Bill Text: CA AB1341 | 2015-2016 | Regular Session | Introduced

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Bill Title: Department of Business Oversight: financial service providers: costs of licensing and regulations.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Failed) 2016-02-01 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB1341 Detail]

Download: California-2015-AB1341-Introduced.html

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BILL NUMBER: AB 1341	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Brown

                        FEBRUARY 27, 2015

   An act to amend Sections 12214, 12306, 17207, 17405.1, 22107,
22707, 23016, 23046, 50302, 50314, and 50401 of the Financial Code,
relating to financial service providers.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1341, as introduced, Brown. Department of Business Oversight:
financial service providers: costs of licensing and regulations.
   Existing law authorizes the Commissioner of Business Oversight to
require certain financial service providers that are licensed and
regulated by the Department of Business Oversight, including, among
others, check sellers, proraters, escrow agents, finance lenders and
brokers, residential mortgage lenders or servicers, and businesses
making deferred deposit transactions, to pay their pro rata share of
the costs and expenses of the department's licensing and regulating
activities. A violation of the licensing laws applicable to these
financial service providers is a crime.
   This bill would revise these provisions to require a licensee
under the supervision of the department to pay to the commissioner
its pro rata share of all costs and expenses in an amount sufficient,
in the commissioner's judgment, to meet the expenses of the
department in administering the applicable licensing law for the next
year that includes, but shall not be limited to, the cost of routine
examinations and the provision of a reasonable reserve for
contingencies, with a consideration of any deficit or less any
surplus actually incurred in the prior fiscal year, as specified. The
bill would make May 31 the uniform date for the commissioner to
notify these licensees of the amount assessed for the next year, and
generally give 30 days to all of these licensees to pay the
assessment. The bill would authorize the commissioner, whenever he or
she found it is necessary or advisable, to conduct a nonroutine
examination of, or to devote any extraordinary attention to, any
licensee and charge and collect from that licensee the department's
expenses, including, but not limited to, hourly wages and travel
costs, for doing so. The bill would authorize the commissioner to
maintain an action for the recovery of these costs in any court of
competent jurisdiction.
   This bill would raise the minimum assessment for a licensee under
the Check Sellers, Bill Payers and Proraters Law from $150 to $1,000,
and the California Finance Lenders Law from $250 to $800. The bill
would modify the minimum calculation of an assessment for a licensee
under the Escrow Law based on $5,000 per main office and $3,500 per
each branch location, and the California Residential Mortgage Lending
Act, based on mortgages loan originated by the licensee.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 12214 of the Financial Code is amended to read:

