California Financing Law: consumer loans: title loans.

Existing law, the California Financing Law (CFL) , provides for the licensure and regulation of finance lenders and brokers and, beginning on January 1, 2019, program administrators, by the Commissioner of Business Oversight. The CFL prohibits anyone from engaging in the business of a finance lender or broker without obtaining a license. Existing law defines a finance lender as any person who is engaged in making consumer loans or commercial loans, as defined. A willful violation of the CFL is a crime, except as specified. The CFL prescribes limits on the maximum rate of charges and administrative fees that a licensee may contract for, and receive, on consumer loans of up to $2,500. The CFL requires a licensee, with respect to loans secured by a lien on a motor vehicle, to comply with specified notice requirements related to the disposition of a repossessed or surrendered motor vehicle. The CFL requires that any person who is liable on a consumer loan secured by a lien on a motor vehicle has the right to reinstate the loan in the event of a default by the borrower, subject to certain conditions and exceptions. This bill would prohibit a licensee from receiving charges under a title loan agreement in an amount that is greater than 3% per month on the unpaid principal balance of the title loan. Because a willful violation of the bill's provisions would be a crime, the 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.