Bill Text: CA AB1284 | 2017-2018 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: California Financing Law: Property Assessed Clean Energy program: program administrators.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Passed) 2017-10-04 - Chaptered by Secretary of State - Chapter 475, Statutes of 2017. [AB1284 Detail]

Download: California-2017-AB1284-Amended.html

Amended  IN  Senate  August 24, 2017
Amended  IN  Senate  June 14, 2017
Amended  IN  Assembly  March 21, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1284


Introduced by Assembly Member Calderon Dababneh
(Coauthor: Assembly Member Calderon)

February 17, 2017


An act to amend Sections 66025.91, 66450, 67300, 67310, 67311, 67312, 67313, 78212, 78230, 78907, 84750.5, 84850, 87003, 87356, 89037, and 99156 of, and to amend the heading of Article 6 (commencing with Section 84850) of Chapter 5 of Part 50 of Division 7 of Title 3 of, the Education Code, relating to postsecondary education. An act to amend, repeal, and add Sections 22001, 22007, 22101, 22101.5, 22102, 22103, 22104, 22105, 22105.3, 22106, 22107, 22109, 22151, 22152, 22153, 22154, 22155, 22156, 22157, 22159, 22161, 22162, 22163, 22164, 22168, 22169, 22700, 22701, 22706, 22712, 22714, and 22716 of, to add Sections 22003.5, 22015, 22016, 22017, 22018, 22019, 22020, 22068, and 22100.5 to, and to add Chapter 3.5 (commencing with Section 22680) to Division 9 of, the Financial Code, relating to financial institutions.


LEGISLATIVE COUNSEL'S DIGEST


AB 1284, as amended, Calderon Dababneh. Postsecondary education: students with disabilities. California Finance Lenders Law: Property Assessed Clean Energy program: program administrators.
Existing law, the California Finance Lenders Law, generally provides for the licensure and regulation of finance lenders and brokers by the Commissioner of Business Oversight. Existing law requires a person seeking to become licensed as a finance lender or broker to submit an application to the commissioner, and to comply with specified licensure requirements such as paying a fee and an annual assessment to the commissioner. Existing law requires a finance lender or broker licensee to comply with requirements related to the conduct of his or her business. Existing law exempts specified types of entities or financial instruments from regulation under the California Finance Lenders Law. Existing law makes a willful violation of the California Finance Lenders Law by any person a crime, and authorizes the commissioner to take specified disciplinary actions against a licensee, including ordering the licensee to cease specified activity or suspending or revoking the license of the licensee.
Existing law, known commonly as a Property Assessed Clean Energy (PACE program), authorizes a public agency, by making specified findings, to authorize public agency officials and property owners to enter into voluntary contractual assessments to finance the installation of distributed generation renewable energy sources or energy or water efficiency improvements that are permanently fixed to real property. Existing law authorizes a private entity to administer a PACE program on behalf of, and with the written consent of, a public agency.
This bill would, commencing on an unspecified date, require a program administrator that administers a PACE program on or behalf of a public agency to be licensed by the commissioner under the California Finance Lenders Law. The bill would require a program administrator to comply with licensure requirements that are similar to that of a finance lender or broker as described above. The bill would require a program administrator licensee to comply with similar requirements to that of finance lenders and brokers under the California Finance Lenders Law as to the conduct of his or her business, including display of his or her license, location of his or her business, maintenance and preservation of its records, reporting, prohibiting making false or misleading statements, and advertising. The bill would provide that the exemptions described above in the California Finance Lenders Law do not apply to a program administrator.
The bill would require a program administrator to enroll a person as a PACE solicitor before that person may act on behalf of the program administrator to solicit property owners to enter into assessment contracts. The bill would require the program administrator to comply with specified requirements when enrolling a person as a PACE solicitor, including conducting a background check and ensuring that person meets specified minimum requirements. The bill would require a program administrator to train each PACE solicitor with respect to the solicitation of assessment contracts, and to establish and maintain a process to oversee the solicitation activity of each PACE solicitor.
The bill would authorize the commissioner to take disciplinary actions against a program administrator or PACE solicitor that are similar to the disciplinary provisions described above for a finance lender or broker, and would make a willful violation of these provisions by any person is a crime. By expanding the scope of an existing crime, this bill would impose a state-mandated local program.
The bill would include findings that the changes proposed by this bill address a matter of statewide concern and is not a municipal affair, therefore, shall apply equally to all cities, including charter cities.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law provides for various programs and services for students with disabilities in higher education.

This bill would change “disabled student” to “student with disabilities” and would make similar changes with regard to specific disabilities throughout the provisions governing postsecondary education.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NOYES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 22001 of the Financial Code is amended to read:

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.
(d) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 2.

 Section 22001 is added to the Financial Code, to read:

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.
(7) To protect property owners from deceptive and misleading practices that threaten the efficacy and viability of property assessed clean energy financing programs.
(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.
(d) A program administrator, as defined in Section 22018, is subject to regulation by the commissioner if he or she offers funding for property improvements secured by a property tax lien.
(e) This section shall become operative on ____.

SEC. 3.

 Section 22003.5 is added to the Financial Code, to read:

22003.5.
 (a) “Assessment contract” means an agreement entered into between all property owners of record on real property and a public agency in which, for voluntary contractual assessments imposed on the real property, the public agency provides a PACE assessment for the installation of one or more property improvements on the real property in accordance with a PACE program.
(b) This section shall become operative on ____.

SEC. 4.

 Section 22007 of the Financial Code is amended to read:

22007.
 (a) “Licensee” means any finance lender or broker who receives a license in accordance with this division.
(b) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 5.

 Section 22007 is added to the Financial Code, to read:

22007.
 (a) “Licensee” means any finance lender, broker, or program administrator who receives a license in accordance with this division.
(b) This section shall become operative on ____.

SEC. 6.

 Section 22015 is added to the Financial Code, to read:

22015.
 (a) “PACE assessment” means a voluntary contractual assessment, voluntary special tax, or special tax, as described in subdivisions (a), (b), and (c) of Section 26054 of the Public Resources Code.
(b) This section shall become operative on ____.

SEC. 7.

 Section 22016 is added to the Financial Code, to read:

22016.
 (a) “PACE program” means a property assessed clean energy financing program in which financing is provided for renewable energy upgrades, energy and water efficiency retrofits, and seismic improvements on real property and funded through the use of property assessments, as well as other program components defined in this section, established pursuant to any of the following:
(1) Chapter 29 (commencing with Section 5898.10) of Part 3 of Division 7 of the Streets and Highways Code.
(2) The Mello-Roos Community Facilities Act of 1982 (Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code).
(3) A charter city’s constitutional authority under Section 5 of Article XI of the California Constitution.
(b) This section shall become operative on ____.

SEC. 8.

 Section 22017 is added to the Financial Code, to read:

22017.
 (a) “PACE solicitor” means a person who solicits a property owner to enter into an assessment contract on behalf of a program administrator. “PACE solicitor” does not include either:
(1) A person who performs purely administrative or clerical tasks on behalf of a program administrator or a PACE solicitor.
(2) A publisher who advertises a PACE program through a publication or mailing, or over an Internet Web site, if the publisher both:
(A) Does not obtain any information from the property owner in response to the advertising.
(B) Has no contact with the property owner beyond the advertising material.
(b) This section shall become operative on ____.

