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

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

history: (History: Added by Stats. 2007, Ch. 101, Sec. 30. Effective January 1, 2008.)


kind: section

code: FIN

text:
(a) The commissioner may do one or more of the following:

(1) Deny, suspend, revoke, condition, or decline to renew a mortgage loan originator license for a violation of this division, or any rules or regulations adopted thereunder.

(2) Deny, suspend, revoke, condition, or decline to renew a mortgage loan originator license if an applicant or licensee fails at any time to meet the requirements of Section 50141 or 50144, or withholds information or makes a material misstatement in an application for a license or license renewal.

(3) Order restitution against a mortgage loan originator or any residential mortgage lender or servicer licensee employing a mortgage loan originator for a violation of this division.

(4) Impose fines on a mortgage loan originator or any residential mortgage lender or servicer licensee employing a mortgage loan originator pursuant to subdivisions (b), (c), and (d).

(5) Issue orders or directives to mortgage loan originators under this division as follows:

(A) Order or direct a mortgage loan originator or any residential mortgage lender or servicer licensee employing a mortgage loan originator to desist and refrain from conducting business, including immediate temporary orders to desist and refrain.

(B) Order or direct a mortgage loan originator or any residential mortgage lender or servicer licensee employing a mortgage loan originator to cease any harmful activities or violations of this division, including immediate temporary orders to desist and refrain.

(C) Enter immediate temporary orders to cease business under a license issued pursuant to the authority granted under Section 50002 if the commissioner determines that the license was erroneously granted or the mortgage loan originator is currently in violation of this division.

(D) Order or direct any other affirmative action as the commissioner deems necessary.

(b) The commissioner may impose a civil penalty on a mortgage loan originator or any residential mortgage lender or servicer licensee employing a mortgage loan originator, if the commissioner finds, on the record after notice and opportunity for hearing, that the mortgage loan originator or any residential mortgage lender or servicer licensee employing a mortgage loan originator has violated or failed to comply with any requirement of this division or any regulation prescribed by the commissioner under this division or order issued under authority of this division.

(c) The maximum amount of penalty for each act or omission described in subdivision (b) shall be twenty-five thousand dollars ($25,000).

(d) Each violation or failure to comply with any directive or order of the commissioner is a separate and distinct violation or failure.

history: (History: Added by Stats. 2009, Ch. 160, Sec. 79. (SB 36) Effective October 11, 2009.)

chapter: 7. Prohibited Practices and Penalties

path: 20. CALIFORNIA RESIDENTIAL MORTGAGE LENDING ACT > 7. Prohibited Practices and Penalties


text:
(a) A residential mortgage lender, or a person or employee acting under the authority of a residential mortgage lender’s license, including a mortgage loan originator, shall not provide brokerage services to a borrower, except as provided in subdivision (c).

(b) “Brokerage services” means either of the following:

(1) Obtaining or attempting to obtain, on behalf of a borrower, a residential mortgage loan, as defined in subdivision (p) of Section 50003, secured by residential real estate, as defined in subdivision (v) of Section 50003, made with the funds of another institutional lender, as defined in paragraphs (1), (2), and (4) of subdivision (k) of Section 50003, and closed in the name of that lender, for a fee paid by the borrower or the institutional lender.

(2) Obtaining or attempting to obtain, on behalf of a borrower, a residential mortgage loan, as defined in subdivision (p) of Section 50003, secured by residential real estate, as defined in subdivision (v) of Section 50003, made with the funds of another institutional lender, as defined in paragraphs (1), (2), and (4) of subdivision (k) of Section 50003, but closed in the name of the licensee, for a fee paid by the borrower or the institutional lender.

(c) A residential mortgage lender or a mortgage loan originator employed by a residential mortgage lender may provide brokerage services under the authority of the lender’s license, if the lender first enters into a written brokerage agreement with the borrower that satisfies the requirements of Section 50701.

(d) This chapter does not authorize a residential mortgage lender licensee to do any of the following:

(1) Provide brokerage services through independent contractors.

(2) Provide brokerage services through an employee not licensed as a mortgage loan originator.

(3) Obtain or attempt to obtain for a borrower a residential mortgage loan that is a “high cost mortgage,” referred to in Section 152(aa)(1) of the federal Home Ownership and Equity Protection Act of 1994, as amended (15 U.S.C. Sec. 1602(aa)).

(4) Hold itself out to borrowers, through advertising, as a mortgage broker, rather than a residential mortgage lender. However, a licensee shall disclose its status as a broker or agent when that disclosure is required by law.

(5) Perform activity subject to Section 10131 of the Business and Professions Code, except activities authorized by this division.

(e) A mortgage loan originator may only provide brokerage services as an employee of a licensed residential mortgage lender.

history: (History: Amended by Stats. 2010, Ch. 287, Sec. 14. (SB 1137) Effective January 1, 2011.)

chapter: 9. Brokerage Services for Borrowers

path: 20. CALIFORNIA RESIDENTIAL MORTGAGE LENDING ACT > 9. Brokerage Services for Borrowers


text:
(a) As soon as practical after a borrower requests that the residential mortgage lender licensee arrange a loan to be made by another institutional lender, and before the licensee performs brokerage services for the borrower, the licensee and borrower shall enter into a written loan brokerage agreement that satisfies the requirements of this section.

(b) Both the licensee’s authorized representative, who shall be a licensed mortgage loan originator, and the borrower shall sign and date the loan brokerage agreement, and the licensee shall deliver a copy of the fully executed loan brokerage agreement to the borrower either upon execution, if the documents are signed in the licensee’s office, or within three business days after execution.

(c) The loan brokerage agreement shall include the mortgage loan originator’s unique identifier.

(d) The loan brokerage agreement shall contain an explicit statement that (1) the licensee is acting as the agent of the borrower in providing brokerage services to the borrower, and (2) when acting as agent for the borrower, it owes to that borrower a fiduciary duty of utmost care, honesty, and loyalty in the transaction, including the duty of full disclosure of all material facts. If the licensee is authorized to act as an agent for any other person, the brokerage agreement shall contain a statement of that fact and identification of that person.

(e) The loan brokerage agreement shall contain a detailed description of the services the licensee agrees to perform for the borrower, and a good faith estimate of any fees the licensee will receive for those services, whether paid by the borrower, the institutional lender, or both.

(f) The loan brokerage agreement shall carry a clear and conspicuous statement of the conditions under which the borrower is obligated to pay the licensee for brokerage services rendered under the agreement.

(g) The loan brokerage agreement shall provide that, if the licensee makes a materially false or misleading statement or omission in the inducement or implementation of the agreement, the borrower may, in addition to any other legal rights or remedies, upon written notice, do any of the following:

(1) Rescind the brokerage agreement.

(2) Recover fees paid by the borrower to the licensee for brokerage services rendered by the licensee pursuant to the agreement.

(3) Recover actual costs, including attorney’s fees, for enforcing the borrower’s rights under the loan brokerage agreement.

(h) If the loan brokerage agreement fails to set forth the rights in subdivision (g), these rights shall be implied by operation of law.

(i) The loan brokerage agreement shall be the only agreement between the borrower and the licensee with respect to a single loan.

(j) A licensee whose services to a borrower are limited to providing brokerage services may not require a borrower to pay fees or charges before the residential mortgage loan closing, other than either of the following:

(1) Actual charges to be incurred by the licensee on behalf of the borrower for services from third parties necessary to process the application, such as credit reports, appraisals, inspections, flood certification, and tax service, and, in transactions where those services are provided by the licensee, a charge not to exceed the fee customarily charged for the same or comparable service in the community in which the service was rendered.

(2) An application fee.

A licensee may not accept a fee under Section 50203(a)(1) or (2) and subsequently require a borrower to pay additional fees or charges under this paragraph for the borrower’s loan transaction.

(k) Any loan brokerage agreement that provides for the collection of an application fee shall be approved as to form by the commissioner before its use by a licensee, if the agreement meets the following requirements:

(1) The agreement specifies the services to be rendered for the application fee.

(2) The agreement sets forth the amount of the application fee and the date the fee becomes due and payable.

(3) The agreement does not contain a provision that purports to except or relieve the licensee from the responsibility to fulfill verbal commitments and representations made by employees or agents of the licensee when contracting for the application fee, or guarantee that a loan will be obtained.

(4) The agreement sets forth a definite date for full performance of the services promised in exchange for the application fee.

history: (History: Amended by Stats. 2009, Ch. 160, Sec. 83. (SB 36) Effective October 11, 2009.)

division: 20. CALIFORNIA RESIDENTIAL MORTGAGE LENDING ACT


text:
(a) The annual report required by Section 50401(a) shall include both of the following:

(1) The number and the aggregate principal amount of closed residential mortgage loans secured by residential real estate in which the licensee provides brokerage services, as defined in this chapter.

(2) The number and aggregate principal amount of residential mortgage loans made by the licensee under this division.

(b) The sum total of the aggregate principal loan amounts reported in paragraphs (1) and (2) of subdivision (a) shall be deemed the aggregate principal amount of mortgage loans secured by residential real property originated by the licensee, for purposes of determining a licensee’s annual assessment under subdivision (a) of Section 50401.

