text: When the property and business of a member, other than a special member, has been liquidated or is in the process of liquidation by the commissioner and the proceeds of liquidation distributed ratably are insufficient to pay up to fifty thousand dollars ($50,000) of each thrift obligation specified in Section 18523, the commissioner shall direct Guaranty Corporation to pay and Guaranty Corporation shall pay each such deficiency at the direction of and in amounts as directed by the commissioner within 10 days from the date the commissioner makes demand for payment. If the total funds available from Guaranty Corporation at that time are insufficient to pay in full the amounts provided by Section 18523, the amount paid to each thriftholder shall be ratably reduced in proportion to the amount by which the fund is deficient, and thereafter further payments shall be made ratably to such thriftholders in accordance with the directions of the commissioner as additional funds are paid into the fund from assessments or otherwise. If the thrift obligations are paid, each member’s account and special member’s account shall be reduced ratably based on the account balance for the total amount paid.

history: (History: Amended by Stats. 1985, Ch. 142, Sec. 13. Effective July 1, 1985.)

article: 2. General

path: 7. INDUSTRIAL LOAN COMPANIES > 7. Guarantee of Thrift Accounts > 2. General


kind: section

code: FIN

text:
(a) When the property and business of a member, other than a special member, is being liquidated, the commissioner may direct Guaranty Corporation to pay each thrift obligation of the member specified in Section 18523 up to fifty thousand dollars ($50,000). Guaranty Corporation shall pay the thrift obligations at the direction of, and in the amounts directed by, the commissioner within 10 days from the date the commissioner makes demand for payment under this section. If the total funds available from Guaranty Corporation at that time are insufficient to pay in full the amounts provided by Section 18523, the amount paid to each thriftholder shall be ratably reduced in proportion to the amount by which the fund is deficient, and thereafter further payments shall be made ratably to those thriftholders in accordance with the directions of the commissioner as additional funds become available to Guaranty Corporation.

(b) When any thrift obligation is paid up to the guaranteed amount as provided in subdivision (a), Guaranty Corporation shall be assigned all rights, title, and interest to each individual thrift obligation up to the amount paid by Guaranty Corporation to each individual thriftholder.

(c) Guaranty Corporation shall first receive ratable liquidation proceeds up to the amount paid by Guaranty Corporation to a thriftholder prior to any payment of liquidation proceeds to a thriftholder whose account was in excess of fifty thousand dollars ($50,000).

(d) Each member’s account and each special member’s account shall be reduced ratably based on the account balance for the total amount paid pursuant to subdivision (a). Liquidation proceeds paid to Guaranty Corporation pursuant to subdivision (c) shall ratably increase each member and special member account based on the account balance for the total amount paid pursuant to subdivision (a).

history: (History: Amended by Stats. 1985, Ch. 142, Sec. 14. Effective July 1, 1985.)

division: 7. INDUSTRIAL LOAN COMPANIES

chapter: 7. Guarantee of Thrift Accounts

article: 2. General


text:
Whenever it appears to the commissioner that Guaranty Corporation has:

(a) Violated its articles of incorporation or any law of this state;

(b) Not paid amounts as directed by the commissioner pursuant to Section 18490;

(c) Invested its funds in violation of Section 18497;

(d) Not levied assessments as required by Sections 18535 and 18536;

(e) Has not brought and diligently prosecuted an action to enforce payment as required by Section 18538;

(f) Violated any section of this chapter; or

(g) Neglected or refused to submit its books, papers, and affairs to the inspection of any examiner; the commissioner may forthwith take possession of the property and business of Guaranty Corporation and retain possession until Guaranty Corporation satisfies the commissioner that it will operate in conformity with this chapter. During the time the commissioner has such possession he shall perform the duties and carry out the obligations of Guaranty Corporation.

history: (History: Added by Stats. 1976, Ch. 964.)

article: 2. General


text: Whenever the commissioner has taken possession of the property and business of Guaranty Corporation, Guaranty Corporation within 10 days after such taking, if it deems itself aggrieved thereby, may apply to the superior court in the county in which the head office of Guaranty Corporation is located to enjoin further proceedings. The court, after citing the commissioner to show cause why further proceedings should not be enjoined, and after a hearing and a determination of the facts upon the merits, may dismiss such application or enjoin the commissioner from further proceedings and direct him to surrender the property and business to Guaranty Corporation, or make such further order as may be just.

article: 2. General


text: An appeal may be taken from the judgment of the court by the commissioner or by Guaranty Corporation in the manner provided by law for appeals from the judgment of a superior court to the court of appeal. An appeal from the judgment of the court does not operate as a stay of the judgment unless the court, on good cause, so orders.

history: (History: Amended by Stats. 1998, Ch. 931, Sec. 150. Effective September 28, 1998.)

article: 2. General


text:
(a) Guaranty Corporation shall have independent authority to approve membership, or suspend or revoke the right to participate in Guaranty Corporation by any member for cause and to submit reports and make recommendations to the commissioner regarding the financial condition of any member and shall also do so if requested by the commissioner. These reports and recommendations shall not be public documents. There shall be no liability on the part of, and no cause of action of any nature shall arise against, Guaranty Corporation or its members, directors, officers, employees or agents, or the commissioner or his or her authorized representatives, for any statements made by them in any reports or recommendations made hereunder.

(b) In order to permit Guaranty Corporation to fulfill its obligations under subdivision (a), upon the written request of Guaranty Corporation the commissioner may furnish to Guaranty Corporation a copy of financial statements or reports filed by a member or an industrial loan company making application to participate in Guaranty Corporation and a copy of the commissioner’s analysis of an industrial loan company’s receivables. Except for reports filed under Sections 18407 and 18410, such statements and reports shall not be public documents, and the information contained therein shall be privileged, and confidential to Guaranty Corporation for its sole use in carrying out its statutory functions. There shall be no liability on the part of, and no cause of action of any nature shall arise against the State of California, the commissioner or members of the commissioner’s staff or the commissioner’s authorized representatives, for the release of any information furnished to Guaranty Corporation pursuant to this subdivision.

(c) By written consent of a majority of its directors, Guaranty Corporation, in order to fulfill its obligations under subdivision (a), may appoint an independent certified public accountant or public accountant to prepare an audit report containing audited financial statements, together with such other information as Guaranty Corporation, in good faith, requires regarding the financial condition of any member. For the purposes of examination and investigation the certified public accountant or public accountant appointed by Guaranty Corporation shall have free access to the offices and places of business, books, accounts, papers, records, files, safes and vaults of the member.

(d) By written consent of a majority of its directors, Guaranty Corporation, in order to fulfill its obligations under subdivision (a), may hire or appoint specialized committees or employees to investigate the operations of a member company. Guaranty Corporation may have its specialized employees or committees investigate the affairs and examine the books, accounts, records and files used in the business of the member. For the purposes of examination and investigation the specialized employees and committees of Guaranty Corporation shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of the member.

(e) Costs and expenses for such audit report or special investigation report shall be paid by Guaranty Corporation.

(f) Any person who uses any information obtained under subdivision (b), (c) or (d) for any purpose not authorized by subdivision (a) is guilty of a misdemeanor.

(g) The powers granted to the Guaranty Corporation by this section may not be exercised in connection with special members.

history: (History: Amended by Stats. 1985, Ch. 142, Sec. 16. Effective July 1, 1985.)

article: 2. General


text:
(a) A director, officer, employee, or agent of Thrift Guaranty Corporation shall be subject to liability for acts of fraud, willful misconduct, or reckless or criminal acts arising out of, or in connection with, the performance of his or her duties on behalf of Thrift Guaranty Corporation, but shall not be subject to liability or causes of action for acts other than those set forth in this section.

(b) The board of directors shall exercise reasonable efforts to obtain directors, officers, employees, and agents, errors and omissions liability insurance coverage and shall within 30 days from the end of each fiscal year submit to the commissioner its reports, advising the commissioner of the terms and costs of such coverage, if available.

history: (History: Added by Stats. 1985, Ch. 1349, Sec. 1. Effective October 1, 1985.)

article: 2. General


text:
Guaranty Corporation may invest its funds only in readily marketable securities as provided by rules of the commissioner.

Upon request of the commissioner, Guaranty Corporation shall furnish an authorization for disclosure to the commissioner of financial records of such funds pursuant to Section 7473 of the Government Code.

history: (History: Amended by Stats. 1985, Ch. 142, Sec. 17. Effective July 1, 1985.)

article: 2. General


text: Income from investments shall be recorded in an income account and be used to defray expenses of administration. Income from investments that exceeds an amount determined by the board of directors to be adequate to provide for current expenses may be credited to members’ accounts. Each member’s account shall receive credit ratably based on the account balance, for the amount of the excess. Income received by Guaranty Corporation, whether or not credited to members’ accounts, shall be subject to a demand of the commissioner made pursuant to Section 18490 except as to that portion reserved by the board of directors for expenses of administration during the calendar year.

article: 2. General


text: Expenses of administration that exceed income from investments at year end shall be charged to members’ accounts. Each member’s account shall be charged ratably based on the account balance for the amount of the excess.

article: 2. General


text:
Guaranty Corporation shall have authority to:

(a) Borrow funds when necessary to effectuate the provisions of this chapter.

(b) Make loans to, deposits in, purchase assets or securities of, assume liabilities of, or make contributions to any Guaranty Corporation member to minimize the deficiency payments that might be required under Article 2 (commencing with Section 18490).

(c) Organize a new thrift company to assume the thrift obligations and temporarily perform the functions of the closed company. The commissioner may waive any provision of the Industrial Loan Law necessary to enable Guaranty Corporation to organize a new thrift company.