SEC. 9.

 Section 22018 is added to the Financial Code, to read:

22018.
 (a) “Program administrator” means a person administering a PACE program on behalf of, and with the written consent of, a public agency. “Program administrator” does not include a public agency.
(b) This section shall become operative on ____.

SEC. 10.

 Section 22019 is added to the Financial Code, to read:

22019.
 (a) “Property improvement” includes renewable energy upgrades, energy and water efficiency retrofits, and seismic improvements on real property that are financed through a PACE assessment.
(b) This section shall become operative on ____.

SEC. 11.

 Section 22020 is added to the Financial Code, to read:

22020.
 (a) “Public agency” means a city, including a charter city, county, city and county, municipal utility district, community services district, community facilities district, joint powers authority, sanitary district, sanitation district, or water district, as defined in Section 20200 of the Water Code, that has established or participates in a PACE program, and utilizes a program administrator.
(b) This section shall become operative on ____.

SEC. 12.

 Section 22068 is added to the Financial Code, to read:

22068.
 (a) The exemptions and exclusions in this article are not applicable to a person engaged in business as a program administrator or a PACE solicitor.
(b) This section shall become operative on ____.

SEC. 13.

 Section 22100.5 is added to the Financial Code, to read:

22100.5.
 (a) A person shall not engage in the business of a program administrator without obtaining a license from the commissioner.
(b) This section shall become operative on ____.

SEC. 14.

 Section 22101 of the Financial Code is amended to read:

22101.
 (a) An application for a license as a finance lender or broker under this division shall be in the form and contain the information that the commissioner may by rule or order require and shall be filed upon payment of the fee specified in Section 22103.
(b) Notwithstanding any other law, an applicant who does not currently hold a license as a finance lender or broker under this division shall furnish, with his or her application, a full set of fingerprints and related information for purposes of the commissioner conducting a criminal history record check. The commissioner shall obtain and receive criminal history information from the Department of Justice and the Federal Bureau of Investigation pursuant to Section 22101.5.
(c) This section shall not be construed to prevent a licensee from engaging in the business of a finance lender through a subsidiary corporation if the subsidiary corporation is licensed pursuant to this division.
(d) For purposes of this section, “subsidiary corporation” means a corporation that is wholly owned by a licensee.
(e) A new application shall not be required for a change in the address of an existing location previously licensed under this division. However, the licensee shall comply with the requirements of Section 22153.
(f) Notwithstanding subdivisions (a) to (e), inclusive, the commissioner may by rule require an application to be made through the Nationwide Mortgage Licensing System and Registry, and may require fees, fingerprints, financial statements, supporting documents, changes of address, and any other information, and amendments or modifications thereto, to be submitted in the same manner.
(g) Notwithstanding any other law, the commissioner may by rule or order prescribe circumstances under which to accept electronic records or electronic signatures. This section does not require the commissioner to accept electronic records or electronic signatures.
(h) For purposes of this section, the following terms have the following meanings:
(1) “Electronic record” means an initial license application, or material modification of that license application, and any other record created, generated, sent, communicated, received, or stored by electronic means. “Electronic records” also includes, but is not limited to, all of the following:
(A) An application, amendment, supplement, and exhibit, filed for any license, consent, or other authority.
(B) A financial statement, a report, or advertising.
(C) An order, license, consent, or other authority.
(D) A notice of public hearing, accusation, and statement of issues in connection with any application, license, consent, or other authority.
(E) A proposed decision of a hearing officer and a decision of the commissioner.
(F) The transcripts of a hearing and correspondence between a party and the commissioner directly relating to the record.
(G) A release, newsletter, interpretive opinion, determination, or specific ruling.
(H) Correspondence between a party and the commissioner directly relating to any document listed in subparagraphs (A) to (G), inclusive.
(2) “Electronic signature” means an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record.
(i) The Legislature finds and declares that the Department of Business Oversight has continuously implemented methods to accept records filed electronically, and is encouraged to continue to expand its use of electronic filings to the extent feasible, as budget, resources, and equipment are made available to accomplish that goal.
(j) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 15.

 Section 22101 is added to the Financial Code, to read:

22101.
 (a) An application for a license as a finance lender, broker, or program administrator under this division shall be in the form and contain the information that the commissioner may by rule or order require and shall be filed upon payment of the fee specified in Section 22103.
(b) Notwithstanding any other law, an applicant who does not currently hold a license as a finance lender, broker, or program administrator under this division shall furnish, with his or her application, a full set of fingerprints and related information for purposes of the commissioner conducting a criminal history record check. The commissioner shall obtain and receive criminal history information from the Department of Justice and the Federal Bureau of Investigation pursuant to Section 22101.5.
(c) This section does not prevent a licensee from engaging in the business of a finance lender through a subsidiary corporation if the subsidiary corporation is licensed pursuant to this division.
(d) For purposes of this section, “subsidiary corporation” means a corporation that is wholly owned by a licensee.
(e) A new application shall not be required for a change in the address of an existing location previously licensed under this division. However, the licensee shall comply with the requirements of Section 22153.
(f) Notwithstanding subdivisions (a) to (e), inclusive, the commissioner may by rule require an application to be made through the Nationwide Mortgage Licensing System and Registry, and may require fees, fingerprints, financial statements, supporting documents, changes of address, and any other information, and amendments or modifications thereto, to be submitted in the same manner.
(g) Notwithstanding any other law, the commissioner may by rule or order prescribe circumstances under which to accept electronic records or electronic signatures. This section does not require the commissioner to accept electronic records or electronic signatures.
(h) For purposes of this section, the following terms have the following meanings:
(1) “Electronic record” means an initial license application, or material modification of that license application, and any other record created, generated, sent, communicated, received, or stored by electronic means. “Electronic records” also includes, but is not limited to, all of the following:
(A) An application, amendment, supplement, and exhibit, filed for any license, consent, or other authority.
(B) A financial statement, a report, or advertising.
(C) An order, license, consent, or other authority.
(D) A notice of public hearing, accusation, and statement of issues in connection with any application, license, consent, or other authority.
(E) A proposed decision of a hearing officer and a decision of the commissioner.
(F) The transcripts of a hearing and correspondence between a party and the commissioner directly relating to the record.
(G) A release, newsletter, interpretive opinion, determination, or specific ruling.
(H) Correspondence between a party and the commissioner directly relating to any document listed in subparagraphs (A) to (G), inclusive.
(2) “Electronic signature” means an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record.
(i) The Legislature finds and declares that the Department of Business Oversight has continuously implemented methods to accept records filed electronically, and is encouraged to continue to expand its use of electronic filings to the extent feasible, as budget, resources, and equipment are made available to accomplish that goal.
(j) This section shall become operative on ____.

SEC. 16.