(c) The commissioner shall provide copies of the annual reports required by subdivision (a) of Section 50401 to the Bureau of Real Estate upon request of the Real Estate Commissioner.

history: (History: Amended by Stats. 2013, Ch. 352, Sec. 93. (AB 1317) Effective September 26, 2013. Operative July 1, 2013, by Sec. 543 of Ch. 352.)


text: Notwithstanding Section 10248.3 of the Business and Professions Code, the provisions of Article 7 (commencing with Section 10240) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code shall apply to a residential mortgage loan arranged by a licensee pursuant to this chapter, unless that loan exceeds the principal loan amount specified for a bona fide loan secured directly or collaterally by a first trust deed or a bona fide loan secured directly or collaterally by a lien junior thereto, specified in Section 10245 of the Business and Professions Code.

history: (History: Added by Stats. 1996, Ch. 19, Sec. 1. Effective March 20, 1996.)


text:
(a) Except as provided in subdivision (b), the commissioner has primary regulatory jurisdiction over all transactions in which a licensed residential mortgage lender provides brokerage services, whether the brokerage services are provided under the authority of this chapter or under the Real Estate Law.

(b) If the commissioner has reason to believe that a residential mortgage lender or one of its employees has violated the Real Estate Law while providing brokerage services under a real estate broker’s license, the commissioner shall refer the matter to the Real Estate Commissioner, who may conduct an investigation to determine if a violation of the Real Estate Law has occurred. If the Real Estate Commissioner believes a violation has occurred, the Real Estate Commissioner may commence an enforcement action under the Real Estate Law.


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

(a) “Client” means the taxpayer with whom the exchange facilitator enters into an agreement described in subparagraph (A) of paragraph (1) of subdivision (b).

(b) (1) “Exchange facilitator” means a person that does any of the following:

(A) Facilitates, for a fee, as defined in subdivision (c), an exchange of like-kind property by entering into an agreement with a taxpayer by which the exchange facilitator acquires from the taxpayer the contractual rights to sell the taxpayer’s relinquished property located in this state and transfers a replacement property to the taxpayer as a qualified intermediary as that term is defined under Treasury Regulation Section 1.1031(k)-1(g)(4), or enters into an agreement with the taxpayer to take title to a property in this state as an exchange accommodation titleholder (EAT) as that term is defined in Internal Revenue Service Revenue Procedure 2000–37, or enters into an agreement with a taxpayer to act as a qualified trustee or qualified escrow holder as those terms are defined under Treasury Regulation Section 1.1031(k)-1(g)(3), except as provided in paragraph (2).

(B) Maintains an office in this state for the purpose of soliciting business as an exchange facilitator.

(C) Holds himself, herself, or itself out as an exchange facilitator by advertising any of the services listed in paragraph (A) or soliciting clients in printed publications, direct mail, television or radio advertisements, telephone calls, facsimile transmissions, or other electronic communications directed to the general public in this state for purposes of providing any of those services.

(2) “Exchange facilitator” does not include any of the following:

(A) A taxpayer or a disqualified person, as that term is defined under Treasury Regulation Section 1.1031(k)-1(k), seeking to qualify for the nonrecognition provisions of Section 1031 of the Internal Revenue Code of 1986, as amended.

(B) A financial institution that is acting as a depository for exchange funds or that is acting solely as a qualified escrow holder or qualified trustee, as those terms are defined under Treasury Regulation Section 1.1031(k)-1(g)(3), and that is not facilitating exchanges.

(C) A title insurance company, underwritten title company, or escrow company that is acting solely as a qualified escrow holder or qualified trustee, as those terms are defined under Treasury Regulation Section 1.1031(k)-1(g)(3), and that is not facilitating exchanges.

(D) A person that advertises for and teaches seminars or classes, or otherwise makes a presentation, to attorneys, accountants, real estate professionals, tax professionals, or other professionals, when the primary purpose is to teach the professionals about tax-deferred exchanges or to train them to act as exchange facilitators.

(E) A qualified intermediary, as that term is defined under Treasury Regulation 1.1031(k)-1(g)(4), who holds exchange funds from the disposition of relinquished property located outside this state.

(F) An entity in which an exchange accommodation titleholder (EAT) has a 100 percent interest and which is used by the EAT to take title to property in this state.

(c) “Fee” means compensation of any nature, direct or indirect, monetary or in-kind, that is received by a person or related person as defined in Section 267(b) or 707(b) of the Internal Revenue Code for any services relating to or incidental to the exchange of like-kind property.

(d) “Financial institution” means a bank, credit union, savings and loan association, savings bank, or trust company chartered under the laws of this state or the United States whose accounts are insured by the full faith and credit of the United States, the Federal Deposit Insurance Corporation, the National Credit Union Share Insurance Fund, or other similar or successor programs.

(e) A person is “affiliated” with another specified person if the person directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with the other specified person.

(f) “Person” means an individual, a corporation, a partnership, a limited liability company, a joint venture, an association, a joint stock company, a trust, or any other form of a legal entity, and includes the agents and employees of that person.

(g) “Prudent investor standard” means the prudent investor rule described in Article 2.5 (commencing with Section 16045) of Chapter 1 of Part 4 of Division 9 of the Probate Code.

history: (History: Added by Stats. 2008, Ch. 708, Sec. 2. Effective January 1, 2009.)

division: 20.5. EXCHANGE FACILITATORS

path: 20.5. EXCHANGE FACILITATORS


text:
(a) A person who engages in business as an exchange facilitator shall notify all existing exchange clients whose relinquished property is located in this state, or whose replacement property held under a qualified exchange accommodation agreement is located in this state, of any change in control of the exchange facilitator. That notification shall be provided within 10 business days of the effective date of the change in control by hand delivery, facsimile, electronic mail, overnight mail, or first-class mail, and shall be posted on the exchange facilitator’s Internet Web site for at least 90 days following the change in control. The notification shall set forth the name, address, and other contact information of the transferees.

(b) For purposes of this section, “change in control” means any transfer of more than 50 percent of the assets or ownership interests, directly or indirectly, of the exchange facilitator.


text:
(a) A person who engages in business as an exchange facilitator shall at all times comply with one or more of the following:

(1) Maintain a fidelity bond or bonds in an amount not less than one million dollars ($1,000,000), executed by an insurer authorized to do business in this state or an eligible surplus line insurer pursuant to Section 1765.1 of the Insurance Code.

(2) Deposit an amount of cash or securities or irrevocable letters of credit in an amount not less than one million dollars ($1,000,000) in an interest-bearing deposit account or a money market account with the financial institution of the person’s choice. Interest on that amount shall accrue to the exchange facilitator.

(3) Deposit all exchange funds in a qualified escrow account or qualified trust, as those terms are defined under Treasury Regulation 1.1031(k)-1(g)(3), with a financial institution and provide that any withdrawals from that escrow account or trust require that person’s and the client’s written authorization.

(b) A person who engages in business as an exchange facilitator may maintain a bond or bonds or deposit an amount of cash or securities or irrevocable letters of credit in excess of the minimum required amounts.

(c) If the person engaging in business as an exchange facilitator is listed as a named insured on one or more fidelity bonds that total at least one million dollars ($1,000,000), the requirements of this section shall be deemed satisfied.

history: (History: Amended by Stats. 2011, Ch. 83, Sec. 2. (AB 315) Effective July 15, 2011. Operative July 21, 2011, by Sec. 34 of Stats. 2011, Ch. 83.)


text: Any person claiming to have sustained damage by reason of the failure of a person engaging in business as an exchange facilitator to comply with this division may file a claim on the bonds, deposits, or letters of credit described in Section 51003 to recover the damages subject to the terms and conditions of the bonds, deposits, or letters of credit. The amounts of the bonds, deposits, or letters of credit shall be reduced to the extent of any payment made.

history: (History: Amended by Stats. 2009, Ch. 568, Sec. 5. (SB 204) Effective January 1, 2010.)


text:
(a) A person who engages in business as an exchange facilitator shall at all times comply with either of the following:

(1) Maintain a policy of errors and omissions insurance in an amount not less than two hundred fifty thousand dollars ($250,000), executed by an insurer authorized to do business in this state or an eligible surplus line insurer pursuant to Section 1765.1 of the Insurance Code.

(2) Deposit an amount of cash or securities or irrevocable letters of credit in an amount not less than two hundred fifty thousand dollars ($250,000) in an interest-bearing deposit account or a money market account with the financial institution of the person’s choice. Interest on that amount shall accrue to the exchange facilitator.

(b) A person who engages in business as an exchange facilitator may maintain insurance or deposit an amount of cash or securities or irrevocable letters of credit in excess of the minimum required amounts.

(c) If the person engaging in business as an exchange facilitator is listed as a named insured on an errors and omissions policy of at least two hundred fifty thousand dollars ($250,000), the requirements of this section shall be deemed satisfied.

history: (History: Amended by Stats. 2011, Ch. 83, Sec. 3. (AB 315) Effective July 15, 2011. Operative July 21, 2011, by Sec. 34 of Stats. 2011, Ch. 83.)


text:
(a) A person who engages in business as an exchange facilitator shall have the responsibility to act as a custodian for all exchange funds, including, but not limited to, money, property, other consideration, or instruments received by the person from, or on behalf of, a client, except funds received as the person’s compensation. A person who engages in business as an exchange facilitator shall invest those exchange funds in investments that meet a prudent investor standard and that satisfy the investment goals of liquidity and preservation of principal. For purposes of this section, a prudent investor standard is violated if any of the following occurs:

(1) Exchange funds are knowingly commingled by the exchange facilitator with the operating accounts of the exchange facilitator.

