text: No person shall, except with the prior approval of the commissioner, acquire control of a licensee.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 669. Effective January 1, 1997. Operative July 1, 1997.)

chapter: 8. Acquisition of Control

path: 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS > 8. Acquisition of Control


kind: section

code: FIN

text:
If the commissioner finds, with respect to an application for approval to acquire control of a licensee:

(a) That the applicant and the directors and officers of the applicant are of good character and sound financial standing;

(b) That it is reasonable to believe that, if the applicant acquires control of the licensee, the applicant will comply with all applicable provisions of this division and of any regulation or order issued under this division; and

(c) That the applicant’s plans, if any, to make any major change in the business, corporate structure, or management of the licensee are not detrimental to the safety and soundness of the licensee or to the public convenience and advantage;

The commissioner shall approve the application. If, after notice and a hearing, the commissioner finds otherwise, he or she shall deny the application.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 670. Effective January 1, 1997. Operative July 1, 1997.)

division: 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS


text:
(a) For purposes of Section 31551, the commissioner may find:

(1) That an applicant or a director or officer of an applicant is not of good character if such person has been convicted of, or has pleaded nolo contendere to, a crime involving fraud or dishonesty.

(2) That an applicant’s plan to make a major change in the management of a licensee is detrimental to the safety and soundness of the licensee and to the public convenience and advantage if the plan provides for a person who has been convicted of, or has pleaded nolo contendere to, a crime involving fraud or dishonesty to become a director or officer of the licensee.

(b) Subdivision (a) shall not be deemed to be the only grounds upon which the commissioner may find, for purposes of Section 31551, that an applicant or a director or officer of an applicant is not of good character or that an applicant’s plan to make a major change in the management of a licensee is detrimental to the safety and soundness of a licensee or to the public convenience and advantage.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 671. Effective January 1, 1997. Operative July 1, 1997.)


text: The commissioner may, by such regulations or orders as he or she deems necessary and appropriate, either unconditionally or upon specified terms and conditions or for specified periods, exempt from the provisions of this chapter any person or transaction or class of persons or transactions, if he or she finds such action to be in the public interest and that the regulation of such persons or transactions is not necessary for the purposes of this division.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 672. Effective January 1, 1997. Operative July 1, 1997.)


text:
In this chapter:

(a) “Acquiring licensee” means:

(1) In the case of a merger, the licensee which is the surviving corporation;

(2) In the case of a purchase or sale, the licensee which is the purchaser.

(b) “Disappearing corporation” has the meaning set forth in Section 165 of the Corporations Code.

(c) “Surviving corporation” has the meaning set forth in Section 190 of the Corporations Code.

history: (History: Added by Stats. 1977, Ch. 1164.)

path: 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS > 9. Merger and Purchase or Sale of Business


text:
No licensee shall merge with any other corporation unless:

(a) In case such licensee is the surviving corporation, such merger shall have first been approved by the commissioner;

(b) In case such licensee is a disappearing corporation, the surviving corporation is a licensee and such merger shall have first been approved by the commissioner.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 673. Effective January 1, 1997. Operative July 1, 1997.)

chapter: 9. Merger and Purchase or Sale of Business


text: No licensee shall purchase all or substantially all of the business of any other person unless such purchase shall have first been approved by the commissioner.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 674. Effective January 1, 1997. Operative July 1, 1997.)


text: No licensee shall sell all or substantially all of its business to any other person unless such other person is a licensee and such sale shall have first been approved by the commissioner.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 675. Effective January 1, 1997. Operative July 1, 1997.)


text:
If the commissioner finds, with respect to an application for approval of a merger, purchase, or sale:

(a) That the merger, purchase, or sale will be safe and sound with respect to the acquiring licensee;

(b) That it is reasonable to believe that, upon consummation of the merger, purchase, or sale, the acquiring licensee will comply with all applicable provisions of this division and of any regulation or order issued under this division; and

(c) That the merger, purchase, or sale will not be detrimental to the public convenience and advantage, or, if the merger, purchase, or sale would be detrimental to the public convenience and advantage, that it is necessary in the interests of the safety and soundness of any of the parties to it;

The commissioner shall approve the application. If, after notice and a hearing, the commissioner finds otherwise, he or she shall deny the application.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 676. Effective January 1, 1997. Operative July 1, 1997.)


history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 677. Effective January 1, 1997. Operative July 1, 1997.)


text: Any licensee may surrender its license by filing with the commissioner such license and a report which shall be in such form, shall contain such information, shall be signed in such manner, and shall (if the commissioner so requires by regulation or order) be verified in such manner, as the commissioner may by regulation or order require.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 678. Effective January 1, 1997. Operative July 1, 1997.)

chapter: 10. Voluntary Surrender of License

path: 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS > 10. Voluntary Surrender of License


text:
(a) Except as otherwise provided in subdivision (b), a voluntary surrender of a license shall be effective on the 30th day after such license and the report called for in Section 31650 are filed with the commissioner or on such earlier date as the commissioner may by order specify.

(b) If a proceeding to revoke or suspend a license is pending at the time when such license and the report called for in Section 31650 are filed with the commissioner or if a proceeding to revoke or suspend a license or to impose conditions upon the surrender of a license is instituted before the 30th day after such license and the report called for in Section 31650 are filed with the commissioner, the voluntary surrender of such license shall become effective at such time and upon such conditions as the commissioner may by order specify.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 679. Effective January 1, 1997. Operative July 1, 1997.)


text: It shall be unlawful for any person willfully to make any untrue statement of a material fact in any application or report filed with the commissioner under this division or under any regulation or order issued under this division, or willfully to omit to state in any such application or report any material fact which is required to be stated therein.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 694. Effective January 1, 1997. Operative July 1, 1997.)

chapter: 12. Crimes and Criminal Penalties

article: 1. General Provisions

path: 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS > 12. Crimes and Criminal Penalties > 1. General Provisions


text: It shall be unlawful for any person having custody of any of the books, accounts, or other records of a licensee willfully to refuse to allow the commissioner, upon request, to inspect or make copies of any of such books, accounts, or other records.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 695. Effective January 1, 1997. Operative July 1, 1997.)

article: 1. General Provisions


text: It shall be unlawful for any person, with intent to deceive any director, officer, employee, auditor, or attorney of a licensee, the commissioner, or any governmental agency, to make any false entry in any of the books, accounts, or other records of such licensee, to omit to make any entry in such books, accounts, or other records which such person is required to make, or to alter, conceal, or destroy any of such books, accounts, or other records.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 696. Effective January 1, 1997. Operative July 1, 1997.)

article: 1. General Provisions


text:
In this article, unless the context otherwise requires:

(a) “Adviser,” when used with respect to a licensee, means any person who regularly provides legal, accounting, or management services or advice to such licensee.

(b) “Associate,” when used with respect to a licensee, means:

(1) Any principal shareholder, director, officer, manager, agent, or adviser of such licensee;

(2) Any director, officer, partner, general manager, agent, employer, or employee of any person referred to in paragraph (1) of this subdivision;

(3) Any person who controls, is controlled by, or is under common control with, any person referred to in paragraph (1) of this subdivision, directly or indirectly through one or more intermediaries;

(4) Any close relative of any person referred to in paragraph (1) of this subdivision;

(5) Any person of which any person referred to in paragraphs (1) to (4), inclusive, of this subdivision is a director or officer; or

(6) Any person in which any person referred to in paragraphs (1) to (4), inclusive, of this subdivision or any combination of such persons acting in concert owns or controls, directly or indirectly, a 10 percent or greater equity interest.

(7) For purposes of this subdivision, any person who is in any of the relationships referred to in paragraphs (1) to (6), inclusive, of this subdivision within six months before or after a licensee provides financing assistance shall be deemed to be in such relationship as of the date when such licensee provides such financing assistance.

(8) For purposes of this subdivision, in case a licensee, in order to protect its interests, designates any person to serve as a director of, officer of, or in any capacity in the management of, a business firm to which such licensee provides financing assistance, such person shall not, on that account, be deemed to have any relationship with such business firm; provided, however, that this paragraph shall not apply in any case where the person has, directly or indirectly, any other financial interest in the business firm or where the person, at any time before the licensee provides the financing assistance, served as a director of, officer of, or in any other capacity in the management of, the business firm for a period of 30 days or more.

(c) “Close relative” means ancestor, lineal descendant, brother or sister and lineal descendants of either, spouse, father-in-law, mother-in-law, son-in-law, brother-in-law, daughter-in-law, or sister-in-law.

(d) “Closing services” means services performed in connection with the providing of financing assistance. “Closing services” includes (but is not limited to) appraising property and preparing credit reports. “Closing services” does not include any services performed after the providing of financing assistance.

(e) “Short-term financing assistance” means any financing assistance with a term of not more than five years.

article: 2. Conflicts of Interest

path: 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS > 12. Crimes and Criminal Penalties > 2. Conflicts of Interest


text:
(a) The commissioner may, by such regulations or orders as he or she deems necessary and appropriate, either unconditionally or upon specified terms and conditions and for specified periods, exempt from the provisions of this article any person or transaction or class of persons or transactions, if the commissioner finds such action to be in the public interest and that the regulation of such persons or transactions is not necessary for the purposes of this division.