 Section 22101.5 of the Financial Code is amended to read:

22101.5.
 (a) The commissioner shall submit to the Department of Justice fingerprint images and related information required by the Department of Justice of all finance lender and broker license candidates, as defined by subdivision (a) of Section 22101, for purposes of obtaining information as to the existence and content of a record of state or federal convictions, state or federal arrests, and information as to the existence and content of a record of state or federal arrests for which the Department of Justice establishes that the person is free on bail or on his or her own recognizance pending trial or appeal.
(b) When received, the Department of Justice shall forward to the Federal Bureau of Investigation requests for federal summary criminal history information received pursuant to this section. The Department of Justice shall review the information returned from the Federal Bureau of Investigation and compile and disseminate a response to the commissioner.
(c) The Department of Justice shall provide a response to the commissioner pursuant to paragraph (1) of subdivision (p) of Section 11105 of the Penal Code.
(d) The commissioner shall request from the Department of Justice subsequent arrest notification service, as provided pursuant to Section 11105.2 of the Penal Code, for license candidates described in subdivision (a).
(e) The Department of Justice shall charge a fee sufficient to cover the costs of processing the requests pursuant to this section.
(f) Notwithstanding subdivisions (a) to (e), inclusive, the commissioner may by rule require fingerprints submitted by an applicant to be submitted to the Nationwide Mortgage Licensing System and Registry in addition to the Department of Justice.
(g) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 17.

 Section 22101.5 is added to the Financial Code, to read:

22101.5.
 (a) The commissioner shall submit to the Department of Justice fingerprint images and related information required by the Department of Justice of all finance lender, broker, or program administrator license candidates, as defined by subdivision (a) of Section 22101, for purposes of obtaining information as to the existence and content of a record of state or federal convictions, state or federal arrests, and information as to the existence and content of a record of state or federal arrests for which the Department of Justice establishes that the person is free on bail or on his or her own recognizance pending trial or appeal.
(b) When received, the Department of Justice shall forward to the Federal Bureau of Investigation requests for federal summary criminal history information received pursuant to this section. The Department of Justice shall review the information returned from the Federal Bureau of Investigation and compile and disseminate a response to the commissioner.
(c) The Department of Justice shall provide a response to the commissioner pursuant to paragraph (1) of subdivision (p) of Section 11105 of the Penal Code.
(d) The commissioner shall request from the Department of Justice subsequent arrest notification service, as provided pursuant to Section 11105.2 of the Penal Code, for license candidates described in subdivision (a).
(e) The Department of Justice shall charge a fee sufficient to cover the costs of processing the requests pursuant to this section.
(f) Notwithstanding subdivisions (a) to (e), inclusive, the commissioner may by rule require fingerprints submitted by an applicant to be submitted to the Nationwide Mortgage Licensing System and Registry in addition to the Department of Justice.
(g) This section shall become operative on ____.

SEC. 18.

 Section 22102 of the Financial Code is amended to read:

22102.
 (a) A finance lender or broker licensee seeking to engage in business at a new location shall submit an application for a branch office license to the commissioner at least 10 days before engaging in business at a new location and pay the fee required by Section 22103. The commissioner may require an applicant seeking to engage in business at a new location to submit its application, or parts thereof, through the Nationwide Mortgage Licensing System and Registry.
(b) The licensee may engage in business at the new location 10 days after the date of submission of a branch office application.
(c) (1) The commissioner shall approve or deny the person responsible for the lending activity at the new location in accordance with Section 22109, and shall notify the licensee of this decision within 90 days of the date of receipt of the application.
(2) If the commissioner denies the application, the licensee shall, within 10 days of the date of receipt of notification of the commissioner’s denial, submit a new application to the commissioner designating a different person responsible for the lending activity at the new location. The commissioner shall approve or deny the different person as provided in paragraph (1).
(d) A licensee shall not engage in business at a new location in a name other than a name approved by the commissioner.
(e) The commissioner may adopt regulations to implement the requirements of this section.
(f) A branch office license to engage in business at a new location shall be issued in accordance with this section. A change of street address of a place of business designated in a license shall be made in accordance with Section 22153 and shall not constitute a new location subject to the requirements of this section.
(g) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 19.

 Section 22102 is added to the Financial Code, to read:

22102.
 (a) A finance lender, broker, or program administrator licensee seeking to engage in business at a new location shall submit an application for a branch office license to the commissioner at least 10 days before engaging in business at a new location and pay the fee required by Section 22103. The commissioner may require an applicant seeking to engage in business at a new location to submit its application, or parts thereof, through the Nationwide Mortgage Licensing System and Registry.
(b) The licensee may engage in business at the new location 10 days after the date of submission of a branch office application.
(c) (1) The commissioner shall approve or deny the person responsible for the lending activity at the new location in accordance with Section 22109, and shall notify the licensee of this decision within 90 days of the date of receipt of the application.
(2) If the commissioner denies the application, the licensee shall, within 10 days of the date of receipt of notification of the commissioner’s denial, submit a new application to the commissioner designating a different person responsible for the lending activity at the new location. The commissioner shall approve or deny the different person as provided in paragraph (1).
(d) A licensee shall not engage in business at a new location in a name other than a name approved by the commissioner.
(e) The commissioner may adopt regulations to implement the requirements of this section.
(f) A branch office license to engage in business at a new location shall be issued in accordance with this section. A change of street address of a place of business designated in a license shall be made in accordance with Section 22153 and shall not constitute a new location subject to the requirements of this section.
(g) This section shall become operative on ____.

SEC. 20.

 Section 22103 of the Financial Code is amended to read:

22103.
 (a) At the time of filing the application for a finance lender, broker, or branch office license, the applicant shall pay to the commissioner the sum of one hundred dollars ($100) as a fee for investigating the application, plus the cost of fingerprint processing and the criminal history record check under Section 22101.5, and two hundred dollars ($200) as an application fee. The investigation fee, including the amount for the criminal history record check, and the application fee are not refundable if an application is denied or withdrawn.
(b) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 21.

 Section 22103 is added to the Financial Code, to read:

22103.
 (a) At the time of filing the application for a finance lender, broker, program administrator, or branch office license, the applicant shall pay to the commissioner the sum of one hundred dollars ($100) as a fee for investigating the application, plus the cost of fingerprint processing and the criminal history record check under Section 22101.5, and two hundred dollars ($200) as an application fee. The investigation fee, including the amount for the criminal history record check, and the application fee are not refundable if an application is denied or withdrawn.
(b) This section shall become operative on ____.

SEC. 22.

 Section 22104 of the Financial Code is amended to read:

22104.
 (a) The applicant shall file with the application for a finance lender or broker license financial statements prepared in accordance with generally accepted accounting principles and acceptable to the commissioner that indicate a net worth of at least twenty-five thousand dollars ($25,000). Except as provided in subdivisions (b) and (c), a licensee shall maintain a net worth of at least twenty-five thousand dollars ($25,000) at all times.
(b) A licensed finance lender or broker, that employs one or more mortgage loan originators and that makes residential mortgage loans, shall continuously maintain a minimum net worth of at least two hundred fifty thousand dollars ($250,000).
(c) A licensed finance broker, that employs one or more mortgage loan originators and that arranges, but does not make, residential mortgage loans, shall continuously maintain a minimum net worth of at least fifty thousand dollars ($50,000).
(d) The commissioner may promulgate rules or regulations with respect to the requirements for minimum net worth, as are necessary to accomplish the purposes of this division and comply with the SAFE Act.
(e) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 23.