(d) Act as a conservator or receiver of a member company that the commissioner has taken possession of.

(e) Guaranty Corporation may use the fund, or any portion of the fund, in exercising its authority.

(f) Employ consultants, advisors, and others to assist Guaranty Corporation in fulfilling its obligations and objectives.

history: (History: Amended by Stats. 1985, Ch. 142, Sec. 18. Effective July 1, 1985.)

article: 2. General


text: The commissioner shall give prompt notice to Guaranty Corporation when the commissioner takes possession of the property and business of a member and shall give further prompt notice when the commissioner determines to liquidate the property and business of a member.

article: 2. General


text: Memberships issued by Guaranty Corporation shall be nontransferable and shall be exempt from the provisions of the Corporate Securities Law of 1968.

article: 2. General


text: The commissioner and the commissioner’s duly designated representatives may at any time investigate the affairs and examine the books, accounts, records and files used by Guaranty Corporation. The commissioner and the commissioner’s duly designated representatives shall have free access to the offices, books, accounts, papers, records, files, safes, and vaults of Guaranty Corporation.

history: (History: Amended by Stats. 1985, Ch. 142, Sec. 19. Effective July 1, 1985.)

article: 2. General


text: Any member or industrial loan company making application to participate in Guaranty Corporation aggrieved by any action or decision of Guaranty Corporation may appeal to the commissioner within 30 days from the action or decision.

history: (History: Amended by Stats. 1985, Ch. 142, Sec. 20. Effective July 1, 1985.)

article: 2. General


text:
(a) After consultation with, and approval by, the Thrift Guaranty Corporation, the commissioner shall adopt rules and regulations regarding information to be given to holders of investment certificates of industrial loan companies including, but not limited to, information containing any reference to a guarantee or insurance program of investment certificates, and the time and conditions for payments to the holders of investment certificates, in the event an industrial loan company is taken over by the commissioner. These regulations shall include the means for informing investment certificate holders of their rights.

(b) It is the intent of the Legislature that the commissioner authorize information which can be clearly understood by a typical investment certificate holder. In addition, the information may in no way imply that the State of California stands behind or is involved with any type of guarantee or insurance program for industrial loan companies investment certificate holders.

(c) These rules and regulations shall be adopted on an emergency basis within 60 days of the effective date of this section.

history: (History: Repealed and added by Stats. 1985, Ch. 142, Sec. 21.5. Effective July 1, 1985.)

article: 2. General


text: No person shall advertise, print, display, publish, distribute, or broadcast, or cause or permit to be advertised, printed, displayed, published, distributed, or broadcast, in any manner any statement or representation with regard to its membership in Guaranty Corporation or that any of its thrift obligations are in any manner guaranteed.

history: (History: Amended by Stats. 1989, Ch. 583, Sec. 3.)

article: 2. General


text: In order to permit Guaranty Corporation to fulfill its obligations under this chapter, the commissioner shall furnish to Guaranty Corporation a list of all industrial loan companies that are not insured companies which have outstanding thrift obligations and one copy of the independent audit report on each such industrial loan company filed with him as of the preceding December 31 and not later than April 1 of each year.

history: (History: Amended by Stats. 1986, Ch. 1011, Sec. 5. Effective September 23, 1986.)

article: 2. General


text: An industrial loan company or its successor shall not be entitled to receive a refund, return, withdrawal, or distribution of the amount in its member’s account or of any assessments paid by it except upon liquidation of Guaranty Corporation.

history: (History: Repealed and added by Stats. 1989, Ch. 583, Sec. 5.)

article: 2. General


text:
(a) Guaranty Corporation may elect to wind up and dissolve upon approval of the commissioner, the board, and the members in accordance with Section 8610 of the Corporations Code, after (1) each industrial loan company has become a member of the Federal Deposit Insurance Corporation or redeemed all of its outstanding thrift obligations or (2) Guaranty Corporation has satisfied its guarantee of thrift obligations as provided in this chapter.

(b) Upon liquidation, after complying with the provisions of Section 8713 of the Corporations Code and notwithstanding Section 8717 of the Corporations Code, the assets of Guaranty Corporation shall be distributed to its members, past and present, including special members, ratably based on the balance of the members’ accounts, as established by resolution of the Board of Directors of Guaranty Corporation in accordance with the following:

(1) The account of each member, past and present, including special members, shall be credited with all assessments paid by the member to Guaranty Corporation.

(2) For each fiscal year, all current and prior expenses of administration of Guaranty Corporation shall be charged to the accounts of all members, past and present, including special members, ratably based on the balance of each account.

(3) With respect to the account of each member to whom Guaranty Corporation has advanced funds or on whose behalf Guaranty Corporation has paid claims and expenses, the following adjustments shall be made:

(A) The member’s account shall be charged in the amount of the funds advanced or paid as of the date of advance or payment.

(B) If the amount advanced or paid exceeds the balance of the member’s account, then (i) the member’s account shall be deemed to have been closed, and the excess shall be allocated and charged ratably to the accounts of all other members, past and present, including special members, and (ii) if the member continued to operate after the date of the advance or payment, whether under new ownership or management or under the management of Guaranty Corporation, then a new member account shall, for purposes of this section, be deemed to have been established for the member with a zero balance, which shall be credited with subsequent assessments paid.

history: (History: Repealed and added by Stats. 1989, Ch. 583, Sec. 7.)

article: 2. General


text: The Board of Directors of Guaranty Corporation shall be composed of five members, at least two of which shall be public members. The five members shall be appointed by the commissioner. The commissioner shall consult with the President of Thrift Guaranty Corporation before making an appointment. Public members shall not be affiliated with any company or affiliate of any company or employed by any state agency. A public member shall not be a relative of any officer or director of any company or its affiliates.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 614. Effective January 1, 1997. Operative July 1, 1997.)

article: 2. General


text: Guaranty Corporation shall establish a permanent office in this state.

history: (History: Added by Stats. 1985, Ch. 142, Sec. 25. Effective July 1, 1985.)

article: 2. General


text: The commissioner may require Guaranty Corporation to obtain a bond, insurance, or reinsurance which provides additional protection against losses to its members’ thriftholders. The type, amount, and form of this protection is subject to the commissioner’s written approval.

history: (History: Added by Stats. 1985, Ch. 142, Sec. 26. Effective July 1, 1985.)

article: 2. General


text: It shall be the purpose of Guaranty Corporation to guarantee full payment of guaranteed accounts of members, exclusive of special members, up to fifty thousand dollars ($50,000) for each account, subject to the express limitations provided in this chapter.

history: (History: Amended by Stats. 1985, Ch. 142, Sec. 27. Effective July 1, 1985.)

path: 7. INDUSTRIAL LOAN COMPANIES > 7. Guarantee of Thrift Accounts > 3. Purpose and Scope of Guaranty Corporation


text:
(a) Notwithstanding Section 18521 or 18100.5, until July 1, 1990, each industrial loan company, other than a premium finance agency, which has issued and has outstanding thrift obligations shall, as a condition of its authority to continue to conduct business under this division, have its outstanding thrift obligations insured or guaranteed by Thrift Guaranty Corporation, or participate as a member of the Federal Deposit Insurance Corporation; however, each industrial loan company shall, as a condition of its authority to continue to conduct business under this division, continue to participate as a member or a special member as defined in Section 18476, in Thrift Guaranty Corporation in accordance with this chapter and rules established by the Board of Directors of Thrift Guaranty Corporation until it has paid assessments required by Section 18537.

(b) On and after July 1, 1990, each industrial loan company, other than a premium finance agency, which has issued and has outstanding thrift obligations, shall, as a condition of its authority to continue to conduct business under this division, participate as a member of the Federal Deposit Insurance Corporation.

(c) Any person not transacting the business of an industrial loan company prior to the effective date of this section, who thereafter commences business under the provisions of this division, shall, upon commencement of its business, participate as a member of the Federal Deposit Insurance Corporation.

(d) Thrift Guaranty Corporation shall have the power to seek insurance, guarantee, or surety, with an insurer or surety, or guarantor authorized to transact business in this state. The insurance shall be subject to the approval of the commissioner after consultation with the Insurance Commissioner. It is the intent of the Legislature to permit Thrift Guaranty Corporation to seek insurance and Thrift Guaranty Corporation’s insurer to seek reinsurance. Thrift Guaranty Corporation shall remain in existence after July 1, 1990, to assist in the winding up, liquidation, or merger of industrial loan companies unable to comply with the requirements of subdivision (b) by that date. Thrift Guaranty Corporation shall continue to guarantee outstanding thrift obligations sold and issued prior to July 1, 1990, by an industrial loan company which has not complied with the requirements of subdivision (b) by July 1, 1990, until all outstanding thrift obligations have been redeemed by the issuer, a successor to the issuer in compliance with the requirements of subdivision (b), or Thrift Guaranty Corporation.

(e) In addition to any other provision of this section, if during that period of time ending July 1, 1990, the United States Congress or the Board of Governors of the Federal Reserve System adopt or amend a law or regulations which pertain to an industrial loan company applying for and obtaining membership in the Federal Deposit Insurance Corporation, and the new federal law or regulations prevent an industrial loan company from obtaining Federal Deposit Insurance Corporation coverage solely because the company’s holding company status prevents Federal Deposit Insurance Corporation membership, a successor to the Thrift Guaranty Corporation approved by the commissioner, or some other institutional mechanism approved by the commissioner, which obtains insurance in accordance with this subdivision, may continue to discharge its function so long as the insurance remains in effect.

