18205. Except as otherwise provided for in this division, an
industrial loan company shall not make any loan or purchase or
discount any other obligation that provides for a repayment of
principal over more than 120 months and 30 days.
18205.5. Notwithstanding any other provision of this division, an
industrial loan company may make a loan or acquire an obligation that
is repayable in unequal periodic payments during its term and that
is secured by either real property or personal property. In order to
ensure the safety and soundness of industrial loan companies and to
avoid an unreasonable concentration of loans and obligations that
could result in balloon payments, all these loans and obligations
with a term in excess of 10 years shall be repaid in substantially
equal weekly, semimonthly, monthly, or quarterly installments during
the term. For purposes of this section, "real property" means real
property other than home loans and other residential real property
loans subject to Title VIII (Alternative Mortgage Transaction Parity
Act of 1982) of the Garn-St. Germain Depository Institutions Act of
1982, as those terms are defined in Part 541 of Title 12 of the Code
of Federal Regulations, as amended. For purposes of this section, the
term of a nonconsumer loan or a nonconsumer obligation secured
solely or primarily by personal property shall not exceed 15 years
and 30 days from the date the loan is made or obligation is acquired
by the industrial loan company. For purposes of this section, the
term of a nonconsumer loan or a nonconsumer obligation secured
primarily by real property shall be as set forth in subdivision (a)
of Section 18210.
18206. Consumer loans made and obligations acquired that are
secured by a motor vehicle and repayable other than in equal periodic
payments during its term shall not exceed 50 percent of all consumer
loans and obligations that are secured by motor vehicles or 20
percent of assets, whichever is less. This section shall not apply to
a loan made to a graduate student while attending an accredited
college or university and for the purpose of actively pursuing a
study program leading to a postbaccalaureate degree.
18207. An industrial loan company may make a consumer loan that is
not secured primarily by real property or other type of loan which is
repayable at maturity by a single payment which includes principal
and charges. In no event shall such loans have a term in excess of
one year or be made for the purpose of evading or avoiding this
division.
18208. An industrial loan company may make a consumer loan in which
the principal and charges are payable at any time during the loan,
provided that the loan is secured at all times at least 100 percent
by either investment certificates of an industrial loan company
authorized to conduct business in the State of California under this
division or traded securities.
18209. An industrial loan company may make loans, purchase or
discount notes, mortgages, contracts or other commercial paper
insured by the Federal Housing Administrator, Veterans
Administration, other federal agency or an agency of the state. Loans
so insured may be made for a term up to but not to exceed the
maximum permitted by such agencies.
18210. (a) Except as provided in Sections 18205.5 and 18209 and
subject to subdivisions (b) and (c), an industrial loan company shall
not make any loan or purchase or discount any note secured primarily
by real property unless the loan or other obligation is repayable in
substantially equal weekly, semimonthly, monthly, or quarterly
installments during its term, which shall not exceed 30 years and 30
days from the date the loan or other obligation is made or acquired
by the company. Equal installment requirements shall not apply to
adjustable or variable rate loans or obligations made or purchased by
the industrial loan company in accordance with Title VIII of the
Garn-St. Germaine Depository Institutions Act of 1982 and any
applicable regulations, guidelines, and policies adopted thereunder.
However, an industrial loan company may make loans secured by first
trust deeds on real property containing single family, or one to four
residential, units provided that the repayment period for each loan
does not exceed 40 years and 30 days from the date the loan is made
by the company. All loans with repayment periods in excess of 30
years and 30 days shall not exceed in the aggregate 5 percent of all
outstanding loans and obligations of the company.
(b) Any consumer loan or any purchase or discount of any consumer
obligation having a term in excess of three years from the date the
loan or other obligation is made or acquired by the company shall be
secured solely by real property or solely by personal property.
However, if the original principal amount of the consumer loan or
obligation is twenty thousand dollars ($20,000) or more, then the
loan or obligation shall be secured solely by real property or solely
by personal property, or by both real property and personal
property. All loans and obligations made and purchased pursuant to
this subdivision shall be repayable in installments and within a term
not to exceed the limitations set forth in subdivision (a), except
that consumer loans or obligations secured solely by personal
property shall have a term not to exceed the term provided for in
Section 18205 and except as otherwise may be provided for in Sections
18207, 18208, and 18209. The equal installment requirements set
forth in subdivision (a) shall not apply to loans or obligations made
or purchased by the industrial loan company in accordance with Title
VIII of the Garn-St. Germaine Depository Institutions Act of 1982
and any applicable regulations, guidelines, and policies adopted
thereunder.