 Section 22104 is added to the Financial Code, to read:

22104.
 (a) The applicant shall file with the application for a finance lender, broker, or program administrator license financial statements prepared in accordance with generally accepted accounting principles and acceptable to the commissioner that indicate a net worth of at least twenty-five thousand dollars ($25,000). Except as provided in subdivisions (b) and (c), a licensee shall maintain a net worth of at least twenty-five thousand dollars ($25,000) at all times.
(b) A licensed finance lender or broker, that employs one or more mortgage loan originators and that makes residential mortgage loans, shall continuously maintain a minimum net worth of at least two hundred fifty thousand dollars ($250,000).
(c) A licensed finance broker, that employs one or more mortgage loan originators and that arranges, but does not make, residential mortgage loans, shall continuously maintain a minimum net worth of at least fifty thousand dollars ($50,000).
(d) The commissioner may promulgate rules or regulations with respect to the requirements for minimum net worth, as are necessary to accomplish the purposes of this division and comply with the SAFE Act.
(e) This section shall become operative on ____.

SEC. 24.

 Section 22105 of the Financial Code is amended to read:

22105.
 (a) Upon the filing of an application pursuant to Section 22101 and the payment of the fees, the commissioner shall investigate the applicant and its general partners and persons owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or any person responsible for the conduct of the applicant’s lending activities in this state, if the applicant is a partnership. If the applicant is a corporation, trust, limited liability company, or association, including an unincorporated organization, the commissioner shall investigate the applicant, its principal officers, directors, managing members, and persons owning or controlling, directly or indirectly, 10 percent or more of the outstanding equity securities or any person responsible for the conduct of the applicant’s lending activities in this state. Upon the filing of an application pursuant to Section 22102 and the payment of the fees, the commissioner shall investigate the person responsible for the lending activity of the licensee at the new location described in the application. The investigation may be limited to information that was not included in prior applications filed pursuant to this division. If the commissioner determines that the applicant has satisfied this division and does not find facts constituting reasons for denial under Section 22109, the commissioner shall issue and deliver a license to the applicant.

For

(b) For the purposes of this section, “principal officers” shall mean president, chief executive officer, treasurer, and chief financial officer, as may be applicable, and any other officer with direct responsibility for the conduct of the applicant’s lending activities within the state.
(c) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 25.

 Section 22105 is added to the Financial Code, to read:

22105.
 (a) Upon the filing of an application pursuant to Section 22101 and the payment of the fees, the commissioner shall investigate the applicant and its general partners and persons owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or any person responsible for the conduct of the applicant’s lending activities in this state, if the applicant is a partnership. If the applicant is a corporation, trust, limited liability company, or association, including an unincorporated organization, the commissioner shall investigate the applicant, its principal officers, directors, managing members, and persons owning or controlling, directly or indirectly, 10 percent or more of the outstanding equity securities or any person responsible for the conduct of the applicant’s lending activities or for administering PACE programs for the applicant in this state. Upon the filing of an application pursuant to Section 22102 and the payment of the fees, the commissioner shall investigate the person responsible for the lending activity of the licensee, or for administering one or more PACE programs for the licensee, at the new location described in the application. The investigation may be limited to information that was not included in prior applications filed pursuant to this division. If the commissioner determines that the applicant has satisfied this division and does not find facts constituting reasons for denial under Section 22109, the commissioner shall issue and deliver a license to the applicant.
(b) For the purposes of this section, “principal officers” shall mean president, chief executive officer, treasurer, and chief financial officer, as may be applicable, and any other officer with direct responsibility for the conduct of the applicant’s lending activities or for PACE program administration for the applicant within the state.
(c) This section shall become operative on ____.

SEC. 26.

 Section 22105.3 of the Financial Code is amended to read:

22105.3.
 (a) Except as otherwise provided in Section 1512 of the SAFE Act, the requirements under any federal or state law regarding the privacy or confidentiality of any information or material provided to the Nationwide Mortgage Licensing System and Registry, and any privilege arising under federal or state law, including the rules of any federal or state court, with respect to that information or material, shall continue to apply to the information or material after the information or material has been disclosed to the Nationwide Mortgage Licensing System and Registry. The information and material may be shared with all state and federal regulatory officials with mortgage industry oversight authority without the loss of privilege or the loss of confidentiality protections provided by federal or state law.
(b) For these purposes, the commissioner is authorized to enter agreements or share arrangements with other governmental agencies, the Conference of State Bank Supervisors, the American Association of Residential Mortgage Regulators, or other associations representing governmental agencies as established by rule, regulation, or order of the commissioner.
(c) Information or material that is subject to a privilege or confidentiality under subdivision (a) shall not be subject to the following:
(1) Disclosure under any federal or state law governing the disclosure to the public of information held by an officer or an agency of the federal government or the state.
(2) Subpoena or discovery, or admission into evidence, in any private civil action or administrative process, unless with respect to any privilege held by the Nationwide Mortgage Licensing System and Registry with respect to the information or material, the person to whom the information or material pertains waives, in whole or in part, in the discretion of the person, that privilege.
(3) This section shall not apply with respect to the information or material relating to the employment history of, and publicly adjudicated disciplinary and enforcement actions against, mortgage loan originators that is included in the Nationwide Mortgage Licensing System and Registry for access by the public.
(d) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 27.

 Section 22105.3 is added to the Financial Code, to read:

22105.3.
 (a) Except as otherwise provided in Section 1512 of the SAFE Act, the requirements under any federal or state law regarding the privacy or confidentiality of any information or material provided to the Nationwide Mortgage Licensing System and Registry, and any privilege arising under federal or state law, including the rules of any federal or state court, with respect to that information or material, shall continue to apply to the information or material after the information or material has been disclosed to the Nationwide Mortgage Licensing System and Registry. The information and material may be shared with all state and federal regulatory officials with mortgage industry or PACE industry oversight authority without the loss of privilege or the loss of confidentiality protections provided by federal or state law.
(b) For these purposes, the commissioner is authorized to enter agreements or share arrangements with other governmental agencies, the Conference of State Bank Supervisors, the American Association of Residential Mortgage Regulators, or other associations representing governmental agencies as established by rule, regulation, or order of the commissioner.
(c) Information or material that is subject to a privilege or confidentiality under subdivision (a) shall not be subject to the following:
(1) Disclosure under any federal or state law governing the disclosure to the public of information held by an officer or an agency of the federal government or the state.
(2) Subpoena or discovery, or admission into evidence, in any private civil action or administrative process, unless with respect to any privilege held by the Nationwide Mortgage Licensing System and Registry with respect to the information or material, the person to whom the information or material pertains waives, in whole or in part, in the discretion of the person, that privilege.
(3) This section shall not apply with respect to the information or material relating to the employment history of, and publicly adjudicated disciplinary and enforcement actions against, mortgage loan originators that is included in the Nationwide Mortgage Licensing System and Registry for access by the public.
(d) This section shall become operative on ____.

SEC. 28.

