operative on January 1, 2020.

(b) The department shall maintain on its Internet Web site the identities of PACE solicitors and PACE solicitor agents ordered to discontinue engaging in the business of soliciting property owners to enter into assessment contracts. The Internet Web site shall identify the date of the most recent update.

history: (History: Added by Stats. 2018, Ch. 798, Sec. 11. (SB 1087) Effective January 1, 2019.)


text: The commissioner may by any rules he or she deems necessary or appropriate in the public interest or for the protection of property owners, either unconditionally or upon specified terms and conditions or for specified periods, exempt any class of persons specified in those rules from the provisions of Sections 22680, 22681, and 22682.

history: (History: Amended by Stats. 2018, Ch. 813, Sec. 12. (AB 2063) Effective January 1, 2019.)


text:
(a) The commissioner shall require a program administrator to submit the following information in the annual report filed under Section 22159:

(1) Information beneficial to an evaluation of the overall impact on property owners caused by the 97 percent cap on total PACE and mortgage-related debt.

(2) Information beneficial to an evaluation of the overall impact on property owners caused by the use of an automated valuation model in determining the market value of property subject to a PACE assessment.

(3) Information beneficial to an evaluation of the overall impact on property owners caused by the emergency HVAC provisions.

(4) Information relevant to determining the overall impact on property owners of the absence of a minimum residual income threshold.

(b) The information received under this section shall appear in a separate section within the composite of the annual reports required to be prepared by the commissioner pursuant to Section 22160.

(c) This section does not limit the authority of the commissioner to require additional information from a program administrator under Section 22159.

history: (History: Added by Stats. 2017, Ch. 475, Sec. 71. (AB 1284) Effective October 4, 2017. Section operative January 1, 2019, pursuant to Section 22696.)


text:
(a) The commissioner may, by rule, require a program administrator to use a real-time registry or database system for tracking PACE assessments in order to carry out his or her regulatory duties and to support enforcement. That registry or database system shall enable the program administrator to trace PACE assessments and shall include, but not be limited to, features for providing or obtaining information about a property’s status with regard to PACE assessments placed on the property, whether recorded or not. All costs associated with the real-time registry or database system shall be apportioned among licensed program administrators based on the volume and amount of PACE assessments by each program administrator, or any other method that fairly apportions the costs, as required by rule. The commissioner may contract with an independent third party for the development and ongoing maintenance and support of the real-time registry or database system, and may require the program administrators to pay for the cost of development and ongoing maintenance and support directly to the independent third party. In no event shall the costs apportioned to a program administrator exceed a reasonable regulatory cost.

(b) On or before January 1, 2020, the commissioner shall determine whether to proceed with a rulemaking action. This subdivision shall not restrict the ability of the commissioner to proceed with a rule under this section at any time.

history: (History: Amended by Stats. 2018, Ch. 813, Sec. 13. (AB 2063) Effective January 1, 2019.)


text: This chapter does not apply to a finance lender, mortgage loan originator, or broker licensee, unless they engage in the business of a program administrator, PACE solicitor, or PACE solicitor agent.

history: (History: Amended by Stats. 2018, Ch. 798, Sec. 13. (SB 1087) Effective January 1, 2019.)


text:
(a) A violation of this chapter by any person is not subject to the criminal penalties established pursuant to Sections 22753 and 22780.

(b) Notwithstanding Section 22696, this section shall become operative on the effective date of this act.

history: (History: Added by Stats. 2017, Ch. 475, Sec. 71. (AB 1284) Effective October 4, 2017. Section operative October 4, 2017, by its own provisions.)


text: Except as provided in Sections 22684, 22685, 22686, 22687, 22688, and 22695, this chapter shall become operative on January 1, 2019.

history: (History: Added by Stats. 2017, Ch. 475, Sec. 71. (AB 1284) Effective October 4, 2017. Note: Operative date provision applies, with specified exceptions, to Chapter 3.5, comprising Sections 22680 to 22697.)


text: This chapter does not preclude or reduce any rights and remedies established under any other laws.


text:
(a) Finance lender, broker, and program administrator licenses issued under this division shall remain in effect until they are surrendered, revoked, or suspended.

(b) Mortgage loan originator licenses issued under this division shall be renewed annually upon the payment of an annual assessment, and, if renewed by the licensee, shall remain in effect until they are surrendered, revoked, or suspended.

(c) Surrender of a license becomes effective 30 days after receipt of an application to surrender the license or within a shorter period of time that the commissioner may determine, unless a revocation or suspension proceeding is pending when the application is filed or a proceeding to revoke or suspend or to impose conditions upon the surrender is instituted within 30 days after the application is filed. If a proceeding is pending or instituted, surrender of a license becomes effective at the time and upon the conditions that the commissioner determines.

(d) This section shall become operative on January 1, 2019.

history: (History: Repealed (in Sec. 72) and added by Stats. 2017, Ch. 475, Sec. 73. (AB 1284) Effective October 4, 2017. Section operative January 1, 2019, by its own provisions.)

chapter: 4. Revocation and Penalties

article: 1. Revocation and Suspension of License

path: 9. CALIFORNIA FINANCING LAW > 4. Revocation and Penalties > 1. Revocation and Suspension of License


text:
(a) For the purpose of discovering violations of this division or securing information required by him or her in the administration and enforcement of this division, the commissioner may at any time investigate the loans, assessment contracts, and business, and examine the books, accounts, records, and files used in the business, of every person engaged in the business of a finance lender, broker, or program administrator, whether the person acts or claims to act as principal or agent, or under or without the authority of this division. For the purpose of examination, the commissioner and his or her representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of all these persons.

(b) This section shall become operative on January 1, 2019.

history: (History: Repealed (in Sec. 74) and added by Stats. 2017, Ch. 475, Sec. 75. (AB 1284) Effective October 4, 2017. Section operative January 1, 2019, by its own provisions.)

article: 1. Revocation and Suspension of License


text: In making any examination or investigation, the commissioner may, for a reasonable time not to exceed 30 days, take possession of the books, records, accounts, and other papers pertaining to the business. The commissioner may place a keeper in exclusive charge and custody of the books, records, accounts, and other papers in the office or place where they are usually kept. During possession, no person shall remove or attempt to remove any of the books, accounts, papers, records, files, safes, and vaults, or any part thereof, except in compliance with a court order or written consent of the commissioner.

history: (History: Added by Stats. 1994, Ch. 1115, Sec. 2. Effective January 1, 1995. Operative July 1, 1995, by Sec. 5 of Ch. 1115.)

article: 1. Revocation and Suspension of License


text: The officers, employees, partners, directors, and stockholders may inspect and examine the books, accounts, papers, records, files, safes, and vaults while they are in the custody of the commissioner. Employees may make entries in these documents reflecting current operations or transactions.