(2) Exchange funds are loaned or otherwise transferred to any person or entity, other than a financial institution, that is affiliated with or related to the exchange facilitator. This paragraph does not apply to the transfer of funds from an exchange facilitator to an exchange accommodation titleholder in accordance with an exchange contract.

(3) Exchange funds are invested in a manner that does not provide sufficient liquidity to meet the exchange facilitator’s contractual obligations to its clients and does not preserve the principal of the exchange funds.

(b) Exchange funds shall not be subject to execution or attachment on any claim against the exchange facilitator. An exchange facilitator shall not knowingly keep, or cause to be kept, any money in any bank, credit union, or other financial institution under a name designating the money as belonging to the client of any exchange facilitator, unless that money belongs to that client and was actually entrusted to the exchange facilitator by that client.


text:
A person engaged in business as an exchange facilitator shall not do any of the following:

(a) Make any material misrepresentations concerning any like-kind exchange transaction that are intended to mislead.

(b) Pursue a continued or flagrant course of misrepresentation, or make false statements through advertising or otherwise.

(c) Fail, within a reasonable time, to account for any moneys or property belonging to others that may be in the possession of, or under control of, the person.

(d) Engage in any conduct constituting fraudulent or dishonest dealings.

(e) Commit any crime involving fraud, misrepresentation, deceit, embezzlement, misappropriation of funds, robbery, or theft.

(f) Materially fail to fulfill its contractual duties to a client to deliver property or funds to the client, unless that failure is due to circumstances beyond the control of the person engaging in business as an exchange facilitator.


text: A person who violates this division is subject to civil suit in a court of competent jurisdiction.


text: For purposes of this division, “fund” means the California Financial Literacy Fund.

history: (History: Added by Stats. 2011, Ch. 612, Sec. 1. (AB 597) Effective January 1, 2012.)

division: 22. CALIFORNIA FINANCIAL LITERACY FUND

path: 22. CALIFORNIA FINANCIAL LITERACY FUND


text:
(a) The California Financial Literacy Fund is hereby established in the State Treasury. The fund shall be administered by the Controller.

(b) The purpose of the fund is to enable partnerships with the financial services community and governmental and nongovernmental stakeholders to improve Californians’ financial literacy.

(c) Funds not appropriated within 18 months of being contributed to the fund shall be returned in full to the contributor.


text: The Controller may accept private donations and deposit those donations into the fund, which shall be made available upon appropriation in the annual Budget Act. Donations shall not be used to promote or market the financial products of any contributor.


text: The Controller may convene a financial literacy advisory committee to provide additional oversight of the fund and develop strategies to improve financial literacy. If convened, the committee shall comply with the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code).


text: Beginning in 2013, the Controller shall provide to the respective chairpersons of the Assembly Committee on Banking and Finance and the Senate Committee on Banking and Financial Institutions a brief annual summary on the use of the funds, when appropriated. This summary shall be submitted no later than August 30 of each year.


text:
(a) The Legislature finds and declares that “Bank on California” is a voluntary collaborative initiative that assists Californians in opening a bank or credit union account and saving for the future.

(b) There is hereby established within the department the Bank on California Program.

history: (History: Added by Stats. 2015, Ch. 750, Sec. 1. (AB 1292) Effective January 1, 2016.)

division: 23. BANK ON CALIFORNIA PROGRAM

path: 23. BANK ON CALIFORNIA PROGRAM


text:
For purposes of this division, the following terms shall have the following meanings:

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

(b) “Program” means the Bank on California Program.

history: (History: Amended by Stats. 2022, Ch. 16, Sec. 5. (SB 577) Effective April 28, 2022.)


text:
(a) The Legislature finds and declares all of the following:

(1) California consumers are vulnerable to abuse if the state lacks a dedicated financial services regulator with broad authority over providers of financial products and services. The lack of such a regulator has left consumers vulnerable to abuse and forced California businesses to compete with unscrupulous providers. The financial victimization of economically vulnerable consumers, including individuals who lack a safety net, not only harms the individual but also has a broader social and economic cost on all of California, and could lead to increased caseloads for social safety net programs. These problems become even more acute in times of crisis, including the global Covid-19 pandemic and economic fallout. Consequently, where feasible, the Legislature should enact statutory measures to protect California residents from financial abuses in the marketplace for financial products and services.

(2) Robust consumer protections enable wealth building and promote a vibrant economy. They are especially important among various populations, including, but not limited to, military service members, seniors, students, and new Californians. Unfair, deceptive, or abusive practices in the provision of financial products and services undermine the public confidence that is essential to the continued functioning of the financial system and sound extensions of credit to consumers.

(3) Technological innovation offers great promise to the more effective and efficient provision of consumer financial products and services to the population of California and also poses risks to consumers and challenges to law enforcement in addressing those risks.

(4) It is the intent of the Legislature to enact the California Consumer Financial Protection Law to strengthen consumer protections by expanding the ability of the Department of Financial Protection and Innovation to improve accountability and transparency in the California financial system, provide consumer financial education, and protect consumers from abusive financial practices, while prioritizing the prevention of unethical businesses from harming the most vulnerable populations including military service members, seniors, students, low- and moderate-income individuals, and new Californians.

(b) The purpose of the California Consumer Financial Protection Law shall be to promote consumer welfare, fair competition, and wealth creation in this state by doing all of the following:

(1) Promoting nondiscriminatory access to responsible, affordable credit on terms that reasonably reflect consumers’ ability to repay.

(2) Promoting nondiscriminatory access to consumer financial products and services that are understandable and not unfair, deceptive, or abusive.

(3) Protecting consumers from discrimination and unfair, deceptive, and abusive acts and practices in connection with financial practices and services.

(4) Promoting nondiscriminatory consumer-protective innovation in consumer financial products and services.

history: (History: Added by Stats. 2020, Ch. 157, Sec. 7. (AB 1864) Effective January 1, 2021.)

chapter: 1. Findings and Purpose

path: 24. CALIFORNIA CONSUMER FINANCIAL PROTECTION LAW > 1. Findings and Purpose


text: This division shall be known, and may be cited, as the “California Consumer Financial Protection Law.”

chapter: 2. Short Title

path: 24. CALIFORNIA CONSUMER FINANCIAL PROTECTION LAW > 2. Short Title


text:
(a) This division shall not apply to a licensee, or an employee of a licensee, of any state agency other than the Department of Financial Protection and Innovation to the extent that licensee or employee is acting under the authority of the other state agency’s license.

(b) (1) Except as provided by paragraph (2), this division shall not apply to a person or employee of that person to the extent that person or employee is acting under the authority of one of the following licenses, certificates, or charters issued by the Department of Financial Protection and Innovation:

(A) Any person licensed as an escrow agent under Division 6 (commencing with Section 17000) of the Financial Code.

(B) Any person licensed as a finance lender, broker, program administrator, or mortgage loan originator under Division 9 (commencing with Section 22000) of the Financial Code.

(C) Any person licensed as a broker-dealer or investment adviser under Division 1 (commencing with Section 25000) of Title 4 the Corporations Code.

(D) Any person licensed as a residential mortgage lender, a mortgage servicer, or a mortgage loan originator under Division 20 (commencing with Section 50000) of the Financial Code.

(E) Any person licensed as a check seller, bill payer, or prorater under Division 3 (commencing with Section 12000) of the Financial Code.

(F) Any person licensed as a capital access company under Division 3 (commencing with Section 28000) of Title 4 of the Corporations Code.

(G) Any person doing business under a license, charter, or certificate issued under the Financial Institutions Law, including Division 1 (commencing with Section 99), Division 1.1 (commencing with Section 1000), Division 1.2 (commencing with Section 2000), Division 1.6 (commencing with Section 4800), Division 2 (commencing with Section 5000), Division 5 (commencing with Section 14000), Division 7 (commencing with Section 18000), and Division 15 (commencing with Section 31000) of the Financial Code.

(2) Nothing in this subdivision shall be deemed to prevent the commissioner from using the authority provided by this division to enforce Section 90003.

(c) This division shall not apply to a bank, bank holding company, trust company, savings and loan association, savings and loan holding company, credit union, or an organization subject to oversight of the Farm Credit Administration, when acting under the authority of a license, certificate, or charter under federal law or the laws of another state.

(d) This division applies to all other covered persons, as defined in subdivision (f) of Section 90005.

history: (History: Amended by Stats. 2025, Ch. 355, Sec. 1. (SB 825) Effective January 1, 2026.)

chapter: 3. Exemptions

path: 24. CALIFORNIA CONSUMER FINANCIAL PROTECTION LAW > 3. Exemptions


text:
(a) It is unlawful for a covered person or service provider, as defined in subdivision (f) of Section 90005, to do any of the following:

(1) Engage, have engaged, or propose to engage in any unlawful, unfair, deceptive, or abusive act or practice with respect to consumer financial products or services.

(2) Offer or provide to a consumer any financial product or service not in conformity with any consumer financial law or otherwise commit any act or omission in violation of a consumer financial law.