 Section 22106 of the Financial Code is amended to read:

22106.
 (a) The finance lender or broker license shall state the name of the licensee, and if the licensee is a partnership, the names of its general partners, and if a corporation or an association, the date and place of its incorporation or organization, and the address of the licensee’s principal business location. On the approval and licensing of a location pursuant to Section 22101 or 22102, the commissioner shall issue an original license endorsed to show the address of the authorized location and, if applicable, the name of the subsidiary corporation licensed to operate the location. The license shall state whether the licensee is licensed as a finance lender or a broker.
(b) (1) An application for a license for a business location outside this state shall constitute an agreement by the applicant to do all of the following:

(1)

(A) Make the licensee’s books, accounts, papers, records, and files available to the commissioner or the commissioner’s representatives in this state.

(2)

(B) Pay the reasonable expenses for travel, meals, and lodging of the commissioner or the commissioner’s representatives incurred during any investigation or examination made at the licensee’s location outside this state.

A

(2) A licensee located outside this state is not required to maintain books and records regarding licensed loans separate from those for other loans if the licensed loans can be readily identified.
(c) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 29.

 Section 22106 is added to the Financial Code, to read:

22106.
 (a) The finance lender, broker, or program administrator license shall state the name of the licensee, and if the licensee is a partnership, the names of its general partners, and if a corporation or an association, the date and place of its incorporation or organization, and the address of the licensee’s principal business location. On the approval and licensing of a location pursuant to Section 22101 or 22102, the commissioner shall issue an original license endorsed to show the address of the authorized location and, if applicable, the name of the subsidiary corporation licensed to operate the location. The license shall state whether the licensee is licensed as a finance lender, broker, or program administrator.
(b) (1) An application for a license for a business location outside this state shall constitute an agreement by the applicant to do all of the following:
(A) Make the licensee’s books, accounts, papers, records, and files available to the commissioner or the commissioner’s representatives in this state.
(B) Pay the reasonable expenses for travel, meals, and lodging of the commissioner or the commissioner’s representatives incurred during any investigation or examination made at the licensee’s location outside this state.
(2) A licensee located outside this state is not required to maintain books and records regarding licensed loans separate from those for other loans if the licensed loans can be readily identified.
(c) This section shall become operative on ____.

SEC. 30.

 Section 22107 of the Financial Code is amended to read:

22107.
 (a) Each finance lender and broker licensee shall pay to the commissioner its pro rata share of all costs and expenses, including the costs and expenses associated with the licensing of mortgage loan originators it employs, reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made. The pro rata share shall be the proportion that a licensee’s gross income bears to the aggregate gross income of all licensees as shown by the annual financial reports to the commissioner, for the costs and expenses remaining after the amount assessed pursuant to subdivision (c).
(b) On or before the 30th day of September in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid by October 31. If payment is not made by October 31, the commissioner shall assess and collect a penalty, in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(c) In the levying and collection of the assessment, a licensee shall neither be assessed for nor be permitted to pay less than two hundred fifty dollars ($250) per licensed location per year.
(d) If a licensee fails to pay the assessment on or before the 31st day of October, the commissioner may by order summarily suspend or revoke the certificate issued to the licensee. If, after an order is made, a request for a hearing is filed in writing within 30 days, and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a finance lender or broker licensee and any mortgage loan originator licensee employed by the finance lender or broker shall not conduct business pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
(e) The commissioner shall, by rule, establish the timelines, fees, and assessments applicable to applicants for original mortgage loan originator licenses, license renewals, and license changes under this division.
(f) Notwithstanding subdivisions (a) to (e), inclusive, the commissioner may by rule require licensees to pay assessments through the Nationwide Mortgage Licensing System and Registry.
(g) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 31.

 Section 22107 is added to the Financial Code, to read:

22107.
 (a) Each finance lender, broker, or program administrator licensee shall pay to the commissioner its pro rata share of all costs and expenses, including the costs and expenses associated with the licensing of mortgage loan originators it employs, reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made. The pro rata share shall be the proportion that a licensee’s gross income bears to the aggregate gross income of all licensees as shown by the annual financial reports to the commissioner, for the costs and expenses remaining after the amount assessed pursuant to subdivision (c).
(b) On or before September 30th in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid by October 31. If payment is not made by October 31, the commissioner shall assess and collect a penalty, in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.
(c) In the levying and collection of the assessment, a licensee shall neither be assessed for nor be permitted to pay less than two hundred fifty dollars ($250) per licensed location per year.
(d) If a licensee fails to pay the assessment on or before the October 31st, the commissioner may by order summarily suspend or revoke the certificate issued to the licensee. If, after an order is made, a request for a hearing is filed in writing within 30 days, and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a finance lender, broker, or program administrator licensee and any mortgage loan originator licensee employed by the finance lender or broker shall not conduct business pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.
(e) The commissioner shall, by rule, establish the timelines, fees, and assessments applicable to applicants for original mortgage loan originator licenses, license renewals, and license changes under this division.
(f) Notwithstanding subdivisions (a) to (e), inclusive, the commissioner may by rule require licensees to pay assessments through the Nationwide Mortgage Licensing System and Registry.
(g) This section shall become operative on ____.

SEC. 32.

 Section 22109 of the Financial Code is amended to read:

22109.
 (a) Upon reasonable notice and opportunity to be heard, the commissioner may deny the application for a finance lender or broker license for any of the following reasons:
(1) A false statement of a material fact has been made in the application.
(2) The applicant or an officer, director, general partner, person responsible for the applicant’s lending activities in this state, or person owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant has, within the last 10 years, been convicted of or pleaded nolo contendere to a crime, or committed an act involving dishonesty, fraud, or deceit, if the crime or act is substantially related to the qualifications, functions, or duties of a person engaged in business in accordance with this division.
(3) The applicant or an officer, director, general partner, person responsible for the applicant’s lending activities in this state, or person owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant has violated any provision of this division or the rules thereunder or any similar regulatory scheme of the State of California or a foreign jurisdiction.
(4) The applicant employs a mortgage loan originator who is not licensed, or has not initiated an application to become licensed, pursuant to this division.
(b) The application shall be considered withdrawn within the meaning of this section if the applicant fails to respond to a written notification of a deficiency in the application within 90 days of the date of the notification.
(c) The commissioner shall, within 60 days from the filing of a full and complete application for a license with the fees, either issue a license or file a statement of issues prepared in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(d) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 33.

 Section 22109 is added to the Financial Code, to read:

22109.
 (a) Upon reasonable notice and opportunity to be heard, the commissioner may deny the application for a finance lender, broker, or program administrator license for any of the following reasons:
(1) A false statement of a material fact has been made in the application.
(2) The applicant or an officer, director, general partner, person responsible for the applicant’s lending activities or administering PACE programs for the applicant in this state, or person owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant has, within the last 10 years, been convicted of or pleaded nolo contendere to a crime, or committed an act involving dishonesty, fraud, or deceit, if the crime or act is substantially related to the qualifications, functions, or duties of a person engaged in business in accordance with this division.
(3) The applicant or an officer, director, general partner, person responsible for the applicant’s lending activities or administering PACE programs for the applicant in this state, or person owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant has violated any provision of this division or the rules thereunder or any similar regulatory scheme of the State of California or a foreign jurisdiction.
(4) The applicant employs a mortgage loan originator who is not licensed, or has not initiated an application to become licensed, pursuant to this division.
(b) The application shall be considered withdrawn within the meaning of this section if the applicant fails to respond to a written notification of a deficiency in the application within 90 days of the date of the notification.
(c) The commissioner shall, within 60 days from the filing of a full and complete application for a license with the fees, either issue a license or file a statement of issues prepared in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(d) This section shall become operative on ____.