(b) In exempting from the provisions of this article any person or transaction or class of persons or transactions, the commissioner shall give due consideration to any conflict of interest provision of federal law or regulation applicable to such person or transaction governing participants in federal financing programs.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 697. Effective January 1, 1997. Operative July 1, 1997.)

article: 2. Conflicts of Interest


text: It shall be unlawful for any licensee, directly or indirectly, to provide financing assistance to any of its associates.

article: 2. Conflicts of Interest


text:
(a) It shall be unlawful for any licensee, directly or indirectly, to provide financing assistance to any associate of another licensee if any associate of the first licensee receives, has received, or is about to receive, directly or indirectly, financing assistance or a commitment for financing assistance from such other licensee.

(b) It shall be unlawful for any licensee, directly or indirectly, to provide financing assistance to any associate of another licensee if any associate of the first licensee receives, has received, or is about to receive, directly or indirectly financing assistance or a commitment for financing assistance from a third licensee pursuant to any contract, understanding, or arrangement among such licensees.

article: 2. Conflicts of Interest


text:
It shall be unlawful for any licensee or for any associate of a licensee, directly or indirectly, to borrow money from:

(a) Any person to which such licensee has provided, or has committed to provide, financing assistance;

(b) Any director of, officer of, or person who owns a 10 percent or greater equity interest in, any person referred to in subdivision (a); or

(c) Any close relative of any person referred to in subdivision (b).

article: 2. Conflicts of Interest


text: It shall be unlawful for any licensee, directly or indirectly, to provide financing assistance to discharge, or to free other funds for use in discharging, in whole or in part, an obligation to any associate of such licensee; provided, however, that this section shall not apply to any transaction effected by an associate of a licensee in the normal course of such associate’s business involving a line of credit or short-term financing assistance.

article: 2. Conflicts of Interest


text: It shall be unlawful for any licensee, directly or indirectly, to provide financing assistance for the purchase of property from any associate of such licensee.

article: 2. Conflicts of Interest


text: It shall be unlawful for any licensee, directly or indirectly, to provide financing assistance to any person to whom any associate of such licensee provides financing assistance, either contemporaneously with, or within one year before or after, the providing of financing assistance by the licensee, if the terms on which the licensee provides financing assistance are less favorable to the licensee than the terms on which the associate provides financing assistance to the associate. In any case where the financing assistance provided by the associate of the licensee is of a different kind from the financing assistance provided by the licensee, the burden shall be on the licensee to prove that the terms on which it provided financing assistance were at least as favorable to it as the terms on which the associate provided financing assistance to the associate. This section shall not apply to any transaction effected by an associate of a licensee in the normal course of such associate’s business involving a line of credit or short-term financing assistance.

article: 2. Conflicts of Interest


text: It shall be unlawful for any associate of a licensee, directly or indirectly, to receive from any person to whom such licensee provides financing assistance, any compensation in connection with the providing of such financing assistance or anything of value for procuring, influencing, or attempting to procure or influence, the licensee’s action with respect to the providing of the financing assistance. This section shall not apply to the receipt by an associate of a licensee of fees for bona fide closing services performed by such associate; provided, however, that the associate is, with the consent and knowledge of the person to whom the financing assistance is provided, designated by the licensee to perform such services, that the services are appropriate and necessary in the circumstances, that the fees for the services are approved as reasonable by the licensee, and that the fees for the services are collected by the licensee on behalf of the associate.

article: 2. Conflicts of Interest


text: It shall be unlawful for any licensee, directly or indirectly, to sell or otherwise transfer any of its assets to any of its associates.

article: 2. Conflicts of Interest


text: Any person who violates any provision of this chapter shall upon conviction be fined not more than ten thousand dollars ($10,000) or be imprisoned pursuant to subdivision (h) of Section 1170 of the Penal Code, or in a county jail for not more than one year, or be punished by both that fine and imprisonment.

history: (History: Amended by Stats. 2011, Ch. 15, Sec. 114. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)

article: 3. Criminal Penalties

path: 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS > 12. Crimes and Criminal Penalties > 3. Criminal Penalties


text: Nothing in this division limits the power of the state to punish any person for any act which constitutes a crime under any statute.

article: 3. Criminal Penalties


text: If, after notice and a hearing, the commissioner finds that any person has violated any provision of this division or of any regulation or order issued under this division, the commissioner may order such person to pay to the commissioner a civil penalty in such amount as the commissioner may specify; provided, however, that the amount of such civil penalty shall not exceed one thousand dollars ($1,000) for each violation, or in the case of a continuing violation, one thousand dollars ($1,000) for each day for which such violation continues.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 698. Effective January 1, 1997. Operative July 1, 1997.)

chapter: 13. Civil Penalties

path: 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS > 13. Civil Penalties


text: The provisions of Section 31900 are additional to, and not alternative to, other provisions of this division which authorize the commissioner to issue orders or to take other action on account of a violation of any provision of this division or of any regulation or order issued under this division; provided, however, that no person who has been finally convicted under Chapter 12 (commencing with Section 31800) of this division on account of a violation of any provision of Chapter 12 shall be liable to pay a civil penalty under Section 31900 on account of such violation, nor shall any person who has paid a civil penalty under Section 31900 on account of a violation of any provision of Chapter 12 be liable to criminal prosecution under Chapter 12 on account of such violation.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 699. Effective January 1, 1997. Operative July 1, 1997.)


text:
In this chapter:

(a) “Member” has the meaning set forth in the old law.

(b) “Old corporation” means a corporation organized under the old law.

(c) “Old law” means Part 6 (commencing with Section 14200), Division 3, Title 1 of the Corporations Code, as added by Chapter 985 of the Statutes of 1975.

chapter: 14. Transition Provisions

path: 15. BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATIONS > 14. Transition Provisions


text:
Except as otherwise provided in Sections 31004 and 31952, the provisions of the General Corporation Law (Division 1 (commencing with Section 100), Title 1 of the Corporations Code) shall, on and after the effective date of this division, apply to each old corporation; provided, however, that, for purposes of the provisions of Chapter 23 (commencing with Section 2300) of the General Corporation Law, with respect to each old corporation:

(a) The term “effective date” shall mean the effective date of this division.

(b) The term “prior law” shall mean the old law.

(c) Each old corporation shall be deemed to be a corporation referred to in Section 162 of the Corporations Code.

history: (History: Amended by Stats. 1978, Ch. 965.)


text:
In case any old corporation has, on the effective date of this division, any members:

(a) The old law shall continue to apply with respect to matters relating to the rights and obligations of such members with respect to such old corporation and to matters relating to the rights and obligations of such old corporation with respect to such members, so long as any of such members continues to be a member of such old corporation; provided, however, that, notwithstanding any provision of the old law to the contrary, any member of an old corporation may withdraw from membership in such old corporation by giving to such old corporation written notice of its intent to withdraw from membership in such old corporation not less than 10 days before the date on which it intends to withdraw from membership in such old corporation, which date shall be specified in such notice, and the withdrawal of such member from membership in such old corporation shall be effective on such date.

(b) No person shall, on or after the effective date of this division, become a member of such old corporation.


text: This division shall be known and may be cited as the “State Assistance Fund for Enterprise Act of 1989.”

history: (History: Amended by Stats. 1989, Ch. 1040, Sec. 2.)

chapter: 1. General Provisions

path: 15.5. STATE ASSISTANCE FUND FOR ENTERPRISE, BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATION > 1. General Provisions > 1. Short Title, Construction and Severability


text:
In this division, unless the context otherwise requires:

(a) A reference to a statute or to a regulation includes such statute or regulation as amended, whether before or after the effective date of this division, as well as any new statute or regulation substituted for such statute or regulation after the effective date of this division.

(b) A reference to a governmental agency or to a public officer includes any governmental agency or public officer which succeeds after the effective date of this division to substantially the same functions as those performed by such governmental agency or public officer on the effective date of this division.

history: (History: Added by Stats. 1980, Ch. 819, Sec. 1.)

division: 15.5. STATE ASSISTANCE FUND FOR ENTERPRISE, BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATION

article: 1. Short Title, Construction and Severability


text: If any provision of this division or the application thereof to any person or circumstances is held invalid, illegal, or unenforceable, such invalidity, illegality, or enforceability shall not affect other provisions or applications of this division which can be given effect without the invalid, illegal, or unenforceable provision or application, and to this end, the provisions of this division are declared to be severable.


text:
The purposes of this division are the following:

(a) To enhance the availability of financial assistance for small business in California.

(b) To increase the cost effectiveness and efficiency of financial assistance to small businesses provided by the state.

(c) To provide maximum utilization of available federal assistance programs, including, but not limited to, the Small Business Administration’s loan guarantee program.

(d) To reduce duplication and overlap in the provisions of financing assistance to small businesses through increased coordination and direction of state assistance programs.

(e) To provide the maximum degree of leverage of the limited state resources available to assist small business, consistent with sound business practices and fiduciary responsibility.