(3) Fail or refuse, as required by a consumer financial law or any rule or order issued by the department thereunder, to do any of the following:

(A) Permit the department access to or copying of records.

(B) Establish or maintain records.

(C) Make reports or provide information to the department.

(b) For any person who knowingly or recklessly provides substantial assistance to a covered person or service provider in violation of subdivision (a) or any rule or order issued thereunder, the provider of that substantial assistance shall be deemed to be in violation of that section to the same extent as the person to whom that assistance is provided.

(c) Notwithstanding subdivision (b), a person shall not be held to have violated paragraph (1) of subdivision (a) solely by virtue of providing or selling time or space to a covered person or service provider placing an advertisement.

chapter: 4. Prohibited Acts

path: 24. CALIFORNIA CONSUMER FINANCIAL PROTECTION LAW > 4. Prohibited Acts


text:
(a) In addition to the prohibitions contained in Section 1102.5 of the Labor Code, a covered person or service provider shall not terminate or in any other way discriminate against, or cause to be terminated or discriminated against, any covered employee or any authorized representative of covered employees by reason of the fact that the employee or representative, whether at the initiative of the employee or in the ordinary course of the duties of the employee, or any person acting pursuant to a request of the employee, has either:

(1) Filed or instituted, or caused to be filed or instituted, any proceeding under any consumer financial law.

(2) Objected to, or refused to participate in, any activity, policy, practice, or assigned task that the employee or other such person reasonably believed to be in violation of any law, rule, order, standard, or prohibition, subject to the jurisdiction of, or enforceable by, the department.

(b) For the purposes of this section, the term “covered employee” means any individual performing tasks related to the offering or provision of a consumer financial product or service.

(c) (1) A person who believes that they have been terminated or otherwise discriminated against by any person in violation of subdivision (a) shall have all remedies available under Section 1102.5 of the Labor Code, subject to the restrictions set forth in that section and the implementing regulations.

(2) This subdivision does not restrict the remedies available under this law.

division: 24. CALIFORNIA CONSUMER FINANCIAL PROTECTION LAW


text:
The definitions in this section apply throughout this division, except as otherwise provided in this division or if the context clearly indicates otherwise:

(a) “Affiliate” means any person that controls, is controlled by, or is under common control with another person. For purposes of this definition, “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person.

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

(c) “Consumer” means an individual or an agent, trustee, or representative acting on behalf of an individual or the estate, trust, or joint trust of an individual, however denominated.

(d) “Consumer financial law” means a federal or California law that directly and specifically regulates the manner, content, or terms and conditions of any financial transaction, or any account, product, or service related thereto, with respect to a consumer.

(e) “Consumer financial product or service” means either of the following:

(1) A financial product or service that is delivered, offered, or provided for use by consumers primarily for personal, family, or household purposes.

(2) A financial product or service as described in paragraph (11) of subdivision (k).

(f) “Covered person” means, to the extent not preempted by federal law, any of the following:

(1) Any person that engages in offering or providing a consumer financial product or service to a resident of this state.

(2) Any affiliate of a person described in this subdivision if the affiliate acts as a service provider to the person.

(3) Any service provider to the extent that the person engages in the offering or provision of its own consumer financial product or service.

(g) “Credit” means the right granted by a person to another person to defer payment of a debt, incur debt and defer its payment, or purchase property or services and defer payment for those purchases.

(h) “Debt” means any obligation of a person to pay another person money regardless of whether the obligation is absolute or contingent, has been reduced to judgment, is fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured and includes any obligation that gives rise to right of an equitable remedy for breach of performance if the breach gives rise to a right to payment.

(i) “Deposit-taking activity” means any of the following:

(1) The acceptance of deposits, maintenance of deposit accounts, or the provision of services related to the acceptance of deposits or the maintenance of deposit accounts.

(2) The acceptance of funds, the provision of other services related to the acceptance of funds, or the maintenance of member share accounts by a credit union.

(3) The receipt of funds or the equivalent thereof, as the department may determine by rule or order, received or held by a covered person or an agent for a covered person for the purpose of facilitating a payment or transferring funds or value of funds between a consumer and a third party.

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

(k) “Financial product or service” means:

(1) Extending credit and servicing extensions of credit, including acquiring, purchasing, selling, brokering extensions of credit, other than solely extending commercial credit to a person who originates consumer credit transactions.

(2) Extending or brokering leases of personal or real property that are the functional equivalent of purchase finance arrangements, if all of the following:

(A) The lease is on a nonoperating basis.

(B) The initial term of the lease is at least 90 days.

(C) In the case of a lease involving real property, at the inception of the initial lease, the transaction is intended to result in ownership of the leased property to be transferred to the lessee, subject to standards prescribed by the department.

(3) Providing real estate settlement services.

(4) Engaging in deposit-taking activities, transmitting or exchanging funds, or otherwise acting as a custodian of funds or any financial instrument for use by or on behalf of a consumer.

(5) Selling, providing, or issuing stored value or payment instruments, except that, in the case of a sale of, or transaction to reload, stored value, only if the seller exercises substantial control over the terms or conditions of the stored value provided to the consumer where, for purposes of this paragraph, both:

(A) A seller shall not be found to exercise substantial control over the terms or conditions of the stored value if the seller is not a party to the contract with the consumer for the stored value product, and another person is principally responsible for establishing the terms or conditions of the stored value.

(B) Advertising the nonfinancial goods or services of the seller on the stored value card or device is not in itself an exercise of substantial control over the terms or conditions.

(6) Providing check cashing, check collection, or check guaranty services.

(7) Providing payments or other financial data processing products or services to a consumer by any technological means, including processing or storing financial or banking data for any payment instrument, or through any payment system or networks used for processing payment data, including payments made through an online banking system or mobile telecommunications network, except that a person shall not be deemed to be a covered person with respect to financial data processing solely because the person either:

(A) Is a merchant, retailer, or seller of any nonfinancial good or service who engages in financial data processing by transmitting or storing payment data about a consumer exclusively for purpose of initiating payment instructions by the consumer to pay that person for the purchase of, or to complete a commercial transaction for, the nonfinancial good or service sold directly by that person to the consumer.

(B) Provides access to a host server to a person for purposes of enabling that person to establish and maintain a website.

(8) Providing financial advisory services other than services relating to securities provided by a person regulated by the Securities Exchange Commission or a person regulated by a state securities commission, but only to the extent that such person acts in a regulated capacity, to consumers on individual financial matters or relating to proprietary financial products or services (other than by publishing any bona fide newspaper, news magazine, or business or financial publication of general and regular circulation, including publishing market data, news, or data analytics or investment information or recommendations that are not tailored to the individual needs of a particular consumer) including both of the following:

(A) Providing credit counseling to any consumer.

(B) Providing services to assist a consumer with debt management or debt settlement, modifying the terms of any extension of credit, or avoiding foreclosure.

(9) Collecting, analyzing, maintaining, or providing consumer report information or other account information, including information relating to the credit history of consumers, used or expected to be used in connection with any decision regarding the offering or provision of a consumer financial product or service, except to the extent that:

(A) A person does any of the following:

(i) Collects, analyzes, or maintains information that relates solely to the transactions between a consumer and that person.

(ii) Provides information to an affiliate of the person, as described in subdivision (a).

(iii) Provides information that is used or expected to be used solely in any decision regarding the offering or provision of a product or service that is not a consumer financial product or service.

(B) The information described in clause (i) of subparagraph (A) is not used by the person or affiliate in connection with any decision regarding the offering or provision of a consumer financial product or service to the consumer, other than credit described in subparagraph (A) of paragraph (1) of subdivision (e) of Section 90006.

(10) Collecting debt related to any consumer financial product or service.

(11) Directly or indirectly brokering the offer or sale of a franchise in this state on behalf of another.

(12) Offering another financial product or service as may be defined by the department, by regulation, for purposes of this division, if the department finds that the financial product or service is either:

(A) Entered into or conducted as a subterfuge or with a purpose to evade any consumer financial law.

(B) Permissible for a bank or for a financial holding company to offer or to provide under any provision of law or regulation applicable to a bank or a financial holding company, and has, or likely will have, a material impact on consumers, excluding, however, solely from the department’s authority to define additional financial products and services under this subparagraph and not the exercise of any other authority it may have, the following activities provided to a covered person:

(i) Providing information products or services to a covered person for identity authentication.

(ii) Providing information products or services for fraud or identify theft detection, prevention, or investigation.

(iii) Providing document retrieval or delivery services.

(iv) Providing public records information retrieval.

(v) Providing information products or services for anti-money laundering activities.

(13) The term “financial product or service” does not include either of the following:

(A) Insurance, as defined in Section 22 of the Insurance Code, regulated by the Department of Insurance.

(B) The provision, by a person, of electronic data transmission, routing, intermediate or transient storage, or connections to a telecommunications system or network, not including a person that provides those electronic conduit services if, when providing those services, the person does any of the following:

(i) Selects or modifies the content of the electronic data.

(ii) Transmits, routes, stores, or provides connections for electronic data, including financial data, in a manner that the financial data is differentiated from other types of data of the same form that the person transmits, routes, or stores, or with respect to which, provides connections.

(iii) Is a payee, payor, correspondent, or similar party to a payment transaction with a consumer.