SEC. 34.

 Section 22151 of the Financial Code is amended to read:

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.
(c) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 35.

 Section 22151 is added to the Financial Code, to read:

22151.
 (a) A finance lender license, broker license, program administrator 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.
(c) This section shall become operative on ____.

SEC. 36.

 Section 22152 of the Financial Code is amended to read:

22152.
 (a) 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.
(b) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 37.

 Section 22152 is added to the Financial Code, to read:

22152.
 (a) A finance lender, broker, or program administrator 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.
(b) This section shall become operative on ____.

SEC. 38.

 Section 22153 of the Financial Code is amended to read:

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 before 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 before 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).
(c) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 39.

 Section 22153 is added to the Financial Code, to read:

22153.
 (a) If a finance lender, broker, or program administrator 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 before 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 before 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 before 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).
(c) This section shall become operative on ____.

SEC. 40.

 Section 22154 of the Financial Code is amended to read:

22154.
 (a) No A licensee shall not 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 authorization, once granted 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 both of the following are met:
(1) The activity is not prohibited by, or in violation of, the laws applicable to the affiliate or supervised financial institution, and (2) the institution.
(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.
(d) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 41.

 Section 22154 is added to the Financial Code, to read:

22154.
 (a) A licensee shall not conduct the business of making loans or administering a PACE program 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 both of the following are met:
(1) The activity is not prohibited by, or in violation of, the laws applicable to the affiliate or supervised financial institution.
(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.
(d) This section shall become operative on ____.

SEC. 42.

 Section 22155 of the Financial Code is amended to read:

22155.
 No (a) A finance lender, broker, or mortgage loan originator licensee shall not 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)

(1) 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)

(2) 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.
(b) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 43.

 Section 22155 is added to the Financial Code, to read:

22155.
 (a) A finance lender, broker, or mortgage loan originator licensee shall not 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 finance lender, broker, or mortgage loan originator 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:
(1) 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.
(2) 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.
(b) This section shall become operative on ____.

SEC. 44.

 Section 22156 of the Financial Code is amended to read:

22156.
 (a) 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.
(b) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 45.

 Section 22156 is added to the Financial Code, to read:

22156.
 (a) Finance lender, broker, program administrator, 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.
(b) This section shall become operative on ____.

SEC. 46.

 Section 22157 of the Financial Code is amended to read:

22157.
 (a) 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.
(b) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 47.

 Section 22157 is added to the Financial Code, to read:

22157.
 (a) 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.
(b) Program administrator licensees shall preserve their books, accounts, and records for at least three years after the final PACE assessment is assessed.
(c) This section shall become operative on ____.

SEC. 48.

 Section 22159 of the Financial Code is amended to read:

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. person. “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).
(e) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 49.

 Section 22159 is added to the Financial Code, to read:

22159.
 (a) Each finance lender, broker, and program administrator licensee shall file an annual report with the commissioner, on or before March 15th, 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 person. “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).
(e) This section shall become operative on ____.

SEC. 50.

 Section 22161 of the Financial Code is amended to read:

22161.
 No (a) A person subject to this division shall not do any of the following:

(a)

(1) 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)

(2) 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.

(c)

(3) Commit an act in violation of Section 1695.13 of the Civil Code.

(d)

(4) Engage in any act in violation of Section 17200 of the Business and Professions Code.

(e)

(5) Knowingly misrepresent, circumvent, or conceal, through subterfuge or device, any material aspect or information regarding a transaction to which the person is a party.

(f)

(6) Commit an act that constitutes fraud or dishonest dealings.
(b) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 51.

 Section 22161 is added to the Financial Code, to read:

22161.
 (a) A person subject to this division shall not do any of the following:
(1) 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.
(2) Make a materially false or misleading statement or representation to a property owner about the terms or conditions of an assessment contract.
(3) 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, or for making or negotiating assessment contracts, 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.
(4) Commit an act in violation of Section 1695.13 of the Civil Code.
(5) Engage in any act in violation of Section 17200 of the Business and Professions Code.
(6) Knowingly misrepresent, circumvent, or conceal, through subterfuge or device, any material aspect or information regarding a transaction to which the person is a party.
(7) Commit an act that constitutes fraud or dishonest dealings.
(b) This section shall become operative on ____.

SEC. 52.

 Section 22162 of the Financial Code is amended to read:

22162.
 No (a) A licensee shall not 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.
(b) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 53.

 Section 22162 is added to the Financial Code, to read:

22162.
 (a) A finance lender, broker, or mortgage loan originator licensee shall not 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.
(b) A program administrator licensee shall not place an advertisement disseminated primarily in this state for an assessment contract 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 assessment contract would be made or arranged.
(c) This section shall become operative on ____.

SEC. 54.

 Section 22163 of the Financial Code is amended to read:

22163.
 (a) 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.
(b) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 55.

 Section 22163 is added to the Financial Code, to read:

22163.
 (a) 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 or property owners.
(b) This section shall become operative on ____.

SEC. 56.

 Section 22164 of the Financial Code is amended to read:

22164.
 (a) 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.
(b) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 57.

 Section 22164 is added to the Financial Code, to read:

22164.
 (a) If any person engaged in the business regulated by this division refers in any advertising to rates of interest, charges, or cost of loans or assessment contracts, 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 or property owners. If the rates or costs advertised do not apply to loans or assessment contracts of all classes made or negotiated by the person, this fact shall be clearly indicated in the advertisement.
(b) This section shall become operative on ____.

SEC. 58.

 Section 22168 of the Financial Code is amended to read:

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.
(e) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 59.

 Section 22168 is added to the Financial Code, to read:

22168.
 (a) (1) 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.
(2) The commissioner may, after appropriate notice and opportunity for hearing, suspend for a period not to exceed 12 months or bar a person from engaging in business as a PACE solicitor for 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 or subject to enrollment with a program administrator 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, PACE solicitor, program administrator, or mortgage loan originator, and from engaging in any business activity on the premises where a licensed finance lender, broker, program administrator, or mortgage loan originator is conducting its business. This subdivision does not prohibit suspended or barred persons from having their personal transactions processed by a licensed finance lender, broker, mortgage loan originator, or program administrator.
(e) This section shall become operative on ____.

SEC. 60.

 Section 22169 of the Financial Code is amended to read:

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 Part 1 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.
(e) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 61.