   12214.  (a) An applicant at the time of filing an application for
a license under this division shall pay to the commissioner the sum
of fifty dollars ($50) as a fee for investigating the application and
two hundred dollars ($200) as an application fee. The investigation
fee and application fee are not refundable if an application is
denied or withdrawn. 
   (b) (1) Each licensee shall pay to the commissioner its pro rata
share of all costs and expenses, 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 programs in the year in which such
assessment is made. The pro rata share shall be the proportion which
a licensee's gross income bears to the aggregate gross income of all
licensees as shown by the annual financial reports to the
commissioner. The pro rata share shall not include the costs of any
examinations provided for in Section 12306, unless they cannot be
collected from the licensee examined.  
   (b) (1) Each licensee under the supervision of the department
shall pay to the commissioner its pro rata share of all costs and
expenses in an amount sufficient, in the commissioner's judgment, to
meet the expenses of the department in administering the law for the
next year that shall include, but not be limited to, the cost of
examination pursuant to Section 12306, and the provision of a
reasonable reserve for contingencies, with a consideration of any
deficit or less any surplus actually incurred in the prior fiscal
year. The pro rata share shall be determined by the proportion which
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 paragraph (3). 
   (2) On or before the  30th   31st  day
of May in each year, the commissioner shall notify each licensee
 by mail  of the amount assessed and levied against
it and that amount shall be paid within  20   30
 days thereafter. If payment is not made within 20
  30  days, the commissioner  shall
  may  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.
   (3) In the levying and collection of the assessment, a licensee
shall not be assessed for nor be permitted to pay less than 
one hundred fifty dollars ($150)   one thousand dollars
($1,000)  per year.
   (4) If a licensee fails to pay the assessment on or before the
30th day of June following the day upon which payment is due, the
commissioner may by order summarily suspend or revoke the certificate
issued to such licensee. If, after such an order is made, a request
for hearing is filed in writing 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 licensee shall not conduct business pursuant to this division
except as may be permitted by order of the commissioner; provided,
however, that the revocation, suspension or surrender of a
certificate shall not affect the powers of the commissioner as
provided in this division.
  SEC. 2.  Section 12306 of the Financial Code is amended to read:
   12306.   (a)    The cost of  every
  a routine  examination of a licensee or other
person subject to this division shall be  paid to the
commissioner by the licensee or person examined, and the commissioner
may maintain an action for the recovery of these costs in any court
of competent jurisdiction. In determining the cost of an examination,
the commissioner may use the estimated average hourly cost for all
persons performing examinations of licensees or other persons subject
to this division for the fiscal year.   included in the
a   nnual assessment pursuant to Section 12214. The cost of
a routine examination shall be determined by the expenses deemed
necessary by the department to carry out its duties, including, but
not limited to, the estimated cost for all persons performing
examinations for the fiscal year.  For the purposes of this
section only, no person other than a licensee shall be deemed to be a
person subject to this division unless and until the person is
determined to be a person subject to this division by an
administrative hearing in accordance with Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code or by a judicial hearing in any court of competent jurisdiction.

   (b) Whenever in the judgment of the commissioner it is necessary
or advisable to conduct a nonroutine examination of, or to devote any
extraordinary attention to, any licensee, the commissioner may do so
and charge and collect from that licensee an amount not exceeding
the department's expenses, including, but not limited to, the average
hourly cost of each examiner engaged in the examination and
compensation of employees. The commissioner may maintain an action
for the recovery of these costs in any court of competent
jurisdiction.  
   (c) Whenever in the judgment of the commissioner it is necessary
or expedient for any examiner engaged in any examination to travel
within or outside this state, the commissioner may charge for the
travel expenses of the examiner. 
  SEC. 3.  Section 17207 of the Financial Code is amended to read:
   17207.  The commissioner shall charge and collect the following
fees and assessments:
   (a) For filing an application for an escrow agent's license, six
hundred twenty-five dollars ($625) for the first office or location
and four hundred twenty-five dollars ($425) for each additional
office or location.
   (b) For filing an application for a duplicate of an escrow agent's
license lost, stolen, or destroyed, or for replacement, upon a
satisfactory showing of the loss, theft, destruction, or surrender of
certificate for replacement, two dollars ($2).
   (c) For investigation services in connection with each
application, one hundred dollars ($100), and for investigation
services in connection with each additional office application, one
hundred dollars ($100).
   (d) For holding a hearing in connection with the application, as
set forth under Section 17209.2, the actual costs experienced in each
particular instance. 
   (e) (1) Each escrow agent shall pay to the commissioner for the
support of this division for the ensuing year an annual license fee
not to exceed two thousand eight hundred dollars ($2,800) for each
office or location.  
   (e) (1) Each licensee under this division shall pay to the
commissioner its pro rata share of all costs and expenses in an
amount sufficient, in the commissioner's judgment, to meet the
expenses of the department in administering the law for the next year
that shall include, but not be limited to, the cost of inspection
and examination pursuant to Section 17405.1, and the provision of a
reasonable reserve for contingencies, with a consideration of any
deficit or less any surplus actually incurred in the prior fiscal
year. The assessment shall be determined by a pro rata share of the
proportion which a licensee's gross income bears to the aggregate
gross income of all licensees, as shown by the annual financial
statements to the commissioner, for the costs and expenses remaining
after assessing up to five thousand dollars ($5,000) per main office
and up to three thousand five hundred dollars ($3,500) for each
branch location. 
   (2) On or before May  30   31  in each
year, the commissioner shall notify each escrow agent by mail of the
amount of the annual license fee levied against it, and that the
payment of the invoice is payable by the escrow agent within 30 days
after receipt of notification by the commissioner.
   (3) If payment is not made within 30 days, the commissioner may
assess and collect a penalty, in addition to the annual license fee,
of 10 percent of the fee for each month or part of a month that the
payment is delayed or withheld.
   (4) If an escrow agent fails to pay the amount due on or before
the June 30 following the day upon which payment is due, the
commissioner may by order summarily suspend or revoke the certificate
issued to the company.
   (5) If, after an order is made pursuant to paragraph (4), a
request for a hearing is filed in writing 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 company 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.
   (f) Fifty dollars ($50) for investigation services in connection
with each application for qualification of any person under Section
17200.8, other than investigation services under subdivision (c) of
this section.
   (g) A fee not to exceed twenty-five dollars ($25) for the filing
of a notice or report required by rules adopted pursuant to
subdivision (a) or Section 17203.1. 
   (h) (1) If costs and expenses associated with the enforcement of
this division, including overhead, are or will be incurred by the
commissioner during the year for which the annual license fee is
levied, and that will or could result in the commissioner's incurring
of costs and expenses, including overhead, in excess of the costs
and expenses, including overhead, budgeted for expenditure for the
year in which the annual license fee is levied, then the commissioner
may levy a special assessment on each escrow agent for each office
or location in an amount estimated to pay for the actual costs and
expenses associated with the enforcement of this division, including
overhead, in an amount not to exceed one thousand dollars ($1,000)
for each office or location. The commissioner shall notify each
escrow agent by mail of the amount of the special assessment levied
against it, and that payment of the special assessment is payable by
the escrow agent within 60 days of receipt of notification by the
commissioner. The funds received from the special assessment shall be
deposited into the State Corporations Fund and shall be used only
for the purposes for which the special assessment is made. 