(f) To increase the competitiveness of California’s small businesses in the world economy and the creation of jobs.

history: (History: Repealed and added by Stats. 1989, Ch. 1040, Sec. 5.)

article: 2. Legislative Purposes

path: 15.5. STATE ASSISTANCE FUND FOR ENTERPRISE, BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATION > 1. General Provisions > 2. Legislative Purposes


text: Subject to additional definitions contained in Division 15 (commencing with Section 31000) and this division which are applicable to specific provisions of these divisions and unless the context otherwise requires, the definitions in this article apply throughout this division.

article: 3. Definitions

path: 15.5. STATE ASSISTANCE FUND FOR ENTERPRISE, BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATION > 1. General Provisions > 3. Definitions


text: “Alternative energy system” means any device or combination of devices which conserves or produces heat, process heat, space heating, water heating, steam, space cooling, refrigeration, mechanical energy, electricity, or energy in any form convertible to these uses, which does not expend or use conventional energy fuels, except when such conventional energy fuels are used as a back up energy system for such alternative energy system or in conjunction with an alternative energy system.

article: 3. Definitions


text: “Conventional energy fuel” means any fuel derived from petroleum deposits, including but not limited to oil, heating oil, gasoline, fuel oil, or natural gas, including liquified natural gas, or nuclear fissionable materials. “Conventional energy fuel” includes energy produced by the use of such fuels.

article: 3. Definitions


text: “Small business” means a business defined as an eligible small business as set forth in Section 121.3-10 of Part 121, Chapter 1, Title 13 of the Code of Federal Regulations.

article: 3. Definitions


text: “State Controller” means the State Controller or any person to whom the State Controller delegates the authority to act for him or her in the particular matter.

article: 3. Definitions


text: “Rules Committee” means the rules committee of the State Senate or any person to whom the rules committee of the State Senate delegates to act for it in the particular matter.

article: 3. Definitions


text: “Speaker” means the Speaker of the State Assembly or any person to whom the Speaker of the Assembly delegates the authority to act for him in the particular matter.

article: 3. Definitions


text: “Corporation” means the State Assistance Fund for Enterprise Business and Industrial Development Corporation.

history: (History: Amended by Stats. 2004, Ch. 25, Sec. 1. Effective March 17, 2004.)

article: 3. Definitions


text: “Energy Commission” means the State Energy Resources Conservation and Development Commission.

history: (History: Amended by Stats. 2015, Ch. 303, Sec. 161. (AB 731) Effective January 1, 2016.)

article: 3. Definitions


text: “ Alternative energy business firm” means any small business engaged primarily in the business of the design, manufacture, production, assembly, distribution, marketing, sale, transportation, or installation of an alternative energy system, or, any small business engaged primarily in the business of producing, transmitting, or selling energy produced by an eligible alternative energy system.

article: 3. Definitions


text: “Board” means the board of directors of the corporation.

article: 3. Definitions


text: “President” means the president of the corporation.

article: 3. Definitions


text: “Finance officer” means the director of the finance division of the corporation.

article: 3. Definitions


text: “Governor” means the Governor of the State of California or any person to whom the Governor of the State of California delegates the authority to act for him in the particular matter.

article: 3. Definitions


text: “Savings-investment ratio” means an analysis of the proposed system in which energy cost savings are added to other net benefits and costs from operation, maintenance, replacements, depreciation, tax credits and financing costs, and divided by initial investment costs. All benefits and costs are to be evaluated in present or constant dollars.

article: 3. Definitions


text: “Life cycle cost analysis” means an analysis of a proposed system in which all costs and benefits are evaluated over the expected life of the system.

article: 3. Definitions


text: “Minimum economic feasibility” means that the net savings or benefits of an investment exceed the net costs.

article: 3. Definitions


text: “Special projects” means any financing assistance or other program undertaken by the corporation pursuant to Article 3 (commencing with Section 32720) of Chapter 6.

article: 3. Definitions


text: The Legislature hereby authorizes the creation of a nonprofit corporation pursuant to the provisions of the Nonprofit Corporation Law (Part 1 (commencing with Section 9000), Division 2, Title 1 of the Corporations Code) on January 1, 1981.

chapter: 2. Corporate Matters

article: 1. Creation of the Corporation

path: 15.5. STATE ASSISTANCE FUND FOR ENTERPRISE, BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATION > 2. Corporate Matters > 1. Creation of the Corporation


text:
Except as otherwise provided in this division:

(a) The Nonprofit Corporation Law shall apply to the corporation. However, whenever any provision of the Nonprofit Corporation Law conflicts with any provision of this division, the provision of the Nonprofit Corporation Law shall not apply and the provision of this division shall apply.

(b) The Business and Industrial Development Corporation Law (Division 15 (commencing with Section 31000)) shall apply to this corporation. However, whenever any provision of the Business and Industrial Development Corporation Law conflicts with any provision of this division, the provision of the Business and Industrial Development Corporation Law shall not apply and the provision of this division shall apply.

(c) The Small Business Development Corporation Law (Chapter 1 (commencing with Section 14000) of Part 5 of Division 3 of Title 1 of the Corporations Code) shall apply to the corporation, except that, to the extent of any conflict between those provisions and this division, the provisions of this division shall prevail.

(d) Whenever a conflict exists between any of the following acts, the conflict shall be resolved by applying the conflicting provision contained in the act in order of preference as listed in this subdivision, and the applicable provision shall prevail over the other conflicting provisions:

(1) The Business and Industrial Development Corporations Law (Division 15 (commencing with Section 31000)).

(2) The Small Business Development Corporation Law (Ch. 1 (commencing with Section 14000), Pt. 5, Div. 3, Corp. C.).

(3) The Nonprofit Corporation Law (Div. 2 (commencing with Section 5000) Pt. 1, Corp. C.).

(e) The State Assistance Fund for Enterprise, Business, and Industrial Development Corporation (SAFE-BIDCO), which was established by this division, meets the definition of a community development financial institution for purposes of eligibility consistent with Sections 12209, 17053.57, and 23657 of the Revenue and Taxation Code.

history: (History: Amended by Stats. 2002, Ch. 939, Sec. 1. Effective September 27, 2002.)

article: 1. Creation of the Corporation


text: The name of this corporation shall be: State Assistance Fund for Enterprise, Business and Industrial Development Corporation.

history: (History: Amended by Stats. 1989, Ch. 1040, Sec. 6.5.)

article: 2. Corporate Name

path: 15.5. STATE ASSISTANCE FUND FOR ENTERPRISE, BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATION > 2. Corporate Matters > 2. Corporate Name


text: Except as provided in Sections 32325 and 32352.5, the board of directors of the corporation shall consist of six members, two official and four public directors.

history: (History: Amended by Stats. 2004, Ch. 25, Sec. 4. Effective March 17, 2004.)

article: 3. Board of Directors

path: 15.5. STATE ASSISTANCE FUND FOR ENTERPRISE, BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATION > 2. Corporate Matters > 3. Board of Directors


text:
(a) The official members of the board shall be:

(1) A member of the Governor’s cabinet, or his or her designee.

(2) One member of the Energy Commission, selected and appointed by the members of the Energy Commission.

(b) The public members of the board shall be:

(1) One member selected and appointed by the Senate Rules Committee.

(2) One member selected and appointed by the Speaker of the Assembly.

(3) Two members selected and appointed by the Governor as follows:

(A) One member with a minimum three years’ experience as an owner, partner, officer, or employee of a California-based small business.

(B) One member with a minimum three years’ experience as an officer or employee of a financial institution.

history: (History: Amended by Stats. 2004, Ch. 25, Sec. 5. Effective March 17, 2004.)

article: 3. Board of Directors


text:
(a) The terms of official members of the board shall coincide with their official terms of office, except in the case of the member selected and appointed by the members of the Energy Commission, who shall serve on the board until he or she is no longer a member of the Energy Commission or until he or she is replaced by a vote of the Energy Commission.

(b) The public members of the board shall be appointed by the Rules Committee, Speaker, and Governor in such a manner that they shall hold office for overlapping terms. At the time of the appointment of first directors, the first term of the directors appointed by the Rules Committee and Speaker shall be approximately two years. At the time of the appointment of first directors, the first term of the directors appointed by the Governor shall be approximately one year for one director and approximately three years for two directors. Thereafter, the terms of all public directors shall be three years. Directors shall be eligible for reappointment for an unlimited number of terms.

(c) A public director’s tenure shall continue until his successor has been appointed and has taken his position on the board.

(d) In the case of public members, vacancies shall be filled by appointment of the respective appointing authority for the unexpired remainder of the term.

article: 3. Board of Directors


text:
(a) The directors selected and appointed by the Governor, Rules Committee, and Speaker shall meet the requirements of subdivision (d) of Section 31152.

(b) The directors shall hold office until the directors of the State Assistance Fund for Enterprise, Business and Industrial Development Corporation take office.

history: (History: Amended by Stats. 1989, Ch. 1040, Sec. 8.)

article: 3. Board of Directors


text:
(a) The official directors shall serve without compensation, except that they shall be reimbursed for their actual and necessary expenses incurred in the performance of their duties, or at the discretion of the board, may receive a reasonable per diem payment and mileage charge as reimbursement for living and traveling expenses incurred in the performance of duties away from their principal areas of residence. The amount of such per diem payment shall not exceed the rate established by the state for any calendar day. No director shall receive per diem both in the course of his official duties and from the corporation for the same calendar day.