article: 1. Revocation and Suspension of License


text: The power of investigation and examination by the commissioner is not terminated by the surrender, suspension, or revocation of any license issued by him or her.

article: 1. Revocation and Suspension of License


text: Whenever the commissioner deems it necessary for the general welfare of the public, he or she has continuous authority to exercise the powers set forth in this division whether or not an application for a license has been filed with the commissioner, any license has been issued, or if issued, has been surrendered, suspended, or revoked.

history: (History: Amended by Stats. 2002, Ch. 772, Sec. 17. Effective January 1, 2003.)

article: 1. Revocation and Suspension of License


text:
(a) For any licensee, a disciplinary action taken by the State of California, another state, an agency of the federal government, or another country for an action substantially related to the activity regulated under this division may be grounds for disciplinary action by the commissioner. A certified copy of the record of the disciplinary action taken against the licensee by the State of California, other state, agency of the federal government, or other country shall be conclusive evidence of the events related therein.

(b) Nothing in this section shall preclude the commissioner from applying a specific statutory provision in this division providing for discipline against a licensee as a result of disciplinary action taken against a licensee by the State of California, another state, an agency of the federal government, or another country.

history: (History: Added by Stats. 2003, Ch. 473, Sec. 21. Effective January 1, 2004.)

article: 1. Revocation and Suspension of License


text: The commissioner may require the attendance of witnesses and examine under oath all persons whose testimony relates to activities and businesses regulated by this division or to the subject matter of any examination, investigation, or hearing.

history: (History: Amended by Stats. 2020, Ch. 160, Sec. 1. (AB 2559) Effective January 1, 2021.)

article: 1. Revocation and Suspension of License


text:
(a) The cost of each examination of a licensee or a person subject to this division shall be paid to the commissioner by the licensee or person examined, and the commissioner may maintain an action for the recovery of the cost in any court of competent jurisdiction. In determining the cost of an examination, the commissioner may use the estimated average hourly cost for all persons performing examinations of licensees or other persons subject to this division for the fiscal year.

(b) For the purpose of this section only, no person other than a licensee shall be deemed to be a person subject to this division until the person is determined to be a person subject to this division by an administrative hearing in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code or by a judicial hearing in any court of competent jurisdiction.

article: 1. Revocation and Suspension of License


text:
(a) If, upon inspection, examination, or investigation, the commissioner has cause to believe that a licensee or other person is violating or has violated any provision of this division or any rule or order thereunder, the commissioner or their designee, may issue a citation to the licensee or person in writing, describing with particularity the basis of the citation. Each citation may contain an order to correct the violation or violations identified and provide a reasonable time period or periods by which the violation or violations must be corrected. In addition, each citation may assess an administrative fine not to exceed two thousand five hundred dollars ($2,500) that shall be deposited in the Financial Protection Fund. In assessing a fine, the commissioner shall give due consideration to the appropriateness of the amount of the fine with respect to factors including the gravity of the violation, the good faith of the person or licensees cited, and the history of previous violations. In addition, the commissioner may include a claim for ancillary relief. The ancillary relief may include, but not be limited to, refunds, restitution or disgorgement, or damages on behalf of the persons injured by the act or practice constituting the subject matter of the action. A citation issued or a fine assessed pursuant to this section, while constituting punishment for a violation of law, shall be in lieu of other administrative discipline by the commissioner for the offense or offenses cited.

(b) Notwithstanding subdivision (a), nothing in this section shall prevent the commissioner from issuing an order to desist and refrain from engaging in a specific business or activity or activities, or an order to suspend all business operations to a person or licensee who is engaged in or who has engaged in continued or repeated violations of this division. In any of these circumstances, the sanctions authorized under this section shall be separate from, and in addition to, all other administrative, civil, or criminal remedies.

(c) If, within 30 days from the receipt of the citation, the licensee or person cited fails to notify the department that they intend to request a hearing as described in subdivision (d), the citation shall be deemed final.

(d) Any hearing under this section shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

(e) After the exhaustion of the review procedures provided for in this section, the commissioner may apply to the appropriate superior court for a judgment in the amount of the administrative fine and an order compelling the cited licensee or person to comply with the order of the commissioner.

(1) The application shall include a certified copy of the final order of the commissioner.

(2) Upon the filing of the application, the superior court shall set a date for a hearing for an order to show cause why judgment should not be entered, which shall be set not less than 60 calendar days from the date the application is filed.

(3) The commissioner shall serve a copy of the application and order along with notice of the hearing to all entities or persons cited in the order against whom a civil judgment is sought not less than 15 calendar days before the date set for the hearing. Service of the application shall be pursuant to the methods specified by Article 3 (commencing with Section 415.10) of Chapter 4 of Title 5 of Part 2 of the Code of Civil Procedure for service of summons.

(4) The court shall consider the filing of a certified copy of the final order of the commissioner and the proof of service of the application and notice of the hearing on the persons or entities against whom the judgment is sought, a sufficient prima facie showing to warrant the issuance of the civil judgment at the hearing. The respondent then has the burden of showing by affirmative evidence at the hearing why the order of the commissioner is not final, or why the timely notice of application and hearing was not provided to avoid judgment being entered. Any method of service authorized by laws under which the order was issued is considered valid service for the purposes of determining whether the order is final. Absent this showing by the respondent, the superior court shall issue a final civil judgment compelling compliance with the order.

(5) The judgment issued pursuant to paragraph (4) may be for injunctive relief or payment of ancillary relief or penalties. The judgment may be enforced by the court pursuant to the procedures authorized for any other civil judgment.

(6) This subdivision shall not be construed to limit judicial review of any order of the commissioner in accordance with the law.

history: (History: Amended by Stats. 2022, Ch. 188, Sec. 14. (AB 2433) Effective January 1, 2023.)

article: 1. Revocation and Suspension of License


text: After an examination, investigation, or hearing under this division, if the commissioner deems it of public interest or advantage, he or she may certify a record to the proper prosecuting official of the city, county, or city and county in which the act complained of, examined, or investigated occurred.

article: 1. Revocation and Suspension of License


text: The commissioner may require the production for examination in this state of all books, records, and supporting data used by the licensee in the preparation of reports to the commissioner. The books, records, and supporting data shall be made available for examination by the commissioner in this state within 10 days after a written demand.

article: 1. Revocation and Suspension of License


text: The commissioner may upon three days’ notice and a hearing, suspend any license for a period not exceeding 30 days, pending investigation.

article: 1. Revocation and Suspension of License


text: Any licensee may surrender any license by delivering to the commissioner written notice that the licensee surrenders that license. Surrender of the license does not affect the licensee’s civil or criminal liability for acts committed prior to surrender of the license.

article: 1. Revocation and Suspension of License


text:
(a) Whenever, in the opinion of the commissioner, any person is engaged or has engaged in business as a finance lender, broker, program administrator, or mortgage loan originator, as defined in this division, without a license from the commissioner, or any licensee is violating or has violated any provision of this division, any provision of an order, or any regulation adopted pursuant to this division, the commissioner may order that person or licensee to desist and to refrain from engaging in the business or further continuing that violation. In addition, the commissioner may include a claim for ancillary relief. The ancillary relief may include, but not be limited to, refunds, restitution or disgorgement, or damages on behalf of the persons injured by the act or practice constituting the subject matter of the action. If, within 30 days after the order is served, a written request for a hearing is filed and no hearing is held within 30 days thereafter, the order is rescinded. For purposes of this section, “licensee” includes a mortgage loan originator.