(f) Within one year of the effective date of the act which adds this section, and annually thereafter until July 1, 1990, the commissioner shall report to the Legislature on the following:

(1) The progress of Thrift Guaranty Corporation in obtaining reinsurance.

(2) The progress of licensees in converting to coverage by an instrumentality of the United States government or by a private insurer, surety, or guarantor.

(3) Recommendations for additional legislation if, in the commissioner’s opinion, additional legislation would be desirable to encourage industrial loan companies to seek coverage for investment certificates from sources other than Thrift Guaranty Corporation.

The commissioner shall submit special reports on these matters as may be required by the circumstances.

history: (History: Amended by Stats. 1987, Ch. 787, Sec. 5.)

article: 3. Purpose and Scope of Guaranty Corporation


text: No industrial loan company which fails to comply with the requirements of subdivision (b) of Section 18521.5 by June 30, 1990, may continue to sell and issue investment certificates beyond that date.

history: (History: Added by Stats. 1987, Ch. 787, Sec. 6.)


text:
The following described thrift obligations will be guaranteed by Guaranty Corporation in the amounts hereinafter set forth below:

(a) Single ownership investment certificates. Funds owned by an individual and invested in the manner set forth below shall be added together and guaranteed up to fifty thousand dollars ($50,000) in the aggregate.

(1) Individual investment certificates (or investment certificates of the marital or domestic partnership community of which the individual is a member) and invested in one or more investment certificates in his or her own name shall be guaranteed up to fifty thousand dollars ($50,000) in the aggregate.

(2) Funds owned by a principal and invested in one or more investment certificates in the name or names of agents or nominees shall be added to any individual investment certificates of the principal and guaranteed up to fifty thousand dollars ($50,000) in the aggregate.

(3) Investment certificates held by guardians, custodians, or conservators for the benefit of their wards or for the benefit of a minor under a Uniform Gifts to Minors Act and invested in one or more investment certificates in the name of the guardian, custodian, or conservator shall be added to any individual investment certificates of the ward or minor and guaranteed up to fifty thousand dollars ($50,000) in the aggregate.

(b) Testamentary investment certificates.

(1) Funds owned by an individual and invested in a revocable trust investment certificate, tentative trust investment certificate, payable-on-death investment certificate, or similar investment certificate evidencing an intention that on his or her death the funds shall belong to his or her spouse, child, or grandchild, shall be guaranteed up to fifty thousand dollars ($50,000) in the aggregate, as to each such named beneficiary, separately from any other investment certificates of the owner.

(2) If the named beneficiary of such an investment certificate is other than the owner’s spouse, child, or grandchild, the funds in the investment certificate shall be added to any individual investment certificates of such owner and guaranteed up to fifty thousand dollars ($50,000) in the aggregate, separately from the individual investment certificates of the beneficiaries of the estate or of the executor or administrator.

(c) Investment certificates held by executors or administrators. Funds of a decedent held in the name of the decedent or in the name of the executor or administrator of his or her estate and invested in one or more investment certificates shall be guaranteed up to fifty thousand dollars ($50,000) in the aggregate, separately from the individual investment certificates of the beneficiaries of the estate or of the executor or administrator.

(d) Corporation or partnership investment certificates. Investment certificates of a corporation or partnership engaged in any independent activity shall be guaranteed up to fifty thousand dollars ($50,000) in the aggregate. An investment certificate of a corporation or partnership not engaged in an independent activity shall be deemed to be owned by the person or persons owning such corporation or comprising such partnership and, for guarantee purposes, the interest of each person in the investment certificate shall be added to any other investment certificates individually owned by such person and guaranteed up to fifty thousand dollars ($50,000) in the aggregate. The term “independent activity” means any activity other than one directed solely at increasing guarantee coverage under this chapter.

(e) Unincorporated associations. Investment certificates of an unincorporated association engaged in any independent activity shall be guaranteed up to fifty thousand dollars ($50,000) in the aggregate. An investment certificate of an unincorporated association not engaged in an independent activity shall be deemed to be owned by the persons comprising such association and, for guarantee purposes, the interest of each owner in the investment certificate shall be added to any other investment certificates individually owned by such person and guaranteed up to fifty thousand dollars ($50,000) in the aggregate.

(f) Joint investment certificates.

(1) Investment certificates owned jointly, whether as joint tenants with right of survivorship, as tenants by the entireties, as tenants in common, or by spouses as community property, shall be guaranteed separately from investment certificates individually owned by the coowners.

(2) A joint investment certificate shall be deemed to exist, for purposes of guarantee of investment certificates, only if each coowner has personally executed an investment certificate signature card and possesses redemption rights.

(3) An investment certificate owned jointly which does not qualify as a joint investment certificate for purposes of guarantee of investment certificates shall be treated as owned by the named persons as individuals and the actual ownership interest of each such person in such investment certificate shall be added to any other investment certificates individually owned by such person and guaranteed up to fifty thousand dollars ($50,000) in the aggregate.

(4) All joint investment certificates owned by the same combination of individuals shall first be added together and guaranteed up to fifty thousand dollars ($50,000) in the aggregate.

(5) The interest of each coowner in all joint investment certificates owned by different combinations of individuals shall then be added together and guaranteed up to fifty thousand dollars ($50,000) in the aggregate.

(g) Trust investment certificates. All trust interests for the same beneficiary invested in investment certificates established pursuant to valid trust arrangements created by the same settlor (grantor) shall be added together and guaranteed up to fifty thousand dollars ($50,000) in the aggregate, separately from other investment certificates of the trustee of such trust funds or the settlor or beneficiary of such trust arrangements.

(h) Thrift obligations withdrawn by checks that have not cleared a member’s bank account at the time the commissioner has taken possession of the property and business of a member. The owner of the funds represented by such a check shall be recognized for all purposes of a claim for guaranteed thrift obligations to the same extent as if his or her name and interest were disclosed on the records of the member.

history: (History: Amended by Stats. 2016, Ch. 50, Sec. 39. (SB 1005) Effective January 1, 2017.)


text: Notwithstanding any other provision of this division, Guaranty Corporation, with the written consent of the commissioner, shall have the power to assume obligations, enter into contracts, including contracts of guarantee or suretyship, incur liabilities, borrow money, lend money or otherwise use its credit, and secure any of its obligations, contracts, or liabilities by mortgage, pledge, security interest, or other encumbrances of all or any part of its property and assets, including, but not limited to, income from assessments of members or rights thereto, and income.

history: (History: Amended by Stats. 1985, Ch. 142, Sec. 34. Effective July 1, 1985.)


text:
Guaranty Corporation shall establish and maintain a guarantee fund as follows:

(a) Each new member, other than a new special member, shall pay one hundred thousand dollars ($100,000) to the guarantee fund to become a member.

(b) Whenever the commissioner finds that the controlling interest or 50 percent or more of the stock of a member which paid less than one hundred thousand dollars ($100,000) to become a member has been transferred, the member shall pay to the fund whatever sums are necessary to bring the member’s total contribution pursuant to subdivision (a) to one hundred thousand dollars ($100,000) or 1 percent of the member’s total outstanding thrift obligations on the date of transfer, whichever is less.

As used in this subdivision “controlling interest” means any percentage of stock which allows the stockholder to have control of management of the member company.

The provisions of this subdivision shall not be applicable (1) if the transfer of stock is between affiliated companies of a holding company and the holding company is exempt from the qualification requirement of Section 25130 of the Corporate Securities Law of 1968 by subdivision (a) or (b) of Section 25101 of the Corporations Code, or (2) if the actual or contemplated change of ownership is to the transferor’s ancestors, descendants, or spouse, or any custodian or trustee for the account of the transferor or the transferor’s ancestors, descendants, or spouse, or to a transferee by a trustee or custodian for the account of the transferee or the transferee’s ancestors, descendants, or spouse.

This subdivision shall apply, commencing January 1, 1987, to any member in existence prior to January 1, 1982. All other members shall be subject to this subdivision on and after January 1, 1982.

(c) If the total amount in the fund (less any then unpaid demand made by the commissioner pursuant to Section 18492) on March 15 of any year is less than 112 percent of the total outstanding thrift obligations of all members, other than special members, as shown on the most recent independent audit reports required by Section 18405, then on or before May 1 of that year Guaranty Corporation shall levy an assessment. Each member, other than a special member, shall be assessed an amount equal to fifteen-hundredths of 1 percent of its outstanding thrift obligations as shown on its most recent independent audit report required by Section 18405. Guaranty Corporation may levy this assessment quarterly, based on members’ quarterly reports, at one quarter of the annual assessment rate authorized by this subdivision.

(d) If the total amount in the fund (less any then unpaid demand made by the commissioner pursuant to Section 18492) on March 15 of any year hereafter is equal to or in excess of 112 percent of the total outstanding thrift obligations of all members, other than special members, as shown on the most recent independent audit reports required by Section 18405, then on or before May 1 of that year Guaranty Corporation shall levy an assessment on each member, other than a special member, that has not fulfilled both the following conditions as of March 15 of that year:

(1) Paid total cumulative assessment payments to Guaranty Corporation exceeding in the aggregate 112 percent of the total outstanding thrift obligations of that member shown on its most recent independent audit report required by Section 18405;

(2) Has a member’s account balance in Guaranty Corporation exceeding 112 percent of the total outstanding thrift obligations of that member shown on its most recent independent audit report required by Section 18405.