(b) All other directors may, at the discretion of the board, be paid a stipend in addition to reimbursement for their actual and necessary expenses incurred in the performance of their duties or reasonable per diem payment and mileage charge. The amount of any per diem payment shall not exceed the rate established by the state for any calendar day. The board shall determine the amount of the stipend received by public directors, provided, however, that such stipend shall not exceed one hundred dollars ($100) for any calendar day. Additionally, public directors may not receive stipends for more than 25 days in any calendar year.

history: (History: Amended by Stats. 2004, Ch. 25, Sec. 6. Effective March 17, 2004.)

article: 3. Board of Directors


text:
If the corporation becomes a federal Community Development Financial Institution (CDFI), in addition to the official and public directors provided for in Section 32321, the board may select not more than three private directors to assist the board in managing the corporation, subject to the following:

(a) Private directors shall serve on the board in an advisory and voluntary capacity.

(b) Each private director shall be knowledgeable about the CDFI target market.

(c) At the discretion of the board, private directors shall be eligible to receive compensation, subject to the limitations contained in subdivision (b) of Section 32324.

history: (History: Amended by Stats. 2004, Ch. 25, Sec. 7. Effective March 17, 2004.)

article: 3. Board of Directors


text: The board of directors of the corporation shall establish a loan committee, which shall review, rank, and approve or disapprove applications for loans under this division in accordance with procedures and criteria adopted by the board of directors. The loan committee shall consist of persons appointed by, and who shall serve at the pleasure of, the board of directors of the corporation.

history: (History: Repealed and added by Stats. 1989, Ch. 1040, Sec. 9.5.)

article: 3. Board of Directors


text:
The management of the corporation shall be conducted by the board of directors, subject to the following limitations:

(a) All action taken by the board of directors shall require the approval of a majority of the board present at a meeting at which there is a quorum or by unanimous written consent of all directors.

(b) The board of directors shall file revised articles of incorporation with the Secretary of State no later than January 30, 1990.

(c) The board of directors shall apply for a revised license as a California Business and Industrial Development Corporation by March 1, 1990.

history: (History: Amended by Stats. 1989, Ch. 1040, Sec. 10.)

article: 4. Management of the Corporation

path: 15.5. STATE ASSISTANCE FUND FOR ENTERPRISE, BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATION > 2. Corporate Matters > 4. Management of the Corporation


text: The operations of the corporation shall be directed by the president of the corporation, who shall be selected and appointed by the board.

article: 4. Management of the Corporation


text: The corporation shall adopt bylaws, which shall include provisions governing the election of officers; the establishment and functions of committees; eligibility criteria for loan applications and application procedures; procedures for the deposit and sale of government guaranteed securities; and the establishment of loan loss reserves.

history: (History: Added by Stats. 1989, Ch. 1040, Sec. 10.2.)

article: 4. Management of the Corporation


text:
(a) The corporation may appoint such agents and employees as it requires, and determine their qualifications, duties, terms of employment, and compensation. The corporation shall adopt personnel rules and regulations applicable to its employees.

(b) The corporation may contract for such legal counsel as in its judgment is necessary or advisable to enable it to carry out its purposes.

article: 6. Powers, Exclusions and Prohibitions

path: 15.5. STATE ASSISTANCE FUND FOR ENTERPRISE, BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATION > 2. Corporate Matters > 6. Powers, Exclusions and Prohibitions


text: The corporation shall not provide financing assistance to any business firm in this state unless such business firm meets the financial and eligibility criteria for the specific type of financial assistance to be provided by the corporation, including, where appropriate, prior application to a bank or other financial institution for a loan or other financial assistance.

history: (History: Amended by Stats. 1986, Ch. 1338, Sec. 6.)

article: 6. Powers, Exclusions and Prohibitions


text:
The corporation shall (a) be empowered to do and perform all acts contemplated for a business and industrial development corporation, and (b) upon approval of the Small Business Development Board, perform acts contemplated for a small business development corporation, pursuant to Part 5 (commencing with Section 14000) of the Corporations Code.

Notwithstanding any other provision of law, upon approval by the Small Business Development Board of the corporation’s application to become a small business development corporation pursuant to this section, the sum of seven hundred fifty thousand dollars ($750,000) shall be transferred from the State Enterprise Loan Fund for deposit in the Small Business Expansion Fund created pursuant to Section 14029 of the Corporations Code for immediate transfer to a loan fund established pursuant to Section 14045 of the Corporations Code. Upon suspension of the corporation as a small business development corporation, the funds shall be transferred to the Small Business Expansion Fund pursuant to Section 14025 of the Corporations Code.

history: (History: Amended by Stats. 1989, Ch. 1040, Sec. 12.)

article: 6. Powers, Exclusions and Prohibitions


text:
(a) If the corporation becomes a small business development corporation pursuant to Section 32352, the official and public members of the board of directors shall, within 30 days thereafter, appoint three additional directors to the board, who shall be residents of the region to be served by the corporation when acting as a small business development corporation.

(b) For purposes of this section, the three regional directors appointed pursuant to subdivision (a) shall be appointed by the official and public members of the board as full voting members of the board.

history: (History: Amended by Stats. 2004, Ch. 25, Sec. 8. Effective March 17, 2004.)

article: 6. Powers, Exclusions and Prohibitions


text: The financial accounts and records of the corporation shall be kept by the finance officer according to policies and rules which the board shall adopt.

history: (History: Added by Stats. 1980, Ch. 819, Sec. 1.)

chapter: 3. Corporate Finances

article: 1. Corporate Accounts

path: 15.5. STATE ASSISTANCE FUND FOR ENTERPRISE, BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATION > 3. Corporate Finances > 1. Corporate Accounts


text: The corporation shall adopt as its fiscal year the period from July 1st to and including the following June 30th.

article: 1. Corporate Accounts


text:
In addition to other accounts the board may establish, the financial accounts of the corporation shall include:

(a) A general operating account.

(b) A general reserve account.

(c) An enterprise loan fund.

(d) A government guaranteed securities trust fund.

history: (History: Amended by Stats. 1989, Ch. 1040, Sec. 15.)

article: 1. Corporate Accounts


text: Except as otherwise provided for in this division, all funds received by the corporation shall be deposited in the general operating account of the corporation.

article: 1. Corporate Accounts


text: Beginning with the fiscal year which begins July 1, 1982, and each fiscal year thereafter, the board shall not adopt any budget for the corporation in which the projected total operating expenditures exceed the expected balance of the general operating account.

article: 1. Corporate Accounts


text: In this article “trust fund” means the government guaranteed securities trust fund of the corporation.

path: 15.5. STATE ASSISTANCE FUND FOR ENTERPRISE, BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATION > 3. Corporate Finances > 3. Government Guaranteed Securities Trust Fund


text: The finance officer shall place into the trust fund all securities held by the corporation which carry a guarantee of repayment issued by the Small Business Administration or guarantee of repayment issued by any other governmental authority.

article: 3. Government Guaranteed Securities Trust Fund


text: According to policies and regulations which the board shall adopt, the finance officer shall use his or her best efforts to sell the guaranteed portion of the securities held in the trust fund to private investors or the state.


text:
The proceeds of the sale of government guaranteed securities shall be allocated to the accounts of the corporation in the following manner:

(a) That portion of the proceeds of the sale of government guaranteed securities which represents the purchase of the principal amount of the securities shall be credited to the enterprise loan fund of the corporation; and

(b) That portion of the proceeds of the sale of government guaranteed securities which represents the purchase of the future interest earnings of the securities shall be credited to the general operating account of the corporation.

history: (History: Amended by Stats. 2004, Ch. 25, Sec. 9. Effective March 17, 2004.)


text:
(a) The finance officer shall not execute any loan that is not:

(1) Approved for guarantee by the Small Business Administration, under that agency’s prevailing standards for loans of similar type, purpose, amount, and duration that are in effect at the time the guarantee is approved by the agency.

(2) Approved for guarantee by another governmental loan guarantee authority, and the minimum amount of the guarantee is not less than 50 percent of the principal amount of the loan.

(3) Made pursuant to the corporation’s participation with the Small Business Administration as a small business investment company or local development company.

(4) Less than 16 percent of the total financing package arranged between the corporation and another lender or lenders on behalf of the applicant.