(b) Notwithstanding subdivision (a), if, after an investigation, the commissioner has reasonable grounds to believe that a person is conducting or has conducted business in an unsafe or injurious manner, the commissioner shall, by written order addressed to that person, direct the discontinuance of the unsafe or injurious practices. The order shall be effective immediately, but shall not become final except in accordance with the provisions of Section 22717.

history: (History: Amended by Stats. 2022, Ch. 188, Sec. 15. (AB 2433) Effective January 1, 2023.)

article: 1. Revocation and Suspension of License


text:
(a) Whenever the commissioner believes from evidence satisfactory to the commissioner that any person has violated or is about to violate a provision of this division, or a provision of any order, license, decision, demand, requirement, or any regulation adopted pursuant to this division, the commissioner may, in the commissioner’s discretion, bring an action, or the commissioner may request the Attorney General to bring an action in the name of the people of the State of California, against that person to enjoin that person from continuing that violation or doing any act in furtherance of the violation. Upon a proper showing, a permanent or preliminary injunction, restraining order, or writ of mandate shall be granted and other ancillary relief may be granted as appropriate.

(b) If the commissioner determines that it is in the public interest, the commissioner may include in any action authorized by subdivision (a) a claim for ancillary relief, including, but not limited to, a claim for restitution, disgorgement, or damages on behalf of the persons injured by the act or practice constituting the subject matter of the action. The court shall have jurisdiction to award additional relief.

(c) Any person who willfully violates any provisions of this division, or who willfully violates any rule or order adopted pursuant to this division, shall be liable for a civil penalty not to exceed two thousand five hundred dollars ($2,500) for each violation, which shall be assessed and recovered in a civil action brought in the name of the people of the State of California by the commissioner in any court of competent jurisdiction.

(d) As applied to the penalties for acts in violation of this division, the remedies provided by this section and by other sections of this division are not exclusive, and may be sought and employed in any combination to enforce the provisions of this division.

article: 1. Revocation and Suspension of License


text:
(a) The commissioner shall suspend or revoke any license, upon notice and reasonable opportunity to be heard, if the commissioner finds any of the following:

(1) The licensee has failed to comply with any demand, ruling, or requirement of the commissioner made pursuant to and within the authority of this division.

(2) The licensee has violated any provision of this division or any rule or regulation made by the commissioner under and within the authority of this division.

(3) A fact or condition exists that, if it had existed at the time of the original application for the license, reasonably would have warranted the commissioner in refusing to issue the license originally.

(4) There has been repeated failure by the finance lender, when making or negotiating loans, to take into consideration in determining the size and duration of loans, the financial ability of the borrower to repay the loan in the time and manner provided in the loan contract, or to refinance the loan at maturity.

(5) There has been repeated failure by the program administrator, when administering assessment contracts, to take into consideration in determining the size and duration of the assessment contracts, the property owner’s ability to meet the annual PACE obligations in the time and manner provided in the contract.

(b) A master license shall not be suspended or revoked pursuant to this section as a result of any action or failure to act by a subsidiary licensee unless grounds exist for the suspension or revocation of the master license pursuant to this section. An order suspending or revoking a license or imposing sanctions against a licensee shall not affect other licensed locations unless expressly stated in the order.

(c) This section shall become operative on January 1, 2019.

history: (History: Repealed (in Sec. 80) and added by Stats. 2017, Ch. 475, Sec. 81. (AB 1284) Effective October 4, 2017. Section operative January 1, 2019, by its own provisions.)

article: 1. Revocation and Suspension of License


text:
(a) The commissioner may by order summarily suspend or revoke the license of any licensee if that person fails to file the report required by Section 22159 within 10 days after notice by the commissioner that the report is due and not filed. If, after an order is made, a request for hearing is filed in writing within 30 days and the hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date.

(b) (1) Subject to paragraph (2), the commissioner may impose, by order, a penalty on any licensee who does not do, within the time specified in any written demand of the commissioner, either of the following:

(A) Make and file with the commissioner any report required by law.

(B) Furnish any material information required by the commissioner to be included in any report required by law.

(2) A penalty may not be imposed on a licensee pursuant to this subdivision in connection with a report or information required to be submitted by a licensee if either:

(A) The commissioner requires information from the licensee pursuant to subdivision (a) of Section 22159 that was not required the prior year and the licensee is notified about the requirement to submit that new information less than 90 days before the information is due to the commissioner.

(B) The commissioner requires the licensee to submit information pursuant to subdivision (b) of Section 22159 and the licensee is notified about the requirement to submit that information less than 90 days before the information is due to the commissioner.

(3) The amount of the penalty imposed pursuant to this subdivision shall not exceed one hundred dollars ($100) for each business day for the first five business days the report or information is overdue, and thereafter shall not exceed five hundred dollars ($500) for each business day the report or information is overdue, not to exceed twenty-five thousand dollars ($25,000) in the aggregate.

(c) If an order has been made under subdivision (b), and a request for a hearing is filed in writing within 30 days of the date of service of the order by the licensee to whom the order was directed, a hearing shall be held in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. At the hearing, the commissioner shall have all the powers granted under that chapter.

(d) If the licensee fails to file a written request for a hearing within 30 days of the date of service of the order, the order imposing the penalty shall be deemed a final order of the commissioner, and the penalty shall be paid within five business days.

(e) If a hearing is requested, the penalty shall be paid within five business days after the effective date of any decision in the case ordering payment to be made.

history: (History: Amended by Stats. 2017, Ch. 329, Sec. 1. (AB 1636) Effective January 1, 2018.)

article: 1. Revocation and Suspension of License


text:
(a) The revocation, suspension, expiration, or surrender of any license does not impair or affect the obligation of any preexisting lawful contract between the licensee and any borrower or property owner, nor the validity and enforceability of any bonds issued and secured by those contracts. This division does not affect the validity and enforceability of any PACE assessment contracts entered into or bonds issued and secured by those contracts.