   (2) If payment is not made within 60 days, the commissioner may
assess and collect a penalty, in addition to the special assessment,
of 10 percent of the special assessment for each month or part of a
month that the payment is delayed or withheld. If an escrow agent
fails to pay the special assessment on or before 60 days following
the day upon which payment is due, the commissioner may by order
summarily suspend or revoke the certificate issued to the company. If
an order is made under this subdivision, the provisions of paragraph
(5) of subdivision (e) shall apply.  
   (3) If the amount collected pursuant to this subdivision exceeds
the actual costs and expenses, including overhead, incurred in the
administration and enforcement of this division and any deficit
incurred, the excess shall be credited to each escrow agent on a pro
rata basis. 
  SEC. 4.  Section 17405.1 of the Financial Code is amended to read:
   17405.1.   (a)    The cost of  every
  a routine  inspection and examination of a
licensee or other person subject to this division shall be 
paid to the commissioner by the licensee or person examined, and the
commissioner may maintain an action for the recovery of these costs
in any court of competent jurisdiction. In determining the cost of an
inspection or examination, the commissioner may use the estimated
average hourly cost for all persons performing inspections or
examinations of licensees or other persons subject to this division
for the fiscal year.   included in the annual assessment
pursuant to Section 17207. The cost of a routine inspection or
examination shall be determined by the expenses deemed necessary by
the department to carry out its duties, including, but not limited
to, the estimated cost for all persons performing inspections and
examinations for the fiscal year.  
   (b) Whenever in the judgment of the commissioner it is necessary
or advisable to conduct a nonroutine inspection, including an
indoctrination or preliminary examination in subdivision (d) of
Section 17405, or conduct an examination of, or to devote any
extraordinary attention to, any licensee, the commissioner may do so
and charge and collect from the licensee an amount not exceeding the
department's expenses, including, but not limited to, the average
hourly cost for each examiner engaged in the examination and
compensation of employees. The commissioner may maintain an action
for the recovery of these costs in any court of competent
jurisdiction.  
   (c) Whenever in the judgment of the commissioner it is necessary
or expedient for any examiner engaged in any examination to travel
within or outside this state, the commissioner may charge for the
travel expenses of the examiner.  
    For 
    (d)     For  the purposes of this
section only, no person other than a licensee shall be deemed to be a
person subject to this division unless and until the person is
determined to be a person subject to this division by an
administrative hearing in accordance with Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code or by a judicial hearing in any court of competent jurisdiction.