(b) This section does not apply to loans made pursuant to Section 32724.

history: (History: Amended by Stats. 1994, Ch. 929, Sec. 1. Effective January 1, 1995.)

chapter: 5. Loan Operations

path: 15.5. STATE ASSISTANCE FUND FOR ENTERPRISE, BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATION > 5. Loan Operations


text: The corporation shall not provide financing assistance on any application, except for any application submitted for review as a special project, which has not been reviewed in the manner specified by the board.

history: (History: Repealed and added by Stats. 1989, Ch. 1040, Sec. 18.5.)


text: The corporation is authorized to accept any public or private financial grant in furtherance of the purposes of this division, including, but not limited to, grants for alternative energy research or demonstration projects, manpower training, or economic development.

chapter: 6. Miscellaneous

article: 3. Special Projects

path: 15.5. STATE ASSISTANCE FUND FOR ENTERPRISE, BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATION > 6. Miscellaneous > 3. Special Projects


text: The board may consider and adopt rules for the acceptance and disbursement of grants, provided, however, that the cost of administering any grant, less any payment for grant administration made to the corporation by the granting authority, shall in no case exceed 5 percent of the operating budget of the corporation in any calendar year.

history: (History: Amended by Stats. 2004, Ch. 25, Sec. 16. Effective March 17, 2004.)

article: 3. Special Projects


text: The corporation may participate with any federal or state governmental agency, department, board, bureau, or office in any program which is intended to assist the development of the alternative energy industry or to encourage economic development.

history: (History: Amended by Stats. 2004, Ch. 25, Sec. 17. Effective March 17, 2004.)

article: 3. Special Projects


text: The corporation may develop and implement a program to assist private financial institutions, to evaluate investment opportunities in alternative energy systems, and to help potential small business borrowers make contact with appropriate private sources of funds for alternative energy investments.

article: 3. Special Projects


text: Notwithstanding any other provision of this division, loans or other financing programs undertaken by the corporation in furtherance of minority enterprises and export financing shall be funded from the enterprise loan fund, or other accounts which the corporation may establish. The board shall promulgate separate loan review procedures and criteria which shall be applicable to loans and other financing programs implemented by the corporation pursuant to this section.

history: (History: Amended by Stats. 1989, Ch. 1040, Sec. 18.7.)

article: 3. Special Projects


text: The Controller shall establish, maintain, and administer a separate account within the General Fund of the State of California to effect the provisions of this chapter.

chapter: 7. Borrowing From the State

article: 2. State Enterprise Loan Fund

path: 15.5. STATE ASSISTANCE FUND FOR ENTERPRISE, BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATION > 7. Borrowing From the State > 2. State Enterprise Loan Fund


text: The name of this account shall be the “State Enterprise Loan Fund,” which fund shall be continuously appropriated for the purposes of this division.

history: (History: Amended by Stats. 1989, Ch. 1040, Sec. 20.)

article: 2. State Enterprise Loan Fund


text:
The Controller shall transfer into the fund from the General Fund and from the Energy Resources Program Account in the General Fund all moneys required to meet the loan requests of the corporation, subject to the following terms and conditions:

(a) The amount transferred to the fund from the General Fund shall not exceed one million five hundred thousand dollars ($1,500,000).

(b) The amount transferred to the fund from the Energy Resources Programs Account in the General Fund shall not exceed one million dollars ($1,000,000) and the Controller shall not transfer any money from the account to the fund unless and until both of the following occur:

(1) The corporation certifies to the Controller that it has approved not less than a total of five million dollars ($5,000,000) in loans to eligible small businesses in this state.

(2) The corporation certifies to the Controller that it will use the additional money transferred to the fund only to make new loans to eligible small businesses in this state.

history: (History: Amended by Stats. 1983, Ch. 323, Sec. 31. Effective July 1, 1983.)

article: 2. State Enterprise Loan Fund


text: The Controller shall disburse moneys from the fund to the corporation subject to the provisions of this chapter.

article: 2. State Enterprise Loan Fund


text: The Controller shall deposit in the fund all moneys received from the corporation in repayment of the principal and interest of loans made to the corporation.

article: 2. State Enterprise Loan Fund


text:
The corporation is authorized to borrow money from the fund, subject to the following terms and conditions:

(a) The interest rate on loans from the fund to the corporation shall be six percent per annum;

(b) The maximum term of the loans to the corporation shall be for 20 years;

article: 3. Borrowing from the Fund

path: 15.5. STATE ASSISTANCE FUND FOR ENTERPRISE, BUSINESS AND INDUSTRIAL DEVELOPMENT CORPORATION > 7. Borrowing From the State > 3. Borrowing from the Fund


text: Upon approval of the corporation to exercise the powers of a small business development corporation pursuant to Section 32352, the corporation shall cease to be liable for payment of interest on loans made or to be made from the fund pursuant to this article.

history: (History: Added by Stats. 1989, Ch. 1040, Sec. 21.)

article: 3. Borrowing from the Fund


text: The corporation shall make application in writing to the Controller for loans from the fund.

article: 3. Borrowing from the Fund


text:
Within five working days after receipt of an application from the corporation for a loan from the fund, the Controller shall disburse the proceeds of the loan to the corporation, unless:

(a) The corporation is in default on any previous loan from the fund; or

(b) In order to lend the amount requested by the corporation, the Controller would be required to transfer to the fund amounts which cumulatively would exceed the maximum amount specified in Section 32812.

history: (History: Amended by Stats. 1983, Ch. 323, Sec. 31.5. Effective July 1, 1983.)

article: 3. Borrowing from the Fund


text: If the Controller finds either subdivision (a) or (b) of Section 32822 to be the case, the Controller shall deny the loan application of the corporation.

article: 3. Borrowing from the Fund


text: It is the intent of the Legislature that a financial institution shall not transfer funds from a depositor’s account unless authorization has been granted by that depositor. This division is declaratory of existing case law and is intended to codify the law for the convenience of the public, regulatory authorities, and financial institutions.

history: (History: Added by Stats. 1985, Ch. 1057, Sec. 1.)

division: 19. RELEASE OF DEMAND DEPOSIT FUNDS

path: 19. RELEASE OF DEMAND DEPOSIT FUNDS


text: In accordance with the implied contract existing between a financial institution and its depositor, no bank, savings association, credit union, or other financial institution operating in this state which maintains and services demand deposit accounts, including NOW accounts, may release any funds from those accounts to any person or entity who is not the account holder, unless the funds are released pursuant to the depositor’s authorization or in accordance with the law. This section does not apply to any setoff for a debt claimed to be owed to a bank, savings association, credit union, or other financial institution by a customer.


text: This division will be known and may be cited as the California Residential Mortgage Lending Act.

history: (History: Added by Stats. 1994, Ch. 994, Sec. 7. Effective January 1, 1995. Section operative January 1, 1996, pursuant to Section 50601 (later repealed).)

chapter: 1. General

path: 20. CALIFORNIA RESIDENTIAL MORTGAGE LENDING ACT > 1. General


text: Unless the context otherwise requires, the definitions in this chapter apply throughout this division.

division: 20. CALIFORNIA RESIDENTIAL MORTGAGE LENDING ACT


text:
(a) No person shall engage in the business of making residential mortgage loans or servicing residential mortgage loans, in this state, without first obtaining a license from the commissioner in accordance with the requirements of Chapter 2 (commencing with Section 50120) or Chapter 3 (commencing with Section 50130), and any rules promulgated by the commissioner under this law, unless a person or transaction is excepted from a definition or exempt from licensure by a provision of this law or a rule of the commissioner.

(b) (1) An employee of a licensee or of a person exempt from licensure is not required to be licensed when acting within the scope of his or her employment and shall be exempt from any other law from which his or her employer is exempt, except that an individual who meets the definition of a mortgage loan originator in Section 50003.5 shall be subject to this division.

(2) A person exempt from this division may apply to the commissioner for an exempt company registration for the purpose of sponsoring one or more individuals required to be licensed as mortgage loan originators as defined in Section 50003.5 and pursuant to the SAFE Act.

(3) An exempt person applying under the exempt company registration procedure shall comply with all rules and orders that the commissioner deems necessary to ensure compliance with the SAFE Act and shall pay an annual registration fee established by the commissioner.

(c) The following persons are exempt from subdivision (a):

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

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

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

(4) A person engaged solely in business, commercial, or agricultural mortgage lending.

(5) A wholly owned service corporation of a savings and loan association or savings bank organized under the laws of this state or the wholly owned service corporation of a federally chartered savings and loan association or savings bank that is authorized to transact business in this state.

(6) An agency or other instrumentality of the federal government, or state or municipal government.

(7) An employee or employer pension plan making residential mortgage loans only to its participants, or a person making those loans only to its employees or the employees of a holding company, or an owner who controls that person, affiliate, or subsidiary of that person.

(8) A person acting in a fiduciary capacity conferred by the authority of a court.

(9) A real estate broker licensed under California law, when making, arranging, selling, or servicing a residential loan.

(10) A California finance lender or broker licensed under Division 9 (commencing with Section 22000), when acting under the authority of that license.

(11) A trustee under a deed of trust pursuant to the Civil Code, when collecting delinquent loan payments, interest, or other loan amounts, or performing other acts in a judicial or nonjudicial foreclosure proceeding.

(12) A mortgage loan originator who has obtained a license under Chapter 3.5 (commencing with Section 50140), provided that the mortgage loan originator is employed by a residential mortgage lender or servicer.

(13) A registered mortgage loan originator described in subdivision (e).

(d) An individual, unless specifically exempted under subdivision (e), shall not engage in the business of a mortgage loan originator with respect to any dwelling located in this state without first obtaining and maintaining annually a license in accordance with the requirements of Chapter 3.5 (commencing with Section 50140) and any rules promulgated by the commissioner under that chapter. Each licensed mortgage loan originator shall register with and maintain a valid unique identifier issued by the Nationwide Mortgage Licensing System and Registry.

(e) A registered mortgage loan originator is exempt from licensure under subdivisions (a) and (d), when he or she is employed by a depository institution, a subsidiary of a depository institution that is owned and controlled by a depository institution and regulated by a federal banking agency, or an institution regulated by the Farm Credit Administration.

