2010 California Code
Financial Code
Article 4. Regulations

22150.  The commissioner may make general rules and regulations and
specific rulings, demands, and findings for the enforcement of this
division, in addition to, and within the general purposes of, this
division.


22151.  (a) A finance lender license, broker license, and the
license of every mortgage loan originator employed by a lender or
finance broker, along with any currently effective order of the
commissioner approving a different name pursuant to Section 22155,
shall be conspicuously posted in the place of business authorized by
the license.
   (b) A license is not transferable or assignable. A license issued
to a partnership or a limited partnership is not transferred or
assigned within the meaning of this section by the death, withdrawal,
or admission of a partner, general partner, or limited partner,
unless the death, withdrawal, or admission dissolves the partnership
to which the license was issued.


22152.  A finance lender or broker licensee shall maintain only one
place of business under a duplicate or original license issued
pursuant to Section 22101 or 22102. The commissioner may issue more
than one license to the same licensee upon compliance with all the
provisions of this division governing an original issuance of a
license.



22153.  (a) If a finance lender or broker licensee seeks to change
its place of business to a street address other than that designated
in its license, the licensee shall provide notice to the commissioner
at least 10 days prior to the change. The commissioner shall notify
the licensee within 10 days if the commissioner disapproves the
change, and if the commissioner does not notify the licensee of
disapproval within 10 days, the change in address shall be deemed
approved. The commissioner may require an applicant to submit its
application to change its place of business through the Nationwide
Mortgage Licensing System and Registry.
   (b) If notice is not given at least 10 days prior to the change of
a street address of a place of business, as required by subdivision
(a), or notice is not given at least 10 days prior to engaging in
business at a new location, as required by Section 22102, the
commissioner may assess a civil or administrative penalty on the
licensee not to exceed five hundred dollars ($500).



22154.  (a) No licensee shall conduct the business of making loans
under this division within any office, room, or place of business in
which any other business is solicited or engaged in, or in
association or conjunction therewith, except as is authorized in
writing by the commissioner upon the commissioner's finding that the
character of the other business is such that the granting of the
authority would not facilitate evasions of this division or of the
rules and regulations made pursuant to this division. An
authorization once granted remains in effect until revoked by the
commissioner. The commissioner may authorize the other business
through the Nationwide Mortgage Licensing System and Registry.
   (b) The products or services of an affiliated corporation of the
licensee that is a supervised financial institution, or a parent or
subsidiary of a supervised financial institution that is an affiliate
of the licensee, may be provided, offered, or sold at the licensed
location of the licensee without authorization by the commissioner
pursuant to subdivision (a) if (1) the activity is not prohibited by,
or in violation of, the laws applicable to the affiliate or
supervised financial institution, and (2) the products and services
are not offered and sold in a manner that restricts the ability of
the borrower or customer to individually select or reject a product
or service that is offered.
   (c) The following definitions govern the construction of this
section:
   (1) "Affiliated" or "affiliate" means the following: A corporation
is an affiliate of, or a corporation is affiliated with, another
specified corporation if it directly, or indirectly through one or
more intermediaries, controls, is controlled by, or is under common
control with, the other specified corporation.
   (2) "Supervised financial institution" means any commercial bank,
industrial bank, credit card bank, trust company, savings and loan
association, savings bank, credit union, California finance lender,
residential mortgage lender or servicer, or insurer, provided that
the institution is subject to supervision by an official or agency of
this state or of the United States.



22155.  No finance lender, broker, or mortgage loan originator
licensee shall transact the business licensed or make any loan
provided for by this division under any other name or at any other
place of business than that named in the license except pursuant to a
currently effective written order of the commissioner authorizing
the other name or other place of business. The commissioner's order,
while effective, shall be deemed to amend the original license issued
pursuant to Section 22105 or 22109.1. Notwithstanding any provision
of this section, a licensee may make any loan and engage in any other
business provided for by this division, other than the business
described in subdivision (b) of Section 22154, at a place other than
the licensed location under either of the following conditions:
   (a) The borrower requests, either orally or in writing, that a
loan be initiated or made at a location other than the licensee's
licensed location. The use by the licensee of a preprinted
solicitation form returned to the licensee by the borrower shall not
constitute a request by the borrower that a loan be initiated or made
at a location other than the licensee's licensed location.
   (b) The licensee makes a solicitation or advertises for, or makes
an offer of, a loan displayed on "home pages" or similar methods by
the licensee on the Internet, the World Wide Web, or similar
proprietary or common carrier electronic systems, and the prospective
borrower may transmit information over these electronic systems to
the licensee in connection with the licensee's offer to make a loan.



22156.  Finance lender, broker, and mortgage loan originator
licensees shall keep and use in their business, books, accounts, and
records which will enable the commissioner to determine if the
licensee is complying with the provisions of this division and with
the rules and regulations made by the commissioner. On any loan
secured by real property in which loan proceeds were disbursed to an
independent escrowholder, the licensee shall retain records and
documents as set forth by rules of the commissioner adopted pursuant
to Section 22150. Upon request of the commissioner, licensees shall
file an authorization for disclosure to the commissioner of financial
records of the licensed business pursuant to Section 7473 of the
Government Code.