(l) “Payment instrument” means a check, draft, warrant, money order, traveler’s check, electronic instrument, or other instrument, payment of funds, or monetary value, other than currency.

(m) “Person” means an individual, corporation, business trust, estate, trust, partnership, proprietorship, syndicate, limited liability company, association, joint venture, government, governmental subdivision, agency or instrumentality, public corporation or joint stock company, or any other organization or legal or commercial entity.

(n) (1) “Service provider” means any person that provides a material service to a covered person in connection with the offering or provision by that covered person of a consumer financial product or service, including a person that either:

(A) Participates in designing, operating, or maintaining the consumer financial product or service.

(B) Processes transactions relating to the consumer financial product or service, other than unknowingly or incidentally transmitting or processing financial data in a manner that the data is undifferentiated from other types of data of the same form as the person transmits or processes.

(2) The term “service provider” does not include a person solely by virtue of that person offering or providing to a covered person either:

(A) A support service of a type provided to businesses generally or a similar ministerial service.

(B) Time or space for an advertisement for a consumer financial product or service through print, newspaper, or electronic media.

(o) (1) “Stored value” means funds or monetary value represented in any electronic format, whether or not specially encrypted, and stored or capable of storage on electronic media in such a way as to be retrievable and transferred electronically, and includes a prepaid debit card or product, or any other similar product, regardless of whether the amount of the funds or monetary value may be increased or reloaded.

(2) Notwithstanding paragraph (1), the term “stored value” does not include a special purpose card or certificate, which shall be defined for purposes of this paragraph as funds or monetary value represented in any electronic format, whether or not specially encrypted, that is all of the following:

(A) Issued by a merchant, retailer, or other seller of nonfinancial goods or services.

(B) Redeemable only for transactions with the merchant, retailer, or seller of nonfinancial goods or services or with an affiliate of such person, which affiliate itself is a merchant, retailer, or seller of nonfinancial goods or services.

(C) Issued in a specified amount that, except in the case of a card or product used solely for telephone services, may not be increased or reloaded.

(D) Purchased on a prepaid basis in exchange for payment.

(E) Honored upon presentation to the merchant, retailer, or seller of nonfinancial goods or services or an affiliate of such person, which affiliate itself is a merchant, retailer, or seller of nonfinancial goods or services, only for any nonfinancial goods or services

(p) These definitions shall be interpreted consistently with the definitions in the Consumer Financial Protection Act of 2010 (12 U.S.C. Sec. 5481). Any inconsistency or ambiguity shall be resolved in favor of greater protections to the consumer and more expansive coverage.

chapter: 5. Definitions

path: 24. CALIFORNIA CONSUMER FINANCIAL PROTECTION LAW > 5. Definitions


text:
(a) The department shall regulate the offering and provision of consumer financial products or services under California consumer financial laws and shall exercise nonexclusive oversight and enforcement authority under California consumer financial laws. To the extent permissible under the federal consumer financial laws, the department shall exercise nonexclusive oversight and enforcement under the federal consumer financial laws.

(b) In addition to existing functions, powers, and duties, the department shall have all of the following functions, powers, and duties in carrying out its responsibilities under this law:

(1) To bring administrative and civil actions, and to prosecute those civil actions before state and federal courts.

(2) To hold hearings and issue publications, results of inquiries and research, and reports that may aid in effectuating the purposes of this law.

(3) To perform such other functions as may be authorized or required by law.

(c) Sections 11040 and 11042 of the Government Code do not apply to this law.

(d) (1) The department shall establish the Financial Technology Innovation Office.

(2) The commissioner may investigate, research, analyze, and report on markets for consumer financial products or services.

(3) The commissioner may develop and implement outreach and education programs to underserved consumers and communities.

(4) The commissioner may develop and implement initiatives to promote innovation, competition, and consumer access within financial services.

(e) Merchants, retailers, and other sellers of nonfinancial goods and services are excluded from the department’s authority, subject to the following conditions:

(1) The department may not exercise authority under this division as to the following:

(A) The bona fide extension of credit by a merchant, retailer, or seller of nonfinancial goods and services to a consumer for the acquisition of a nonfinancial good or service, provided that all of the following conditions are met:

(i) The credit extended does not significantly exceed the fair market value of the nonfinancial good or service provided.

(ii) The merchant, retailer, or seller does not sell or otherwise assign the debt, except as to the sale of delinquent debt for the purposes of collection.

(iii) The merchant, retailer, or seller of nonfinancial goods and services does not regularly extend credit, as defined under the federal Truth in Lending Act (15 U.S.C. Sec. 1601 et seq.) and regulations issued thereunder.

(B) The collection or sale of delinquent debt arising from credit described in clause (i).

(2) Nothing in paragraph (1) shall limit the department’s authority to the extent that the department finds the sale of the nonfinancial good or service is done as a subterfuge, so as to evade or circumvent the provisions of this title.

chapter: 6. Administration

path: 24. CALIFORNIA CONSUMER FINANCIAL PROTECTION LAW > 6. Administration


text:
With respect to funds under this division:

(a) All moneys collected or received by the commissioner under this division shall be deposited with the State Treasurer to the credit of the Financial Protection Fund, which is hereby created. All moneys in the Financial Protection Fund shall be available, upon appropriation by the Legislature, to the commissioner for purposes of administering this division.

(b) The department may set and collect an annual registration fee for each entity required to register under subdivision (a) of Section 90009, which may be scaled based on the size or market participation of the entity. The annual registration fee shall be limited to the reasonable regulatory costs under this division incident to issuing registrations and performing investigations, inspections, examinations, audits, and supervisory activities; and the administrative enforcement and adjudication of this division with respect to registrants. The regulatory costs for the administrative enforcement of this division are for the purposes of protecting consumers against unfair, deceptive, or abusive acts or practices in connection with any transaction involving the provision of financial products and services in this state; protecting registrants against unfair competition; improving accountability and transparency; and ensuring equitable enforcement of consumer financial laws.

(1) The cost of every inspection and examination of a covered person conducted under the authority of this law shall be paid to the department by the covered person examined and the department may maintain an action for recovery of those costs in any court of competent jurisdiction. In determining the cost of any inspection or examination, the department may use the estimated average hourly cost, including overhead, for all persons performing inspections or examinations of licensees or other persons subject to this division for the fiscal year.

(2) Nothing in this subdivision shall alter or supersede the requirements for the cost of an examination conducted under the authority of any other law administered by the commissioner.

(c) (1) The commissioner shall use funds obtained by the commissioner through the enforcement of any of the laws administered by the commissioner, including moneys received through fines, penalties, settlements, judgements, or otherwise, for the administration of this division, whether those funds were received before or after the enactment of this division. This provision shall not be applicable to fines, penalties, settlements, or judgments received by any other agency unless the settlement, judgment, or an agreement expressly allocates funds for the administration of this division.

(2) In addition to funds obtained through the enforcement of any of the laws administered by the commissioner, the commissioner may use funds for the administration of this division that are obtained, awarded, delegated, or otherwise attributed to the department through the enforcement of any other consumer, borrower, or investor protection law, regardless of whether the action is brought directly by the commissioner or by another agency or official.

(3) Funds designated as restitution or other ancillary relief to an injured person shall not be subject to this subdivision.

(d) The fees and assessments paid pursuant to this section are nonrefundable.


text:
(a) The department shall, by rule, establish reasonable procedures to provide a timely response to consumers, in writing where appropriate, to complaints against, or inquiries concerning, a covered person.

(b) The department shall, by rule, require a covered person to provide a timely response, in writing where appropriate, to the department concerning a consumer complaint or inquiry, including all of the following:

(1) Steps that have been taken by the covered person to respond to the complaint or inquiry of the consumer.

(2) Responses received by the covered person from the consumer.

(3) Follow-up actions or planned follow-up actions by the covered person to respond to the complaint or inquiry of the consumer.

(c) Subdivisions (a) and (b) shall not apply to a covered person to the extent it is a consumer reporting agency, as defined by the Fair Credit Reporting Act (15 U.S.C. Sec. 1681a(f)).

(d) With respect to the provision of information to consumers by covered persons, all of the following shall apply:

(1) A covered person shall, in a timely manner, comply with a consumer request for information in the control or possession of that covered person concerning the consumer financial product or service that the consumer obtained from that covered person, including supporting written documentation, concerning the account of the consumer.

(2) Notwithstanding paragraph (1), a covered person may not be required by this section to make available to the consumer any of the following information:

(A) Confidential commercial information, including an algorithm used to derive credit scores or other risk scores or predictors.

(B) Information collected by the covered person for the purpose of preventing fraud or money laundering, or detecting or making any report regarding other unlawful or potentially unlawful conduct.

(C) Information required to be kept confidential by any other provision of law.

(D) Nonpublic or confidential information, including confidential supervisory information.

(E) Information collected, received, maintained, disclosed, sold, or processed pursuant to the Fair Credit Reporting Act (15 U.S.C. Sec. 1681 et seq.), but only to the extent subdivision (b) is inconsistent with any provision of the Fair Credit Reporting Act, and then only to the extent of the inconsistency, or to the extent that subdivision (b) imposes a requirement that is otherwise prohibited under Section 1681t(b) of Title 15 of the United States Code.