Each member who has failed to fulfill both the preceding conditions as of March 15 of that year shall be assessed an amount equal to fifteen-hundredths of 1 percent of its outstanding thrift obligations as shown on its most recent independent audit report required by Section 18405.

(e) If two members merge prior to May 1 of any year, the surviving member shall be liable for the assessment of the disappearing member that would have been payable to Guaranty Corporation pursuant to subdivision (c) or (d) had the merger not occurred prior to May 1.

history: (History: Amended by Stats. 1985, Ch. 142, Sec. 34.5. Effective July 1, 1985.)

article: 4. Assessments

path: 7. INDUSTRIAL LOAN COMPANIES > 7. Guarantee of Thrift Accounts > 4. Assessments


text: Guaranty Corporation shall send a written notice of assessment to each member assessed within 10 days after the levy of any assessment. Amounts assessed shall be paid to Guaranty Corporation by each member assessed not later than 90 days following written notice of assessment.

history: (History: Added by Stats. 1976, Ch. 964.)

article: 4. Assessments


text: In the event any member fails to pay an assessment when due, Guaranty Corporation shall report such default in writing to the commissioner and the defaulting member within 24 hours of such default and thereafter the rights and benefits of membership of such defaulting member in Guaranty Corporation shall be suspended and the defaulting member shall not be authorized to sell or issue its investment certificates in any form until all delinquent assessments are paid in full; provided, however, that the thrift obligations of the defaulting member shall continue to be protected as provided in this chapter. Within 30 days after default, Guaranty Corporation shall bring an action in law or in equity to enforce payment. If Guaranty Corporation does not bring such action within the time specified, the commissioner may bring an action in law or in equity to enforce such payment. Upon payment of all sums due, the member shall be reinstated and thereafter may sell and issue its investment certificates.

history: (History: Amended by Stats. 1983, Ch. 87, Sec. 2.)

article: 4. Assessments


text: “Premium finance agency” means any industrial loan company incorporated under this division which, by the terms of its authority to engage in the industrial loan business, is permitted to issue or sell investment certificates subject to the limitations set forth in Section 18596 and its business is limited to that set forth in this chapter.

history: (History: Added by Stats. 1976, Ch. 1296.)

chapter: 8. Insurance Premium Financing

article: 1. Definitions

path: 7. INDUSTRIAL LOAN COMPANIES > 8. Insurance Premium Financing > 1. Definitions


text: Such terms relating to insurance as are used in this chapter shall have the meaning ascribed to them in the Insurance Code and in the practices of the insurance business.

article: 1. Definitions


text: As used in this chapter, “insured” means the person who has purchased or arranged to purchase an insurance contract and who enters into a premium finance agreement with a premium finance agency.

article: 1. Definitions


text: As used in this chapter, “premium financing” means the activities of a company engaging in the business of advancing money directly or indirectly to an insurer or producer at the request of an insured pursuant to the terms of a premium finance agreement, wherein the insured has assigned the unearned premiums, accrued dividends or loss payments as security for such advancement in payment of premiums on insurance contracts only, and acquiring premium finance agreements, and does not include the financing of insurance contract premiums purchased in connection with the financing of goods and services. The amount of such advancement in payment of premiums must bear a reasonable relationship to the premium or premiums being financed.

history: (History: Amended by Stats. 1998, Ch. 827, Sec. 16. Effective January 1, 1999.)

article: 1. Definitions


text: As used in this chapter, “premium finance agreement” means a loan contract, note, agreement or obligation by which an insured agrees to pay to a company in installments the principal amount advanced by the company to an insurer or producer in payment of premium on an insurance contract or contracts, plus charges, with the assignment as security therefor of the unearned premiums, accrued dividends or loss payments, the final installment due date of the agreement not to extend beyond the term of the insurance contract included in the agreement having the latest expiration date.

article: 1. Definitions


text: As used in this chapter, “company” means a premium finance agency.

article: 1. Definitions


text: As used in this chapter, “principal balance” means the difference between the amount of the premium and fees charged by the insurer or producer and the downpayment on the premium.

history: (History: Amended by Stats. 1985, Ch. 297, Sec. 3.)

article: 1. Definitions


text: As used in this chapter, “finance charge” means any amount which the insured agrees to pay the company in excess of the premium and fees charged by the insurer or producer, and exclusive of the cost of credit life insurance and attorney fees.

article: 1. Definitions


text: A premium finance agency desiring the full authority which may be conferred by this division, shall, in respect to any lending operations other than insurance premium financing, be required to amend its articles of incorporation and meet the requirements of this division as if it were making an original application for authority to organize under this division.

article: 2. General

path: 7. INDUSTRIAL LOAN COMPANIES > 8. Insurance Premium Financing > 2. General


text: The articles of incorporation of any corporation organized under this division as a premium finance agency shall include reference to that fact.

article: 2. General


text: Capital stock of any premium finance agency shall not be less than seventy-five thousand dollars ($75,000) and need not exceed that sum regardless of the number of branch offices or business locations which may be authorized under the provisions of this division.

article: 2. General


text: Before a premium finance agency commences business or opens a branch office or place of business, there must be paid in cash, for the benefit of the agency, 100 percent of the amount of the minimum capital stock required under this chapter.

article: 2. General


text: An insurance premium finance agreement, as defined in Section 18564, may be prepared in the office of an insurance producer licensed by the Department of Insurance, and mailed or otherwise delivered to a premium finance agency for acceptance without the office of the producer thereby being constituted a place of business of the company. A producer at whose office a premium finance agreement is so prepared shall not be considered to be a broker of the company as that term is used in this division.

article: 2. General


text: In the event of any conflict in the provisions of this chapter with the provisions of any other chapter in this division, the provisions of this chapter shall control with regard to a premium finance agency or to insurance premium financing.

article: 2. General


text: The provisions of Sections 18023, 18024, 18120, 18205, 18268, 18269, 18271, 18272, 18274, and 18455 shall not apply to a premium finance agency.

history: (History: Amended by Stats. 2001, Ch. 159, Sec. 95. Effective January 1, 2002.)

article: 2. General


text: The provisions of Sections 18607, 18625, and 18626 shall not apply to any bona fide loan with a principal amount of two thousand five hundred dollars ($2,500) or more or to a premium finance agency in connection with such loans if the provisions of this section are not used for the purpose of evading this division.

history: (History: Amended by Stats. 1986, Ch. 598, Sec. 1.)

article: 2. General


text:
Unless the insured has notice of the assignment of a premium finance agreement, payment thereunder by him to the last known assignee of the agreement shall be binding upon all subsequent assignees.

Assignment of the premium finance agreement shall not cut off any defenses which the insured would have against the company or an assignee of the agreement arising from obligations imposed by this division.

The obligations and rights of a premium finance agency, under this chapter, shall also apply to the assignee of a premium finance agreement.

article: 2. General


text: At any time during the term of the premium finance agreement, but not later than one year after the last payment thereunder, the company shall upon written request of the insured, give or mail to him a written statement of the dates and amounts of payment, and the total amount, if any, unpaid thereunder. Such a statement shall be supplied once each year without charge; if any additional statement is requested, the company shall supply such statement at a charge not exceeding one dollar ($1) for each additional statement so supplied.

article: 2. General


text: Upon payment of a loan in full the company upon request shall return the premium finance agreement marked “Paid” to the insured.

article: 2. General


text: No filing of the premium finance agreement shall be necessary to perfect the validity of such agreement as a secured transaction as against creditors, subsequent purchasers, pledgees, encumbrances, successors or assigns of the insured.

article: 2. General


text:
Any downpayment which is made and which is received by the company from the insured, or from the insurance producer on behalf of the insured, shall be held by the company in trust for and in transit to the insurer, and shall be paid to the insurer, together with the balance of the premium payable pursuant to the terms of the premium finance agreement within 30 days from the effective date of the policy, or within 30 days after the receipt of a proper premium finance agreement by the company, or within 15 days after the company has mailed to the insured notice of a revised finance agreement pursuant to Section 18606, whichever is later. In the event that the premium is paid to the insurance agent or broker of record, such agent or broker of record shall not be deemed the agent of the company by reason of such payment.

Upon request of the commissioner, the company shall furnish an authorization for disclosure to the commissioner of financial records of such trust accounts pursuant to Section 7473 of the Government Code.

history: (History: Amended by Stats. 1977, Ch. 487.)

article: 2. General


text: The downpayments received by the company under the provisions of Section 18592, may be held by the company in trust in a separate bank account or depository, or in lieu thereof, the company may maintain a time deposit with a bank, savings and loan association, or comparable institution, or obtain a certificate or certificates of deposit or a clean and irrevocable letter or letters of credit from a bank, in an amount at least equal to the average amount of such downpayments being held at any given time by the company as ascertained by the commissioner, and which are payable to the insurer pursuant to the terms of the premium finance agreement. Such deposits, certificates, or a clean and irrevocable letter or letters of credit shall be held in trust for the benefit of the insureds, as their relative interests in such downpayments may exist at any given time, and in the event of the insolvency of a company, such funds on deposit under the provisions of this section or as represented by a certificate or certificates of deposit or a clean and irrevocable letter or letters of credit shall be first applied to remitting the amount of the downpayment to the insureds on all premium finance agreements upon which the company has not then forwarded in full the downpayments collected from and then being held for insureds, and, if insufficient to pay all such amounts in full, then such funds shall be applied for such purposes pro rata.

history: (History: Amended by Stats. 1983, Ch. 356, Sec. 1.)

article: 2. General


text: Any corporation organized as an industrial loan company other than a premium finance agency shall conduct any insurance premium financing business under the authority of this chapter and it shall be subject to all of the provisions of this chapter in respect to such business, as if it were a premium finance agency.

history: (History: Amended by Stats. 1998, Ch. 827, Sec. 17. Effective January 1, 1999.)

article: 2. General


text: A premium finance agency shall not incorporate the words “industrial loan company” in its corporate name, on its loan forms, or in its advertising.

article: 2. General


text: A premium finance company may issue or sell investment certificates only (a) to its customers directly in connection with the financing of premiums for those customers, provided that the aggregate finance charges, including interest paid or not paid on those investment certificates, do not exceed those charges permitted under Section 18626 and (b) to any institutional investors, governmental agency, or instrumentality as the Commissioner of Financial Protection and Innovation may designate by rule.

history: (History: Amended by Stats. 2022, Ch. 452, Sec. 131. (SB 1498) Effective January 1, 2023.)

article: 2. General


text:
A premium finance agreement shall be in writing and the printed portion thereof shall be in at least eight-point type. The agreement shall set forth:

1. The names and addresses of the insured and the company, and the date of the agreement.

2. A description of the insurance contracts for which the premiums are advanced including the total amount of the premiums and fees and a specific breakdown thereof by policies and a general description of coverages.