(f) A loan processor or underwriter who is an independent contractor employed by a residential mortgage lender or servicer may not perform the activities of a loan processor or underwriter under this division unless the independent contractor loan processor or underwriter obtains and maintains a license under Section 50120.

history: (History: Amended by Stats. 2012, Ch. 264, Sec. 8. (AB 2666) Effective January 1, 2013.)


text:
(a) Every licensee engaging in the business of making, servicing, or making and servicing residential mortgage loans shall require that every mortgage loan originator employed or compensated by that licensee obtains and maintains a mortgage loan originator license from the commissioner under this division or Division 9 (commencing with Section 22000), or has first obtained a license endorsement from the commissioner of Real Estate pursuant to Article 2.1 (commencing with Section 10166.01) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code.

(b) A residential mortgage lender or servicer shall not employ a mortgage loan originator whose license or license endorsement has lapsed.

(c) A residential mortgage lender or servicer may not make or broker a residential mortgage loan unless that loan is negotiated by or applied for through a licensed mortgage loan originator.

(d) Every licensee engaged in the business of making, servicing, or making and servicing residential mortgage loans and every mortgage loan originator licensed under this division shall register with and maintain a valid unique identifier issued by the Nationwide Mortgage Licensing System and Registry.

(e) No mortgage loan originator licensed under this division and employed by a licensed residential mortgage lender or residential mortgage servicer shall engage in any activity that is not an authorized activity for a licensed residential mortgage lender or residential mortgage servicer pursuant to this division.

history: (History: Added by Stats. 2009, Ch. 160, Sec. 46. (SB 36) Effective October 11, 2009.)


text:
(a) “Annual audit” means a certified audit of the licensee’s books, records, and systems of internal control performed by an independent certified public accountant in accordance with generally accepted accounting principles and generally accepted auditing standards.

(b) “Borrower” means the loan applicant.

(c) “Buy” includes exchange, offer to buy, or solicitation to buy.

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

(e) “Control” means the possession, directly or indirectly, of the power to direct, or cause the direction of, the management and policies of a licensee under this division, whether through voting or through the ownership of voting power of an entity that possesses voting power of the licensee, or otherwise. Control is presumed to exist if a person, directly or indirectly, owns, controls, or holds 10 percent or more of the voting power of a licensee or of an entity that owns, controls, or holds, with power to vote, 10 percent or more of the voting power of a licensee. No person shall be deemed to control a licensee solely by reason of their status as an officer or director of the licensee.

(f) “Depository institution” has the same meaning as in Section 3 of the Federal Deposit Insurance Act, and includes any credit union.

(g) “Engage in the business” means the dissemination to the public, or any part of the public, by means of written, printed, or electronic communication or any communication by means of recorded telephone messages or spoken on radio, television, or similar communications media, of any information relating to the making of residential mortgage loans, the servicing of residential mortgage loans, or both. “Engage in the business” also means, without limitation, making residential mortgage loans or servicing residential mortgage loans, or both.

(h) “Federal banking agencies” means the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the National Credit Union Administration, and the Federal Deposit Insurance Corporation.

(i) “In this state” includes any activity of a person relating to making or servicing a residential mortgage loan that originates from this state and is directed to persons outside this state, or that originates from outside this state and is directed to persons inside this state, or that originates inside this state and is directed to persons inside this state, or that leads to the formation of a contract and the offer or acceptance thereof is directed to a person in this state (whether from inside or outside this state and whether the offer was made inside or outside the state).

(j) “Institutional investor” means the following:

(1) The United States or any state, district, territory, or commonwealth thereof, or any city, county, city and county, public district, public authority, public corporation, public entity, or political subdivision of a state, district, territory, or commonwealth of the United States, or any agency or other instrumentality of any one or more of the foregoing, including, by way of example, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.

(2) Any bank, trust company, savings bank or savings and loan association, credit union, industrial bank or industrial loan company, personal property broker, consumer finance lender, commercial finance lender, or insurance company, or subsidiary or affiliate of one of the preceding entities, doing business under the authority of or in accordance with a license, certificate, or charter issued by the United States or any state, district, territory, or commonwealth of the United States.

(3) Trustees of pension, profit-sharing, or welfare funds, if the pension, profit-sharing, or welfare fund has a net worth of not less than fifteen million dollars ($15,000,000), except pension, profit-sharing, or welfare funds of a licensee or its affiliate, self-employed individual retirement plans, or individual retirement accounts.

(4) A corporation or other entity with outstanding securities registered under Section 12 of the federal Securities Exchange Act of 1934 or a wholly owned subsidiary of that corporation or entity, provided that the purchaser represents either of the following:

(A) That it is purchasing for its own account for investment and not with a view to, or for sale in connection with, any distribution of a promissory note.

(B) That it is purchasing for resale pursuant to an exemption under Rule 144A (17 C.F.R. 230.144A) of the Securities and Exchange Commission.

(5) An investment company registered under the Investment Company Act of 1940; or a wholly owned and controlled subsidiary of that company, provided that the purchaser makes either of the representations provided in paragraph (4).

(6) A residential mortgage lender or servicer licensed to make residential mortgage loans under this law or an affiliate or subsidiary of that person.

(7) Any person who is licensed as a securities broker or securities dealer under any law of this state, or of the United States, or any employee, officer, or agent of that person, if that person is acting within the scope of authority granted by that license or an affiliate or subsidiary controlled by that broker or dealer, in connection with a transaction involving the offer, sale, purchase, or exchange of one or more promissory notes secured directly or indirectly by liens on real property or a security representing an ownership interest in a pool of promissory notes secured directly or indirectly by liens on real property, and the offer and sale of those securities is qualified under the California Corporate Securities Law of 1968 or registered under federal securities laws, or exempt from qualification or registration.

(8) A licensed real estate broker selling the loan to an institutional investor specified in paragraphs (1) to (7), inclusive, or paragraph (9) or (10).

(9) A business development company as defined in Section 2(a)(48) of the Investment Company Act of 1940 or a small business investment company licensed by the United States Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958.

(10) A syndication or other combination of any of the foregoing entities that is organized to purchase a promissory note.

(11) A trust or other business entity established by an institutional investor for the purpose of issuing or facilitating the issuance of securities representing undivided interests in, or rights to receive payments from or to receive payments primarily from, a pool of financial assets held by the trust or business entity, provided that all of the following apply:

(A) The business entity is not a sole proprietorship.

(B) The pool of assets consists of one or more of the following:

(i) Interest-bearing obligations.

(ii) Other contractual obligations representing the right to receive payments from the assets.

(iii) Surety bonds, insurance policies, letters of credit, or other instruments providing credit enhancement for the assets.

(C) The securities will be either one of the following:

(i) Rated as “investment grade” by Standard and Poor’s Corporation or Moody’s Investors Service, Inc. “Investment grade” means that the securities will be rated by Standard and Poor’s Corporation as AAA, AA, A, or BBB or by Moody’s Investors Service, Inc. as Aaa, Aa, A, or Baa, including any of those ratings with “+” or “—” designation or other variations that occur within those ratings.

(ii) Sold to an institutional investor.

(D) The offer and sale of the securities is qualified under the California Corporate Securities Law of 1968 or registered under federal securities laws, or exempt from qualification or registration.

(k) “Institutional lender” means the following:

(1) The United States or any state, district, territory, or commonwealth thereof, or any city, county, city and county, public district, public authority, public corporation, public entity, or political subdivision of a state, district, territory, or commonwealth of the United States, or any agency or other instrumentality of any one or more of the foregoing, including, by way of example, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.

(2) Any bank, trust company, savings bank or savings and loan association, credit union, industrial loan company, or insurance company, or service or investment company that is wholly owned and controlled by one of the preceding entities, doing business under the authority of and in accordance with a license, certificate, or charter issued by the United States or any state, district, territory, or commonwealth of the United States.

(3) Any corporation with outstanding securities registered under Section 12 of the Securities Exchange Act of 1934 or any wholly owned subsidiary of that corporation.

(4) A residential mortgage lender or servicer licensed to make residential mortgage loans under this law.

(l) “Law” means the California Residential Mortgage Lending Act.

(m) “Lender” means a person that satisfies either of the following:

(1) The person is or does all of the following:

(A) The person is an approved lender for the Federal Housing Administration, Veterans Administration, Farmers Home Administration, Government National Mortgage Association, Federal National Mortgage Association, or Federal Home Loan Mortgage Corporation.

(B) The person directly makes residential mortgage loans.

(C) The person makes the credit decision in the loan transactions.

(2) The person is either of the following:

(A) Is not a natural person and engages in the activities of a loan processor or underwriter for a residential mortgage loan but does not solicit loan applicants, originate mortgage loans, or fund mortgage loans unless the person is also a lender under paragraph (1).

(B) Is a natural person and an independent contractor who engages in the activities of a loan processor or underwriter for a residential mortgage loan as described in subdivision (c) of Section 50003.6 but does not solicit loan applicants, originate mortgage loans, or fund mortgage loans unless the person is also a lender under paragraph (1).

(n) “Licensee” means, depending on the context, a person licensed under Chapter 2 (commencing with Section 50120), Chapter 3 (commencing with Section 50130), or Chapter 3.5 (commencing with Section 50140).

(o) “Makes or making residential mortgage loans” or “mortgage lending” means processing, underwriting, or as a lender using or advancing one’s own funds, or making a commitment to advance one’s own funds, to a loan applicant for a residential mortgage loan.

(p) “Mortgage loan,” “residential mortgage loan,” or “home mortgage loan” means a federally related mortgage loan as defined in Section 1024.2 of Title 12 of the Code of Federal Regulations, or a loan made to finance construction of a one-to-four family dwelling.

