California Financing Law: enforcement and penalties.

(1) Existing law, the California Financing Law (CFL) , generally provides for the licensure and regulation of finance lenders, brokers, and program administrators by the Commissioner of Business Oversight. The CFL authorizes the commissioner to require the attendance of witnesses and examine under oath, punishable under penalty of perjury, all persons whose testimony is required relative to the loans, assessment contracts, or businesses regulated under the CFL. This bill would instead authorize the commissioner to require the attendance of witnesses and examine under oath all persons whose testimony relates to activities and businesses regulated under the CFL. By expanding the crime of perjury, the bill would impose a state-mandated local program. (2) Existing law authorizes the commissioner, upon believing that a licensee or other person is violating the CFL, to issue a citation to the person and to assess an administrative fine for deposit into the State Corporations Fund. Existing law provides that a citation issued or a fine assessed is in lieu of other administrative discipline by the commissioner for the offense or offenses cited, and the citation and fine payment thereof by a licensee shall not be reported as disciplinary action taken by the commissioner. This bill would delete the above language providing that the citation and fine payment by a licensee shall not be reported as disciplinary action by the commissioner. The bill would also authorize the commissioner to include a claim for ancillary relief, including refunds, restitution or disgorgement, or damages on behalf of the persons injured by the act. (3) The CFL authorizes the commissioner, after exhausting various disciplinary review procedures, to apply to the superior court for a judgment in the amount of the administrative fine and an order compelling the cited licensee or person to comply with the order of the commissioner. Existing law provides that the application, which is required to include a certified copy of the commissioner's final order, constitutes a sufficient showing to warrant issuance of the judgment and order. This bill would revise the above provisions relating to this judicial procedure to require the application to include a certified copy of the final order to the commissioner, to require the superior court, upon the filing of the application, to set a date for a hearing for an order to show cause why judgment should not be entered, and would require the commissioner to serve a copy of the application and order to all entities or persons cited in the order, in accordance with specified timeframes. The bill would establish additional procedural requirements, including setting evidentiary standards, for these actions. (4) Existing law authorizes the commissioner, upon determining a person is engaged in business as a finance lender, broker, program administrator, or mortgage loan originator without a license, to order that person or licensee to desist and refrain from engaging in the business or further continuing that violation. This bill would authorize the commissioner, in the above circumstances, to include a claim for ancillary relief, as specified. (5) 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.