3. The amount of the downpayment.

4. The cost, if any, for credit life insurance.

5. The principal balance.

6. The finance charges.

7. The unpaid balance.

8. The due date of the first installment.

9. The number, amount and frequency of payment of the installments.

10. A statement that the insured may prepay the full amount due and receive a refund credit of the unearned finance charge, in the manner provided by Section 18629.

history: (History: Repealed and added by Stats. 1976, Ch. 964.)

path: 7. INDUSTRIAL LOAN COMPANIES > 8. Insurance Premium Financing > 3. Provisions of Premium Finance Agreements


text:
A premium finance agreement shall not be executed by or on behalf of the insured when it contains any blank space to be filled in thereafter; however, if any insurance contract, premiums for which are advanced or to be advanced under the agreement, has not been issued at the time of execution and the premium finance agreement so provides, the name of the insurer, the policy number and the due date of the first installment may be left blank and inserted later. In connection with the financing of an additional premium or policies, upon the completion of the computations necessary to determine the amount of the revised unpaid balance and the number and amount of future installment payments, the company shall mail notice of the changes to the insured at his address shown in the agreement. The notice of the revised finance agreement shall set forth:

(a) The unpaid balance, as adjusted.

(b) The number and frequency of each installment under the revised finance agreement.

(c) The amount of each installment.

(d) A statement to the insured that he may disaffirm the revised finance agreement by mailing, to the company’s office, notice of his intention to do so within 10 days of the company’s mailing of the notice of the revised finance agreement.

(e) A statement to the insured that the company may, in the event he disaffirms, cancel his insurance contract or contracts as provided in Section 18608, except that the 10-day period required by that section shall be deemed to commence with the mailing of the notice of the revised finance agreement.

article: 3. Provisions of Premium Finance Agreements


text: Upon receipt of the loan form the company shall promptly mail to the insured at the address shown in the agreement, or deliver to the insured personally, either a notice to the effect that the application for a loan is rejected or a copy of the agreement, thereby signifying acceptance by the company, or if the agreement contained any blank space when it was executed by or on behalf of the insured and such blank space was subsequently filled in, a copy of the agreement as so filled in and the insured shall in such event have 10 days in which to disaffirm his obligation under the premium finance agreement by giving written notice thereof to the producer and the company. In the event the agreement is not disaffirmed by the insured, the agreement shall be as binding an obligation of the insured as if the agreement were complete on its face when it was executed.


text:
(a) A premium finance agreement may contain a power of attorney or other authority enabling the company to cancel the insurance contract or contracts listed in the agreement in the event of default in the terms thereof.

(b) Upon the exercise of such a right to cancel, the company shall mail to the insured, to his or her last known address or to the address shown on the premium finance agreement at least 10 days prior to cancellation, a notice of its intent to cancel the insurance contract or contracts.

(c) The liability of a company to any person or corporation upon the exercise of such a right or authority of cancellation shall be limited to the amount of the principal balance, except in the event of willful failure by the company to mail the notice required by this section.

history: (History: Amended by Stats. 1999, Ch. 428, Sec. 2. Effective January 1, 2000.)


text: All statutory, regulatory and contractual restrictions providing that the insured or the insurer shall not cancel the insurance contract unless the insured or the insurer first satisfies such restrictions by giving a prescribed notice of cancellation to a governmental agency, the insurer, the insured, the holder of a security interest in the subject of the insurance, or other prescribed party, shall not be affected by the provisions of this division. However, any cancellation notice period required by such statutory, regulatory or contractual restriction shall not be cumulative to the period required by Section 18606 or 18608. If cancellation of the insurance contract is initiated by the company under the terms of this division, the insurer shall (in accordance with the requirement for a prescribed notice), on behalf of itself or the insured, give such notice to the governmental agency, the holder of a security interest in the subject of the insurance or other prescribed party; and the insurer shall determine and calculate the effective date of cancellation (in accordance with the terms of that prescribed notice) from the date it receives the notice of request for cancellation from the company. In no instance shall the effective date of cancellation be prior to that established by the company.


text: The insurer within a reasonable time after the effective date of cancellation shall return whatever gross unearned premiums or accrued dividends are payable under the insurance contract to the company, which financed the insurance contract, for the benefit of the insured. Whenever any funds are received by the company which are in excess of the amount due to the company, such an excess shall be remitted promptly to the insured or to his order or to the insurance agent for the account of the insured.

history: (History: Amended by Stats. 1983, Ch. 356, Sec. 2.)


text:
At the time of mailing the notice required by Section 18606 or 18608, the employee of the company who is doing the mailing shall prepare and sign an affidavit setting forth the following:

(a) The name and address of the employee doing the mailing.

(b) That the employee is over 18 years of age.

(c) The date and place of deposit in the mail.

(d) The addressee’s name and address as shown on the envelope mailed.

(e) That the envelope weas sealed and deposited in the mail with the postage thereon fully paid.

An affidavit of mailing, prepared as prescribed in this section, shall raise a rebuttable presumption that the notice was mailed to the addressee stated in the affidavit.


text: A premium finance agency shall not, except as otherwise provided by law, impose, take, receive, reserve or charge a finance charge which in the aggregate is greater than that which is permitted by this article.

article: 4. Limitation on Finance Charges

path: 7. INDUSTRIAL LOAN COMPANIES > 8. Insurance Premium Financing > 4. Limitation on Finance Charges


text:
A premium finance agency may, in a premium finance agreement, contract for, charge, receive, and collect a finance charge which shall not exceed in the aggregate:

(a) Two percent per month on that part of the unpaid principal balance of any loan up to, including, but not in excess of, one thousand dollars ($1,000).

(b) One percent per month on any remainder of such unpaid principal balance in excess of one thousand dollars ($1,000).

As used in this article “consumer insurance premium finance loan” shall mean an insurance premium finance loan where the insurance policies which are security for the loan are for personal, family or household use.

(c) As an alternative to the charges authorized by subdivisions (a) and (b), a premium finance agency may contract for and receive charges at a rate not exceeding 1.6 percent per month on the unpaid principal balance.

history: (History: Amended by Stats. 1983, Ch. 356, Sec. 3.)

article: 4. Limitation on Finance Charges


text: If the finance charge computed under Section 18626 is less than twenty-five dollars ($25), a minimum finance charge of twenty-five dollars ($25) may be imposed.

history: (History: Amended by Stats. 1979, Ch. 984.)

article: 4. Limitation on Finance Charges


text:
The finance charge may be computed from the effective date of the insurance coverage, provided that the company shall pay the premium due the insurer, either:

(a) Within 30 days from the effective date of the insurance coverage; or

(b) Within 30 days after the receipt by the company of a proper premium finance agreement; or

(c) Within 15 days after the company has mailed to the insured, notice of a revised finance agreement pursuant to Section 18606 whichever is later.

If the conditions of subdivision (a), (b), or (c) are not met the finance charge shall be computed from the date the proceeds of the loan are forwarded to the insurer. In the event the company receives a proper premium finance agreement later than 60 days from the effective date of the policy financed, a proportioned adjustment of the finance charge shall be made after such 60-day period.

article: 4. Limitation on Finance Charges


text: Notwithstanding the provisions of any premium finance agreement to the contrary, any insured may pay the obligation in full at any time before maturity of the final installment. If he does so, he shall receive a refund credit of the unearned finance charge computed in accordance with Section 18635 or 18637, except where the amount of the refund credit is less than one dollar ($1) no refund need be made, and except that where the earned finance charge amounts to less than the minimum finance charge permitted by Section 18627, the company may retain as an earned finance charge a sum equal to the minimum permitted by Section 18627 or the maximum prescribed by Section 18627, whichever is applicable.

history: (History: Amended by Stats. 1979, Ch. 270.)

article: 4. Limitation on Finance Charges


text: In the event that the insurance policy or policies which are the subject of a premium finance agreement are canceled by the insured or by the insurer, for any cause, the insured shall be entitled to receive a refund credit of the unearned finance charge. This refund credit shall be calculated in the same manner as prescribed in Section 18629, and shall be paid to the insured within a reasonable time.

history: (History: Added by Stats. 1976, Ch. 964.)

article: 4. Limitation on Finance Charges


text:
(a) A premium finance agreement may provide for the payment of a default charge of one dollar ($1) to a maximum of 5 percent of the delinquent installment, in the event of a default for a period of not less than 10 days in the payment of any scheduled installment under the terms of a premium finance agreement. That charge may not be collected more than once for the same default and may be collected at the time of the default or at any time thereafter. If the default charge is deducted from any payment received after default occurs, and the deduction results in the default of a subsequent installment, no charge may be made for the resulting default.

