Bill Text: CA SB1482 | 2023-2024 | Regular Session | Amended
Bill Title: Commercial financing.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Engrossed) 2024-08-15 - From committee: Do pass as amended. (Ayes 11. Noes 0.) (August 15). [SB1482 Detail]
Download: California-2023-SB1482-Amended.html
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Amended
IN
Assembly
June 25, 2024 |
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Amended
IN
Senate
May 16, 2024 |
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Amended
IN
Senate
April 09, 2024 |
CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Senate Bill
No. 1482
| Introduced by Senators Glazer and Limón (Coauthor: Senator Min) |
February 16, 2024 |
An act to amend Section 90000 of, and to add Chapter 11 (commencing with Section 90020) to Division 24 of, the Financial Code, relating to financing.
LEGISLATIVE COUNSEL'S DIGEST
SB 1482, as amended, Glazer.
Commercial financing.
Existing law, the California Consumer Financial Protection Law (CCFPL), establishes certain consumer protections relating to consumer financial products, practices, and services, including, among others, making it unlawful for covered persons or service providers, as defined, to, among other acts, engage in unlawful, unfair, deceptive, or abusive acts or practices with respect to consumer financial products or services. Existing law establishes that the purpose of the CCFPL is to promote consumer welfare, fair competition, and wealth creation in this state by promoting, among other things, nondiscriminatory access to consumer financial products and services that are understandable and not unfair, deceptive, or abusive. Existing law authorizes the Department of Financial Protection and Innovation, under the direction of the Commissioner of Financial Protection and Innovation, to
prescribe rules regarding registration requirements applicable to a covered person in the business of offering or providing a consumer financial product or service, as defined, and rules requiring the payment of registration fees.
This bill would expand the purposes of the CCFPL to include the protection of small businesses from abusive financial practices, as specified. The bill would prohibit a person from engaging in the business of offering to provide or providing commercial financing transactions or brokerage services to California residents recipients without first registering with the commissioner, as specified. The bill would impose various requirements related to registration for this purpose, including, among others, imposing an application fee of $350. The bill would
require a registrant to pay an annual registration fee of $100 plus an assessment equal to the registrant’s pro rata share of all costs and expenses associated with the administration of the CCFPL, as specified. The bill would require a registrant to submit an annual report to the commissioner, as specified. Under the bill, a registration would be effective until it is revoked by the commissioner or surrendered by the registrant. The bill would impose various duties on commercial financing providers and brokers, including, among other things, prohibiting the taking of a confession of judgment or power of attorney at any time before a default, as specified.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 90000 of the Financial Code is amended to read:90000.
(a) The Legislature finds and declares all of the following:(1) California consumers are vulnerable to abuse if the state lacks a dedicated financial services regulator with broad authority over providers of financial products and services. The lack of such a regulator has left consumers vulnerable to abuse and forced California businesses to compete with unscrupulous providers. The financial victimization of economically vulnerable consumers, including individuals who lack a safety net, not only harms the individual but also has a broader social and economic cost on all of California, and could lead to increased caseloads for social safety net programs. These problems become even more
acute in times of crisis, including the global COVID-19 pandemic and economic fallout. Consequently, where feasible, the Legislature should enact statutory measures to protect California residents from financial abuses in the marketplace for financial products and services.
(2) Robust consumer protections enable wealth building and promote a vibrant economy. They are especially important among various populations, including, but not limited to, military service members, seniors, students, and new Californians. Unfair, deceptive, or abusive practices in the provision of financial products and services undermine the public confidence that is essential to the continued functioning of the financial system and sound extensions of credit to consumers.
(3) Technological
innovation offers great promise to the more effective and efficient provision of consumer financial products and services to the population of California and also poses risks to consumers and challenges to law enforcement in addressing those risks.
(4) Small business owners are often similarly situated as consumers with regards to their sophistication and bargaining power relative to providers of financial services and products. Many of the rationales supporting legal protections for consumers apply also to small business owners. Small businesses have a better chance to survive and grow if they are able to access safe and effective financial products and are protected from unfair, deceptive, or abusive practices when accessing financial products and services.
