2007 California Financial Code Article 4. Regulations

CA Codes (fin:22150-22171)

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 license, 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 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 licensee desires to change its place of business to
a street address other than that designated in its license, the
licensee shall give written notice to the commissioner on a form
provided by the commissioner at least 10 days prior to the change.
The commissioner shall then provide a written approval of the change
and the date of the approval.
   (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 (0).



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.
   (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 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 22106.  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.  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.  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 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.



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.  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.


22166.  The commissioner may require licensees to maintain a file of
all advertising copy for a period of 90 days 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 and from engaging in any business activity on the premises
where a licensed finance lender 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.


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, 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, 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 and
from engaging in any business activity on the premises where a
finance lender 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 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 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).