(c) In order to ensure the safety and soundness of industrial loan
companies and to avoid an unreasonable concentration of loans and
obligations that could result in balloon payments, all loans and
obligations with a term in excess of 15 years and 30 days shall be
repaid in substantially equal weekly, semimonthly, monthly, or
quarterly installments during their term.
18211. No charge shall be collected unless a loan is made, except
that an industrial loan company may charge, contract for, and receive
a fee in connection with making a written commitment to make a loan,
secured by real property having a face amount in excess of five
thousand dollars ($5,000) whether or not the loan is consummated, or
in connection with the purchase, sale, or origination of a lease as
lessor and may charge, contract for, and receive an application fee
for a loan having an original principal balance in excess of five
thousand dollars ($5,000) or for a lease which payments are in excess
of five thousand dollars ($5,000), provided, however, that a
disclosure statement setting forth the amount of the fee, which may
be reviewed by the commissioner as to form and content, shall be
provided to each person to whom an application fee is charged. The
commitment fee or the loan application fee with respect to a consumer
loan shall be limited to the actual expenses incurred.
18212. (a) The charges by an industrial loan company, broker, and
all other persons on any loan, forbearance of money, credit, goods,
or things in action under this division, shall not exceed in the
aggregate:
(1) Two percent per month on that part of the unpaid principal
balance of any loan up to, including, but not in excess of, one
thousand dollars ($1,000).
(2) One percent per month on any remainder of such unpaid
principal balance in excess of one thousand dollars ($1,000).
(b) As an alternative to the charges authorized by subdivision
(a), a company may contract for and receive charges at a rate not
exceeding 1.6 percent per month on the unpaid principal balance.
18212.1. As an alternative to the charges authorized by Section
18212 a licensee may contract for and receive charges at a rate not
exceeding five-sixths of 1 percent per month plus a percentage per
month equal to one-twelfth of the annual rate prevailing on the 25th
day of the second month of the quarter preceding the quarter in which
the loan is made as established by the Federal Reserve Bank of San
Francisco on advances to member banks under Section 13 and 13a of the
Federal Reserve Act as now in effect or hereafter from time to time
amended, or if there is no such single determinable rate for
advances, the closest counterpart of such rate as shall be designated
by the commissioner. Charges shall be calculated on the unpaid
principal balance.
18212.2. In addition to the charges authorized by Section 18212 or
18212.1 an industrial loan company may contract for and receive an
administrative fee, which shall be fully earned immediately upon
making the loan, with respect to a loan of a principal amount of not
more than two thousand five hundred dollars ($2,500) at a rate not in
excess of 5 percent of the principal amount or fifty dollars ($50),
whichever is lesser. No administrative fee may be contracted for or
received in connection with refinancing a loan unless at least one
year has elapsed since receipt of a previous administrative fee paid
by the borrower.
18213. Notwithstanding any other provision of law not within this
division, industrial loan companies making loans pursuant to this
division may not precompute interest on such loans.
18214. For the purpose of computing the charges set forth in this
article, a month is any period of 30 consecutive days.
18215. An industrial loan company may contract for, collect, and
receive at the time of making the loan or at any time thereafter, any
of the following:
(a) Any cost of publication as required by law.
(b) The statutory fee paid by it to any public officer for
acknowledging, filing, recording, or releasing in any public office
any instrument securing the loan or executed in connection with a
loan.
(c) Premiums of the kind and to the extent described in paragraph
(2) of subsection (e) of Section 226.4 of Regulation Z promulgated by
the Board of Governors of the Federal Reserve System (12 C.F.R.
226.1 et seq.).
These amounts are not included in computing the maximum charges
which may be made under this division.
18216. (a) Notwithstanding Section 18211, an appraisal fee may be
charged to an applicant or borrower by an industrial loan company in
connection with an application or request for any loan having a face
amount in excess of five thousand dollars ($5,000) that is secured
primarily by real property whether or not the loan is made. That fee
shall not exceed the actual cost of the appraisal. The appraisal
shall be rendered to the industrial loan company in writing by a
qualified appraiser approved pursuant to Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989, Public
Law 101-73, and any applicable regulations, guidelines, and policies
adopted thereunder. Only one fee for appraising the same real
property made in connection with the same applicant or borrower may
be collected unless the applicant or borrower has obtained a new or
additional loan and more than one year has elapsed since the prior
appraisal. The fee is not included in charges as defined in this
division or in computing the maximum charges that may be made under
this division.