(b) This section shall become operative on January 1, 2019.

history: (History: Amended (as added by Stats. 2017, Ch. 475, Sec. 83) by Stats. 2018, Ch. 813, Sec. 14. (AB 2063) Effective January 1, 2019.)

article: 1. Revocation and Suspension of License


text: Except in cases in which the time for setting the hearing is shortened as provided in this division, the proceedings under this article shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and in all cases the commissioner has all the powers granted therein.

article: 1. Revocation and Suspension of License


text: Every order, decision, license, or other official act of the commissioner is subject to judicial review in accordance with law.

article: 1. Revocation and Suspension of License


text:
(a) If any amount other than, or in excess of, the charges permitted by this division is willfully charged, contracted for, or received, the contract of loan is void, and no person has any right to collect or receive any principal, charges, or recompense in connection with the transaction.

(b) If any provision of this division is willfully violated in the making or collection of a loan, whether by a licensee or by an unlicensed person subject to this division, the contract of loan is void, and no person has any right to collect or receive any principal, charges, or recompense in connection with the transaction.

history: (History: Amended by Stats. 2013, Ch. 467, Sec. 3. (SB 318) Effective January 1, 2014.)

article: 2. Consumer Loan Penalties

path: 9. CALIFORNIA FINANCING LAW > 4. Revocation and Penalties > 2. Consumer Loan Penalties


text:
(a) If any amount other than or in excess of the charges permitted by this division is charged or contracted for, or received, for any reason other than a willful act of the licensee, the licensee shall forfeit all interest and charges on the loan and may collect or receive only the principal amount of the loan.

(b) Subdivision (a) shall not apply to an error in computation if (1) the licensee shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error, and (2) within 60 days of discovering the error the licensee notifies the borrower of the error and makes whatever adjustments in the account are necessary to correct the error.

article: 2. Consumer Loan Penalties


text:
(a) If any provision of this division is violated in the making or collection of a loan, for any reason other than a willful act of the licensee, the licensee shall forfeit all interest and charges on the loan and may collect or receive only the principal amount of the loan.

(b) Subdivision (a) shall not apply to a violation if (1) the licensee shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error, and (2) within 30 days of discovering the error the licensee notifies the borrower of the error and rectifies the error by making the appropriate changes in the documents or account and by taking other action necessary to correct the error.

article: 2. Consumer Loan Penalties


text: Except as provided in Section 22696, any person who willfully violates any provision of this division or who willfully violates any rule or order adopted pursuant to this division, shall, upon conviction, be punished by a fine of not more than ten thousand dollars ($10,000), by imprisonment in a county jail for not more than one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment. However, no person may be imprisoned for the violation of any rule or order unless he or she had knowledge of the rule or order. Conviction under this section shall not preclude the commissioner from exercising the authority in Section 22713.

history: (History: Amended by Stats. 2017, Ch. 475, Sec. 84. (AB 1284) Effective October 4, 2017.)

article: 2. Consumer Loan Penalties


text: No provision imposing liability under this division, including the provisions of subdivision (a) of Section 22751 and subdivision (a) of Section 22752, shall apply to any act done or omitted in good faith in conformity with any written general rule, regulation, or specific ruling of the commissioner, notwithstanding that after the act or omission has occurred, the written general rule, regulation, or specific ruling is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.

article: 2. Consumer Loan Penalties


text:
It is a violation of this division for a mortgage loan originator to do any of the following:

(a) Directly or indirectly employ any scheme, device, or artifice to defraud or mislead borrowers or lenders or to defraud any person.

(b) Engage in any unfair or deceptive practice toward any person.

(c) Obtain property by fraud or misrepresentation.

(d) Solicit or enter into a contract with a borrower that provides in substance that the mortgage loan originator may earn a fee or commission through best efforts to obtain a loan even though no loan is actually obtained for the borrower.

(e) Solicit, advertise, or enter into a contract for specific interest rates, points, or other financing terms unless the terms are actually available at the time of soliciting, advertising, or contracting.

(f) Conduct any business covered by this division without holding a valid license as required under this division, or assist or aide and abet any person in the conduct of business under this division without a valid license as required under this division.

(g) Fail to make disclosures as required by this division and any other applicable state or federal law, including regulations thereunder.

(h) Fail to comply with this division or rules or regulations promulgated under this division, or fail to comply with any other state or federal law, including the rules and regulations thereunder, applicable to any business authorized or conducted under this division.

(i) Make, in any manner, any false or deceptive statement or representation including, with regard to the rates, points, or other financing terms or conditions for a residential mortgage loan, or engage in bait and switch advertising.

(j) Negligently make any false statement or knowingly and willfully make any omission of material fact in connection with any information or reports filed with a governmental agency or the Nationwide Mortgage Licensing System and Registry or in connection with any investigation conducted by the commissioner or another governmental agency.

(k) Make any payment, threat, or promise, directly or indirectly, to any person for the purposes of influencing the independent judgment of the person in connection with a residential mortgage loan, or make any payment, threat, or promise, directly or indirectly, to any appraiser of a property, for the purposes of influencing the independent judgment of the appraiser with respect to the value of the property.

(l) Collect, charge, attempt to collect or charge, or use or propose any agreement purporting to collect or charge any fee prohibited by this division.

(m) Cause or require a borrower to obtain property insurance coverage in an amount that exceeds the replacement cost of the improvements as established by the property insurer.

(n) Fail to truthfully account for moneys belonging to a party of a residential mortgage loan transaction.

history: (History: Added by Stats. 2009, Ch. 160, Sec. 44. (SB 36) Effective October 11, 2009.)

article: 2. Consumer Loan Penalties


text: Notwithstanding any other law, any application for licensure, amendment to the application or registration document or notice filed under any of the laws administered by the Department of Financial Protection and Innovation, or record otherwise required to be filed in this state as an electronic record pursuant to a nationwide central depository for information regarding licensees, including mortgage loan originators, or any electronic record filed through the Nationwide Mortgage Licensing System and Registry, shall be deemed to be a valid original document upon reproduction to paper form by the Department of Financial Protection and Innovation.

history: (History: Amended by Stats. 2022, Ch. 452, Sec. 141. (SB 1498) Effective January 1, 2023.)

article: 2. Consumer Loan Penalties


text: A finance lender, broker, or mortgage loan originator licensed under this division shall not pay any commission, fee, or other compensation to an unlicensed individual for conducting activities that require a license, unless that unlicensed individual is exempt from licensure pursuant to this division.

history: (History: Added by Stats. 2012, Ch. 264, Sec. 7. (AB 2666) Effective January 1, 2013.)

article: 2. Consumer Loan Penalties


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

history: (History: Added by Stats. 2017, Ch. 475, Sec. 85. (AB 1284) Effective October 4, 2017.)

article: 2. Consumer Loan Penalties


text:
Except as provided in Section 22696, any person who willfully violates any provision of this division, or who willfully violates any rule or order adopted pursuant to this division, shall, upon conviction, be punished by a fine of not more than ten thousand dollars ($10,000), by imprisonment in a county jail for not more than one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment. However, no person may be imprisoned for the violation of any rule or order unless he or she had knowledge of the rule or order. Conviction under this section shall not preclude the commissioner from exercising the authority provided in Section 22713.