(3) This subdivision shall not apply to a consumer credit reporting agency subject to Section 1785.10 of the Civil Code.

(e) The department shall promulgate regulations to implement subdivisions (a) and (b) before commencing an enforcement action against a covered person or service provider for a violation of those provisions.


text:
(a) (1) The department may prescribe rules regarding registration requirements applicable to a covered person engaged in the business of offering or providing a consumer financial product or service, including requiring a filing be made under oath, and requiring the payment of registration fees. The department may require registration through the Nationwide Multistate Licensing System and Registry.

(2) Notwithstanding paragraph (1), the department shall not require the registration or the payment of a fee by any of the following:

(A) A covered person who is licensed by the department under another law and who is providing a financial product or service within the scope of that license.

(B) A covered person who is licensed or registered by another agency unless the covered person is offering or providing a financial product or service that is not regulated by the agency licensing or registering the covered person.

(C) A covered person who is licensed by the department or a federal agency who engages in deposit-taking activity unless the covered person is offering or providing a financial product or service that is not regulated by the agency licensing the covered person.

(b) The following procedures apply to the oversight of persons required to register under subdivision (a):

(1) The department may prescribe rules to facilitate oversight of covered persons and assessment and detection of risks to consumers.

(2) The department may require a covered person to generate, provide, or retain records for the purposes of facilitating oversight of those persons and assessing and detecting risks to consumers.

(3) The department may prescribe rules regarding a covered person to ensure that such persons are legitimate entities and are able to perform their obligations to consumers. Such requirements may include background checks for principals, officers, directors, or key personnel and bonding or other appropriate financial requirements.

(c) The department may prescribe rules applicable to any covered person or service provider identifying as unlawful, unfair, deceptive, or abusive acts or practices in connection with any transaction with a consumer for a consumer financial product or service, or the offering of a consumer financial product or service. Such rules shall consider the relative harm to the consumer, the frequency of the act or practice in question, and whether such act or practice is unintentional or stems from a technical, clerical, or nonmaterial error. Rules under this section may include requirements for the purpose of preventing those acts or practices.

(1) The department shall interpret “unfair” and “deceptive” consistent with Section 17200 of the Business and Professions Code and the case law thereunder.

(2) The department shall have no authority under this law to declare an act or practice abusive in connection with the provision of a consumer financial product or service, unless the act or practice either:

(A) Materially interferes with the ability of a consumer to understand a term or condition of a consumer financial product or service.

(B) Takes unreasonable advantage regarding any of the following:

(i) A lack of understanding on the part of the consumer of the material risks, costs, or conditions of the product or service.

(ii) The inability of the consumer to protect the interests of the consumer in selecting or using a consumer financial product or service.

(iii) The reasonable reliance by the consumer on a covered person to act in the interests of the consumer.

(3) The term “abusive” shall be interpreted consistent with Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (12 U.S.C. Sec. 5481). Any inconsistency shall be resolved in favor of greater protections to the consumer and more expansive coverage.

(d) The department may prescribe rules applicable to any covered person to ensure that the features of any consumer financial product or service, both initially and over the term of the product or service, are fully, accurately, and effectively disclosed to consumers in a manner that permits consumers to understand the costs, benefits, and risks associated with the product or service, in light of the facts and circumstances.

(e) The department, by regulation, may define unfair, deceptive, and abusive acts and practices in connection with the offering or provision of commercial financing, as defined in subdivision (d) of Section 22800, or other offering or provision of financial products and services to small business recipients, nonprofits, and family farms. The rulemaking may also include data collection and reporting on the provision of commercial financing or other financial products and services.

(f) (1) In conducting any monitoring, regulatory or assessment activity, the department may gather information from time to time regarding the organization, business conduct, markets, and activities of any covered persons and service providers.

(2) The department may require any covered persons and service providers participating in consumer financial services markets to file with the department, under oath or otherwise, in the form and within a reasonable period of time as the department may prescribe by rule or order, annual or special reports, or answers in writing to specific questions, as necessary for the department to fulfill its monitoring, assessment, and reporting responsibilities.

(3) To clarify the applicability of state credit cost limitations, including rate and fee caps, to the offering and provision of consumer financial products and services by covered persons, the department may interpret and implement, including to prevent evasion thereof, all California credit cost provisions as to their applicability to consumer financial products and services. Nothing in this paragraph shall be construed to give the department authority to establish a usury limit applicable to an extension of credit offered or made by a covered person to a consumer, except as otherwise provided for by statute.

(g) If the department and another agency have joint authority, the department shall consult with that agency before promulgating regulations under such laws. The department shall conduct this consultation a minimum of 30 days before the issuance of a notice of proposed rulemaking and a minimum of 30 days before the issuance of any final rule. The commissioner may not amend or rescind any regulation promulgated by another department or agency.

(h) The department shall promulgate regulations to implement subdivisions (a), (b), and (d) before commencing an enforcement action against a covered person or service provider for a violation of these provisions.


text:
(a) Notwithstanding paragraph (1) of subdivision (a) of Section 90009, the department shall promulgate rules regarding registration requirements applicable to a covered person no later than three years following the initiation of its second action to enforce a violation of this division by persons providing the same or substantially similar consumer financial product or service as the covered person.

(b) The regulation requiring a covered person to register with the department shall become inoperative on January 1, of the calendar year that is four years following the initial year of required registration unless the Legislature takes action to extend the registration or to incorporate the scope of the activity in which the covered person is authorized to engage into a new or existing licensing law. The Legislature shall conduct public hearings to obtain input on the desirability or feasibility of extending, revising, or terminating the regulation. Failure of the Legislature to take action pursuant to this section shall not impact the department’s enforcement authority under this division.

(c) The department shall submit to the appropriate committees of the Legislature on or before December 1 before the year a regulation described in subdivision (b) is set to become inoperative, a complete report of the department’s activities related to the covered persons required to be registered by the regulation covering the entire period since the initial year of required registration.

(d) At least once annually, prior to March 15, the commissioner shall appear before and present a report to the appropriate committees of the Legislature reviewing all of the activities conducted to implement this division during the prior year and summarizing, with specificity, all of the activities it intends to conduct during the upcoming year. This report shall include, but not be limited to, all of the following:

(1) A summary of all enforcement actions taken to implement this division during the prior year.

(2) A review of business models in use among covered persons that it studied during the prior year and a description of which business models in use among covered persons it plans to study during the upcoming year.

(3) A review of all regulations it proposed, or finalized, or on which it sought public feedback during the prior year and a description of all regulations it intends to propose, finalize, or on which it intends to seek public feedback during the upcoming year.

(4) A review of all of the activities in which it engaged during the prior year using authority contained in paragraph (1) of subdivision (d) of Section 90006 and a description of the activities in which it plans to engage during the upcoming year.

(5) A review of all outreach efforts it conducted during the prior year using authority contained in paragraph (2) of subdivision (d) of Section 90006 and a description of subject matter it plans to include and groups to which it plans to outreach during the upcoming year.

(6) A review of all activities it conducted during the prior year using authority contained in paragraph (3) of subdivision (d) of Section 90006 and a description of what activities it plans to conduct during the upcoming year.

(7) Any other topic deemed relevant by the commissioner or requested to be covered by a chair of the appropriate committee of the Legislature.


text:
(a) This section shall apply to any covered person who meets any of the following conditions:

(1) Offers or provides origination, brokerage, or servicing of loans secured by real estate for use by consumers primarily for personal, family, or household purposes, or loan modification or foreclosure relief services in connection with those loans.

(2) Is a registrant of the department that is required to be registered by statute or by rule.

(3) The department has reasonable cause to determine, by order, after notice to the covered person that the covered person is offering or providing financial products or services.

(4) Is a service provider to a person described in paragraphs (1) to (3), inclusive.

(b) The department may require reports and conduct examinations on a periodic basis of persons described in subdivision (a) for purposes of all of the following:

(1) Assessing compliance with the requirements of consumer financial laws.

(2) Obtaining information about the activities and compliance systems or procedures of that person.

(3) Detecting and assessing risks to consumers, small business, and to markets for consumer financial products and services.

(c) This division shall not be construed to limit the authority of the commissioner to require reports from persons described in subdivision (a), as permitted under subdivision (b), regarding information owned or under the control of the person, regardless of whether the information is maintained, stored, or processed by another person.

chapter: 7. Oversight

path: 24. CALIFORNIA CONSUMER FINANCIAL PROTECTION LAW > 7. Oversight


text:
The commissioner and the department shall have all the investigatory and subpoena powers set forth in Sections 11180 to 11191, inclusive, of the Government Code and any subpoena may further require a person to:

(a) Produce documentary material for inspection and copying or reproduction in the form or medium requested by the department.

(b) File written reports or answers to questions.

chapter: 8. Enforcement Powers and Duties

path: 24. CALIFORNIA CONSUMER FINANCIAL PROTECTION LAW > 8. Enforcement Powers and Duties


text:
With respect to the enforcement powers of the commissioner and the department under this division, all of the following apply:

(a) The department may take any action authorized by this law against a covered person or service provider who engages, has engaged, or proposes to engage in unfair, deceptive, or abusive practices with respect to consumer financial products or services.

(b) Relief under this section may include, but is not limited to, any of the following:

(1) Rescission or reformation of contracts.