(b) If an appraisal fee is charged, a copy of the appraisal report
shall be provided by the industrial loan company upon the request of
the borrower or applicant at or before the closing of a loan
transaction.
18217. An escrow fee of a reasonable amount may be charged for any
loan made which is secured primarily by real property when such
services are actually performed. Such fee shall be considered
reasonable when paid to a company licensed to do business under the
Escrow Law, Division 6 (commencing with Section 17000), or any person
exempted by the Escrow Law, provided that such fees are comparable
to fees being charged by escrow companies so authorized to do
business in this state. Such fee is not included in computing the
maximum charges which may be made under this division.
18218. Notwithstanding any other provision of this division, an
industrial loan company, in the collection of a delinquent loan of an
unpaid principal balance, may do any of the following:
(a) Collect and receive the court costs and reasonable attorney's
fees allowed by a court in a judgment against a defaulting debtor.
(b) Contract for, collect, and receive the bona fide expenses
actually incurred and paid by the industrial loan company, not
exceeding 10 percent of the unpaid principal balance of the loan
where no judgment at law is sought.
(c) Contract for, collect, and receive the bona fide expenses
actually incurred and paid by the industrial loan company in
obtaining a certificate of compliance or certificate of noncompliance
issued for a motor vehicle pursuant to Part 5 (commencing with
Section 43000) of Division 26 of the Health and Safety Code and the
rules and regulations of the State Air Resources Board prior to the
consignment of the vehicle for sale at public auction, pursuant to
Sections 24007 and 24007.5 of the Vehicle Code.
18218.5. With respect to a loan under this division, a fee not to
exceed fifteen dollars ($15) for return by a depository institution
of a dishonored check, negotiable order of withdrawal, or share draft
may be charged and collected by the licensee. The fee is not
included in charges as defined in this division or in determining the
applicable maximum charges which may be made under this article.
18219. An industrial loan company shall not induce or permit any
borrower to split up or divide any loan and thereby contract for or
receive a higher rate of charge than would otherwise be permitted by
this division.
18220. An industrial loan company shall not induce any husband and
wife jointly or severally, to become obligated, directly or
contingently or both, under more than one contract of loan at the
same time, with the result of obtaining a higher rate of charge than
would otherwise be permitted by this division.
18221. Nothing in this division shall prevent an industrial loan
company from transacting loan contracts with different borrowers and
from contracting for and receiving, up to and including the highest
rate of charge permitted by this division at the time of making said
loans; provided, however, that if any person is obligated to and does
pay more than one loan contract outstanding at the same time, the
entire amount of charges paid by such person and received by the
industrial loan company on such loan contracts, shall not exceed the
maximum that would be permitted by this division if all such loan
contracts so paid were combined into one loan transaction.
18222. An industrial loan company shall permit payment to be made
in advance in any amount on any contract of loan at any time. The
industrial loan company shall apply such payment first to all charges
due up to the date of such payment and the remainder to the loan
balance.
18205. Except as otherwise provided for in this division, an
industrial loan company shall not make any loan or purchase or
discount any other obligation that provides for a repayment of
principal over more than 120 months and 30 days.
18205.5. Notwithstanding any other provision of this division, an
industrial loan company may make a loan or acquire an obligation that
is repayable in unequal periodic payments during its term and that
is secured by either real property or personal property. In order to
ensure the safety and soundness of industrial loan companies and to
avoid an unreasonable concentration of loans and obligations that
could result in balloon payments, all these loans and obligations
with a term in excess of 10 years shall be repaid in substantially
equal weekly, semimonthly, monthly, or quarterly installments during
the term. For purposes of this section, "real property" means real
property other than home loans and other residential real property
loans subject to Title VIII (Alternative Mortgage Transaction Parity
Act of 1982) of the Garn-St. Germain Depository Institutions Act of
1982, as those terms are defined in Part 541 of Title 12 of the Code
of Federal Regulations, as amended. For purposes of this section, the
term of a nonconsumer loan or a nonconsumer obligation secured
solely or primarily by personal property shall not exceed 15 years
and 30 days from the date the loan is made or obligation is acquired
by the industrial loan company. For purposes of this section, the
term of a nonconsumer loan or a nonconsumer obligation secured
primarily by real property shall be as set forth in subdivision (a)
of Section 18210.
