Consumer loans.

Existing law, the California Financing Law, prohibits a person, as defined, from engaging in the business of a finance lender or broker without obtaining a license from the commissioner. The law prohibits a licensee who makes a loan of a bona fide principal amount of less than $10,000 from receiving charges that exceed specified limits based on the amount of the principal, including, for a loan of a bona fide principal amount of $2,500 but less than $10,000, a rate not exceeding an annual simple interest rate of 36 percent per annum plus the Federal Funds Rate. Existing law, the Money Transmission Act, prohibits a person from engaging in the business of money transmission in this state, or advertising, soliciting, or holding itself out as providing money transmission in this state, unless the person is licensed or exempt from licensure, as specified. A person that intentionally makes a false statement, misrepresentation, or false certification in a record filed or required to be maintained under the act or that intentionally makes a false entry or omits a material entry in a record is guilty of a felony. Existing law, the California Deferred Deposit Transaction Law, prohibits a person from offering, originating, or making a deferred deposit transaction, arranging a deferred deposit transaction for a deferred deposit originator, acting as an agent for a deferred deposit originator, or assisting a deferred deposit originator in the origination of a deferred deposit transaction without first obtaining a license from the commissioner and complying with the law. A person, including a partner or officer of an entity that is a licensee, who willfully violates any provision of the law or who willfully violates any rule or order adopted pursuant to the law is liable for a fine of not more than $10,000, or by imprisonment in a county jail for not more than one year, or by both that fine and imprisonment. This bill would prohibit a licensee under the Money Transmission Act or the California Deferred Deposit Transaction Law from arranging a loan, referring, directly or indirectly, a person to a provider of a loan, or distributing or sharing marketing materials or any similar information with a person related to a provider of a loan if that loan contains charges that exceed the limits described above in the California Financing Law. By expanding the scope of the crimes described above with respect to the Money Transmission Act and the California Deferred Deposit Transaction Law, 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.