(5) It is
the intent of the Legislature to enact the California Consumer Financial Protection Law to strengthen consumer protections by expanding the ability of the Department of Financial Protection and Innovation to improve accountability and transparency in the California financial system, provide consumer financial education, and protect consumers and small businesses from abusive financial practices, while prioritizing the prevention of unethical businesses from harming the most vulnerable populations including military service members, seniors, students, low- and moderate-income individuals, and new Californians.
(b) The purpose of the California Consumer Financial Protection Law shall be to promote consumer welfare, fair competition, and wealth creation in this state by doing all of the following:
(1) Promoting nondiscriminatory access to responsible, affordable credit on terms that reasonably reflect consumers’ ability to repay.
(2) Promoting nondiscriminatory access to consumer financial products and services that are understandable and not unfair, deceptive, or abusive.
(3) Protecting consumers from discrimination and unfair, deceptive, and abusive acts and practices in connection with financial practices and services.
(4) Promoting nondiscriminatory consumer-protective innovation in consumer financial products and services.
(5) Promoting the interests of small businesses and protecting them from harm in connection with financial
practices and services, in manners similar to those undertaken for consumers.
SEC. 2.
Chapter 11 (commencing with Section 90020) is added to Division 24 of the Financial Code, to read:CHAPTER 11. Registration of Covered Persons
Article 1. General Provisions
90020.
It is the intent of the Legislature to require covered persons specified by this chapter to be registered pursuant to this division. The purpose of this chapter is to supplement any registration requirements prescribed by the department pursuant to Section 90009. The limitations imposed by Section 90009.5 on registration requirements prescribed by the department pursuant to Section 90009 do not apply to the registration requirements of this chapter.90021.
For purposes of this chapter, the following definitions shall apply except as otherwise provided in this chapter or if the context clearly indicates otherwise:(a) “Applicant” means any person who applies for registration under this division.
(b) “Branch office” means a location of the applicant other than the applicant’s principal place of business identified in a registration application or an amended application where the applicant offers or provides financial products or services to California residents.
(c) “California resident” has the same meaning as
“resident” as that term is defined in Section 17014 of the Revenue and Taxation Code.
(d) “Commercial financing” has the same meaning as that term is defined in Section 22800.
(e) (1) “Commercial financing brokerage services” means the following acts in connection with a commercial financing transaction:
(A) Transmitting sensitive data about a prospective recipient to a commercial financing provider with the expectation of compensation in connection with making a referral.
(B) Making a referral to a commercial financing provider under an agreement with the commercial financing provider that a prospective recipient referred by the
person to the commercial financing provider meets certain criteria involving sensitive data.
(C) Participating in a commercial financing negotiation between a commercial financing provider and prospective recipient.
(D) Counseling, advising, or making recommendations to a prospective recipient about a commercial financing transaction based on the prospective recipient’s sensitive data.
(E) (i) Participating in the preparation of commercial financing documents, including commercial financing applications, other than providing a prospective recipient blank copies of commercial financing documents.
(ii) Transmitting information that is not
sensitive data to a commercial financing provider at the request of a prospective recipient shall not, by itself, constitute participation in the preparation of commercial financing documents within the meaning of this subparagraph.
(F) Communicating to a prospective recipient a commercial financing provider’s commercial financing approval decisions.
(G) Charging a fee to a prospective recipient for services related to a prospective recipient’s application for a commercial financing transaction from a commercial financing provider.
(2) Notwithstanding paragraph (1), the following acts in connection with a commercial financing transaction do not constitute “commercial financing brokerage services”:
(A) Performing support tasks, including, but not limited to, typing, word processing, data entry, filing, billing, answering telephone calls, taking and receiving messages, and scheduling, in support of the performance by a broker of any of the activities described in subparagraphs (E) to (G), inclusive, of paragraph (1).
(B) Furnishing a consumer report to a covered entity by a consumer reporting agency in accordance with subsection (a) or (c) of Section 1681b of Title 15 of the United States Code.
(C) Furnishing a consumer credit report, as defined in Section 1785.3 of the Civil Code, to a covered entity by a consumer credit reporting agency in accordance with subdivision (a) or paragraph (1) of subdivision (b) of
Section 1785.11 of the Civil Code.
(D) Furnishing a prequalifying report, as defined in Section 1785.3 of the Civil Code, to a covered entity by a consumer credit reporting agency in accordance with paragraph (2) of subdivision (b) of Section 1785.11 of the Civil Code.