18206. Consumer loans made and obligations acquired that are
secured by a motor vehicle and repayable other than in equal periodic
payments during its term shall not exceed 50 percent of all consumer
loans and obligations that are secured by motor vehicles or 20
percent of assets, whichever is less. This section shall not apply to
a loan made to a graduate student while attending an accredited
college or university and for the purpose of actively pursuing a
study program leading to a postbaccalaureate degree.
18207. An industrial loan company may make a consumer loan that is
not secured primarily by real property or other type of loan which is
repayable at maturity by a single payment which includes principal
and charges. In no event shall such loans have a term in excess of
one year or be made for the purpose of evading or avoiding this
division.
18208. An industrial loan company may make a consumer loan in which
the principal and charges are payable at any time during the loan,
provided that the loan is secured at all times at least 100 percent
by either investment certificates of an industrial loan company
authorized to conduct business in the State of California under this
division or traded securities.
18209. An industrial loan company may make loans, purchase or
discount notes, mortgages, contracts or other commercial paper
insured by the Federal Housing Administrator, Veterans
Administration, other federal agency or an agency of the state. Loans
so insured may be made for a term up to but not to exceed the
maximum permitted by such agencies.
18210. (a) Except as provided in Sections 18205.5 and 18209 and
subject to subdivisions (b) and (c), an industrial loan company shall
not make any loan or purchase or discount any note secured primarily
by real property unless the loan or other obligation is repayable in
substantially equal weekly, semimonthly, monthly, or quarterly
installments during its term, which shall not exceed 30 years and 30
days from the date the loan or other obligation is made or acquired
by the company. Equal installment requirements shall not apply to
adjustable or variable rate loans or obligations made or purchased by
the industrial loan company in accordance with Title VIII of the
Garn-St. Germaine Depository Institutions Act of 1982 and any
applicable regulations, guidelines, and policies adopted thereunder.
However, an industrial loan company may make loans secured by first
trust deeds on real property containing single family, or one to four
residential, units provided that the repayment period for each loan
does not exceed 40 years and 30 days from the date the loan is made
by the company. All loans with repayment periods in excess of 30
years and 30 days shall not exceed in the aggregate 5 percent of all
outstanding loans and obligations of the company.
(b) Any consumer loan or any purchase or discount of any consumer
obligation having a term in excess of three years from the date the
loan or other obligation is made or acquired by the company shall be
secured solely by real property or solely by personal property.
However, if the original principal amount of the consumer loan or
obligation is twenty thousand dollars ($20,000) or more, then the
loan or obligation shall be secured solely by real property or solely
by personal property, or by both real property and personal
property. All loans and obligations made and purchased pursuant to
this subdivision shall be repayable in installments and within a term
not to exceed the limitations set forth in subdivision (a), except
that consumer loans or obligations secured solely by personal
property shall have a term not to exceed the term provided for in
Section 18205 and except as otherwise may be provided for in Sections
18207, 18208, and 18209. The equal installment requirements set
forth in subdivision (a) shall not apply to loans or obligations made
or purchased by the industrial loan company in accordance with Title
VIII of the Garn-St. Germaine Depository Institutions Act of 1982
and any applicable regulations, guidelines, and policies adopted
thereunder.
(c) In order to ensure the safety and soundness of industrial loan
companies and to avoid an unreasonable concentration of loans and
obligations that could result in balloon payments, all loans and
obligations with a term in excess of 15 years and 30 days shall be
repaid in substantially equal weekly, semimonthly, monthly, or
quarterly installments during their term.
18211. No charge shall be collected unless a loan is made, except
that an industrial loan company may charge, contract for, and receive
a fee in connection with making a written commitment to make a loan,
secured by real property having a face amount in excess of five
thousand dollars ($5,000) whether or not the loan is consummated, or
in connection with the purchase, sale, or origination of a lease as
lessor and may charge, contract for, and receive an application fee
for a loan having an original principal balance in excess of five
thousand dollars ($5,000) or for a lease which payments are in excess
of five thousand dollars ($5,000), provided, however, that a
disclosure statement setting forth the amount of the fee, which may
be reviewed by the commissioner as to form and content, shall be
provided to each person to whom an application fee is charged. The
commitment fee or the loan application fee with respect to a consumer
loan shall be limited to the actual expenses incurred.
18212. (a) The charges by an industrial loan company, broker, and
all other persons on any loan, forbearance of money, credit, goods,
or things in action under this division, shall not exceed in the
aggregate:
(1) Two percent per month on that part of the unpaid principal
balance of any loan up to, including, but not in excess of, one
thousand dollars ($1,000).
