State Codes and Statutes

State Codes and Statutes

Statutes > California > Fin > 22000-22014

FINANCIAL CODE
SECTION 22000-22014



22000.  This division is known and may be cited as the "California
Finance Lenders Law."



22001.  (a) This division shall be liberally construed and applied
to promote its underlying purposes and policies, which are:
   (1) To ensure an adequate supply of credit to borrowers in this
state.
   (2) To simplify, clarify, and modernize the law governing loans
made by finance lenders.
   (3) To foster competition among finance lenders.
   (4) To protect borrowers against unfair practices by some lenders,
having due regard for the interests of legitimate and scrupulous
lenders.
   (5) To permit and encourage the development of fair and
economically sound lending practices.
   (6) To encourage and foster a sound economic climate in this
state.
   (b) Consumer loans, as defined in Sections 22203 and 22204, are
subject to this chapter, Chapter 2 (commencing with Section 22200),
Article 1 (commencing with Section 22700) of Chapter 4, and Article 2
(commencing with Section 22750) of Chapter 4.
   (c) Commercial loans, as defined in Section 22502, are subject to
this chapter, Chapter 3 (commencing with Section 22500), Article 1
(commencing with Section 22700) of Chapter 4, and Article 3
(commencing with Section 22780) of Chapter 4.



22002.  To accomplish its underlying purposes and policies, this
division creates a class of exempt persons pursuant to Section 1 of
Article XV of the California Constitution.
   It is the intent of the Legislature to preserve existing
exemptions under Section 1 of Article XV of the Constitution and
statutory law for (a) personal property brokers formerly regulated by
the Personal Property Brokers Law; (b) lenders formerly regulated by
the Consumer Finance Lenders Law; and (c) lenders formerly regulated
by the Commercial Finance Lenders Law; and no finding that any
provision of this division is invalid with respect to a particular
lender or class of lenders shall affect the enforceability of this
division with respect to any of the foregoing classifications of
lenders, which shall in all events continue to be exempted by this
division.


22003.  Unless the context otherwise requires, the definitions given
in this article govern the construction of this division.



22004.  "Broker" includes any person who is engaged in the business
of negotiating or performing any act as broker in connection with
loans made by a finance lender.



22005.  "Commissioner" means the Commissioner of Corporations.



22006.  As used in this division, the terms "security interest,"
"accounts," "chattel paper," "documents," "general intangibles,"
"goods," and "instruments" are as defined in the Uniform Commercial
Code.


22007.  "Licensee" means any finance lender or broker who receives a
license in accordance with this division.



22008.  "Person" means an individual, a corporation, a partnership,
a limited liability company, a joint venture, an association, a joint
stock company, a trust, an unincorporated organization, a
government, or a political subdivision of a government.




22009.  "Finance lender" includes any person who is engaged in the
business of making consumer loans or making commercial loans. The
business of making consumer loans or commercial loans may include
lending money and taking, in the name of the lender, or in any other
name, in whole or in part, as security for a loan, any contract or
obligation involving the forfeiture of rights in or to personal
property, the use and possession of which property is retained by
other than the mortgagee or lender, or any lien on, assignment of, or
power of attorney relative to wages, salary, earnings, income, or
commission.
   It is the intent of the Legislature that the definition of finance
lender shall be interpreted to include a personal property broker as
referenced in Section 1 of Article XV of the California
Constitution.



22010.  "Finance lender" and "broker" do not include employees
regularly employed at the location specified in the license of the
finance lender or broker, except that an employee, when acting within
the scope of his or her employment, shall be exempt from any other
law from which his or her employer is exempt.



22011.  A "regulatory ceiling provision" is a statement in a section
or subdivision that specifies an original bona fide principal loan
amount at or above which that section or subdivision does not apply
to a loan.