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

history: (History: Amended by Stats. 2017, Ch. 475, Sec. 86. (AB 1284) Effective October 4, 2017.)

article: 3. Commercial Loan Penalties

path: 9. CALIFORNIA FINANCING LAW > 4. Revocation and Penalties > 3. Commercial Loan Penalties


text: A violation of Division 9.5 (commencing with Section 22800) by a licensee shall constitute a violation of this division.

history: (History: Added by Stats. 2018, Ch. 1011, Sec. 1. (SB 1235) Effective January 1, 2019.)

article: 3. Commercial Loan Penalties


text:
For purposes of this division:

(a) “Account” means a right to a payment of a monetary obligation.

(b) “Accounts receivable purchase transaction” means a transaction as part of an agreement requiring a recipient to forward or otherwise sell to the provider all or a portion of accounts, payment intangibles, or cash receipts that are owed to the recipient or are collected by the recipient during a specified period or in a specified amount.

(c) “Asset-based lending transaction” means a transaction in which advances are made from time to time contingent on a recipient forwarding payments received from one or more third parties for goods the recipient has supplied or services the recipient has rendered to that third party or parties.

(d) (1) “Commercial financing” means an accounts receivable purchase transaction, including factoring, asset-based lending transaction, commercial loan, commercial open-end credit plan, or lease financing transaction intended by the recipient for use primarily for other than personal, family, or household purposes.

(2) For purposes of determining whether financing is commercial financing within the meaning of this subdivision, the provider may rely on any written statement of intended purposes signed by the recipient. The statement may be a separate statement signed by the recipient or may be contained in a loan application or other document signed by the recipient. The provider shall not be required to ascertain that the proceeds of the commercial financing are used in accordance with the statement of intended purposes.

(e) “Commercial loan” means a loan of a principal amount of five thousand dollars ($5,000) or more, or any loan under an open-end credit plan, the proceeds of which are intended by the recipient for use primarily for other than personal, family, or household purposes.

(f) “Commercial open-end credit plan” means a provider’s plan for making open-end loans pursuant to a loan agreement that sets forth the terms and conditions governing the use of the open-end credit program, and provides that:

(1) The recipient may use the open-end credit program to obtain money, goods, labor, or services or credit, and the provider makes open-end loans to the recipient for the purpose of paying money to, or at the direction of, the recipient or paying obligations that the recipient creates through use of the open-end credit program.

(2) The amount of each advance and the charges and other permitted costs are debited to an account.

(3) The charges are computed from time to time on the unpaid balances of the recipient’s account, excluding from the computation any unpaid charges other than permitted fees, costs, and expenses.

(4) The recipient has the privilege of paying the account in full at any time.

(g) “Commissioner” means the Commissioner of Financial Protection and Innovation.

(h) “Depository institution” means any of the following:

(1) A bank, trust company, or industrial loan company doing business under the authority of, or in accordance with, a license, certificate, or charter issued by the United States, this state, or any other state, district, territory, or commonwealth of the United States that is authorized to transact business in this state.

(2) A federally chartered savings and loan association, federal savings bank, or federal credit union that is authorized to transact business in this state.

(3) A savings and loan association, savings bank, or credit union organized under the laws of this or any other state that is authorized to transact business in this state.

(i) “Factoring” means an accounts receivable purchase transaction that includes an agreement to purchase, transfer, or sell a legally enforceable claim for payment held by a recipient for goods the recipient has supplied or services the recipient has rendered that have been ordered but for which payment has not yet been made.

(j) (1) “Lease financing” means providing a lease for goods if the lease includes a purchase option that creates a security interest in the goods leased, as defined in paragraph (35) of subdivision (b) of Section 1201 and Section 1203 of the Commercial Code.

(2) The definition of lease financing in this Division shall not be construed to repeal or otherwise amend existing law related to the definition of leases and security interests under the Commercial Code.

(k) “Payment intangible” means a general intangible under which the account debtor’s principal obligation is a monetary obligation.

(l) “Person” means an individual, a corporation, a partnership, a limited liability company, a joint venture, an association, a joint stock company, a trust, or an unincorporated organization.

(m) “Provider” means a person who extends a specific offer of commercial financing to a recipient. “Provider” also includes a nondepository institution, which enters into a written agreement with a depository institution to arrange for the extension of commercial financing by the depository institution to a recipient via an online lending platform administered by the nondepository institution. The fact that a provider extends a specific offer of commercial financing or lending on behalf of a depository institution shall not be construed to mean that the provider engaged in lending or originated that loan or financing.

(n) “Recipient” means a person who is presented a specific commercial financing offer by a provider that is equal to or less than five hundred thousand dollars ($500,000).

history: (History: Amended by Stats. 2022, Ch. 452, Sec. 142. (SB 1498) Effective January 1, 2023.)

division: 9.5. COMMERCIAL FINANCING DISCLOSURES

path: 9.5. COMMERCIAL FINANCING DISCLOSURES


text:
This division does not apply to any of the following:

(a) A provider that is a depository institution.

(b) A provider that is a lender regulated under the federal Farm Credit Act (12 U.S.C. Sec. 2001 et seq.).

(c) A commercial financing transaction secured by real property.

(d) A commercial financing transaction in which the recipient is a dealer, as defined by Section 285 of the Vehicle Code, or an affiliate of such a dealer, or a vehicle rental company, or an affiliate of such a company, pursuant to a specific commercial financing offer or commercial open-end credit plan of at least fifty thousand dollars ($50,000), including any commercial loan made pursuant to such a commercial financing transaction.

(e) Any person who makes no more than one commercial financing transaction in California in a 12-month period or any person who makes five or fewer commercial financing transactions in California in a 12-month period that are incidental to the business of the person relying upon the exemption.

history: (History: Added by Stats. 2018, Ch. 1011, Sec. 2. (SB 1235) Effective January 1, 2019.)


text:
(a) A provider subject to this division shall disclose all of the information in subdivision (b) or in Section 22803, if applicable, to a recipient at the time of extending a specific commercial financing offer to that recipient, and shall obtain the recipient’s signature on the disclosure before consummating the commercial financing transaction.