(q) “Mortgage servicer” or “residential mortgage loan servicer” means a person that (1) is an approved servicer for the Federal Housing Administration, Veterans Administration, Farmers Home Administration, Government National Mortgage Association, Federal National Mortgage Association, or Federal Home Loan Mortgage Corporation, and (2) directly services or offers to service mortgage loans.

(r) “Nationwide Mortgage Licensing System and Registry” means a mortgage licensing system developed and maintained by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators for the licensing and registration of licensed mortgage loan originators.

(s) “Net worth” has the meaning set forth in Section 50201.

(t) “Own funds” means (1) cash, corporate capital, or warehouse credit lines at commercial banks, savings banks, savings and loan associations, industrial loan companies, or other sources that are liability items on a lender’s financial statements, whether secured or unsecured, or (2) a lender’s affiliate’s cash, corporate capital, or warehouse credit lines at commercial banks or other sources that are liability items on the affiliate’s financial statements, whether secured or unsecured. “Own funds” does not include funds provided by a third party to fund a loan on condition that the third party will subsequently purchase or accept an assignment of that loan.

(u) “Person” means a natural person, a sole proprietorship, a corporation, a partnership, a limited liability company, an association, a trust, a joint venture, an unincorporated organization, a joint stock company, a government or a political subdivision of a government, and any other entity.

(v) “Residential real property” or “residential real estate” means real property located in this state that is improved by a one-to-four family dwelling.

(w) “SAFE Act” means the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (Public Law 110-289).

(x) “Service” or “servicing” means receiving more than three installment payments of principal, interest, or other amounts placed in escrow, pursuant to the terms of a mortgage loan and performing services by a licensee relating to that receipt or the enforcement of its receipt, on behalf of the holder of the note evidencing that loan.

(y) “Sell” includes exchange, offer to sell, or solicitation to sell.

(z) “Unique identifier” means a number or other identifier assigned by protocols established by the Nationwide Mortgage Licensing System and Registry.

(aa) For purposes of Sections 50142, 50143, and 50145, “nontraditional mortgage product” means any mortgage product other than a 30-year fixed rate mortgage.

(ab) For purposes of Section 50141, “expungement” means the subsequent order under the provisions of Section 1203.4 of the Penal Code allowing such individual to withdraw their plea of guilty and to enter a plea of not guilty, or setting aside the verdict of guilty or dismissing the accusation, information, or indictment. With respect to criminal convictions in another state, that state’s definition of expungement will apply.

history: (History: Amended by Stats. 2022, Ch. 452, Sec. 158. (SB 1498) Effective January 1, 2023.)


text:
(a) “Mortgage loan originator” means an individual who, for compensation or gain, or in the expectation of compensation or gain, takes a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan.

(b) Mortgage loan originator does not include any of the following:

(1) An individual who performs purely administrative or clerical tasks on behalf of a person meeting the definition of a mortgage loan originator, except as provided in subdivision (c) of Section 50003.6. The term “administrative or clerical tasks” means the receipt, collection, and distribution of information common for the processing or underwriting of a loan in the mortgage industry and communication with a consumer to obtain information necessary for the processing or underwriting of a residential mortgage loan, to the extent that the communication does not include offering or negotiating loan rates or terms, or counseling consumers about residential mortgage loan rates or terms.

(2) An individual who solely renegotiates terms for existing mortgage loans held or serviced by his or her employer and who does not otherwise act as a mortgage loan originator, unless the United States Department of Housing and Urban Development or a court of competent jurisdiction determines that the SAFE Act requires that employee to be licensed as a mortgage loan originator under state laws implementing the SAFE Act.

(3) An individual that is solely involved in extensions of credit relating to timeshare plans, as that term is defined in Section 101(53D) of Title 11 of the United States Code.

(4) An individual licensed as a mortgage loan originator pursuant to Article 2.1 (commencing with Section 10166.01) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code and the SAFE Act.

(5) An individual who is an employee of a federal, state, or local government agency or housing finance agency and who acts as a loan originator only pursuant to his or her official duties as an employee of the federal, state, or local government agency or housing finance agency.

(A) For purposes of this paragraph, the term “employee” means an individual whose manner and means of performance of work are subject to the right of control of, or are controlled by, a person, and whose compensation for federal income tax purposes is reported, or required to be reported, on a W-2 form issued by the controlling person.

(B) For purposes of this paragraph, the term “housing finance agency” means any authority:

(i) That is chartered by a state to help meet the affordable housing needs of the residents of the state.

(ii) That is supervised directly or indirectly by the state government.

(iii) That is subject to audit and review by the state in which it operates.

(6) (A) An employee of a bona fide nonprofit organization who exclusively originates residential mortgage loans for a bona fide nonprofit organization, and who acts as a mortgage loan originator only with respect to residential mortgage loans with terms that are favorable to the borrower.

(B) To qualify for the exemption under this paragraph, the bona fide nonprofit organization under this paragraph must register with the department on a form prescribed by the commissioner, along with documentation of all of the following by December 31 of each year:

(i) Status of a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986.

(ii) That the organization promotes affordable housing or provides home ownership education or similar services.

(iii) That the organization conducts its activities in a manner that serves public or charitable purposes, rather than commercial purposes.

(iv) That the organization receives funding and revenue, and charges fees in a manner that does not incentivize the organization or its employees to act other than in the best interests of its clients.

(v) That the organization compensates employees in a manner that does not incentivize employees to act other than in the best interests of its clients.

(vi) That the organization provides to, or identifies for, the borrower residential mortgage loans with terms favorable to the borrower and comparable to mortgage loans and housing assistance provided under government housing assistance programs.

(vii) That the organization is certified by the United States Department of Housing and Urban Development as a housing counselor who engages solely in traditional housing counseling services, if applicable.

(C) The commissioner may periodically require reports regarding the activities of the bona fide nonprofit organization, and shall examine the nonprofit organization’s books and records in accordance with the regulations of the United States Department of Housing and Urban Development, or any successor guidance or requirement by the Consumer Financial Protection Bureau. If the nonprofit organization fails to provide documentation as required by subparagraph (B), or if it does not continue to meet the criteria under subparagraph (B), the commissioner may revoke the nonprofit organization’s status as a registered bona fide nonprofit organization.

(D) For residential mortgage loans to have terms that are favorable to the borrower, the terms shall be consistent with loan origination in a public or charitable context, rather than a commercial context.

(E) In making its determinations and examinations, the commissioner may rely on the receipt and review of:

(i) Reports filed with federal, state, or local housing agencies and authorities.

(ii) Reports and attestations prescribed by the commissioner by rule or order.

(c) “Registered mortgage loan originator” means any individual who is all of the following:

(1) Meets the definition of mortgage loan originator.

(2) Is an employee of a depository institution, a subsidiary that is owned and controlled by a depository institution and regulated by a federal banking agency, or an institution regulated by the Farm Credit Administration.

(3) Is registered with, and maintains a unique identifier through, the Nationwide Mortgage Licensing System and Registry.

(d) “Loan processor or underwriter” means an individual who performs clerical or support duties as an employee at the direction of, and subject to the supervision and instruction of, a mortgage loan originator licensed by the state or a registered mortgage loan originator.

history: (History: Amended by Stats. 2012, Ch. 264, Sec. 10. (AB 2666) Effective January 1, 2013.)


text:
(a) A loan processor or underwriter who does not represent to the public, through advertising or other means of communicating or providing information, including the use of business cards, stationery, brochures, signs, rate lists, or other promotional items, that the individual can or will perform any of the activities of a loan originator shall not be required to be licensed as a mortgage loan originator.

(b) An individual engaging solely in loan processor or underwriter activities shall not represent to the public, through advertising or other means of communicating or providing information including the use of business cards, stationery, brochures, signs, rate lists, or other promotional items, that the individual can or will perform any of the activities of a mortgage loan originator.

(c) An independent contractor may not engage in the activities of a loan processor or underwriter for a residential mortgage loan unless the independent contractor loan processor or underwriter obtains and maintains a residential mortgage lender or residential mortgage servicer license and a mortgage loan originator license under this division.

history: (History: Added by Stats. 2009, Ch. 160, Sec. 49. (SB 36) Effective October 11, 2009.)


text: “Fraud,” “deceit,” and “defraud” are not limited to common law fraud or deceit.


text: This division creates and authorizes a class of exempt persons pursuant to Section 1 of Article XV of the California Constitution.

history: (History: Amended by Stats. 1995, Ch. 564, Sec. 7. Effective January 1, 1996.)


text: No person subject to this law shall use in its name “bank,” “trust,” “trustee,” “loan association,” or related terms. This section does not apply to any person licensed under the Banking Law or the Savings Association Law.


text:
(a) A residential mortgage lender shall file an application for licensure under this chapter with the commissioner to make or service residential mortgage loans in this state.

(b) A licensee may not engage in the business as a residential mortgage lender under a name other than the name that appears on the license, or a legally assumed name disclosed either in the application or in an amendment to the application, which shall be reflected on the license.

(c) A licensee may not make or service residential mortgage loans secured by real property pursuant to the authority of a license, or an exemption from licensure, under the Real Estate Law.