  SEC. 5.  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).  
licensee under this division shall pay to the commissioner its pro
rata share of all costs and expenses in an amount sufficient, in the
commissioner's judgment, to meet the expenses of the department in
administering the law for the next year that shall include, but not
be limited to, the costs of examination pursuant to Section 22707,
and the provision of a reasonable reserve for contingencies, with a
consideration of any deficit or less any surplus actually incurred in
the prior fiscal year. The pro rata share shall be determined by the
proportion which 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   31st  day
of  September   May  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.   within 30 days therea   fter.  If
payment is not made  by October 31,   within 30
days,  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)   eight
hundred dollars ($800)  per licensed location per year.
   (d) If a licensee fails to pay the assessment on or before the
 31st day of October,   30th day of June
following the day upon which payment is due.  the commissioner
may by order summarily suspend or revoke the certificate issued to
the licensee. If, after an order is made, a request for 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.
  SEC. 6.  Section 22707 of the Financial Code is amended to read:
   22707.  (a) The cost of  each   a routine
 examination of a licensee or a person subject to this division
shall be  paid to the commissioner by the licensee or person
examined, and the commissioner may maintain an action for the
recovery of the cost in any court of competent jurisdiction. In
determining the cost of an examination, the commissioner may use the
estimated average hourly cost for all persons performing examinations
of licensees or other persons subject to this division for the
fiscal year.   included in the annual assessment
pursuant to Section 22107. The cost of a routine examination shall be
determined by the expenses deemed necessary by the department to
carry out its duties, including, but not limited to, the estimated
cost for all persons performing examinations for the fiscal year.

   (b) For the purpose of this section only, no person other than a
licensee shall be deemed to be a person subject to this division
until the person is determined to be a person subject to this
division by an administrative hearing in accordance with Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code or by a judicial hearing in any court of
competent jurisdiction. 
   (c) Whenever in the judgment of the commissioner it is necessary
or advisable to conduct a nonroutine examination of, or to devote any
extraordinary attention to, any licensee, the commissioner may do so
and charge and collect from the licensee an amount not exceeding the
department's expenses, including, but not limited to, the estimated
average hourly cost for all persons performing the examinations and
compensation of employees. The commissioner may maintain an action
for the recovery of the cost in any court of competent jurisdiction.
 