 Section 22169 is added to the Financial Code, to read:

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, program administrator, PACE solicitor, 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, program administrator, 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) The commissioner may, after appropriate notice and opportunity for hearing, by order, censure or suspend for a period not exceeding 12 months, or bar a PACE solicitor from soliciting property owners to enter into assessment contracts on behalf of any program administrator, for any reason set forth in subdivision (a).
(c) Within 15 days from the date of a notice of intention to issue an order pursuant to subdivision (a) or (b), the person may request a hearing under the Administrative Procedure Act (Chapter 4.5 (commencing with Section 11400) of Part 1 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.
(d) 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.
(e) Persons suspended or barred under this section are prohibited from participating in any business activity of a finance lender, broker, program administrator, PACE solicitor, or mortgage loan originator, and from engaging in any business activity on the premises where a finance lender, broker, program administrator, PACE solicitor, or mortgage loan originator is conducting business.
(f) This section shall become operative on ____.

SEC. 62.

 Chapter 3.5 (commencing with Section 22680) is added to Division 9 of the Financial Code, to read:
CHAPTER  3.5. Program Administrators

22680.
 (a) A PACE solicitor shall not, on behalf of a program administrator licensed under this division, do any of the following:
(1) Solicit a property owner to enter into an assessment contract with a program administrator unless the PACE solicitor and the program administrator comply with the requirements of this chapter and any rules adopted by the commissioner.
(2) Engage in any act in violation of a law related to a PACE program.
(3) Offer an assessment contract with terms, conditions, or disclosures that do not comply with the law.
(4) Offer an assessment contract that omits terms, conditions, or disclosures required by law.
(b) A program administrator shall enroll a person as a PACE solicitor to solicit property owners to enter into an assessment contract on behalf of the program administrator in accordance with this section, including all of the following requirements:
(1) If required by rule of the commissioner, the program administrator shall require a PACE solicitor to maintain a minimum net worth of up to ten thousand dollars ($10,000) at all times.
(2) A program administrator shall investigate the background of a PACE solicitor and each natural person employed by the PACE solicitor that solicits a property owner to enter into an assessment contract on behalf of the program administrator. A program administrator may rely on a background check conducted by the Contractors’ State License Board to comply with this paragraph.
(3) A program administrator shall require a PACE solicitor to fall within one of the following:
(A) Maintain in good standing a license from the Contractors’ State License Board that authorizes the PACE solicitor to make the property improvements authorized under the PACE program.
(B) Maintain a registration in good standing with the Contractors’ State License Board as a home improvement salesperson.
(C) Be exempt from, or not subject to, licensure or registration under the Contractors’ State License Law (Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code).
(4) A program administrator shall not enroll a person as a PACE solicitor if the program administrator finds any of the following:
(A) The PACE solicitor or a principal officer of the PACE solicitor has, within the last 10 years, been convicted or pleaded nolo contendere to a felony involving dishonesty, fraud, or deceit.
(B) The PACE solicitor or a principal officer of the PACE solicitor has violated any provision of the Contractors’ State License Law (Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code) or any rule adopted under it.
(C) The PACE solicitor has a pattern of consumer complaints regarding dishonesty, misrepresentations, omissions, or inferior workmanship.
(D) The PACE solicitor intends to solicit assessment contracts in a manner that does not comply with the requirements for a PACE program in the law.
(E) The PACE solicitor does not demonstrate the ability to timely receive and respond to property owner complaints.
(5) The program administrator shall provide each PACE solicitor with training related to the solicitation of assessment contracts in accordance with the following:
(A) A program administrator shall require each PACE solicitor that solicits property owners for assessment contracts to complete at least six hours of education provided by the program administrator.
(B) The commissioner shall approve the education described in this paragraph.
(C) The education shall include all of the following topics:
(i) PACE programs and assessment contracts.
(ii) Ethics.
(iii) Fraud prevention.
(iv) Consumer protection.
(v) Fair lending.
(vi) PACE disclosures.
(vii) Senior financial abuse.
(D) The program administrator shall develop and administer a test that measures the PACE solicitor’s knowledge and comprehension in the areas of PACE programs and assessments, ethics, fraud prevention, consumer protection, fair lending, PACE disclosures, and senior financial abuse.
(6) A program administrator shall establish and implement a process for canceling the enrollment of a PACE solicitor who fails to maintain the minimum qualifications required by this section, or who violates any provision of this division.
(c) A program administrator shall establish and maintain a process to oversee the solicitation activity of each PACE solicitor that solicits a property owner on behalf of the program administrator, that complies with all of the following requirements:
(1) The oversight shall include a review of the business practices of each PACE solicitor to ensure that each PACE solicitor complies with the requirements for PACE programs and is conducting business in a fair and honest manner. The program administrator shall conduct this review at least once every two years.
(2) The program administrator shall prepare and adopt a procedures manual setting forth the procedures for a PACE solicitor to follow when soliciting a property owner to enter into an assessment contract.
(3) Each program administrator is responsible for the supervision of each PACE solicitor soliciting property owners on behalf of the program administrator.

22681.
 (a) A program administrator shall, in the manner prescribed by the commissioner, notify the commissioner of each PACE solicitor enrolled by the program administrator to solicit property owners on behalf of the program administrator.
(b) A program administrator shall, in the manner prescribed by the commissioner, timely notify the commissioner of each enrollment cancellation and withdrawal pursuant to paragraph (6) of subdivision (b) of Section 22680.

22682.
 A program administrator shall establish and maintain a process for timely responding to complaints.

22683.
 The commissioner may, pursuant to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), adopt rules regarding the participation of a program administrator in the issuance or purchase of PACE assessments in this state.

22684.
 A program administrator shall comply with all requirements in the law related to a PACE program.

22685.
 This chapter shall become operative on ____.

SEC. 63.

 Section 22700 of the Financial Code is amended to read:

22700.
 (a) Finance lender and broker licenses issued under this division shall remain in effect until they are surrendered, revoked, or suspended.
(b) Mortgage loan originator licenses issued under this division shall be renewed annually upon the payment of an annual assessment, and and, if renewed by the licensee, shall remain in effect until they are surrendered, revoked, or suspended.
(c) Surrender of a license becomes effective 30 days after receipt of an application to surrender the license or within a shorter period of time that the commissioner may determine, unless a revocation or suspension proceeding is pending when the application is filed or a proceeding to revoke or suspend or to impose conditions upon the surrender is instituted within 30 days after the application is filed. If a proceeding is pending or instituted, surrender of a license becomes effective at the time and upon the conditions that the commissioner determines.
(d) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 64.

 Section 22700 is added to the Financial Code, to read:

22700.
 (a) Finance lender, broker, and program administrator licenses issued under this division shall remain in effect until they are surrendered, revoked, or suspended.
(b) Mortgage loan originator licenses issued under this division shall be renewed annually upon the payment of an annual assessment, and, if renewed by the licensee, shall remain in effect until they are surrendered, revoked, or suspended.
(c) Surrender of a license becomes effective 30 days after receipt of an application to surrender the license or within a shorter period of time that the commissioner may determine, unless a revocation or suspension proceeding is pending when the application is filed or a proceeding to revoke or suspend or to impose conditions upon the surrender is instituted within 30 days after the application is filed. If a proceeding is pending or instituted, surrender of a license becomes effective at the time and upon the conditions that the commissioner determines.
(d) This section shall become operative on ____.

SEC. 65.