22157.  Finance lender, broker, and mortgage loan originator
licensees shall preserve their books, accounts, and records,
including cards used in the card system, if any, for at least three
years after making the final entry on any loan recorded therein.




22158.  Nothing contained in Sections 22156 and 22157 shall require
the maintenance or preservation of original records, provided that
any information requested by the commissioner can be furnished within
48 hours, excluding Saturdays, Sundays, and holidays as defined in
Sections 6700 and 6701 of the Government Code.


22159.  (a) Each finance lender and broker licensee shall file an
annual report with the commissioner, on or before the 15th day of
March, giving the relevant information that the commissioner
reasonably requires concerning the business and operations conducted
by the licensee within the state during the preceding calendar year
for each licensed place of business. The individual annual reports
filed pursuant to this section shall be made available to the public
for inspection except, upon request in the annual report to the
commissioner, the balance sheet contained in the annual report of a
sole proprietor or any other nonpublicly traded persons. "Nonpublicly
traded person" for purposes of this section means persons with
securities owned by 35 or fewer individuals. The report shall be made
under oath and in the form prescribed by the commissioner.
   (b) A licensee shall make other special reports that may be
required by the commissioner.
   (c) The commissioner may require a licensee that employs one or
more mortgage loan originators to submit to the Nationwide Mortgage
Licensing System and Registry reports of condition, which shall be in
the form and shall contain the information as the Nationwide
Mortgage Licensing System and Registry may require.
   (d) The commissioner may by rule or order require a mortgage loan
originator to submit reports of condition to the Nationwide Mortgage
Licensing System and Registry, in lieu of the reports of condition
required of his or her employer pursuant to subdivision (c).




22159.5.  (a) The commissioner may, as he or she deems necessary,
require licensees to provide reports concerning their residential
mortgage loan servicing activities, including, but not limited to,
information similar to that collected in connection with the Mortgage
Servicers Survey, first published by the Department of Corporations
in December 2007. The commissioner is additionally authorized to seek
and accept information provided on a voluntary basis by residential
mortgage loan servicers not subject to the commissioner's
jurisdiction. The commissioner shall post only aggregated survey
results on the department's Internet Web site, and shall note the
number of loan servicers submitting data included in the aggregated
totals and the estimated percentage of outstanding mortgage loans to
Californians that are serviced by these loan servicers, to the extent
information on the number of outstanding loans is available from a
reliable source. Nothing in this section is intended to reduce or
change the commissioner's authority to request and demand reports
under Sections 22150 and 22159.
   (b) For purposes of this section, "mortgage loan servicing
activity" means receiving more than three installment payments of
principal, interest, or other amounts placed in escrow, pursuant to
the terms of a mortgage loan, and performing services relating to
that receipt or the enforcement of its receipt, on behalf of the
holder of the note evidencing that loan.



22160.  The commissioner shall make and file annually with the
Department of Corporations as a public record a composite of the
annual reports and any comments on the reports that he or she deems
to be in the public interest.


22161.  (a) No person shall make a materially false or misleading
statement or representation to a borrower about the terms or
conditions of that borrower's loan, when making or brokering the
loan.
   (b) No person shall advertise, print, display, publish,
distribute, or broadcast, or cause or permit to be advertised,
printed, displayed, published, distributed, or broadcast in any
manner, any statement or representation with regard to the business
subject to the provisions of this division, including the rates,
terms, or conditions for making or negotiating loans, that is false,
misleading, or deceptive, or that omits material information that is
necessary to make the statements not false, misleading, or deceptive,
or in the case of a licensee, that refers to the supervision of the
business by the state or any department or official of the state.



22162.  No licensee shall place an advertisement disseminated
primarily in this state for a loan unless the licensee discloses in
the printed text of the advertisement, or in the oral text in the
case of a radio or television advertisement, the license under which
the loan would be made or arranged.



22163.  The commissioner may require that rates of charge, if stated
by a licensee, be stated fully and clearly in the manner that the
commissioner deems necessary to prevent misunderstanding by
prospective borrowers.


22164.  If any person engaged in the business regulated by this
division refers in any advertising to rates of interest, charges, or
cost of loans, the commissioner shall require that the rates,
charges, or costs are stated fully and clearly in the manner that he
or she deems necessary to give adequate information to prospective
borrowers. If the rates or costs advertised do not apply to loans of
all classes made or negotiated by the person, this fact shall be
clearly indicated in the advertisement.



22165.  No advertising copy shall be used after its use has been
disapproved by the commissioner and the licensee is notified in
writing of the disapproval. The commissioner may by order direct any
licensee to submit advertising copy to the commissioner for review
prior to use.