(d) The commissioner may, pursuant to Section 50321, order a licensee to cease any other business conducted at any location where the licensee operates under the authority of a residential mortgage lender license, if the commissioner finds that the conduct of that business has facilitated evasions of this division or the rules adopted pursuant to this division, or that the conduct of that business is in violation of any law to which that business is subject.

(e) A license issued for a business location outside this state shall constitute an agreement by the licensee to, at the sole discretion of the commissioner, either (1) make the licensee’s books, accounts, papers, records, and files available to the commissioner or the commissioner’s representatives in this state within 10 calendar days of a request from the commissioner or, (2) pay the reasonable expenses for travel, meals, and lodging of the commissioner or the commissioner’s representatives incurred during an investigation or examination made at the licensee’s location outside this state.

(f) The commissioner may, by rule, require an applicant for a residential mortgage lender or servicer license or a residential mortgage lender or servicer licensee to make some or all filings with the commissioner through the Nationwide Mortgage Licensing System and Registry.

(g) The commissioner may, by rule, require licensees to pay assessments through the Nationwide Mortgage Licensing System and Registry.

history: (History: Amended by Stats. 2009, Ch. 160, Sec. 50. (SB 36) Effective October 11, 2009.)

path: 20. CALIFORNIA RESIDENTIAL MORTGAGE LENDING ACT > 2. Licensing: Residential Mortgage Lender


text:
The commissioner shall issue a residential mortgage lender license upon the satisfaction of all of the following:

(a) The filing with the commissioner of a complete and executed application for licensure, which may, at the discretion of the commissioner, include background and experience disclosures required by any of the uniform application forms of the Nationwide Mortgage Licensing System and Registry.

(b) The payment of a nonrefundable investigation fee of one hundred dollars ($100), plus the cost of fingerprint processing and clearance, and an application filing fee of nine hundred dollars ($900).

(c) An investigation of the statements required by Section 50124 based upon which the commissioner is able to issue findings that the financial responsibility, criminal records (verified by fingerprint, at the discretion of the commissioner), experience, character, and general fitness of the applicant and of the partners or members thereof, if the applicant is a partnership or association, and of the principal officers and directors thereof, if the license applicant is a corporation, support a finding that the business will be operated honestly, fairly, and in accordance with the requirements of this division.

history: (History: Amended by Stats. 2009, Ch. 160, Sec. 51. (SB 36) Effective October 11, 2009.)

chapter: 2. Licensing: Residential Mortgage Lender


text:
(a) Except as provided in Section 50120, the information provided on an application for a residential mortgage lender, residential mortgage servicer, or residential mortgage lender and servicer license shall be sworn testimony on a form prescribed by the commissioner. If an applicant proposes to engage in business as a residential mortgage loan servicer as well as a residential mortgage lender, this information shall be set forth in the application. The commissioner may issue a license under this chapter to engage in business as a residential mortgage lender or to engage in business as a residential mortgage lender and residential mortgage loan servicer. A person filing an application under this chapter to engage in business as a residential mortgage lender and a residential mortgage loan servicer is not required to file an application under Chapter 3 (commencing with Section 50130).

(b) The application shall contain the name and complete business and residential address or addresses of the applicant. If the applicant is a partnership, association, corporation, or other entity, the application shall contain the names and complete business and residential addresses of each member, director, and principal officer. The application also shall include a description of the activities of the applicant in the detail and for the periods that the commissioner may require, including all of the following:

(1) A statement of financial solvency, noting the net worth requirements and supported by an audited financial statement prepared by an independent certified public accountant, and access to the supporting credit information as required by this division.

(2) A statement that the applicant or its members, directors, or principals, as appropriate, are at least 18 years of age. The statement may be made by providing each person’s date of birth.

(3) Information as to the character, fitness, financial and business responsibility, background, experience, and criminal convictions of any of the following:

(A) Any person that owns or controls, directly or indirectly, 10 percent or more of any class of stock of the applicant.

(B) Any person that controls, directly or indirectly, the election of 25 percent or more of the members of the board of directors of an applicant.

(C) Any person or entity that significantly influences or controls the management of the applicant.

(4) A description of any disciplinary action filed under any other license through which the person conducts its business.

(5) A description of any adverse judgments entered in court actions filed by borrowers based upon allegations of fraud, misrepresentation, or dishonesty in the conduct of the person’s business.

(6) A copy of the fidelity bond currently in effect.

(7) Other information as required by rule of the commissioner.

history: (History: Amended by Stats. 2009, Ch. 160, Sec. 52. (SB 36) Effective October 11, 2009.)


text:
(a) A residential mortgage lender license shall remain in effect until suspended, surrendered, or revoked.

(b) A residential mortgage lender licensee that ceases to engage in the business regulated by this division and desires to no longer be licensed shall inform the commissioner in writing and, at that time, surrender the license and all other indicia of licensure to the commissioner. The licensee shall file a plan for the withdrawal from regulated business, and the plan shall include a timetable for the disposition of the business. The plan shall also include a closing audit, review, or other agreed upon procedures performed by an independent certified public accountant prescribed by rule or order of the commissioner. Upon receipt of the written notice and plan, the commissioner shall review the plan and, if satisfactory to the commissioner, shall accept the surrender of the license. A license is not surrendered until its tender is accepted in writing by the commissioner after a review, and a finding has been made on the licensee’s plan required to be filed by this section, and a determination has been made that there is no violation of this law.

(c) A residential mortgage lender or servicer licensee may not surrender its license under this division and, under the authority of a real estate license, subsequently engage in residential mortgage lending or servicing activities that are subject to this division, unless the licensee has been licensed under this division for a period of five years or more.

history: (History: Amended by Stats. 2009, Ch. 160, Sec. 53. (SB 36) Effective October 11, 2009.)


text:
(a) A residential mortgage lender or servicer shall do all of the following:

(1) Maintain staff adequate to meet the requirements of this division, as prescribed by rule or order of the commissioner.

(2) Keep and maintain for 36 months from the date of final entry the business records and other information required by law or rules of the commissioner regarding any mortgage loan made or serviced in the course of the conduct of its business.

(3) File with the commissioner any report required under law or by rule or order of the commissioner.

(4) Disburse funds in accordance with its agreements and to make a good faith and reasonable effort to effect closing in a timely manner.

(5) Account or deliver to a person any personal property such as money, funds, deposit, check, draft, mortgage, other document, or thing of value, that has come into its possession and is not its property, or that it is not in law or equity entitled to retain under the circumstances, at the time that has been agreed upon or is required by law, or, in the absence of a fixed time, upon demand of the person entitled to the accounting or delivery.

(6) File with the commissioner an amendment to its application prior to any material change in the information contained in the application for licensure, including, without limitation, the plan of operation. The commissioner shall, within 20 business days of receiving a completed amendment to the application, or within a longer time if agreed to by the licensee, approve or disapprove the effectiveness of the proposed amendment.

(7) Comply with the provisions of this division, and with any order or rule of the commissioner.

(8) Submit to periodic examination by the commissioner as required by this division.

(9) Advise the commissioner by amendment to its application of any material judgment filed against, or bankruptcy petition filed by, the licensee within five days of the filing.

(10) Notify the commissioner, in writing, prior to opening a branch office in this state or changing its business location or locations or its branch offices from which activities subject to this division are conducted.

(11) Comply with all applicable state and federal tax return filing requirements.

(12) Refrain from employing, or paying a commission or other fee to, a mortgage loan originator who is not licensed in this state, unless the individual is exempt from licensure.

(13) Refrain from committing a crime against the laws of any state or the United States, involving moral turpitude, misrepresentation, fraudulent or dishonest dealing, or fraud, and disclose to the commissioner any final judgment entered against it in a civil action upon grounds or allegations of fraud, misrepresentation, or deceit.

(14) Refrain from engaging in conduct that would be cause for denial of a license.

(15) Remain solvent.

(16) Proceed with due care and competence in performing any act for which it is required to hold a license under this division.

(17) Comply with any other requirement established by rule of the commissioner.

(b) The commissioner may require an applicant to submit a statement agreeing to comply with the requirements of this section.

history: (History: Amended by Stats. 2009, Ch. 160, Sec. 54. (SB 36) Effective October 11, 2009.)


text:
The commissioner may refuse to issue a residential mortgage lender or servicer license if any of the following apply:

(a) The applicant is not in material compliance with a provision of this division or an order or rule of the commissioner.

(b) The commissioner cannot make the findings specified in subdivision (c) of Section 50121.

(c) A material requirement for issuance of a license has not been met.

history: (History: Amended by Stats. 2009, Ch. 160, Sec. 55. (SB 36) Effective October 11, 2009.)


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

(1) A false statement of a 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, 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.

(4) The applicant employs a mortgage loan originator who is not licensed in this state, unless the mortgage loan originator is exempt from licensure.

(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, including the receipt of background and investigative reports from the Department of Justice or other government agencies, and the payment of the fees required by Section 50121, issue either a residential mortgage lender or servicer license or 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.

history: (History: Amended by Stats. 2009, Ch. 160, Sec. 56. (SB 36) Effective October 11, 2009.)


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


text: As used in this act, the term “principal officer” means an officer with direct responsibility for the conduct of the residential mortgage lender or servicer licensee’s or license applicant’s lending or servicing activities in this state.

history: (History: Amended by Stats. 2009, Ch. 160, Sec. 57. (SB 36) Effective October 11, 2009.)