22012.  (a) "Branch office license" means a license to engage in
business as a finance lender or broker at a location other than the
location identified in a finance lender or broker license application
or amended application.
   (b) "Depository institution" has the same meaning as in Section 3
of the Federal Deposit Insurance Act, and includes any credit union.
   (c) "Federal banking agencies" means the Board of Governors of the
Federal Reserve System, the Comptroller of the Currency, the
Director of the Office of Thrift Supervision, the National Credit
Union Administration, and the Federal Deposit Insurance Corporation.
   (d) "Nationwide Mortgage Licensing System and Registry" means a
mortgage licensing system developed and maintained by the Conference
of State Bank Supervisors and the American Association of Residential
Mortgage Regulators for the licensing and registration of licensed
mortgage loan originators.
   (e) "Residential mortgage loan" means any loan primarily for
personal, family, or household use that is secured by a mortgage,
deed of trust, or other equivalent consensual security interest on a
dwelling, as defined in Section 103(v) of the federal Truth in
Lending Act, or residential real estate upon which is constructed or
intended to be constructed a dwelling. "Dwelling" means a residential
structure that contains one to four units, whether or not that
structure is attached to real property. The term includes an
individual condominium unit, cooperative unit, mobilehome, or
trailer, if it is used as a residence.
   (f) "SAFE Act" means the federal Secure and Fair Enforcement for
Mortgage Licensing Act of 2008 (Public Law 110-289).
   (g) "Unique identifier" means a number or other identifier
assigned by protocols established by the Nationwide Mortgage
Licensing System and Registry.
   (h) For purposes of Sections 22109.2, 22109.3, and 22109.5,
"nontraditional mortgage product" means any mortgage product other
than a 30-year fixed rate mortgage.


22013.  (a) "Mortgage loan originator" means an individual who, for
compensation or gain, or in the expectation of compensation or gain,
takes a residential mortgage loan application or offers or negotiates
terms of a residential mortgage loan.
   (b) Mortgage loan originator does not include any of the
following:
   (1) An individual who performs purely administrative or clerical
tasks on behalf of a person meeting the definition of a mortgage loan
originator, except as provided in subdivision (c) of Section 22014.
The term "administrative or clerical tasks" means the receipt,
collection, and distribution of information common for the processing
or underwriting of a loan in the mortgage industry and communication
with a consumer to obtain information necessary for the processing
or underwriting of a residential mortgage loan, to the extent that
the communication does not include offering or negotiating loan rates
or terms, or counseling consumers about residential mortgage loan
rates or terms.
   (2) An individual who solely renegotiates terms for existing
mortgage loans held or serviced by his or her employer and who does
not otherwise act as a mortgage loan originator, unless the United
States Department of Housing and Urban Development or a court of
competent jurisdiction determines that the SAFE Act requires such an
employee to be licensed as a mortgage loan originator under state
laws implementing the SAFE Act.
   (3) An individual that is solely involved in extensions of credit
relating to timeshare plans, as that term is defined in Section 101
(53D) of Title 11 of the United States Code.
   (4) An individual licensed as a mortgage loan originator pursuant
to the provisions of Article 2.1 (commencing with Section 10166.01)
of Chapter 3 of Part 1 of Division 4 of the Business and Professions
Code and the SAFE Act.
   (c) "Registered mortgage loan originator" means any individual who
is all of the following:
   (1) Meets the definition of mortgage loan originator.
   (2) Is an employee of a depository institution, a subsidiary that
is owned and controlled by a depository institution and regulated by
a federal banking agency, or an institution regulated by the Farm
Credit Administration.
   (3) Is registered with, and maintains a unique identifier through,
the Nationwide Mortgage Licensing System and Registry.
   (d) "Loan processor or underwriter" means an individual who
performs clerical or support duties as an employee at the direction
of, and subject to the supervision and instruction of, a mortgage
loan originator licensed by the state or a registered mortgage loan
originator.


22014.  (a) A loan processor or underwriter who does not represent
to the public, through advertising or other means of communicating or
providing information, including the use of business cards,
stationery, brochures, signs, rate lists, or other promotional items,
that the individual can or will perform any of the activities of a
mortgage loan originator shall not be required to be licensed as a
mortgage loan originator.
   (b) An individual engaging solely in loan processor or underwriter
activities shall not represent to the public, through advertising or
other means of communicating or providing information including the
use of business cards, stationery, brochures, signs, rate lists, or
other promotional items, that the individual can or will perform any
of the activities of a mortgage loan originator.
   (c) An independent contractor may not engage in the activities of
a loan processor or underwriter for a residential mortgage loan
unless the independent contractor loan processor or underwriter
obtains and maintains a mortgage loan originator license under this
division. Each independent contractor loan processor or underwriter
licensed as a mortgage loan originator shall have and maintain a
valid unique identifier issued by the Nationwide Mortgage Licensing
System and Registry.