(E) Distributing or disseminating to a prospective recipient of a provider’s marketing materials or factual information about the provider, its lending activities, or its loan products, including, but not limited to, the provider’s interest rates, the provider’s minimum or maximum loan amounts or loan periods, or a general description of the provider’s underwriting criteria.
(3) For purposes of this subdivision, “sensitive data” means any of the following:
(A) A bank account number.
(B) A bank statement.
(C) A credit or debit card account number.
(D) A credit score, as defined in Section 1785.15.1 of the Civil Code.
(4) For purposes of this subdivision, “referral” means the introduction of a prospective recipient to a commercial financing provider, or the delivery of a prospective recipient’s contact information to a commercial financing provider, for the purposes of making an introduction.
(f) “Commercial financing transaction” means a consummated commercial financing transaction for
which a disclosure is provided required in accordance with subsection (a) of Section 920 of Title 10 of the California Code of Regulations.
(g) “Control” as used in subdivision (i) of this section and paragraph (13) of subdivision (a) of Section 90029 means possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person with respect to the offering or provision of subject products, whether through the ownership of voting securities, by contract, or otherwise.
(h) “Form MU1” means the uniform licensing form, entitled “NMLS Company Form” developed
by the Nationwide Multistate Licensing System and Registry and used to provide information on a company or sole proprietor registration applicant.
(i) “Form MU2” means the uniform licensing form, entitled “NMLS Individual Form” developed by the Nationwide Multistate Licensing System and Registry and used to provide information on an individual who directly or indirectly owns or controls the activities of the applicant, including principal officers, directors, and other individuals specified on Form MU1.
(j) “Individual” means a natural person.
(k) “NMLS” means the Nationwide Multistate Licensing System and Registry.
(l) “Principal officers” means the individuals
performing the functions of the president, chief executive officer, treasurer, chief financial officer, and the chief operating officer, and the officer primarily responsible for the conduct of the applicant’s activities with respect to subject products in California.
(m) (1) “Recipient” means a small business whose activities are principally directed or managed from California.
(2) For purposes of determining whether activities are “principally directed or managed from California” a registrant may rely on any relevant written representation by the small business, nonprofit, or family farm, including a business address provided in any application or agreement for commercial financing or other financial product or service.
(n) “Registrant” means any person who is registered under this division.
(o) (1) “Small business” means a business entity organized for profit with annual gross receipts of no more than sixteen million dollars ($16,000,000) or the annual gross receipt level as biennially adjusted by the Department of General Services in accordance with Section 14837 of the Government Code, whichever is greater.
(2) For purposes of determining a business entity’s annual gross receipts, a covered provider may rely on any relevant written representation by the business entity, including information provided in any application or agreement for commercial financing.
(p) “Subject product” means
either of the following products or services:
(1) Commercial financing transactions as defined in this section.
(2) Commercial financing brokerage services as defined in this section.
90023.
This division does not apply to any of the following:(a) A provider that is a depository institution.
(b) A provider that is a lender regulated under the federal Farm Credit Act (12 U.S.C. Sec. 2001 et seq.).
(c) A commercial financing transaction secured by real property.
(d) A commercial financing transaction in which the recipient is a dealer, as defined by Section 285 of the Vehicle Code, or an affiliate of such a dealer, or a vehicle rental company, or an affiliate of such a company, pursuant to a specific commercial financing offer or commercial open-end credit
plan of at least fifty thousand dollars ($50,000), including any commercial loan made pursuant to such a commercial financing transaction.
(e) Any person who makes no more than one commercial financing transaction in California in a 12-month period or any person who makes five or fewer commercial financing transactions in California in a 12-month period that are incidental to the business of the person relying upon the exemption.
Article 2. Registration
90025.
(a) A person shall not engage in the business of offering to provide or providing subject products to(b) Notwithstanding subdivision (a), an applicant for registration who has filed Forms MU1 and MU2 and paid all required registration fees before January 1, 2025, may offer and provide the subject product for which the applicant has sought registration until their application is approved or abandoned.
90026.
(a) A determination by the commissioner that a person engaged in the business of offering or providing a subject product must register with the commissioner does not constitute a determination that other laws, including other licensing laws under the jurisdiction of the commissioner, do not apply to that person.(b) The act of granting registration to an applicant does not constitute a determination that the applicant’s acts, practices, or business model comply with any law or regulation.