(2) Refund of moneys or return of real property.

(3) Restitution.

(4) Disgorgement or compensation for unjust enrichment, with any disgorged amounts returned to the affected consumers, to the extent practicable.

(5) Payment of damages or other monetary relief.

(6) Public notification regarding the violation, including the costs of notification.

(7) Limits on the activities or functions of the person.

(8) Monetary penalties, as set forth more fully in paragraph (1) of subdivision (c).

(c) In any civil or administrative action brought pursuant to this division, the following penalties shall apply:

(1) Any person that violates, through any act or omission, any provision of this division shall forfeit and pay a penalty pursuant to this subdivision.

(A) The penalty amounts are as follows:

(i) For any violation of this division, rule or final order, or condition imposed in writing by the department, a penalty may not exceed the greater of either five thousand dollars ($5,000) for each day during which the violation or failure to pay continues, or two thousand five hundred dollars ($2,500) for each act or omission in violation.

(ii) Notwithstanding clause (i), for any reckless violation by a person of this division, rule or final order, or condition imposed by the department, a penalty may not exceed the greater of twenty-five thousand dollars ($25,000) for each day during which the violation continues, or ten thousand dollars ($10,000) for each act or omission in violation.

(iii) Notwithstanding clause (i) or (ii), for any knowing violation, by a person of this division, rule or final order, or condition imposed by the department, a penalty may not exceed the lesser of 1 percent of the person’s total assets, one million dollars ($1,000,000) for each day during which the violation continues, or twenty-five thousand dollars ($25,000) for each act or omission in violation.

(B) In determining the amount of any penalty assessed under this division, the department shall take into account mitigating factors and the appropriateness of the penalty with respect to all of the following:

(i) The amount of financial resources of the person charged.

(ii) The good faith of the person charged.

(iii) The gravity of the violation.

(iv) The severity of the risks to or losses of the consumer, which may take into account the number of products or services sold or provided.

(v) The history of previous violations.

(vi) Other matters as justice may require.

(C) The department may compromise, modify, or remit any penalty that may be assessed or has already been assessed.


text:
The department may bring a civil action in accordance with the following:

(a) If a person violates any provision of this division, rule or final order, or condition imposed in writing by the department, the department may bring an action in the name of the People of the State of California in the superior court to enjoin the acts or practices or to enforce compliance with this law or any rule or order herein under. Upon a proper showing, a permanent or preliminary injunction, restraining order, or writ of mandate shall be granted and a receiver, monitor, conservator, or other designated fiduciary or officer of the court may be appointed for the defendant or the defendant’s assets, or any other ancillary relief may be granted as appropriate. A receiver, monitor, conservator, or other designated fiduciary or officer of the court appointed by the superior court pursuant to this section may, with the approval of the court, exercise any or all of the powers of the defendant’s officers, directors, partners, trustees, or persons who exercise similar powers and perform similar duties, including the filing of a petition for bankruptcy. No action at law or in equity may be maintained by any party against the commissioner, or a receiver, monitor, conservator, or other designated fiduciary or officer of the court, by reason of their exercising these powers or performing these duties pursuant to the order of, or with the approval of, the superior court.

(b) If the commissioner determines it is in the public interest, the commissioner may include in any action authorized by subdivision (a) a claim for ancillary relief, including, but not limited to, those listed in subdivision (b) of Section 90012 and a claim for penalties as stated in subdivision (c) of Section 90012. The court shall have jurisdiction to award additional relief.

(c) In any action brought by the department, the department may recover its costs in connection with prosecuting the action if the department is the prevailing party in the action.

(d) This section shall not be construed to authorize the imposition of exemplary or punitive damages.


text:
The following limitations apply to actions brought under this division:

(a) Except as otherwise permitted by law or equity, including provisions under any consumer financial law, no civil action may be brought under this division more than four years after the date of discovery of the violation to which an action relates.

(b) In any action arising solely under a California or federal consumer financial law, both:

(1) The limitations period under that consumer financial law shall apply, and not the period under subdivision (a).

(2) The department may commence, defend, or intervene in the action in accordance with the requirements of that provision of law, as applicable.


text:
(a) The department may conduct hearings and adjudication proceedings with respect to any person in order to ensure or enforce compliance with both of the following:

(1) The provisions of this division, including any rule, final order, or condition imposed by the department, under this division.

(2) Any other law that the department is authorized to enforce and any regulations or order prescribed thereunder, unless that law specifically limits the department from conducting a hearing or adjudication proceeding and only to the extent of that limitation.

(b) All hearings provided for in this division shall be conducted in accordance with the administrative adjudication provisions of the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and the commissioner shall have all the powers granted therein.

(c) After notice and an opportunity to be heard, the commissioner may, by order, assess penalties under subdivision (c) of Section 90012.

(d) (1) If, in the opinion of the department, any person engages, has engaged, or proposes to engage in any activity prohibited by Section 90003 or 90004, or an activity, act, practice, or course of business that violates a law, rule, order, or any condition imposed in writing on the person by the department, the department may issue an order directing the person to desist and refrain from engaging in the activity, act, practice, or course of business.

(2) If that person fails to file a written request for a hearing within 30 days from the date of service of the order, the order shall be deemed a final order of the commissioner.

(e) If any person engages, has engaged, or proposes to engage in any activity prohibited by Section 90003 or 90004, or an activity, act, practice, or course of business that violates a law, rule, order, or any condition imposed in writing on the person by the department, with respect to consumer financial products, the department may include in any administrative action authorized under this section, a claim for ancillary relief as set forth in subdivision (b) of Section 90012. The court shall have jurisdiction to award additional relief.

(f) If, in the opinion of the department, any covered person or service provider is engaging, has engaged, or proposes to engage in an activity, act, practice, or course of business that violates a law, rule, order, or any condition imposed in writing on the person by the department, the department may, after notice and an opportunity for a hearing, suspend or revoke the license or registration of the covered person or service provider.

(g) After the exhaustion of the review procedures provided for in this section, the commissioner may apply to the appropriate superior court for an order compelling the cited licensee or person to comply with the orders of the commissioner.

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

(2) Upon the filing of the application, the superior court shall set a date for a hearing for an order to show cause why judgment should not be entered, which shall be set not less than 30 calendar days from the date the application is filed.

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

(4) The court shall consider the filing of a certified copy of the final order of the commissioner and the proof of service of the application and notice of the hearing on the persons or entities against whom the judgment is sought, a sufficient prima facie showing to warrant the issuance of the civil judgment and order at the hearing. The respondent bears the burden of showing by affirmative evidence at the hearing why the order of the commissioner is not final, or why the timely notice of application and hearing was not provided to avoid judgment being entered by the superior court. Any method of service authorized by laws under which the final order was issued, including those methods under Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code is considered valid service for the purposes of determining whether the order of the commissioner is final.

(5) The respondent shall not be allowed to raise any defenses or present any evidence at the hearing on the application that had been or could have been raised by the respondent at an administrative hearing to challenge the commissioner’s order, or in an appeal or writ from such proceedings.

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


text: The commissioner shall not outsource or delegate enforcement authority under this division to a private attorney.


text:
In regard to cooperation with the Attorney General, the following provisions apply:

(a) The department may enter into an agreement with the Attorney General with respect to civil actions by each agency.

(b) A provision of this division, any regulation or order made under the authority of this division, or any agreement under this subdivision shall not do any of the following:

(1) Limit the powers or authorities of the Attorney General, including, but not limited to, the Attorney General’s ability to prosecute violations of civil or criminal laws.

(2) Limit the rights of any consumer, or the obligations of any covered person or service provider, under the Unfair Competition Law, the False Advertising Law, or any consumer financial law.

(c) (1) If the department obtains evidence that a person has engaged in conduct that may constitute a violation of criminal law, the department shall transmit that evidence to the Attorney General.

(2) This subdivision shall not affect any other authority of the department to disclose information.

(d) (1) This section shall not be construed to limit the authority of the department under this division to cooperate with any regulatory or law enforcement body.

(2) The department shall notify other regulatory agencies that will be impacted by the department’s actions under this division.

(e) Nothing in this division shall limit the ability of any district attorney or any city attorney lawfully permitted pursuant to Section 17204 of the Business and Professions Code to bring actions or obtain relief pursuant to Chapter 5 (commencing with Section 17200) of Part 2 of Division 7 of the Business and Professions Code. Remedies sought and obtained by district attorneys and city attorneys pursuant to Chapter 5 (commencing with Section 17200) of Part 2 of Division 7 of the Business and Professions Code shall be cumulative to remedies set forth in this division.


text:
(a) The commissioner shall prepare and publish on the department’s internet website an annual report detailing actions taken during the prior year under this law.

(b) The report described in subdivision (a) shall include, but not be limited to, information on actions taken with respect to all of the following:

(1) Rulemaking, enforcement, oversight, consumer complaints and resolutions, education, and research.

(2) The activities of the Financial Technology Innovation Office.

(3) The activities of the Office of the Ombuds.

(c) The report may include recommendations, including those intended to result in improved oversight, greater transparency, or increased availability of beneficial financial products and services in the marketplace.

history: (History: Amended by Stats. 2025, Ch. 162, Sec. 1. (AB 665) Effective January 1, 2026.)

chapter: 9. Annual Report

path: 24. CALIFORNIA CONSUMER FINANCIAL PROTECTION LAW > 9. Annual Report


text:
(a) The provisions of this division shall be liberally construed to effectuate its purposes.