(b) A premium finance agreement may provide for the payment of a dishonored check fee not to exceed fifteen dollars ($15) for actual expenses incurred in the processing of a dishonored check.

history: (History: Amended by Stats. 2000, Ch. 101, Sec. 1. Effective January 1, 2001.)

article: 4. Limitation on Finance Charges


text: This article is applicable only to premium finance agencies.

history: (History: Added by Stats. 1979, Ch. 270.)

article: 5. Charges on Scheduled Balances

path: 7. INDUSTRIAL LOAN COMPANIES > 8. Insurance Premium Financing > 5. Charges on Scheduled Balances


text: Whenever the interest or charges, or interest and charges deducted in advance exceed the maximum provided by this division, by reason of subsequent repayment of the loan, a new loan, refinancing, or otherwise, or any portion thereof prior to maturity, such excess shall be rebated to the borrower or credited on any balance owing by the borrower to the company. The rebate shall be the difference between the total of the precomputed charge, any charge for extending the first due date, plus any default or deferment charges and the charges at the contract rate computed on unpaid principal balances for the number of days actually elapsed by applying each payment first to charges and the remainder to principal. The tender, by the borrower or at his request, of an amount equal to the unpaid balance less the required rebate must be accepted by the company in full payment of the loan contract.

article: 5. Charges on Scheduled Balances


text:
(a) As an alternative to the provisions of Section 18635, if a loan is repayable in substantially equal and consecutive monthly installments of principal and charges combined, the first of which is due not less than 15 days nor more than one month and 15 days from the date the loan is made, a company may precompute charges and apply payments as provided in this article.

(b) The total charges which would be earned if the loan contract were repaid exactly according to its terms, at the monthly rate stated in the loan contract, may be precomputed when the loan is made and added to the principal of the loan. Every payment may be applied to the combined total of principal and precomputed charges until the loan contract is fully paid.

(c) The portion of the precomputed charge applicable to any particular monthly installment period shall bear the same ratio to the total precomputed charge, excluding any adjustment made for a first period of more or less than one month, as the balance scheduled to be outstanding during that monthly period bears to the sum of all monthly balances scheduled originally by the loan contract.

article: 5. Charges on Scheduled Balances


text: If a loan contract made under Section 18636 is prepaid in full by cash, a new loan, refinancing or otherwise before the final installment date, the borrower shall receive a rebate of the portion of the precomputed charge applicable to the full installment periods following the installment date nearest the date of such prepayment; provided, however, that if prepayment in full occurs on or before the third installment date the rebate shall be the difference between the total precomputed charge and the charges at the contract rate computed on unpaid principal balances by applying each payment first to charges and the remainder to principal. After the third installment date, any prepayment made on or before the 15th day following an installment date shall be deemed to have been made on the installment date preceding such prepayment. The tender, by the borrower or at his request, of an amount equal to the unpaid balance less the required rebate must be accepted by the company in full payment of the loan contract.

article: 5. Charges on Scheduled Balances


text: A special rebate of precomputed charges shall be made if three or more, but not all, installments are prepaid in full at any one time either in one transaction or over a period of time on a loan made under Section 18636. The special rebate shall be equal to the portion of precomputed charge applicable to the last installment period multiplied by the total number of full installment periods such installments and any subsequent installments are prepaid. Such special rebate shall be computed and made at the termination of the loan contract and shall be an addition to any required rebate for prepayment in full.

article: 5. Charges on Scheduled Balances


text: A deferment charge may be charged and collected on a loan made under Section 18636 if the payment date of all wholly unpaid installments on which no default charge has been collected is deferred one or more full months and the loan contract so provides. Such deferment charge shall not exceed the portion of precomputed charge applicable, prior to deferment, to the first deferred monthly installment period multiplied by the number of months the maturity of the contract is deferred. Such number of months shall not exceed the number of full installments which are in default on the date of deferment or which may become due within 15 days of such date. When a deferment charge is made, no portion of the precomputed charge shall apply to the installment periods in which no installment payment is required by reason of the deferment. In computing any default charge or required rebate, the portion of the precomputed charge applicable to each deferred balance and installment period following the deferment period and prior to the deferred maturity shall remain the same as that applicable to such balances and periods under the original contract of loan. Such charge may be collected at the time of deferment or at any time thereafter. Any payment received at the time of deferment may be applied first to the deferment charge and the remainder, if any, applied to the unpaid balance of the loan contract; provided, however, if such payment is sufficient to pay, in addition to the appropriate deferment charge, any installment which is in default and the applicable default charge, it shall be first so applied and any such installment shall not be deferred nor subject to the deferment charge.

article: 5. Charges on Scheduled Balances


text: If the maturity of a loan made under Section 18636 is accelerated for any reason, the company shall make the same refund or credit as would be required if the loan contract was paid in full on the date of acceleration and the unpaid balance shall be treated as the unpaid principal balance and thereafter the unpaid balance of the loan contract shall bear charges at the agreed rate of charge if the loan contract so provides.

article: 5. Charges on Scheduled Balances


text: Notwithstanding any other provision of law not within this article, with respect to precomputed loans, premium finance agencies derive authority only from this article.

article: 5. Charges on Scheduled Balances


text:
This chapter does not apply to any of the following transactions:

(a) An acquisition of control of a California industrial loan company that requires the approval of the commissioner under Section 18138.

(b) A sale or merger that requires the approval of the commissioner under Division 1.5 (commencing with Section 4800).

history: (History: Added by Stats. 1995, Ch. 479, Sec. 6. Effective October 2, 1995.)

chapter: 9. Interstate Acquisitions

path: 7. INDUSTRIAL LOAN COMPANIES > 9. Interstate Acquisitions


text: Each application filed with the commissioner for an approval under this chapter shall be in the form, shall contain the information, shall be signed in the manner, and shall, if the commissioner requires by rule or order, be verified in the manner that the commissioner may by rule or order require.


text: The fee for filing with the commissioner an application for an approval under this chapter is four hundred dollars ($400).


text:
(a) The definitions that are set forth in or are applicable to Section 44 of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1831u) apply to this section.

(b) This section does not apply unless each bank involved in an interstate merger transaction (including each insured depository institution that is an affiliate of the surviving, resulting, or purchasing bank) that is organized under the laws of this state or maintains a branch office in this state, is an industrial loan company (as defined in Section 4805.10).

(c) The commissioner may approve an interstate merger transaction that is subject to Section 44(b)(2)(B) and (D)(ii) of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1831u(b)(2)(B) and (D)(ii)) if the commissioner finds that the transaction is consistent with the public convenience and advantage in this state.

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 53. Effective September 25, 1996.)


text: The commissioner is authorized to adopt rules to implement this chapter similar to regulations adopted under similar provisions of law contained in Chapter 21.5 (commencing with Section 3750) of Division 1, and for the same or similar reasons. The authority granted to the commissioner by this section is in addition to the authority granted to the commissioner under Section 18347.

history: (History: Amended by Stats. 1996, Ch. 1064, Sec. 615. Effective January 1, 1997. Operative July 1, 1997.)


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

(a) “Authorized agency activities” means issuing investment certificates, renewing certificates of deposits, as defined in Section 18003.6, closing loans, servicing loans, and receiving payments on loans and other obligations. “Authorized agency activities” includes ministerial functions such as providing loan applications, assembling documents, providing a location for returning documents necessary for making a loan, providing loan account information, receiving payments, disbursing loan funds, evaluating loan applications, and other activities that the commissioner may specify by rule or order. However, “authorized agency activities” does not include any other activities that the commissioner may specify by rule or order.

(b) “Branch business unit” means all or substantially all of the business of a branch office of an industrial loan company.

(c) “California”:

(1) When used with respect to an industrial loan company, means a corporation of the type described in Section 18003 organized and licensed under the laws of this state.

(2) When used with respect to an office of an industrial loan company, means an office which is located in this state.

(3) When used with respect to a bank or an office of a bank, has the meaning set forth in subdivision (a) or (b) of Section 126.5.

(d) “Core business” means the business of issuing investment certificates, making loans, and other activities that the commissioner may specify by rule or order.

(e) “Depository institution affiliate” means a depository institution affiliate within the meaning of Section 18(r) of the Federal Deposit Insurance Act (18 U.S.C. Sec. 1828(r)).

(f) “Facility,” when used with respect to a foreign (other state) industrial loan company, means an office in this state at which the industrial loan company engages in noncore business but at which it does not engage in core business.

(g) “Foreign (other state) industrial loan company” means a corporation of the type described in Section 18003 organized under the laws of any state of the United States, as defined in Section 146.7, other than this state.

(h) “Insured”:

(1) When used with respect to an industrial loan company, means an industrial loan company, the investment certificates of which are insured by the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act (12 U.S.C. Sec. 1811 et seq.).

(2) When used with respect to an investment certificate or deposit, means an investment certificate or deposit that is insured by the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act (12 U.S.C. Sec. 1811 et seq.).

(i) “Law of the domicile,” when used with respect to an industrial loan company, means the law of the state of the United States, as defined in Section 146.7, under which the industrial loan company is organized.

(j) “Noncore business” means all activities permissible for an industrial loan company, except core business, and except those activities prohibited by law or determined by the commissioner by rule or order not to be noncore business.