90027.
(a) It is a deceptive practice under this division for a registrant to represent, directly or indirectly, that the registrant’s acts, practices, or business have been approved by the commissioner or the Department of Financial Protection and Innovation.(b) If a registrant operates a website that describes its subject products, the registrant shall disclose on that website that the registrant is registered with the California Department of Financial Protection and Innovation, which may be abbreviated as “DFPI,” under the California Consumer Financial Protection Law, which may be abbreviated as “CCFPL,” and provide the registrant’s department registration
number.
90028.
(a) Except as provided in Section 90035, NMLS shall be used to receive and store filings and collect related fees and assessments from applicants and registrants on behalf of the commissioner.(b) All applications, amendments, notices, related filings, supporting documents, renewals, authorizations, assessments assessments, and fees required to be filed with the commissioner shall be filed electronically with and transmitted through NMLS, except as otherwise indicated in this chapter. The following
conditions relate to electronic filings:
(1) When a signature or signatures are required by the instructions of any filing, including any attestation to be made through NMLS, a duly authorized officer or proper delegate of the applicant or the applicant, if the applicant is an individual, as required, shall affix their electronic signature to the filing by typing their name in the appropriate field and submitting the filing to the commissioner through NMLS. Submission of a filing in this manner shall constitute irrefutable evidence of legal signature by any individual making the filing.
(2) Solely for purposes of a filing made through NMLS, unless otherwise specified by regulation, a document is considered filed with the commissioner when all fees are received by NMLS and the
filing is transmitted by NMLS to the commissioner.
(3) Any document required to be filed with the commissioner that is not permitted to be filed with or cannot be filed with NMLS shall be filed directly with the commissioner.
90029.
Except as provided in Section 90035, an applicant for registration pursuant to this chapter shall do all of the following:(a) An applicant shall complete and file Form MU1 in accordance with the instructions of NMLS and this chapter for transmission to the commissioner. Unless otherwise specified in this section, an applicant shall complete all sections of Form MU1. All exhibits and supporting documents related to the application or amendment required by NMLS or identified in this section shall also be filed with NMLS, unless otherwise specified, in accordance with the instructions of NMLS and this chapter for transmission to the commissioner. An applicant shall provide the following information,
exhibits, and documentation in accordance with this section.
(1) Applicants are not required to complete Item Number 9 (Approvals and Designations), Item Number 10 (Bank Account Information), or Item Number 17 (Qualifying Individuals) of Form MU1.
(2) On Item Number 1 of Form MU1 (Business Activities), an applicant shall indicate that it will offer or provide commercial financing activities by selecting “Commercial Financing (Lending/Brokering)” under the Consumer Finance section of the form.
(3) An applicant shall provide all identifying information on Item Number 2 of Form MU1, including, the entity’s name, IRS employee identification number or social security number, legal name amendment, main address,
not including a post office box, business telephone number, toll-free number for consumers, fax line, email address, mailing address, and a statement as to whether the entity conducts business with California residents through branch offices or other business locations.
(4) An applicant shall provide all fictitious business names on Item Number 3 of Form MU1. An applicant and registrant shall comply with the laws governing the filing of a fictitious business name set forth in Chapter 5 (commencing with Section 17900) of Part 3 of Division 7 of the Business and Professions Code.
(5) An applicant shall list the contact information for its agent for service of process on Item Number 4 of Form MU1.
(6) An applicant shall list
the full web addresses and any separate website addresses for fictitious business names it uses to offer or provide consumer financial products and services to California residents and indicate whether the applicant transacts business through the websites on Item Number 5 of Form MU1.
(7) An applicant shall provide the name, title, physical address, email address, and telephone and fax number of the contact employee to serve as the primary contact for compliance and licensing matters and the contact employee for consumer complaints (regulator) on Item Number 6 of Form MU1. The applicant may add additional contact employees for licensing and consumer complaints (regulator) on Item Number 7 of Form MU1.
(8) An applicant shall provide the name, address, telephone number, fax
number, and email address of the custodian of records for the entity on Item Number 8 of Form MU1. This address may be the same as the entity’s main address.
(9) An applicant shall provide information on its legal status on Item Number 11 of Form MU1, including the entity’s fiscal year end, the date and place the entity obtained its legal status, stock symbol if the entity is publicly traded, and the entity’s legal status.
