California Financing Law: consumer loans: motor vehicles.

Existing law, the California Financing Law (CFL) , provides for the licensure and regulation of finance lenders, among others, by the Commissioner of Business Oversight. The CFL defines a finance lender as any person who is engaged in making consumer loans or commercial loans, as defined, and prohibits anyone from engaging in the business of a finance lender without obtaining a license. A willful violation of the CFL is a crime, except as specified. 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. Existing law, the Automobile Sales Finance Act, requires a notice of delinquency to be provided to any cosigners as a condition of granting credit to any person for the purpose of acquiring a motor vehicle. This bill would enact the Fair Treatment of Motor Vehicle Title Credit Act. The bill, for a title loan entered into on or after January 1, 2020, would require the licensee to provide specified notice to a borrower regarding alternative loan products by other lenders that may be available at a specified annual percentage rate (APR) . The bill would also require the licensee to provide the borrower with specified information regarding, among other things, the amount borrowed, the APR, and the periodic payment amount. The bill would require the lender to provide notice to the borrower regarding the borrower's right to rescind the loan within a specified timeframe. The bill would provide minimum repayment timeframes based on different loan amounts. The bill would require the lender to confirm specified financial information about the borrower's ability to repay the loan, including the borrower's income and other outstanding debt, before determining the amount of the loan, as provided. The bill would also provide the borrower with specified right-to-cure remedies before a repossession can be initiated. 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.