(k) “Whole business unit” means all or substantially all of the business of an industrial loan company.

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 54. Effective September 25, 1996.)

article: 1. General Provisions

path: 7. INDUSTRIAL LOAN COMPANIES > 10. Foreign (Other State) Industrial Loan Companies: Agency Activities > 1. General Provisions


text: Each application filed with the commissioner under this chapter or under any rule or order issued under this chapter shall be in the form, shall contain the information, shall be signed in the manner, and shall (if the commissioner requires by rule or order) be verified in the manner that the commissioner may by rule or order require.

history: (History: Added by Stats. 1995, Ch. 479, Sec. 7. Effective October 2, 1995.)

chapter: 10. Foreign (Other State) Industrial Loan Companies: Agency Activities

article: 1. General Provisions


text:
(a) Each foreign (other state) industrial loan company that maintains a facility or a California branch office shall file with the commissioner such reports as and when the commissioner may by rule or order require.

(b) Each report filed with the commissioner under this chapter or under any rule or order issued under this chapter shall be in the form, shall contain the information, shall be signed in the manner, and shall (if the commissioner so requires by rule or order) be verified in the manner that the commissioner may by rule or order require.

article: 1. General Provisions


text: Each foreign (other state) industrial loan company that maintains a facility or a California branch office shall make, keep, and preserve at the facility or branch office or at another place that the commissioner may by rule or order approve, the books, accounts, and other records relating to the business of the office, in the form, in the manner, and for the time that the commissioner may by rule or order provide.

article: 1. General Provisions


text:
Fees shall be paid to, and collected by, the commissioner as follows:

(a) Each foreign (other state) industrial loan company that on July 1 of any year maintains a California branch office shall pay, on or before December 20 of that year, the assessment levied under Section 18351.

(b) Each foreign (other state) industrial loan company that on June 1 of any year maintains a facility but no California branch office shall pay, on or before the following July 1, a fee of two hundred fifty dollars ($250) for each facility.

(c) If the commissioner makes an examination of a foreign (other state) industrial loan company that maintains a California branch office, the industrial loan company shall pay a fee for the examination in the sum of fifty dollars ($50) per hour for each examiner engaged in the examination plus, if in the opinion of the commissioner it is necessary for any examiner engaged in the examination to travel outside this state, the travel expenses of the examiner.

article: 1. General Provisions


text:
(a) Any foreign (other state) industrial loan company is exempted from the restrictions of Section 1 of Article XV of the California Constitution relating to rates of interest upon the loan or forbearance of any money, goods, or things in action or on accounts after demand.

(b) This section does not exempt a foreign (other state) industrial loan company or any subsidiary, as defined in Section 189 of the Corporations Code, from complying with all other laws and regulations governing the business in which the industrial loan company or subsidiary is engaged.

(c) This section creates and authorizes an exempt class of persons pursuant to Section 1 of Article XV of the California Constitution.

article: 1. General Provisions


text: The commissioner is authorized to adopt rules to implement this chapter similar to regulations adopted by the Superintendent of Banks under similar provisions of law contained in Division 1 (commencing with Section 99), and for the same or similar reasons regulations are adopted by the Superintendent of Banks. The authority granted to the commissioner by this section is in addition to the authority granted to the commissioner under Section 18347.

article: 1. General Provisions


text: No provision of this article applies to an insured foreign (other state) industrial loan company that maintains a California branch office.

path: 7. INDUSTRIAL LOAN COMPANIES > 10. Foreign (Other State) Industrial Loan Companies: Agency Activities > 2. Facilities of Insured Foreign (Other State) Industrial Loan Companies


text:
(a) No foreign (other state) industrial loan company may establish or maintain an office in this state at which it engages in noncore industrial loan company business unless the industrial loan company complies with this article and applicable provisions of Article 1 (commencing with Section 18660).

(b) (1) No person may establish or maintain an office in this state as representative of an insured foreign (other state) industrial loan company unless the industrial loan company complies with this article and applicable provisions of Article 1 (commencing with Section 18660).

(2) For purposes of this article, if any person establishes or maintains an office in this state as representative of an insured foreign (other state) industrial loan company, the insured foreign (other state) industrial loan company is deemed to establish and maintain the office as a facility.

article: 2. Facilities of Insured Foreign (Other State) Industrial Loan Companies


text: Not less than 30 days before an insured foreign (other state) industrial loan company establishes a facility, it shall file with the commissioner a report and the appointment called for in Section 18673.


text:
(a) Not less than 30 days before establishing a facility, an insured foreign (other state) industrial loan company shall file with the commissioner, in the form that the commissioner may by rule or order require, an appointment irrevocably appointing the commissioner and the commissioner’s successor from time to time in office to be the industrial loan company’s attorney to receive service of any lawful process in any noncriminal judicial or administrative proceeding against the industrial loan company or any of its successors that arises out of the activities in this state of the facility after the appointment has been filed, with the same force and validity as if served personally on the industrial loan company or its successors, as the case may be.

(b) Any insured foreign (other state) industrial loan company that maintains a facility and that has not filed with the commissioner an appointment pursuant to subdivision (a) is deemed by the maintenance of the facility to have appointed the commissioner as its attorney to receive service of any lawful process in any noncriminal judicial or administrative proceeding against the industrial loan company or any of its successors that arises out of the activities in this state of the facility, with the same force and validity as if served personally on the industrial loan company or its successor, as the case may be.

(c) Service may be made on an insured foreign (other state) industrial loan company that has appointed or is deemed to have appointed the commissioner as its attorney for service of process by leaving a copy of the process at any office of the commissioner. However, the service is not effective unless (1) the party making the service, who may be the commissioner, forthwith sends notice of the service and a copy of the process by registered or certified mail to the industrial loan company served at the last address on file with the commissioner for any of the industrial loan company’s offices in this state or at its head office, and (2) an affidavit of compliance with this subdivision by the party making the service is filed in the case on or before the return date, if any, or within any further time that the court, in the case of a judicial proceeding, or the administrative agency, in the case of an administrative proceeding, allows.


text: Not less than 30 days before an insured foreign (other state) industrial loan company relocates a facility, it shall file a report with the commissioner.


text: Not less than 30 days before an insured foreign (other state) industrial loan company closes a facility, it shall file a report with the commissioner.


text: No foreign (other state) industrial loan company may transact core business in this state except at a branch office established in accordance with federal law and the law of the domicile of the industrial loan company.

article: 3. California Branch Offices

path: 7. INDUSTRIAL LOAN COMPANIES > 10. Foreign (Other State) Industrial Loan Companies: Agency Activities > 3. California Branch Offices


text:
Section 18680 does not prohibit:

(a) Any foreign (other state) industrial loan company which does not maintain a California branch office from carrying on the activities described in subdivision (d) of Section 191 of the Corporations Code.

(b) Any foreign (other state) industrial loan company which does not maintain a California branch office from making in this state loans secured by liens on real property located in this state.

(c) Any foreign (other state) industrial loan company from having a California industrial loan company as its agent pursuant to Article 5 (commencing with Section 18700).

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 55. Effective September 25, 1996.)

article: 3. California Branch Offices


text: No foreign (other state) industrial loan company may establish or maintain a California branch office unless it is qualified to transact intrastate business in this state under Chapter 21 (commencing with Section 2100) of Division 1 of Title 1 of the Corporations Code.

article: 3. California Branch Offices


text: No foreign (other state) industrial loan company may establish or maintain a California branch office unless the industrial loan company is insured.

article: 3. California Branch Offices


text:
(a) (1) No foreign (other state) industrial loan company may merge as the surviving corporation (Section 148) with a California industrial loan company or California bank except that an insured foreign (other state) industrial loan company may do so in accordance with federal law, the law of the domicile of the foreign (other state) industrial loan company, this chapter, and Division 1.5 (commencing with Section 4800).

(2) No foreign (other state) industrial loan company may purchase the whole business unit of a California industrial loan company or California bank except that an insured foreign (other state) industrial loan company may do so in accordance with federal law, the law of the domicile of the foreign (other state) industrial loan company, this chapter and Division 1.5 (commencing with Section 4800).

(3) No foreign (other state) industrial loan company that does not already maintain a California branch office may establish or maintain a California branch office except in the manner described in paragraph (1) or (2) and in accordance with federal law, the law of the domicile of the foreign (other state) industrial loan company and this chapter.

(b) This section constitutes:

(1) An election to permit early interstate merger transactions pursuant to Section 44(a)(3) of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1831u(a)(3)).

(2) An express prohibition against interstate branching through the acquisition of a branch business unit located in this state of a California industrial loan company or California bank (without acquisition of the whole business unit of the California industrial loan company or California bank) pursuant to Section 44(a)(4) of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1831u(a)(4)).

(3) An express prohibition against interstate branching through de novo establishment of California branch offices pursuant to Section 5155 of the Revised Statutes (12 U.S.C. Sec. 36) or Section 18(d) of the Federal Deposit Insurance Act (12 U.S.C. Sec. 1828(d)).

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 56. Effective September 25, 1996.)

article: 3. California Branch Offices


text:
(a) No foreign (other state) industrial loan company that does not already maintain a California branch office may:

(1) Merge as the surviving corporation (Section 148) with a California industrial loan company or California bank pursuant to paragraph (1) of subdivision (a) of Section 18684 unless the California industrial loan company or California bank has been in existence for at least five years.

(2) Purchase the whole business unit, of a California industrial loan company or California bank pursuant to paragraph (2) of subdivision (a) of Section 18684 unless the California industrial loan company or California bank has been in existence for at least five years.