(2) One percent per month on any remainder of such unpaid
principal balance in excess of one thousand dollars ($1,000).
(b) As an alternative to the charges authorized by subdivision
(a), a company may contract for and receive charges at a rate not
exceeding 1.6 percent per month on the unpaid principal balance.
18212.1. As an alternative to the charges authorized by Section
18212 a licensee may contract for and receive charges at a rate not
exceeding five-sixths of 1 percent per month plus a percentage per
month equal to one-twelfth of the annual rate prevailing on the 25th
day of the second month of the quarter preceding the quarter in which
the loan is made as established by the Federal Reserve Bank of San
Francisco on advances to member banks under Section 13 and 13a of the
Federal Reserve Act as now in effect or hereafter from time to time
amended, or if there is no such single determinable rate for
advances, the closest counterpart of such rate as shall be designated
by the commissioner. Charges shall be calculated on the unpaid
principal balance.
18212.2. In addition to the charges authorized by Section 18212 or
18212.1 an industrial loan company may contract for and receive an
administrative fee, which shall be fully earned immediately upon
making the loan, with respect to a loan of a principal amount of not
more than two thousand five hundred dollars ($2,500) at a rate not in
excess of 5 percent of the principal amount or fifty dollars ($50),
whichever is lesser. No administrative fee may be contracted for or
received in connection with refinancing a loan unless at least one
year has elapsed since receipt of a previous administrative fee paid
by the borrower.
18213. Notwithstanding any other provision of law not within this
division, industrial loan companies making loans pursuant to this
division may not precompute interest on such loans.
18214. For the purpose of computing the charges set forth in this
article, a month is any period of 30 consecutive days.
18215. An industrial loan company may contract for, collect, and
receive at the time of making the loan or at any time thereafter, any
of the following:
(a) Any cost of publication as required by law.
(b) The statutory fee paid by it to any public officer for
acknowledging, filing, recording, or releasing in any public office
any instrument securing the loan or executed in connection with a
loan.
(c) Premiums of the kind and to the extent described in paragraph
(2) of subsection (e) of Section 226.4 of Regulation Z promulgated by
the Board of Governors of the Federal Reserve System (12 C.F.R.
226.1 et seq.).
These amounts are not included in computing the maximum charges
which may be made under this division.
18216. (a) Notwithstanding Section 18211, an appraisal fee may be
charged to an applicant or borrower by an industrial loan company in
connection with an application or request for any loan having a face
amount in excess of five thousand dollars ($5,000) that is secured
primarily by real property whether or not the loan is made. That fee
shall not exceed the actual cost of the appraisal. The appraisal
shall be rendered to the industrial loan company in writing by a
qualified appraiser approved pursuant to Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989, Public
Law 101-73, and any applicable regulations, guidelines, and policies
adopted thereunder. Only one fee for appraising the same real
property made in connection with the same applicant or borrower may
be collected unless the applicant or borrower has obtained a new or
additional loan and more than one year has elapsed since the prior
appraisal. The fee is not included in charges as defined in this
division or in computing the maximum charges that may be made under
this division.
(b) If an appraisal fee is charged, a copy of the appraisal report
shall be provided by the industrial loan company upon the request of
the borrower or applicant at or before the closing of a loan
transaction.
18217. An escrow fee of a reasonable amount may be charged for any
loan made which is secured primarily by real property when such
services are actually performed. Such fee shall be considered
reasonable when paid to a company licensed to do business under the
Escrow Law, Division 6 (commencing with Section 17000), or any person
exempted by the Escrow Law, provided that such fees are comparable
to fees being charged by escrow companies so authorized to do
business in this state. Such fee is not included in computing the
maximum charges which may be made under this division.
18218. Notwithstanding any other provision of this division, an
industrial loan company, in the collection of a delinquent loan of an
unpaid principal balance, may do any of the following:
(a) Collect and receive the court costs and reasonable attorney's
fees allowed by a court in a judgment against a defaulting debtor.
(b) Contract for, collect, and receive the bona fide expenses
actually incurred and paid by the industrial loan company, not
exceeding 10 percent of the unpaid principal balance of the loan
where no judgment at law is sought.
(c) Contract for, collect, and receive the bona fide expenses
actually incurred and paid by the industrial loan company in
obtaining a certificate of compliance or certificate of noncompliance
issued for a motor vehicle pursuant to Part 5 (commencing with
Section 43000) of Division 26 of the Health and Safety Code and the
rules and regulations of the State Air Resources Board prior to the
consignment of the vehicle for sale at public auction, pursuant to
Sections 24007 and 24007.5 of the Vehicle Code.