(10) An applicant shall provide information on each entity under common ownership (affiliates) and each entity under the applicant’s control (subsidiaries) that provides consumer financial products or services to California residents on Item Number 12 of Form MU1, including the name, address, and description of each affiliate and subsidiary and an organization
chart or document describing the relationship and percentage of ownership.
(11) An applicant shall provide information on whether it is controlled by certain financial institutions on Item Number 13 of Form MU1, including, the name, address, and the type of institution, and relationship of the institution to the applicant.
(12) An applicant shall disclose and provide complete information on its criminal history, regulatory actions, civil actions, and financial history, including complete details where the applicant answers “YES” to any disclosure question listed on Item Number 14 of Form MU1.
(13) (A) An applicant shall provide the name and title, percentage of ownership of the applicant, NMLS
identification number, and federal identification number or social security number of the following individuals on Item Numbers 15 and 16 of Form MU1:
(i) Applicant, if an individual.
(ii) Principal officers.
(iii) Directors.
(iv) Managing members, if the applicant is a limited liability company.
(v) General and managing partners, if the applicant is a partnership.
(vi) Trustees, if the applicant is a trust.
(vii) Any other individual who, directly or indirectly,
owns, manages, holds with the power to vote, or holds proxies representing, 10 percent or more of the outstanding voting securities issued by the applicant and controls that applicant.
(viii) Any individual primarily responsible for the applicant’s offering or provision of subject products in California.
(B) For each individual, the applicant shall complete Form MU2 in accordance with the instructions of NMLS and this chapter for transmission to the commissioner. The applicant shall complete Form MU2 except for J and K of Item Number 1 (Passport Issuing Country and Passport Number), Item Number 7 (Fingerprint Information), and Item Number 8 (Credit Report). The applicant shall disclose and provide complete details where the applicant answers “YES” to any disclosure question
listed on the individual’s criminal history, regulatory actions, civil actions, and financial history in Item Number 6.
(14) An applicant shall file with NMLS a management chart identifying the following individuals by name and title:
(A) Directors.
(B) Principal officers.
(C) Any individual primarily responsible for the applicant’s offering or provision of a subject product in California.
(D) General and managing partners.
(E) Managing members.
(F) Trustees.
(15) An applicant shall file with NMLS a detailed description of the applicant’s business activities relating to the offering or provision of subject products in California that includes the following information:
(A) A description of all products or services offered or provided to California residents including, but not limited to, subject products.
(B) A detailed schedule of the charges associated with the products and services provided to California residents including, but not limited to, subject products. Where charges vary based upon the type of the transaction or other factors, the applicant shall provide a description of how charges are set or determined.
(C) A description of how the applicant markets to California residents who may be consumers of subject products, including identifying any websites, social media accounts, and third-party brokers or lead generators that the applicant uses to acquire potential California consumers for its products or services.
(D) Whether the applicant offers or provides subject products to California residents through a mobile application.
(16) The individual attesting to the filing of the Form MU1 must be a duly authorized individual who has submitted a Form MU2 or has been delegated to attest to the filing by an individual who has submitted a Form MU2.
(b) An applicant shall pay a nonrefundable application fee of three
hundred fifty dollars ($350) through NMLS for transmission to the commissioner.
(c) An application for registration shall be deemed complete when all required fees and all information required by this section are received by the commissioner. The filing of Forms MU1 and MU2 with NMLS does not constitute automatic approval of a registration. Within 30 days of an applicant filing Forms MU1 and MU2 and other information, and paying all required fees, the commissioner shall do either of the following:
(1) Inform the applicant in writing that the registration application has been approved.
(2) Inform the applicant in writing that the applicant has not fully completed parts of the application, identify the part or parts that
have not been fully completed, and state that the application will be considered abandoned if the applicant does not respond within 60 days.
(d) Except as provided in subdivision (f), if an applicant submits additional information after receiving a notice of deficiency under paragraph (2) of subdivision (c) or paragraph (2), the commissioner shall, within 30 days, do either of the following:
(1) Inform the applicant in writing that the registration application has been approved.
(2) Inform the applicant in writing that the applicant has not fully completed parts of the application, identify the part or parts that have not been fully completed, and state that the application will be considered abandoned if the applicant
does not respond within 60 days.