(b) For purposes of this section, a California industrial loan company or California bank that is established solely for the purpose of, and does not open for business prior to, acquiring the whole business unit of a second California industrial loan company or California bank through a merger or purchase is deemed to have been in existence for the same period of time as the second California industrial loan company or California bank.

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 57. Effective September 25, 1996.)

article: 3. California Branch Offices


text:
(a) No foreign (other state) industrial loan company that maintains a California branch office may transact at the branch office any business that it is not authorized to transact or is prohibited from transacting under the law of its domicile or that industrial loan companies organized and licensed under the laws of this state are not authorized to transact or are prohibited from transacting.

(b) Whenever any provision of this chapter or of any rule or order issued under this chapter which is applicable to or with respect to a foreign (other state) industrial loan company that maintains a California branch office is inconsistent with any provision of any other chapter of this division, the former provision applies, and the latter provision does not apply.

article: 3. California Branch Offices


text: Notwithstanding the provisions of Sections 18147 and 18165, a California industrial loan company may, with the prior approval of the commissioner and subject to any rules that the commissioner may prescribe, have an insured depository institution engage in authorized agency activities as its agent.

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 59. Effective September 25, 1996.)

path: 7. INDUSTRIAL LOAN COMPANIES > 10. Foreign (Other State) Industrial Loan Companies: Agency Activities > 4. California Industrial Loan Company as Principal


text: An application by a California industrial loan company for approval to have an insured depository institution engage in authorized agency activities as its agent shall be in the form, shall contain the information, shall be signed in the manner, and shall, if the commissioner requires by rule or order, be verified in the manner that the commissioner may, by rule or order, require.

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 60. Effective September 25, 1996.)

article: 4. California Industrial Loan Company as Principal


text: An application by a California industrial loan company for approval to have an insured depository institution engage in authorized agency activities as its agent shall be accompanied by a filing fee of two hundred fifty dollars ($250).

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 61. Effective September 25, 1996.)


text:
In determining whether to approve or deny an application by a California industrial loan company for approval to have an insured depository institution engage in authorized agency activities as its agent, the commissioner shall consider both of the following:

(a) Whether the proposed agency arrangement is consistent with the safe and sound operation of the California industrial loan company.

(b) Any other factors that the commissioner deems relevant.

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 62. Effective September 25, 1996.)


text: No California industrial loan company may have an insured depository institution conduct as its agent any activity that the California industrial loan company is prohibited from conducting itself.

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 63. Effective September 25, 1996.)


text: No office of an insured depository institution that is performing authorized agency activities as agent for a California industrial loan company in accordance with this article shall, on that account, be deemed to be an office of the California industrial loan company.

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 64. Effective September 25, 1996.)


text: If the commissioner finds that any activity performed by an insured depository institution as agent for a California industrial loan company is not an authorized agency activity or that the agency arrangement is inconsistent with safe and sound practices, the commissioner may order the California industrial loan company to terminate the agency arrangement.

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 65. Effective September 25, 1996.)


text: This article does not apply to a California industrial loan company’s having an insured depository institution engage in authorized agency activities as its agent in any case other than a case where, but for Section 18695, an office of the insured depository institution affiliate would for regulatory purposes be considered to be an office of the California industrial loan company.

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 66. Effective September 25, 1996.)


text: Notwithstanding the provisions of Sections 18147 and 18165, a California industrial loan company may, with the prior approval of the commissioner and subject to any rules that the commissioner may prescribe, engage in authorized agency activities as agent for an insured depository institution.

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 67. Effective September 25, 1996.)

path: 7. INDUSTRIAL LOAN COMPANIES > 10. Foreign (Other State) Industrial Loan Companies: Agency Activities > 5. California Industrial Loan Company as Agent


text: An application by a California industrial loan company for approval to engage in authorized agency activities as agent for an insured depository institution shall be in the form, shall contain the information, shall be signed in the manner, and shall, if the commissioner requires by rule or order, be verified in the manner that the commissioner may, by rule or order, require.

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 68. Effective September 25, 1996.)

article: 5. California Industrial Loan Company as Agent


text: An application by a California industrial loan company for approval to engage in authorized agency activities as agent for an insured depository institution shall be accompanied by a filing fee of two hundred fifty dollars ($250).

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 69. Effective September 25, 1996.)


text:
In determining whether to approve or deny an application by a California industrial loan company for approval to engage in authorized agency activities as agent for an insured depository institution, the commissioner shall consider both of the following factors:

(a) Whether the proposed agency arrangement is consistent with the safe and sound operation of the California industrial loan company.

(b) Any other factors that the commissioner deems relevant.

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 70. Effective September 25, 1996.)


text: No California industrial loan company may conduct any activity as an agent for an insured depository institution that the California industrial loan company would be prohibited from conducting as a principal.

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 71. Effective September 25, 1996.)


text:
(a) No office of a California industrial loan company that conducts authorized agency activities as agent for an insured depository institution in accordance with this article shall, on that account, be deemed to be an office of the insured depository institution.

(b) For purposes of this division, no insured depository institution that has a California industrial loan company engaged in authorized agency activities as its agent shall on that account be deemed to be transacting business in this state.

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 72. Effective September 25, 1996.)


text: If the commissioner finds that any activities performed by a California industrial loan company as agent for an insured depository institution are not authorized agency activities or that the agency arrangement is inconsistent with safe and sound practices, the commissioner may order the California industrial loan company to terminate the agency arrangement.

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 73. Effective September 25, 1996.)


text: This article does not apply to a California industrial loan company’s engaging in authorized agency activities as agent for an insured depository institution in any case other than a case where, but for Section 18705, an office of the California industrial loan company would for regulatory purposes be considered to be an office of the insured depository institution.

history: (History: Amended by Stats. 1996, Ch. 887, Sec. 74. Effective September 25, 1996.)


text: Every person engaged in the business of receiving goods, including motor vehicles, in pledge as security for a loan is a pawnbroker within the meaning of this division.

history: (History: Amended by Stats. 1996, Ch. 923, Sec. 7. Effective January 1, 1997.)

division: 8. PAWNBROKERS

chapter: 1. General Provisions

article: 1. Definitions

path: 8. PAWNBROKERS > 1. General Provisions > 1. Definitions


text: As used in this division “receiving goods as security for a loan” does not include a good faith purchase of goods.

history: (History: Added by Stats. 1979, Ch. 1037.)

article: 1. Definitions


text: “Compensation” includes expenses, interest, disbursements, storage charges, and all other charges of any nature in connection with a loan or forbearance.

history: (History: Enacted by Stats. 1951, Ch. 364.)

article: 1. Definitions


text:
(a) As used in this division, “pledged property” is property held as security for a loan, the title to which remains with the pledgor and has not passed to the pawnbroker pursuant to Section 21201.

(b) “Vested property” is property the title to which has been transferred from the pledgor to the pawnbroker pursuant to Section 21201. Vested property is not pledged property.

history: (History: Added by Stats. 1983, Ch. 1128, Sec. 1.)

article: 1. Definitions


text: For purposes of this division, the term “month” means a period of time consisting of 30 consecutive calendar days.

history: (History: Added by Stats. 2011, Ch. 318, Sec. 1. (AB 424) Effective January 1, 2012.)

article: 1. Definitions


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

(a) Any corporation organized for the purpose of securing credit from any federal intermediate credit bank organized and existing pursuant to the provisions of an act of Congress entitled “Agricultural Credits Act of 1923.”

(b) Any nonprofit cooperative corporation or association with or without capital stock, organized or existing pursuant to Chapter 1 (commencing with Section 54001) of Division 20 of the Food and Agricultural Code.

(c) Any person, corporation, association, syndicate, joint stock company, or partnership, engaged exclusively in the business of marketing agricultural, horticultural, viticultural, dairy, livestock, poultry, and bee products on a cooperative nonprofit basis.

history: (History: Amended by Stats. 2006, Ch. 538, Sec. 175. Effective January 1, 2007.)

article: 2. Exceptions to This Division

path: 8. PAWNBROKERS > 1. General Provisions > 2. Exceptions to This Division


text:
(a) The limitations with respect to rates and charges set forth in Sections 21200 and 21200.5 do not apply to any loan of a bona fide principal amount of two thousand five hundred dollars ($2,500) or more if this section is not used for the purpose of evading this division.

(b) In determining whether a loan is a loan of the principal amount of two thousand five hundred dollars ($2,500), Section 22054 shall apply.

history: (History: Amended by Stats. 1987, Ch. 576, Sec. 1.)

article: 2. Exceptions to This Division


text:
(a) Except as otherwise provided in this chapter, no pawnbroker shall charge or receive compensation at a rate exceeding the sum of the following:

(1) Three percent per month on the unpaid principal balance of any loan.

(2) A charge not exceeding three dollars ($3) a month on any loan when the monthly charge permitted by paragraph (1) would otherwise be less.

(b) One month’s interest may be charged for any part of the month in which pawned property is redeemed.

history: (History: Amended by Stats. 2015, Ch. 245, Sec. 1. (SB 285) Effective January 1, 2016.)

chapter: 2. Pawnbroker Regulations

path: 8. PAWNBROKERS > 2. Pawnbroker Regulations


text: A loan setup fee of seven dollars and fifty cents ($7.50) or 3.5 percent, whichever is greater, may be charged for each loan. However, the maximum loan setup fee shall not exceed ninety dollars ($90). Loan setup fees are in addition to any other allowed charges.

history: (History: Amended by Stats. 2019, Ch. 189, Sec. 1. (AB 1186) Effective January 1, 2020.)