18218.5. With respect to a loan under this division, a fee not to
exceed fifteen dollars ($15) for return by a depository institution
of a dishonored check, negotiable order of withdrawal, or share draft
may be charged and collected by the licensee. The fee is not
included in charges as defined in this division or in determining the
applicable maximum charges which may be made under this article.
18219. An industrial loan company shall not induce or permit any
borrower to split up or divide any loan and thereby contract for or
receive a higher rate of charge than would otherwise be permitted by
this division.
18220. An industrial loan company shall not induce any husband and
wife jointly or severally, to become obligated, directly or
contingently or both, under more than one contract of loan at the
same time, with the result of obtaining a higher rate of charge than
would otherwise be permitted by this division.
18221. Nothing in this division shall prevent an industrial loan
company from transacting loan contracts with different borrowers and
from contracting for and receiving, up to and including the highest
rate of charge permitted by this division at the time of making said
loans; provided, however, that if any person is obligated to and does
pay more than one loan contract outstanding at the same time, the
entire amount of charges paid by such person and received by the
industrial loan company on such loan contracts, shall not exceed the
maximum that would be permitted by this division if all such loan
contracts so paid were combined into one loan transaction.
18222. An industrial loan company shall permit payment to be made
in advance in any amount on any contract of loan at any time. The
industrial loan company shall apply such payment first to all charges
due up to the date of such payment and the remainder to the loan
balance.
18205. Except as otherwise provided for in this division, an
industrial loan company shall not make any loan or purchase or
discount any other obligation that provides for a repayment of
principal over more than 120 months and 30 days.
18205.5. Notwithstanding any other provision of this division, an
industrial loan company may make a loan or acquire an obligation that
is repayable in unequal periodic payments during its term and that
is secured by either real property or personal property. In order to
ensure the safety and soundness of industrial loan companies and to
avoid an unreasonable concentration of loans and obligations that
could result in balloon payments, all these loans and obligations
with a term in excess of 10 years shall be repaid in substantially
equal weekly, semimonthly, monthly, or quarterly installments during
the term. For purposes of this section, "real property" means real
property other than home loans and other residential real property
loans subject to Title VIII (Alternative Mortgage Transaction Parity
Act of 1982) of the Garn-St. Germain Depository Institutions Act of
1982, as those terms are defined in Part 541 of Title 12 of the Code
of Federal Regulations, as amended. For purposes of this section, the
term of a nonconsumer loan or a nonconsumer obligation secured
solely or primarily by personal property shall not exceed 15 years
and 30 days from the date the loan is made or obligation is acquired
by the industrial loan company. For purposes of this section, the
term of a nonconsumer loan or a nonconsumer obligation secured
primarily by real property shall be as set forth in subdivision (a)
of Section 18210.
18206. Consumer loans made and obligations acquired that are
secured by a motor vehicle and repayable other than in equal periodic
payments during its term shall not exceed 50 percent of all consumer
loans and obligations that are secured by motor vehicles or 20
percent of assets, whichever is less. This section shall not apply to
a loan made to a graduate student while attending an accredited
college or university and for the purpose of actively pursuing a
study program leading to a postbaccalaureate degree.
18207. An industrial loan company may make a consumer loan that is
not secured primarily by real property or other type of loan which is
repayable at maturity by a single payment which includes principal
and charges. In no event shall such loans have a term in excess of
one year or be made for the purpose of evading or avoiding this
division.
18208. An industrial loan company may make a consumer loan in which
the principal and charges are payable at any time during the loan,
provided that the loan is secured at all times at least 100 percent
by either investment certificates of an industrial loan company
authorized to conduct business in the State of California under this
division or traded securities.
18209. An industrial loan company may make loans, purchase or
discount notes, mortgages, contracts or other commercial paper
insured by the Federal Housing Administrator, Veterans
Administration, other federal agency or an agency of the state. Loans
so insured may be made for a term up to but not to exceed the
maximum permitted by such agencies.
18210. (a) Except as provided in Sections 18205.5 and 18209 and
subject to subdivisions (b) and (c), an industrial loan company shall
not make any loan or purchase or discount any note secured primarily
by real property unless the loan or other obligation is repayable in
substantially equal weekly, semimonthly, monthly, or quarterly
installments during its term, which shall not exceed 30 years and 30
days from the date the loan or other obligation is made or acquired
by the company. Equal installment requirements shall not apply to
adjustable or variable rate loans or obligations made or purchased by
the industrial loan company in accordance with Title VIII of the
Garn-St. Germaine Depository Institutions Act of 1982 and any
applicable regulations, guidelines, and policies adopted thereunder.