(e) If an applicant fails to respond to the notice of deficiency provided under paragraph (2) of subdivision (c) or paragraph (2) of subdivision (d) within 60 days, the commissioner shall deem the application for registration abandoned.
(f) If the applicant fails to submit a complete application within 60 days after the third notice of deficiency under paragraph (2) of subdivision (c) or paragraph (2) of subdivision (d) of this section, the commissioner shall deem the application for registration abandoned.
(g) An application fee paid in connection with an abandoned application shall not be refunded. Abandonment of an application does not preclude the applicant from submitting
a new application and fee for a registration.
(h) Any reference to the terms “license” and “licensee” on Forms MU1 and MU2 or other NMLS information means “registration” and “registrant” for purposes of this chapter.
90030.
An applicant for registration shall, as part of the registration application, submit directly to the commissioner, either by email at CCFPL.Applications@dfpi.ca.gov or other method specified by the department, the following information:(a) Images documenting the standard enrollment or application process California residents use to request or receive the subject product from the applicant through any mobile applications and websites.
(b) Any documentation of the standard enrollment or application process California residents use to request or receive the subject product from the applicant over the telephone.
(c) Any standard enrollment materials or applications the applicant provides to California residents in connection with the offer or sale of the subject product.
(d) Copies of representative contracts and disclosures used by the applicant to provide subject products to California residents.
(e) A list of addresses of all branch locations, if any, from which the applicant will offer or provide subject products to California residents.
(f) The applicant’s gross income for the prior calendar year from subject products provided to California residents.
90031.
Within five days of receiving a registration application approval under Section 90029, a registrant shall establish a designated email address by registering for a Department of Financial Protection and Innovation Self-Service Portal Account through the department’s internet website. By registering the designated email address, the registrant consents to receive information from the commissioner at that email address. A registrant is responsible for ensuring that its designated email address is current and functional.90032.
The commissioner may provide any notice required by state law or regulation, including, but not limited to, the assessment notice required by Section 90040, by emailing a copy of the notice to the designated email address provided pursuant to Section 90031 or by sending a copy of the notice to the registrant through NMLS.90033.
An applicant or registrant shall not make or cause to be made in any application or any report filed with the commissioner under state law or regulation, or in any proceeding before the commissioner, any statement which is at the time and in the light of the circumstances under which it is made false or misleading with respect to any material fact, or omit to state in the application or report any material fact which is required to be stated in the application or report.90034.
(a) A registrant shall, upon any change to the application information contained in Form MU1, Item Numbers 2, 4, and 6, file the changed information with the commissioner. The registrant shall file this information within 30 days of the date of the occurrence of the event that results in the information becoming inaccurate or incomplete.(b) Between December 1 and December 31 of each calendar year, a registrant shall file with the commissioner any changes to its application information that occurred since October 31 of the prior calendar year contained in Forms MU1, other than Item Numbers 2, 4, and 6, and MU2 and any other exhibits and supporting documents
submitted with its application.
90035.
The department may adopt regulations revising the requirements of this chapter, as necessary, to accommodate any changes made to Form MU1, Form MU2, or the NMLS generally.Article 3. Annual Assessment and Reporting
90040.
(a) A registrant shall pay to the commissioner an annual registration fee of one hundred dollars ($100) plus an assessment equal to its pro rata share of all costs and expenses, including the costs and expenses associated with registration, reasonably incurred in the administration of this division as it relates to registrants, 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 registrant’s gross income from subject products provided to California residents bears to the aggregate gross income from subject products provided to California residents by all registrants as shown by the annual reports to the commissioner.(b) A registrant who reports in its annual report no gross income from subject products during the year or whose reported gross income from subject products results in an assessment amount of less than five hundred dollars ($500) as calculated under subdivision (a) shall pay an assessment of five hundred dollars ($500) for that year.
(c) On or before November 30, 2025, and each November 30 thereafter, the commissioner shall notify each registrant of the amount assessed and levied against it and that amount shall be paid by December 31 of that year. Except as provided pursuant to Section 90035, a registrant shall pay the amount assessed to the commissioner through NMLS.
(d) If a registrant fails to pay the assessment on or before December 31, the commissioner may by order summarily revoke the registration. If, after an order is made, a request for a hearing is filed in writing within 30 days of the date of the order and a hearing is not held within 60 days of the date of the order, the order is deemed rescinded as of its effective date. The proceedings under this section shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and in all cases the commissioner has all powers granted therein. During any period when its registration is revoked, a former registrant shall not offer or provide a subject product to California residents except as may be permitted by order of the commissioner.