(b) The provisions of this act are severable. If any provision of this division, or amendments to it, or regulations promulgated under it, or under such amendments, is held invalid, illegal, or unenforceable, then that invalidity, illegality, or unenforceability shall not affect other provisions, amendments, or regulations that can be given effect without the invalid, illegal, or unenforceable provision, amendment, or regulation. Any invalidity, illegality, or unenforceability shall be construed as narrowly as possible and shall be confined in its operation to the clause, sentence, paragraph, or part thereof directly involved in the controversy in which such judgment shall have been rendered and to the person or circumstances involved.

(c) To the extent that any provision of this division is preempted by federal law, the provision shall not apply and shall not be enforced solely as to the extent of the preemption and not as to other circumstances, persons, or applications.

chapter: 10. Miscellaneous

path: 24. CALIFORNIA CONSUMER FINANCIAL PROTECTION LAW > 10. Miscellaneous


text: This division shall be known, and may be cited, as the Debt Collection Licensing Act.

history: (History: Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.)

division: 25. DEBT COLLECTION LICENSING ACT

chapter: 1. General Provisions

article: 1. Short Title

path: 25. DEBT COLLECTION LICENSING ACT > 1. General Provisions > 1. Short Title


text:
(a) The commissioner shall allow any debt collector that submits an application before January 1, 2023, to operate pending the approval or denial of the application.

(b) (1) Notwithstanding Section 100011, the commissioner may issue a conditional license to an applicant pending compliance with the requirements of subdivisions (a) to (c), inclusive, of Section 100008.

(2) A conditional license issued pursuant to this subdivision shall expire at the earliest of the following:

(A) Ninety days after the requirements of Sections 100007, 100008, and 100009 have been satisfied.

(B) Upon the issuance of an unconditional license.

(C) Ninety days after the commissioner directs the licensee in writing to submit fingerprints for submission to the Department of Justice pursuant to Section 100008, if the licensee fails to submit a set of fingerprints for each individual described in Section 100009.

(D) Upon the denial, pursuant to Section 100012, of a license application.

(c) The commissioner may deny an application under Section 100012 at any time before the issuance of an unconditional license.

history: (History: Amended by Stats. 2022, Ch. 569, Sec. 10. (AB 156) Effective September 27, 2022.)

article: 1. Short Title


text: No county, city, or other political subdivision within this state shall require a debt collector to be licensed or to register as a debt collector.

article: 1. Short Title


text:
(a) No person shall engage in the business of debt collection in this state without first obtaining a license pursuant to this division. To the extent permitted by federal law, a person is acting in this state if the person is located in this state and is seeking to collect from a debtor that resides inside or outside the state, or is located outside of the state and is seeking to collect from a debtor that resides in this state. A license shall be obtained for the licensee’s principal place of business and shall not be transferred or assigned. A separate license is not required for each individual branch office.

(b) (1) Except as provided in paragraph (2), this division shall not apply to a depository institution, as defined in Section 1420, a person licensed pursuant to Division 9 (commencing with Section 22000) or Division 20 (commencing with Section 50000), a person licensed pursuant to Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code, a person who is subject to the Karnette Rental-Purchase Act (Title 2.96 (commencing with Section 1812.620) of Part 4 of Division 3 of the Civil Code), or a trustee performing acts in connection with a nonjudicial foreclosure pursuant to Article 1 (commencing with Section 2920) of Chapter 2 of Title 14 of Part 4 of Division 3 of the Civil Code.

(2) The commissioner may use the authority described in Section 100005 in connection with a violation of Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code by a person described in paragraph (1).

(c) This division shall not apply to debt collection regulated pursuant to Division 12.5 (commencing with Section 28100) or to the collection of covered commercial debt or covered commercial credit, as those terms are defined in Title 1.6C (commencing with Section 1788) of Part 4 of Division 3 of the Civil Code.

history: (History: Amended by Stats. 2024, Ch. 522, Sec. 16. (SB 1286) Effective January 1, 2025.)

article: 2. Requirements for Licensure

path: 25. DEBT COLLECTION LICENSING ACT > 1. General Provisions > 2. Requirements for Licensure


text:
For purposes of this division, the following terms have the following meanings:

(a) “Applicant” means a person, including a natural person, partnership, corporation, limited liability company, trust, estate, cooperative, association, or other entity, who applied for a license pursuant to this division.

(b) “California debtor accounts” means accounts that are owned by consumers who reside in California at the time that the consumer makes a payment on the account.

(c) “Collection agency” means a business entity through which a debt collector or an association of debt collectors engage in debt collection.

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

(e) “Consumer credit transaction” means a transaction between a natural person and another person in which property, services, or money is acquired on credit by that natural person from the other person primarily for personal, family, or household purposes.

(f) “Consumer debt” or “consumer credit” means money, property, or their equivalent, due or owing, or alleged to be due or owing, from a natural person by reason of a consumer credit transaction. The term “consumer debt” includes a mortgage debt. The term “consumer debt” includes “charged-off consumer debt” as defined in Section 1788.50 of the Civil Code.

(g) “Creditor” means a person who extends consumer credit to a debtor.

(h) “Debt” means money, property, or their equivalent that is due or owning or alleged to be due or owing from a natural person to another person.

(i) “Debt collection” means any act or practice in connection with the collection of consumer debt.

(j) “Debt collector” means any person who, in the ordinary course of business, regularly, on the person’s own behalf or on behalf of others, engages in debt collection. The term includes any person who composes and sells, or offers to compose and sell, forms, letters and other collection media used or intended to be used for debt collection. The term “debt collector” includes “debt buyer” as defined in Section 1788.50 of the Civil Code.

(k) “Debtor” means a natural person from whom a debt collector seeks to collect a consumer debt that is due or owing or alleged to be due or owing from the person.

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

(m) “Fund” means the Debt Collection Licensing Fund established pursuant to Section 100006.5.

(n) “Licensee” means a person licensed, conditionally or unconditionally, pursuant to this chapter.

(o) “Nationwide Multistate Licensing System & Registry” means a system of record, created by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, for nondepository, financial services licensing or registration in participating state agencies, the District of Columbia, Puerto Rico, the United States Virgin Islands, and Guam.

(p) “Person” means a natural person, partnership, corporation, limited liability company, trust, estate, cooperative, association, or other similar entity.

history: (History: Amended by Stats. 2023, Ch. 198, Sec. 7. (SB 152) Effective September 13, 2023.)

article: 3. Definitions

path: 25. DEBT COLLECTION LICENSING ACT > 1. General Provisions > 3. Definitions


text:
(a) The commissioner shall administer this division and may adopt rules and regulations, and issue orders, consistent with that authority.

(b) Without limitation, the functions, powers, and duties of the commissioner include all of the following:

(1) To issue or to refuse to issue a license as provided in this division.

(2) To allow affiliated companies to be under a single license. The commissioner shall adopt regulations specifying what constitutes an affiliated company for these purposes.

(3) To revoke or suspend any license for a violation of this division or a violation of Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code.

(4) To keep records of licenses issued under this division.

(5) To receive, consider, investigate, and act upon a complaint made in connection with a licensee.

(6) To prescribe the form of and to receive applications for licenses and reports, books, and records required to be made or retained by a licensee.

(7) To subpoena documents and witnesses, and to compel their attendance and production, to administer oaths, and to require the production of books, papers, or other materials relevant to any inquiry authorized by this division.

(8) To require information with regard to an applicant that the commissioner may deem necessary, with regard for the paramount public interest in ascertaining the experience, background, honesty, truthfulness, integrity, and competency of an applicant for collecting consumer debt, and if an applicant is an entity other than an individual, in ascertaining the honesty, truthfulness, integrity, and competency of officers, directors, or managing members of the corporation, association, or other entity, or the general patters of a partnership.

(9) To enforce by order any provision of this division.

(10) To levy fees, fines, and charges in an amount sufficient to cover the cost of the services performed in administering this division. The fees collected pursuant to this division shall not exceed the costs of administering this division.

chapter: 2. Licensing

path: 25. DEBT COLLECTION LICENSING ACT > 2. Licensing > 1. Commissioner on Financial Protection and Innovation


text:
(a) The proceedings for a revocation of a license shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

(b) The commissioner may suspend or revoke a license if, after notice and an opportunity for hearing, the commissioner finds any of the following:

(1) The licensee violated this division or a regulation adopted or an order issued under this division.

(2) The licensee does not cooperate with an examination or investigation by the commissioner.

(3) The licensee violates Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code. The commissioner may adopt regulations that specify the factors that the commissioner will consider in revoking or suspending a license, including, but not limited to, the harm to the consumer, the frequency of the violation, and the number of prior disciplinary actions taken against the licensee.

(4) The licensee is insolvent, suspends payment of its obligations, or makes a general assignment for the benefit of its creditors.

(5) A receiver, liquidator, or conservator has been appointed for a licensee.

(6) Any fact or condition exists that, if it had existed at the time that the licensee applied for the license, would have been grounds for denying the application.

article: 1. Commissioner on Financial Protection and Innovation