However, an industrial loan company may make loans secured by first
trust deeds on real property containing single family, or one to four
residential, units provided that the repayment period for each loan
does not exceed 40 years and 30 days from the date the loan is made
by the company. All loans with repayment periods in excess of 30
years and 30 days shall not exceed in the aggregate 5 percent of all
outstanding loans and obligations of the company.
(b) Any consumer loan or any purchase or discount of any consumer
obligation having a term in excess of three years from the date the
loan or other obligation is made or acquired by the company shall be
secured solely by real property or solely by personal property.
However, if the original principal amount of the consumer loan or
obligation is twenty thousand dollars ($20,000) or more, then the
loan or obligation shall be secured solely by real property or solely
by personal property, or by both real property and personal
property. All loans and obligations made and purchased pursuant to
this subdivision shall be repayable in installments and within a term
not to exceed the limitations set forth in subdivision (a), except
that consumer loans or obligations secured solely by personal
property shall have a term not to exceed the term provided for in
Section 18205 and except as otherwise may be provided for in Sections
18207, 18208, and 18209. The equal installment requirements set
forth in subdivision (a) shall not apply to loans or obligations made
or purchased by the industrial loan company in accordance with Title
VIII of the Garn-St. Germaine Depository Institutions Act of 1982
and any applicable regulations, guidelines, and policies adopted
thereunder.
(c) In order to ensure the safety and soundness of industrial loan
companies and to avoid an unreasonable concentration of loans and
obligations that could result in balloon payments, all loans and
obligations with a term in excess of 15 years and 30 days shall be
repaid in substantially equal weekly, semimonthly, monthly, or
quarterly installments during their term.
18211. No charge shall be collected unless a loan is made, except
that an industrial loan company may charge, contract for, and receive
a fee in connection with making a written commitment to make a loan,
secured by real property having a face amount in excess of five
thousand dollars ($5,000) whether or not the loan is consummated, or
in connection with the purchase, sale, or origination of a lease as
lessor and may charge, contract for, and receive an application fee
for a loan having an original principal balance in excess of five
thousand dollars ($5,000) or for a lease which payments are in excess
of five thousand dollars ($5,000), provided, however, that a
disclosure statement setting forth the amount of the fee, which may
be reviewed by the commissioner as to form and content, shall be
provided to each person to whom an application fee is charged. The
commitment fee or the loan application fee with respect to a consumer
loan shall be limited to the actual expenses incurred.
18212. (a) The charges by an industrial loan company, broker, and
all other persons on any loan, forbearance of money, credit, goods,
or things in action under this division, shall not exceed in the
aggregate:
(1) Two percent per month on that part of the unpaid principal
balance of any loan up to, including, but not in excess of, one
thousand dollars ($1,000).
(2) One percent per month on any remainder of such unpaid
principal balance in excess of one thousand dollars ($1,000).
(b) As an alternative to the charges authorized by subdivision
(a), a company may contract for and receive charges at a rate not
exceeding 1.6 percent per month on the unpaid principal balance.
18212.1. As an alternative to the charges authorized by Section
18212 a licensee may contract for and receive charges at a rate not
exceeding five-sixths of 1 percent per month plus a percentage per
month equal to one-twelfth of the annual rate prevailing on the 25th
day of the second month of the quarter preceding the quarter in which
the loan is made as established by the Federal Reserve Bank of San
Francisco on advances to member banks under Section 13 and 13a of the
Federal Reserve Act as now in effect or hereafter from time to time
amended, or if there is no such single determinable rate for
advances, the closest counterpart of such rate as shall be designated
by the commissioner. Charges shall be calculated on the unpaid
principal balance.
18212.2. In addition to the charges authorized by Section 18212 or
18212.1 an industrial loan company may contract for and receive an
administrative fee, which shall be fully earned immediately upon
making the loan, with respect to a loan of a principal amount of not
more than two thousand five hundred dollars ($2,500) at a rate not in
excess of 5 percent of the principal amount or fifty dollars ($50),
whichever is lesser. No administrative fee may be contracted for or
received in connection with refinancing a loan unless at least one
year has elapsed since receipt of a previous administrative fee paid
by the borrower.
18213. Notwithstanding any other provision of law not within this
division, industrial loan companies making loans pursuant to this
division may not precompute interest on such loans.