   (d) Whenever in the judgment of the commissioner it is necessary
or expedient for any examiner engaged in any examination to travel
within or outside this state, the commissioner may charge for the
travel expenses of the examiner. 
  SEC. 7.  Section 23016 of the Financial Code is amended to read:
   23016.  (a) Each licensee  shall pay to the commissioner
its pro rata share of all costs and expenses 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 assessment will be based on the
number of locations.   under this division shall pay the
commissioner its pro rata share of all costs and expenses in an
amount sufficient, in the commissioner's judgment, to meet the
expenses of the department in administering the law for the next year
that   shall include, but not be limited to, the cost of
examination pursuant to Section 23046, and the provision of a
reasonable reserve for contingencies, with a consideration of any
deficit or less any surplus actually incurred in the prior fiscal
year. 
   (b) On or before the  20th  30th  day of
May in each year, the commissioner shall notify each licensee
 by mail  of the amount assessed and levied against
it and that amount shall be paid within 30 days thereafter. If
payment is not made within 30 days, the commissioner may 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) If a licensee fails to pay the assessment on or before the
30th day of June following the day upon which payment is due, the
commissioner may by order summarily suspend or revoke the certificate
issued to the licensee. If, after an order is made, a request for
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 licensee 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.
  SEC. 8.  Section 23046 of the Financial Code is amended to read:
   23046.  (a) For the purpose of discovering violations of this
division or securing information required by the commissioner in the
administration and enforcement of this division, the commissioner may
at any time, but not less than once every two years, investigate the
business of deferred deposits, and examine the books, accounts,
records, and files used in the business of deferred deposit
transactions, of every person engaged in the business of deferred
deposit transactions, whether the person acts or claims to act as a
principal or an agent, or under or without the authority of this
division. For the purpose of examination, the commissioner and the
commissioner's 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) The cost of  each   a routine 
examination of a licensee or a person subject to this division shall
be  paid to the commissioner by the licensee or person
examined, and the commissioner may maintain an action for the
recovery of the cost in any court of competent jurisdiction. In
determining the cost of an examination, the commissioner may use the
estimated average hourly cost for all persons performing examinations
of licensees or other persons subject to this division for the
fiscal year.   included in the annual assessment
pursuant to Section 23016. The cost of a   routine
inspection or examination shall be determined by the expenses deemed
necessary by the department to carry out its duties, including, but
not limited to, the estimated cost for all persons performing
inspections and examinations for the fiscal year.  
   (c) Whenever in the judgment of the commissioner it is necessary
or advisable to conduct a nonroutine examination of, or to devote any
extraordinary attention to, any licensee, the commissioner may do so
and charge and collect from the licensee an amount not exceeding the
department's expenses, including, but not limited to, the estimated
average hourly cost for all persons performing the examinations and
compensation of employees. The commissioner may maintain an action
for the recovery of the cost in any court of competent jurisdiction.
 
   (d) Whenever in the judgment of the commissioner it is necessary
or expedient for any examiner engaged in any examination to travel
within or outside this state, the commissioner may charge for the
travel expenses of the examiner. 
  SEC. 9.  Section 50302 of the Financial Code is amended to read:
   50302.  (a) As often as the commissioner deems necessary and
appropriate, but at least once every 48 months, the commissioner
shall examine the affairs of each residential mortgage lender and
servicer licensee for compliance with this division. The commissioner
shall appoint suitable persons to perform the examination. The
commissioner and his or her appointees may examine the books,
records, and documents of the licensee, and may examine the licensee'
s officers, directors, employees, or agents
                under oath regarding the licensee's operations. The
commissioner may cooperate with any agency of the state or federal
government, other states, agencies, the Federal National Mortgage
Association, or the Federal Home Loan Mortgage Corporation. The
commissioner may accept an examination conducted by one of these
entities in place of an examination by the commissioner under this
law, unless the commissioner determines that the examination does not
provide information necessary to enable the commissioner to fulfill
his or her responsibilities under this division.
   (b) The commissioner shall provide a written statement of the
findings of the examination, issue a copy of that statement to each
licensee's principals, officers, or directors, and take appropriate
steps to ensure correction of any violations of this division.
   (c) Affiliates of a licensee are subject to examination by the
commissioner on the same terms as the licensee, but only when reports
from, or examination of, a licensee provides documented evidence of
unlawful activity between a licensee and affiliate benefiting,
affecting, or arising from the activities regulated by this division.

   (d) The residential mortgage lender or servicer licensee shall
pay, and the commissioner shall assess,  in the annual
assessment,  the  reasonable expenses  
cost  of any examination of the licensee and affiliates,
consistent with the requirements of subdivision (c) of Section 50314.