(b) Except as provided in Section 22803, a provider subject to this division shall disclose all of the following:

(1) The total amount of funds provided.

(2) The total dollar cost of the financing.

(3) The term or estimated term.

(4) The method, frequency, and amount of payments.

(5) A description of prepayment policies.

(6) The total cost of the financing expressed as an annualized rate.

history: (History: Amended (as added by Stats. 2018, Ch. 1011, Sec. 2, 1st text) by Stats. 2023, Ch. 376, Sec. 1. (SB 33) Effective January 1, 2024.)


text:
As an alternative to the disclosures required in subdivision (b) of Section 22802, a provider who offers commercial financing that is factoring or asset-based lending and that offers the recipient an agreement that describes the general terms and conditions of the commercial financing transaction that will occur under the agreement, may provide the following disclosures as an example of a transaction that could occur under the general agreement for a given amount of accounts receivables:

(a) An amount financed.

(b) The total dollar cost.

(c) The term or estimated term.

(d) The method, frequency, and amount of payments.

(e) A description of prepayment policies.

(f) The total cost of the financing expressed as an annualized rate.

history: (History: Amended (as added by Stats. 2018, Ch. 1011, Sec. 2, 1st text) by Stats. 2023, Ch. 376, Sec. 3. (SB 33) Effective January 1, 2024.)


text:
(a) The commissioner shall adopt regulations governing the disclosures described in paragraphs (1) to (5), inclusive, of subdivision (b) of Section 22802 and subdivisions (a) to (e), inclusive, of Section 22803. Those regulations shall include all of the following:

(1) Definitions, contents, or methods of calculations for each of the disclosure items set forth in each applicable paragraph of subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803.

(2) Requirements concerning the time, manner, and format of the applicable disclosures described in subdivision (b) of Section 22802 and subdivisions (a) to (f), inclusive, of Section 22803.

(b) The commissioner shall adopt regulations concerning the annualized rate disclosure described in paragraph (6) of subdivision (b) of Section 22802 and subdivision (f) of Section 22803. Those regulations shall include all of the following:

(1) A determination of the appropriate method to express the annualized rate disclosure and the types of fees and charges to be included in that calculation.

(2) When providers shall be permitted to disclose an estimated annualized rate, and how that estimate shall be calculated. The method of calculation determined by this paragraph shall specify the accuracy requirements and tolerance allowances for the calculation, and the types of fees and charges to be included in the calculation.

(3) Requirements concerning the time, manner, and format of the disclosure.

(c) A provider shall not be required to comply with the disclosure requirements of this division until the final regulations are adopted by the commissioner pursuant to this section and become effective on the applicable date described in Section 11343.4 of the Government Code.

history: (History: Amended by Stats. 2023, Ch. 376, Sec. 5. (SB 33) Effective January 1, 2024.)


text: No provision of this division imposes any liability on a provider as a result of the actual Annual Percentage Rate (APR) charged by a provider differing from the Estimated APR disclosed in conformity with any regulation, order, or written interpretive opinion of the commissioner or any such opinion of the Attorney General, whether or not such regulation, order, or written interpretive opinion is later amended, rescinded, or repealed or determined by judicial or other authority to be invalid for any reason.

history: (History: Added by renumbering Section 22806 by Stats. 2025, Ch. 352, Sec. 3. (SB 362) Effective January 1, 2026.)


text:
(a) A provider shall not use the term “interest” or “rate” in a deceptive way that could reasonably result in the recipient being misled.

(b) After extending a specific offer to a potential recipient, whenever a provider states a charge, pricing metric, or financing amount to the potential recipient for that specific offer during an application process for commercial financing, the provider shall also state the annual percentage rate of that commercial financing offer by using the term “annual percentage rate” or the acronym “APR.”

(c) Use of the term “interest” or “rate” is not deceptive or likely to mislead for purposes of this division if the metric of financing cost is an annual interest rate or annual percentage rate that is either fixed or floating for the period of the financing and that is expressed as a margin over an index rate.

history: (History: Added by Stats. 2025, Ch. 352, Sec. 4. (SB 362) Effective January 1, 2026.)


text:
(a) A violation of this division by a person licensed under the California Financing Law (Division 9 (commencing with Section 22000)) shall be deemed a violation of the California Financing Law if the violation relates to a commercial financing transaction that is subject to the California Financing Law.

(b) A violation of this provision shall be deemed an unfair, deceptive, or abusive act or practice under the California Consumer Financial Protection Law (Division 24 (commencing with Section 90000)) if the violation relates to a commercial financing transaction that is not subject to the California Financing Law (Division 9 (commencing with Section 22000)).

history: (History: Added by Stats. 2025, Ch. 352, Sec. 5. (SB 362) Effective January 1, 2026.)


text: This division shall be known and may be cited as the “California Deferred Deposit Transaction Law.”

history: (History: Added by Stats. 2002, Ch. 777, Sec. 10. Effective January 1, 2003. Section operative on December 31, 2004, or sooner, pursuant to Section 23104.)

chapter: 1. General Provisions

article: 1. Construction and Definitions

path: 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW > 1. General Provisions > 1. Construction and Definitions


text:
As used in this division, the following terms have the following meanings:

(a) “Deferred deposit transaction” means a transaction whereby a person defers depositing a customer’s personal check until a specific date, pursuant to a written agreement for a fee or other charge, as provided in Section 23035.

(b) “Commissioner” means the Commissioner of Financial Protection and Innovation.

(c) “Department” means the Department of Financial Protection and Innovation.

(d) “Licensee” means any person who offers, originates, or makes a deferred deposit transaction, who arranges a deferred deposit transaction for a deferred deposit originator, who acts as an agent for a deferred deposit originator, or who assists a deferred deposit originator in the origination of a deferred deposit transaction. However, “licensee” does not include a state or federally chartered bank, thrift, savings association, industrial loan company, or credit union. “Licensee” also does not include a retail seller engaged primarily in the business of selling consumer goods, including consumables, to retail buyers that cashes checks or issues money orders for a minimum fee not exceeding two dollars ($2) as a service to its customers that is incidental to its main purpose or business. “Licensee” also does not include an employee regularly employed by a licensee at the licensee’s place of business. An employee, when acting under the scope of the employee’s employment, shall be exempt from any other law from which the employee’s employer is exempt.

(e) “Person” means an individual, a corporation, a partnership, a limited liability company, a joint venture, an association, a joint stock company, a trust, an unincorporated organization, a government entity, or a political subdivision of a government entity.