22166.  The commissioner may require licensees to maintain a file of
all advertising copy for a period of two years from the date of its
use. The file shall be available to the commissioner upon request.



22167.  A licensed finance lender may act as a broker as defined in
Section 22004 at its licensed place of business without obtaining an
additional license as a broker under this division provided the
licensee has notified the commissioner of the action in writing.




22168.  (a) The commissioner may, after appropriate notice and
opportunity for hearing, suspend for a period not to exceed 12 months
or bar a person from any position of employment with a licensee if
the commissioner finds that the person has willfully used or claimed
without authority a designation or certification of special
education, practice, or skill that the person has not attained, or
willfully held out to the public a confusingly similar designation or
certification for the purpose of misleading the public regarding his
or her qualifications or experience.
   (b) Within 15 days from the date of a notice of intention to issue
an order pursuant to subdivision (a), the person may request a
hearing under the Administrative Procedure Act (Chapter 5 (commencing
with Section 11500) of Part 1 of Division 3 of Title 2 of the
Government Code). Upon receiving a request, the matter shall be set
for hearing to commence within 30 days after receipt unless the
person subject to this division consents to a later date. If no
hearing is requested within 15 days after the mailing or service of
the notice and none is ordered by the commissioner, the failure to
request a hearing shall constitute a waiver of the right to a
hearing.
   (c) Upon receipt of a notice of intention to issue an order
pursuant to subdivision (a), the person who is the subject of the
proposed order is immediately prohibited from engaging in any
activities subject to licensure under this division.
   (d) Persons suspended or barred under this section are prohibited
from participating in any business activity of a licensed finance
lender, broker, or mortgage loan originator, and from engaging in any
business activity on the premises where a licensed finance lender,
broker, or mortgage loan originator is conducting its business. This
subdivision shall not be construed to prohibit suspended or barred
persons from having their personal transactions processed by a
licensed finance lender, broker, or mortgage loan originator.




22169.  (a) The commissioner may, after appropriate notice and
opportunity for hearing, by order, censure or suspend for a period
not exceeding 12 months, or bar from any position of employment,
management, or control any finance lender, broker, mortgage loan
originator, or any other person, if the commissioner finds either of
the following:
   (1) That the censure, suspension, or bar is in the public interest
and that the person has committed or caused a violation of this
division or rule or order of the commissioner, which violation was
either known or should have been known by the person committing or
causing it or has caused material damage to the finance lender,
broker, or mortgage loan originator, or to the public.
   (2) That the person has been convicted of or pleaded nolo
contendere to any crime, or has been held liable in any civil action
by final judgment, or any administrative judgment by any public
agency, if that crime or civil or administrative judgment involved
any offense involving dishonesty, fraud, or deceit, or any other
offense reasonably related to the qualifications, functions, or
duties of a person engaged in the business in accordance with the
provisions of this division.
   (b) Within 15 days from the date of a notice of intention to issue
an order pursuant to subdivision (a), the person may request a
hearing under the Administrative Procedure Act (Chapter 4.5
(commencing with Section 11400) of Division 3 of Title 2 of the
Government Code). Upon receipt of a request, the matter shall be set
for hearing to commence within 30 days after such receipt unless the
person subject to this division consents to a later date. If no
hearing is requested within 15 days after the mailing or service of
such notice and none is ordered by the commissioner, the failure to
request a hearing shall constitute a waiver of the right to a
hearing.
   (c) Upon receipt of a notice of intention to issue an order
pursuant to this section, the person who is the subject of the
proposed order is immediately prohibited from engaging in any
activities subject to licensure under the law.
   (d) Persons suspended or barred under this section are prohibited
from participating in any business activity of a finance lender,
broker, or mortgage loan originator, and from engaging in any
business activity on the premises where a finance lender, broker, or
mortgage loan originator is conducting business.



22170.  (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 or the Nationwide Mortgage Licensing
System and Registry 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.



22171.  (a) The commissioner shall apply the guidance on
nontraditional mortgage product risks published on November 14, 2006,
by the Conference of State Bank Supervisors and the American
Association of Residential Mortgage Regulators, and the Statement on
Subprime Mortgage Lending published on July 17, 2007, by the
aforementioned entities and the National Association of Consumer
Credit Administrators, to licensees.
   (b) The commissioner may adopt emergency and final regulations to
clarify the application of this section as soon as possible.
   (c) A finance lender or broker licensee shall adopt and adhere to
policies and procedures that are reasonably intended to achieve the
objectives set forth in the documents described in subdivision (a). A
mortgage loan originator licensee shall adhere to policies and
procedures developed by its employer in accordance with this division
and applicable federal law and regulation.



22172.  (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 22109.1 or 22109.4, 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
finance lender or broker licensee employing a mortgage loan
originator for a violation of this division.
   (4) Impose fines on a mortgage loan originator or any finance
lender or broker 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 finance
lender or broker 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 finance
lender or broker 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 22100
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 finance lender or broker 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 finance lender or broker 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.