   (e) The statement of the findings of an examination shall belong
to the commissioner and shall not be disclosed to anyone other than
the licensee, law enforcement officials, or other state or federal
regulatory agencies for further investigation and enforcement.
Reports required of licensees by the commissioner under this division
and results of examinations performed by the commissioner under this
division are the property of the commissioner.
  SEC. 10.  Section 50314 of the Financial Code is amended to read:
   50314.  (a) Every person subject to this division shall keep
documents and records that will properly enable the commissioner to
determine whether the residential mortgage lending or residential
mortgage loan servicing functions performed by that person comply
with the provisions of this division and with all rules and orders
made by the commissioner under this division. Upon request of the
commissioner, residential mortgage lenders and residential mortgage
loan servicers 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) The business documents and records of every residential
mortgage lender or residential mortgage loan servicer, whether
required to be licensed under this division or not, are subject to
inspection and examination by the commissioner at any time without
prior notice. The provisions of this subdivision shall not apply to
persons specified in subdivision (g) of Section 50003.
   Any person subject to this division shall, upon request and within
the time specified in the request, allow inspection and copying of
any documents and records by the commissioner or his or her
authorized representative.
   (c) The cost of  every   a routine 
inspection and examination of a licensee or other person subject to
this division shall be  paid to the commissioner by the
licensee or person examined, and the commissioner may maintain an
action for the recovery of these costs in any court of competent
jurisdiction. In determining the cost of any inspection or
examination, the commissioner may use the estimated average hourly
cost, including overhead, for all persons performing inspections or
examinations of licensees or other persons subject to this division
for the fiscal year.   included in the annual assessment
pursuant to Section 50401. The cost of a routine inspection or
examination shall be determined by the   expenses deemed
necessary by the department to carry out its duties, including, but
not limited to, the estimated cost for all persons performing
inspections and examinations. 
   For the purpose of this subdivision only, no person other than a
licensee shall be deemed to be a person subject to this division
unless and until the person is determined to be a person subject to
this division by an administrative hearing in accordance with Chapter
5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2
of the Government Code, or by a judicial hearing in any court of
competent jurisdiction.
   (d) Investigation and examination reports prepared by the
commissioner's duly designated representatives are not public
reports. Those reports may be disclosed to the officers or directors
of a licensee that is the subject of the report for the purpose of
corrective action by the officers or directors. Such a disclosure
shall not operate as a waiver of the exemption specified in
subdivision (d) of Section 6254 of the Government Code. 
   (e) Whenever in the judgment of the commissioner it is necessary
or advisable to conduct a nonroutine examination of, or to devote any
extraordinary attention to, any licensee, the commissioner may do so
and charge and collect from the licensee an amount not exceeding the
department's expenses, including, but not limited to, the estimated
average hourly cost for all persons performing the examinations and
compensation of employees. The commissioner may maintain an action
for the recovery of the cost in any court of competent jurisdiction.
 
   (f) Whenever in the judgment of the commissioner it is necessary
or expedient for any examiner engaged in any examination to travel
within or outside this state, the commissioner may charge for the
travel expenses of the examiner. 
  SEC. 11.  Section 50401 of the Financial Code is amended to read:
   50401.  (a) In addition to other fees and reimbursements required
to be paid under this division, each  residential mortgage
lender or servicer licensee shall pay to the commissioner an amount
equal to the lesser of: (1) its pro rata share of all costs and
expenses (including overhead and the maintenance of a prudent reserve
not to exceed 90 days' costs and expenses) that the commissioner
reasonably expects to incur in the current fiscal year in the
administration of this division and not otherwise recovered by the
commissioner under this division or from the State Corporations Fund,
plus a deficit or less a surplus actually incurred during the prior
fiscal year; or (2) five thousand dollars ($5,000). The pro rata
share shall be the greater of either one thousand dollars ($1,000) or
the sum of: (A) a number derived from the ratio of the aggregate
principal amount of the mortgage loans secured by residential real
property originated by the licensee to all mortgage loans secured by
residential real property originated by all licensees under this
division, as shown by the annual financial reports to the
commissioner, which number is then multiplied by one-half of the
costs and expenses estimated by the commissioner for the current
fiscal year; plus (B) a number derived from the ratio of the average
value of mortgage loans secured by residential real property serviced
by a licensee to the average value of all mortgage loans secured by
residential real property serviced by all licensees under this
division, as shown by the annual financial reports to the
commissioner, which number is then multiplied by one-half of the
costs and expenses estimated by the commissioner for the current
fiscal year. For the purposes of this section, the "principal amount"
of a mortgage loan means the initial total amount a borrower is
obligated to repay the lender and the "average value" of loans
serviced means the sum of the aggregate dollar value of all mortgage
loans secured by residential real property serviced by a licensee,
calculated as of the last day of each month in the calendar year just
ended, divided by 12.   licensee shall pay to the
commissioner a pro rata share of all costs and expenses in an amount
sufficient, in the commissioner's judgment, to meet the expenses of
the department in administering the law for the next year that shall
include,   but not be limited to, the cost of examination
pursuant to Sections 50302 and 50314, and the provision of a
reasonable reserve for contingencies, as provided in subdivision (b).
 