(f) “Deferred deposit originator” means a person who offers, originates, or makes a deferred deposit transaction.

history: (History: Amended by Stats. 2022, Ch. 452, Sec. 143. (SB 1498) Effective January 1, 2023.)

division: 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW

article: 1. Construction and Definitions


text:
(a) A person shall not offer, originate, or make a deferred deposit transaction, arrange a deferred deposit transaction for a deferred deposit originator, act as an agent for a deferred deposit originator, or assist a deferred deposit originator in the origination of a deferred deposit transaction without first obtaining a license from the commissioner and complying with the provisions of this division. The requirements of this subdivision shall not apply to persons or entities that are excluded from the definition of “licensee” as set forth in Section 23001. This division shall not be construed to require the commissioner to create separate classes of licenses.

(b) An application for a license under this division shall be in the form and contain the information that the commissioner may by rule require and shall be filed upon payment of the fee specified in Section 23006.

(c) A licensee with one or more licensed locations seeking an additional location license may file a short form license application as may be established by the commissioner pursuant to subdivision (b) of this section.

(d) Notwithstanding any other law, the commissioner may by rule or order prescribe circumstances under which to accept electronic records or electronic signatures. This section does not require the commissioner to accept electronic records or electronic signatures.

(e) For purposes of this section, the following terms have the following meanings:

(1) “Electronic record” means an initial license application, or material modification of that license application, and any other record created, generated, sent, communicated, received, or stored by electronic means. “Electronic records” also includes, but is not limited to, all of the following:

(A) An application, amendment, supplement, and exhibit, filed for any license, consent, or other authority.

(B) A financial statement, report, or advertising.

(C) An order, license, consent, or other authority.

(D) A notice of public hearing, accusation, and statement of issues in connection with any application, license, consent, or other authority.

(E) A proposed decision of a hearing officer and a decision of the commissioner.

(F) The transcripts of a hearing.

(G) A release, newsletter, interpretive opinion, determination, or specific ruling.

(H) Correspondence between a party and the commissioner directly relating to any document listed in subparagraphs (A) to (G), inclusive.

(2) “Electronic signature” means an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record.

(f) The Legislature finds and declares that the Department of Financial Protection and Innovation has continuously implemented methods to accept records filed electronically, and is encouraged to continue to expand its use of electronic filings to the extent feasible, as budget, resources, and equipment are made available to accomplish that goal.

history: (History: Amended by Stats. 2022, Ch. 452, Sec. 144. (SB 1498) Effective January 1, 2023.)

article: 2. Licensing and Exemptions

path: 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW > 1. General Provisions > 2. Licensing and Exemptions


text: At the time of filing the application, the applicant shall pay to the commissioner the sum of one hundred dollars ($100) as a fee for investigating the application, the sum of two hundred dollars ($200) as an application fee, and the cost of fingerprint processing. The investigation fee and application fee are not refundable if an application is denied or withdrawn.

article: 2. Licensing and Exemptions


text: The applicant shall file with the application financial statements prepared in accordance with generally accepted accounting principles and acceptable to the commissioner that indicate a net worth of at least twenty-five thousand dollars ($25,000). A licensee, regardless of the number of licensed locations, shall maintain a net worth of at least twenty-five thousand dollars ($25,000) at all times.

article: 2. Licensing and Exemptions


text: Upon the filing of an application pursuant to Section 23005 and the payment of fees pursuant to Section 23006, the commissioner shall investigate the applicant, and its general partners and persons owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests if the applicant is a partnership. If the applicant is a corporation, trust, or association, including an unincorporated organization, the commissioner shall investigate its officers, directors, and persons owning or controlling, directly or indirectly, 10 percent or more of the outstanding equity securities. If the commissioner determines that the applicant has satisfied this division and does not find facts constituting reasons for denial under Section 23011, the commissioner shall issue and deliver a license to the applicant.

article: 2. Licensing and Exemptions


text: The license shall state the name of the licensee, and if the licensee is a partnership, the names of its general partners, and if a corporation or an association, the date and place of its incorporation or organization, and the address of the licensee’s principal business location. On the approval and licensing of a location pursuant to Section 23008, the commissioner shall issue an original license endorsed to show the address of the authorized location.

article: 2. Licensing and Exemptions


text: The commissioner may by regulation require licensees to file, at the times that the commissioner may specify, the information that the commissioner may reasonably require regarding any changes in the information provided in any application filed pursuant to this division.

article: 2. Licensing and Exemptions


text:
(a) Upon reasonable notice and the opportunity to be heard, the commissioner may deny the application for any of the following reasons:

(1) Any false statement of material fact has been made in the application.

(2) Any officer, director, general partner, or person owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant has, within the last 10 years (A) been convicted of or pleaded nolo contendere to a crime, or (B) committed any act involving dishonesty, fraud, or deceit, if the crime or act is substantially related to the qualifications, functions, or duties of a person engaged in business in accordance with this division.

(3) The applicant or any officer, director, or general partner, or person owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant has violated any provision of this division or the rules thereunder or any similar regulatory scheme of the State of California or a foreign jurisdiction.

(b) The application shall be considered withdrawn within the meaning of this section if the applicant fails to respond to a written notification of a deficiency in the application within 90 days of the date of the notification.

(c) The commissioner shall, within 60 days from the filing of a full and complete application for a license and the payment of required fees, either issue a license or file a statement of issues prepared in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

article: 2. Licensing and Exemptions


text:
(a) The commissioner may, after appropriate notice and opportunity for hearing, by order, censure or suspend for a period not exceeding 12 months, or bar from any position of employment, management, or control any deferred deposit originator, or any other person, if the commissioner finds either of the following:

(1) That the censure, suspension, or bar is in the public interest and that the person has committed or caused a violation of this division or rule or order of the commissioner, which violation was either known or should have been known by the person committing or causing it or has caused material damage to the deferred deposit originator, or to the public.

(2) That the person has been convicted of or pleaded nolo contendere to any crime, or has been held liable in any civil action by final judgment, or any administrative judgment by any public agency, if that crime or civil or administrative judgment involved any offense involving dishonesty, fraud, or deceit, or any other offense reasonably related to the qualifications, functions, or duties of a person engaged in the business in accordance with the provisions of this division.

(b) Within 15 days from the date of a notice of intention to issue an order pursuant to subdivision (a), the person may request a hearing under the Administrative Procedure Act (Chapter 4.5 (commencing with Section 11400) of Division 3 of Title 2 of the Government Code). Upon receipt of a request, the matter shall be set for hearing to commence within 30 days after such receipt unless the person subject to this division consents to a later date. If no hearing is requested within 15 days after the mailing or service of such notice and none is ordered by the commissioner, the failure to request a hearing shall constitute a waiver of the right to a hearing.

