California Finance Lenders Law: unsecured consumer loans: terms and conditions: violations.

Existing law, the California Finance Lenders Law, provides for the licensure and regulation of finance lenders and brokers, which includes any person who is engaged in the business of making consumer loans, by the Commissioner of Business Oversight and makes a willful violation of its provisions a crime. Existing law authorizes the commissioner to investigate at any time 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 for the purpose of discovering violations or securing information required by the commissioner in the administration and enforcement of the California Finance Lenders Law, as provided. This bill would require the commissioner to examine at least every 48 months the affairs of every person engaged in the business of a finance lender or broker for compliance under that law, and would authorize the commissioner to examine those persons as often as the commissioner deems necessary and appropriate for those purposes. The California Finance Lenders Law regulates the terms and conditions under which a licensee under that law may make consumer loans, including, but not limited to, the maximum rate and administrative fee a borrower may be charged for specific loan amounts. This bill would revise and impose additional terms and conditions under which a licensee may make unsecured consumer loans of a maximum principal balance upon origination of $3,000 or less, including, among other things, the term of the loan, maximum rates that a licensee may charge for a loan, and restrictions on refinancing, as specified. The bill would allow a licensee, with prior approval from the commissioner, to use the services of one or more referral partners with respect to those loans that the licensee may make or negotiate, if specified conditions and requirements are met. By imposing new requirements under the California Finance Lenders Law, the violation of which would be a crime, this bill would impose a state-mandated local program. 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.