   (b) Each licensee under this division shall pay to the
commissioner its pro rata share of all costs and expenses deemed
necessary by the department to carry out its duties and maintain a
reasonable reserve for contingencies for the next fiscal year,
considering any deficit or less any surplus actually incurred in the
prior fiscal year, or fifteen thousand dollars ($15,000). The pro
rata share shall be the greater of either two thousand five hundred
dollars ($2,500) or the sum of: (1) a number derived from the ratio
of the aggregate principal amount of the mortgage loans secured by
residential real property originated by the licensee to all mortgage
loans secured by residential real property originated by all
licensees under this division, as shown by the annual financial
reports to the commissioner, which number is then multiplied by
one-half of the costs and expenses estimated by the commissioner for
the next fiscal year; plus (2) a number derived from the ratio of the
average value of mortgage loans secured by residential real property
serviced by a licensee to the average value of all mortgage loans
secured by residential real property serviced by all licensees under
this division, as shown by the annual financial reports to the
commissioner, which number is then multiplied by one-half of the
costs and expenses estimated by the commissioner for the next fiscal
year. For the purposes of this section, the "principal amount" of a
mortgage loan means the initial total amount a borrower is obligated
to repay the lender and the "average value" of loans serviced means
the sum of the aggregate dollar value of all mortgage loans secured
by residential real property serviced by a licensee, calculated as of
the last day of each month in the calendar year just ended, divided
by 12. 
   In order for the commissioner to calculate the assessment under
this section, each licensee shall file an annual report for the
calendar year just ended containing the information required by the
commissioner on or before March 1 of the year in which the assessment
is to be calculated.
   In determining the amount assessed, the commissioner shall
consider all appropriations from the State Corporations Fund for the
support of this division and all reimbursements provided for under
this division. 
   (b) 
    (c)  In no case shall the reimbursement, payment, or
other fee authorized by this section exceed the cost, including
overhead, reasonably incurred in the administration of this division,
and the maintenance of a prudent reserve not to exceed 90 days'
costs and expenses. 
   (c) 
    (d)  On or before the 30th day of September in each
year, the commissioner shall notify each licensee by mail of the
amount assessed and levied against it and that amount shall be paid
within 20 days. If payment is not made within 20 days, 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. 
   (d) 
    (e)  If a licensee fails to pay the assessment on or
before the 30th day following the day upon which payment is due, the
commissioner may by order summarily suspend or revoke the license
issued to the licensee. An order issued under this section is not
stayed by the filing of a request for a hearing. If, after an order
is made, the request for hearing is filed in writing within 15 days
from the date of service of the order and a hearing is not held
within 60 days of the filing, the order is deemed rescinded as of its
effective date. During a period when its license is revoked or
suspended, a licensee shall not conduct business pursuant to this
division except as may be permitted by further order of the
commissioner. However, the revocation, suspension, or surrender of a
license shall not affect the powers of the commissioner as provided
in this division.