 Section 22701 of the Financial Code is amended to read:

22701.
 (a) For the purpose of discovering violations of this division or securing information required by him or her in the administration and enforcement of this division, the commissioner may at any time investigate the loans and business, and examine the books, accounts, records, and files used in the business, of every person engaged in the business of a finance lender or broker, whether the person acts or claims to act as principal or agent, or under or without the authority of this division. For the purpose of examination, the commissioner and his or her representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of all these persons.
(b) This section shall remain in effect only until ____,and as of that date is repealed.

SEC. 66.

 Section 22701 is added to the Financial Code, to read:

22701.
 (a) For the purpose of discovering violations of this division or securing information required by him or her in the administration and enforcement of this division, the commissioner may at any time investigate the loans, assessment contracts, and business, and examine the books, accounts, records, and files used in the business, of every person engaged in the business of a finance lender, broker, PACE solicitor, or program administrator, whether the person acts or claims to act as principal or agent, or under or without the authority of this division. For the purpose of examination, the commissioner and his or her representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of all these persons.
(b) This section shall become operative on ____.

SEC. 67.

 Section 22706 of the Financial Code is amended to read:

22706.
 (a) The commissioner may require the attendance of witnesses and examine under oath all persons whose testimony he or she requires relative to loans or business regulated by this division or to the subject matter of any examination, investigation, or hearing.
(b) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 68.

 Section 22706 is added to the Financial Code, to read:

22706.
 (a) The commissioner may require the attendance of witnesses and examine under oath all persons whose testimony he or she requires relative to loans, assessment contracts, or business regulated by this division or to the subject matter of any examination, investigation, or hearing.
(b) This section shall become operative on ____.

SEC. 69.

 Section 22712 of the Financial Code is amended to read:

22712.
 (a) Whenever, in the opinion of the commissioner, any person is engaged in the business as a broker or finance lender, or a mortgage loan originator, as defined in this division, without a license from the commissioner, or any licensee violates any provision of this division, any provision of an order, or any regulation adopted pursuant to this division, the commissioner may order that person or licensee to desist and to refrain from engaging in the business or further continuing that violation. If, within 30 days after the order is served, a written request for a hearing is filed and no hearing is held within 30 days thereafter, the order is rescinded. For purposes of this section, “licensee” includes a mortgage loan originator.
(b) Notwithstanding subdivision (a), if, after an investigation, the commissioner has reasonable grounds to believe that a person is conducting business in an unsafe or injurious manner, the commissioner shall, by written order addressed to that person, direct the discontinuance of the unsafe or injurious practices. The order shall be effective immediately, but shall not become final except in accordance with the provisions of Section 22717.
(c) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 70.

 Section 22712 is added to the Financial Code, to read:

22712.
 (a) Whenever, in the opinion of the commissioner, any person is engaged in business as a finance lender, broker, program administrator, or PACE solicitor, or a mortgage loan originator, as defined in this division, without a license from the commissioner, or any licensee or PACE solicitor violates any provision of this division, any provision of an order, or any regulation adopted pursuant to this division, the commissioner may order that person or licensee to desist and to refrain from engaging in the business or further continuing that violation. If, within 30 days after the order is served, a written request for a hearing is filed and no hearing is held within 30 days thereafter, the order is rescinded. For purposes of this section, “licensee” includes a mortgage loan originator.
(b) Notwithstanding subdivision (a), if, after an investigation, the commissioner has reasonable grounds to believe that a person is conducting business in an unsafe or injurious manner, the commissioner shall, by written order addressed to that person, direct the discontinuance of the unsafe or injurious practices. The order shall be effective immediately, but shall not become final except in accordance with the provisions of Section 22717.
(c) This section shall become operative on ____.

SEC. 71.

 Section 22714 of the Financial Code is amended to read:

22714.
 (a) The commissioner shall suspend or revoke any license, upon notice and reasonable opportunity to be heard, if the commissioner finds any of the following:
(1) The licensee has failed to comply with any demand, ruling, or requirement of the commissioner made pursuant to and within the authority of this division.
(2) The licensee has violated any provision of this division or any rule or regulation made by the commissioner under and within the authority of this division.
(3) A fact or condition exists that, if it had existed at the time of the original application for the license, reasonably would have warranted the commissioner in refusing to issue the license originally.
(4) There has been repeated failure by the finance lender, when making or negotiating loans, to take into consideration in determining the size and duration of loans, the financial ability of the borrower to repay the loan in the time and manner provided in the loan contract, or to refinance the loan at maturity.
(b) A master license may shall not be suspended or revoked pursuant to this section as a result of any action or failure to act by a subsidiary licensee unless grounds exist for the suspension or revocation of the master license pursuant to this section. An order suspending or revoking a license or imposing sanctions against a licensee shall not affect other licensed locations unless expressly stated in the order.
(c) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 72.

 Section 22714 is added to the Financial Code, to read:

22714.
 (a) The commissioner shall suspend or revoke any license, upon notice and reasonable opportunity to be heard, if the commissioner finds any of the following:
(1) The licensee has failed to comply with any demand, ruling, or requirement of the commissioner made pursuant to and within the authority of this division.
(2) The licensee has violated any provision of this division or any rule or regulation made by the commissioner under and within the authority of this division.
(3) A fact or condition exists that, if it had existed at the time of the original application for the license, reasonably would have warranted the commissioner in refusing to issue the license originally.
(4) There has been repeated failure by the finance lender, when making or negotiating loans, to take into consideration in determining the size and duration of loans, the financial ability of the borrower to repay the loan in the time and manner provided in the loan contract, or to refinance the loan at maturity.
(5) There has been repeated failure by the program administrator, when arranging assessment contracts with property owners, to take into consideration in determining the size and duration of the assessment contracts, the financial ability of the property owner to repay the assessment contract in the time and manner provided in the contract.
(b) A master license shall not be suspended or revoked pursuant to this section as a result of any action or failure to act by a subsidiary licensee unless grounds exist for the suspension or revocation of the master license pursuant to this section. An order suspending or revoking a license or imposing sanctions against a licensee shall not affect other licensed locations unless expressly stated in the order.
(c) This section shall become operative on ____.

SEC. 73.

 Section 22716 of the Financial Code is amended to read:

22716.
 (a) The revocation, suspension, expiration, or surrender of any license does not impair or affect the obligation of any preexisting lawful contract between the licensee and any borrower.
(b) This section shall remain in effect only until ____, and as of that date is repealed.

SEC. 74.

 Section 22716 is added to the Financial Code, to read:

22716.
 (a) The revocation, suspension, expiration, or surrender of any license does not impair or affect the obligation of any preexisting lawful contract between the licensee and any borrower or property owner.
(b) This section shall become operative on ____.

SEC. 75.

 This act shall become operative on ____. However, notwithstanding the delayed operation of the act, the Commissioner of Business Oversight may, on or after January 1, 2018, take any necessary actions using the authority granted by this act in order to ensure that the licensing of program administrators and enrollment of PACE solicitors may commence by ____, including, but not limited to, the adoption of regulations and preparation of necessary forms and procedures.

SEC. 76.

 The Legislature finds and declares that creating a comprehensive scheme to regulate program administrators is a matter of statewide concern and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this act shall apply to program administrators managing PACE programs on behalf of any public agency, including a charter city.

SEC. 77.

  No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
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