90041.
(a) Commencing March 15, 2026, and each March 15 thereafter, a registrant who is registered as of December 31 of the prior year shall file with the commissioner an annual report containing the information set forth in this section. An annual report is required each year even if the registrant did not provide any subject products or did not engage in any activities under the registration in the calendar year.(b) A registrant shall provide its gross income for the prior calendar year from subject products provided to California residents.
(c) The commissioner may by order summarily revoke the registration
of any registrant if the registrant fails to file the report required by this section within 10 days after notice by the commissioner that the report is due and not filed. If, after an order is issued, a request for hearing is filed in writing within 30 days of the date of the order and the hearing is not held within 60 days of the date of the order, the order is deemed rescinded as of its effective date. The proceedings under this section shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and in all cases the commissioner has all powers granted therein. During any period when its registration is revoked, a former registrant shall not offer or provide a subject product to California residents except as may be permitted by order of the commissioner.
Article 4. Revocation and Surrender
90045.
(a) The commissioner shall rescind a summary revocation order issued under Section 90040 or 90041 if the former registrant submits a written request for reinstatement to the commissioner, either by email at CCFPL.Applications@dfpi.ca.gov or another method specified by the department, no later than 180 days after the date of revocation, pays any annual assessment required by Section 90040, files any report required by Section 90041, including reports that would have become due if the registration had not been revoked, and pays the following administrative fine:(1) One hundred dollars ($100) if the reinstatement request is received by the commissioner within the
first 14 days after the date of revocation.
(2) Two hundred dollars ($200) if the reinstatement request is received by the commissioner between 15 and 30 days after the date of revocation.
(3) Four hundred dollars ($400) if the reinstatement request is received by the commissioner between 31 and 60 days after the date of revocation.
(4) Six hundred dollars ($600) if the reinstatement request is received by the commissioner between 61 and 90 days after the date of revocation.
(5) Six hundred dollars ($600) plus ten dollars ($10) per day if the reinstatement request is received by the commissioner between 91 and 180 days after the date of
revocation.
(b) Rescission of the summary revocation order under subdivision (a) shall be effective as of the date of revocation, such that there will be no lapse in the registration required by Section 90025, provided that reinstatement was not used by the registrant to evade the registration requirements.
(c) This section does not preclude the commissioner from bringing an action under Chapter 8 (commencing with section Section 90011) against a person for failure to maintain a registration as required by Section 90025.
90046.
A registration issued under this chapter is effective until it is revoked by the commissioner or it is surrendered by the registrant pursuant to Section 90047.90047.
(a) An application to surrender a registration shall be filed on Form MU1 with NMLS in accordance with the procedures for transmission to the commissioner.(b) Surrender of a registration becomes effective when the commissioner approves the application for surrender.
(c) Surrender of a registration does not affect a registrant’s liability for acts committed prior to the surrender.
(d) Surrender of a registration does not relieve a registrant of any obligation to pay a fee, fine, or other amount due to the commissioner or to file any required
report.
90048.
A proceeding to revoke a registration shall be conducted pursuant to Section 90015. During any period when its registration is revoked, a former registrant shall not offer or provide a subject product to California residents except as may be permitted by order of the commissioner.Article 5. Obligations Related to Subject Products
90050.
(a) A commercial financing provider or a commercial financing broker shall not take a confession of judgment or any power of attorney at any time before a default by a recipient under the terms of a commercial financing transaction agreement or contract.(b) A commercial financing provider or a commercial financing broker shall not include a provision in a commercial financing transaction agreement or contract that authorizes a commercial financing provider or commercial financing broker to attach or garnish any of a recipient’s money held in an account in a depository institution.
(c) A
commercial financing transaction found to be unconscionable pursuant to Section 1670.5 of the Civil Code shall be deemed to be in violation of this division and subject to the remedies specified in this division.
(d) A commercial financing provider or a commercial financing broker shall not include a provision in a contract or agreement with a recipient that limits or restricts the recipient from disclosing information that the recipient gains from the recipient’s business activities with the registrant, including, but not limited to, terms or conditions of a product or service offered by the registrant.