(c) Upon receipt of a notice of intention to issue an order pursuant to this section, the person who is the subject of the proposed order is immediately prohibited from engaging in any activities subject to licensure under the law.

(d) Persons suspended or barred under this section are prohibited from participating in any business activity of a deferred deposit originator and from engaging in any business activity on the premises where a deferred deposit originator is conducting business.

history: (History: Added by Stats. 2007, Ch. 101, Sec. 24. Effective January 1, 2008.)

article: 2. Licensing and Exemptions


text: The proceedings for denial of a license shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner has all the powers granted therein.

article: 2. Licensing and Exemptions


text:
(a) A licensee shall maintain a surety bond in accordance with this subdivision in the amount of twenty-five thousand dollars ($25,000). The bond shall be payable to the commissioner and issued by an insurer authorized to do business in this state. A copy of the bond, including any and all riders and endorsements executed subsequent to the effective date of the bond, shall be filed with the commissioner for review and approval within 10 days of execution. For licensees with multiple licensed locations, only one surety bond in the amount of twenty-five thousand dollars ($25,000) is required. The bond shall be used for the recovery of expenses, fines, and fees levied by the commissioner in accordance with this division or for losses or damages incurred by consumers as the result of a licensee’s noncompliance with the requirements of this division.

(b) When an action is commenced on a licensee’s bond, the commissioner may require the filing of a new bond. Immediately upon recovery of any action on the bond, the licensee shall file a new bond. Failure to file a new bond within 10 days of the recovery on a bond, or within 10 days after notification by the commissioner that a new bond is required, constitutes sufficient grounds for the suspension or revocation of the license.

article: 2. Licensing and Exemptions


text: In any proceeding under this division, the burden of proving an exemption or exception is upon the person claiming it.

article: 2. Licensing and Exemptions


text: The commissioner may make general rules and regulations and specific rulings, demands, and findings for the enforcement of this division, in addition to, and within the general purposes of, this division.

article: 3. Administration and Operations

path: 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW > 1. General Provisions > 3. Administration and Operations


text:
(a) It is unlawful for any person to knowingly alter, destroy, mutilate, conceal, cover up, falsify, or make a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the administration or enforcement of any provision of this division.

(b) It is unlawful for any person to knowingly make an untrue statement to the commissioner during the course of licensing, investigation, or examination, with the intent to impede, obstruct, or influence the administration or enforcement of any provision of this division.

history: (History: Added by renumbering Section 23015 (as added by Stats. 2007, Ch. 101, Sec. 25) by Stats. 2015, Ch. 303, Sec. 159. (AB 731) Effective January 1, 2016.)

article: 3. Administration and Operations


text:
(a) (1) Each licensee shall pay to the commissioner its pro rata share of all costs and expenses reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made.

(2) The pro rata share shall be the proportion that a licensee’s total dollar amount of deferred deposit transactions made bears to the aggregate total dollar amount of deferred deposit transactions made by all licensees as shown by the annual reports to the commissioner pursuant to Section 23026.

(3) Notwithstanding paragraph (2), a licensee shall neither be assessed for nor be permitted to pay less than five hundred dollars ($500) per licensed location per year.

(b) On or before the 20th day of May in each year, the commissioner shall notify each licensee by mail of the amount assessed and levied against it and that amount shall be paid within 30 days thereafter. If payment is not made within 30 days, the commissioner may assess and collect a penalty, in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.

(c) If a licensee fails to pay the assessment on or before the 30th day of June following the day upon which payment is due, the commissioner may by order summarily suspend or revoke the certificate issued to the licensee. If, after an order is made, a request for hearing is filed in writing within 30 days, and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a licensee shall not conduct business pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.

history: (History: Amended by Stats. 2024, Ch. 252, Sec. 1. (AB 3148) Effective January 1, 2025.)

article: 3. Administration and Operations


text: All money paid or collected under this division shall be deposited in the State Treasury to the credit of the State Corporations Fund. The administration of this division shall be supported out of the State Corporations Fund upon appropriation by the Legislature.

article: 3. Administration and Operations


text:
(a) A license, along with any currently effective order of the commissioner approving a different name pursuant to Section 23023, shall be conspicuously posted in the place of business authorized by the licensee.

(b) A license is not transferable or assignable. A license issued to a partnership or limited partnership is not transferred or assigned within the meaning of this section by the death, withdrawal, or admission of a partner, general partner, or limited partner, unless the death, withdrawal, or admission dissolves the partnership to which the license was issued.

article: 3. Administration and Operations


text: Every licensee shall post a complete, detailed, and unambiguous schedule of fees. The information required by this section shall be clear, legible, and in letters not less than one-half inch in height. The information shall be posted in a conspicuous location in the unobstructed view of the public within the licensee’s location.

article: 3. Administration and Operations


text: A licensee shall maintain only one place of business under an original or amended license issued pursuant to Section 23008. The commissioner may issue more than one license to the same licensee upon compliance with all the provisions of this division governing an original issuance of a license.

article: 3. Administration and Operations


text:
(a) If a licensee desires to change its place of business to a street address other than that designated in its license, the licensee shall give written notice to the commissioner at least 10 days prior to the change. The commissioner shall then provide written approval of the change and the date of the approval. A new application shall not be required for a change in the address of an existing business location previously licensed pursuant to this division.

(b) If notice is not given at least 10 days prior to the change, as required by subdivision (a), the commissioner may assess a civil penalty on the licensee not to exceed five hundred dollars ($500).

article: 3. Administration and Operations


text: No licensee shall transact the business licensed or make any transaction provided for by this division under any other name or at any other place of business than that named in the license except pursuant to a currently effective written order of the commissioner authorizing the other name or other place of business.

article: 3. Administration and Operations


text: Each licensee shall keep and use books, accounts, and records that will enable the commissioner to determine if the licensee is complying with the provisions of this division and with the rules and regulations promulgated by the commissioner. Each licensee shall maintain any other records as required by the commissioner. The commissioner or a designee of the commissioner may examine those records at any reasonable time. Upon the request of the commissioner, a licensee shall file an authorization for disclosure of financial records of the licensed businesses pursuant to Section 7473 of the Government Code. All records shall be kept for two years following the last entry on a deferred deposit transaction and shall enable an examiner to review the recordkeeping and reconcile each consumer deferred deposit transaction with documentation maintained in the consumer’s deferred deposit transaction file records.

article: 3. Administration and Operations


text: The department shall maintain a toll-free telephone number for deferred deposit transaction customers to make complaints and express concerns regarding the product or a specific licensee.

article: 3. Administration and Operations