18214. For the purpose of computing the charges set forth in this
article, a month is any period of 30 consecutive days.
18215. An industrial loan company may contract for, collect, and
receive at the time of making the loan or at any time thereafter, any
of the following:
(a) Any cost of publication as required by law.
(b) The statutory fee paid by it to any public officer for
acknowledging, filing, recording, or releasing in any public office
any instrument securing the loan or executed in connection with a
loan.
(c) Premiums of the kind and to the extent described in paragraph
(2) of subsection (e) of Section 226.4 of Regulation Z promulgated by
the Board of Governors of the Federal Reserve System (12 C.F.R.
226.1 et seq.).
These amounts are not included in computing the maximum charges
which may be made under this division.
18216. (a) Notwithstanding Section 18211, an appraisal fee may be
charged to an applicant or borrower by an industrial loan company in
connection with an application or request for any loan having a face
amount in excess of five thousand dollars ($5,000) that is secured
primarily by real property whether or not the loan is made. That fee
shall not exceed the actual cost of the appraisal. The appraisal
shall be rendered to the industrial loan company in writing by a
qualified appraiser approved pursuant to Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989, Public
Law 101-73, and any applicable regulations, guidelines, and policies
adopted thereunder. Only one fee for appraising the same real
property made in connection with the same applicant or borrower may
be collected unless the applicant or borrower has obtained a new or
additional loan and more than one year has elapsed since the prior
appraisal. The fee is not included in charges as defined in this
division or in computing the maximum charges that may be made under
this division.
(b) If an appraisal fee is charged, a copy of the appraisal report
shall be provided by the industrial loan company upon the request of
the borrower or applicant at or before the closing of a loan
transaction.
18217. An escrow fee of a reasonable amount may be charged for any
loan made which is secured primarily by real property when such
services are actually performed. Such fee shall be considered
reasonable when paid to a company licensed to do business under the
Escrow Law, Division 6 (commencing with Section 17000), or any person
exempted by the Escrow Law, provided that such fees are comparable
to fees being charged by escrow companies so authorized to do
business in this state. Such fee is not included in computing the
maximum charges which may be made under this division.
18218. Notwithstanding any other provision of this division, an
industrial loan company, in the collection of a delinquent loan of an
unpaid principal balance, may do any of the following:
(a) Collect and receive the court costs and reasonable attorney's
fees allowed by a court in a judgment against a defaulting debtor.
(b) Contract for, collect, and receive the bona fide expenses
actually incurred and paid by the industrial loan company, not
exceeding 10 percent of the unpaid principal balance of the loan
where no judgment at law is sought.
(c) Contract for, collect, and receive the bona fide expenses
actually incurred and paid by the industrial loan company in
obtaining a certificate of compliance or certificate of noncompliance
issued for a motor vehicle pursuant to Part 5 (commencing with
Section 43000) of Division 26 of the Health and Safety Code and the
rules and regulations of the State Air Resources Board prior to the
consignment of the vehicle for sale at public auction, pursuant to
Sections 24007 and 24007.5 of the Vehicle Code.
18218.5. With respect to a loan under this division, a fee not to
exceed fifteen dollars ($15) for return by a depository institution
of a dishonored check, negotiable order of withdrawal, or share draft
may be charged and collected by the licensee. The fee is not
included in charges as defined in this division or in determining the
applicable maximum charges which may be made under this article.
18219. An industrial loan company shall not induce or permit any
borrower to split up or divide any loan and thereby contract for or
receive a higher rate of charge than would otherwise be permitted by
this division.
18220. An industrial loan company shall not induce any husband and
wife jointly or severally, to become obligated, directly or
contingently or both, under more than one contract of loan at the
same time, with the result of obtaining a higher rate of charge than
would otherwise be permitted by this division.
18221. Nothing in this division shall prevent an industrial loan
company from transacting loan contracts with different borrowers and
from contracting for and receiving, up to and including the highest
rate of charge permitted by this division at the time of making said
loans; provided, however, that if any person is obligated to and does
pay more than one loan contract outstanding at the same time, the
entire amount of charges paid by such person and received by the
industrial loan company on such loan contracts, shall not exceed the
maximum that would be permitted by this division if all such loan
contracts so paid were combined into one loan transaction.
18222. An industrial loan company shall permit payment to be made
in advance in any amount on any contract of loan at any time. The
industrial loan company shall apply such payment first to all charges
due up to the date of such payment and the remainder to the loan
balance.
