BILL NUMBER: AB 1230	CHAPTERED  10/01/01

	CHAPTER  392
	FILED WITH SECRETARY OF STATE  OCTOBER 1, 2001
	APPROVED BY GOVERNOR  SEPTEMBER 29, 2001
	PASSED THE ASSEMBLY  SEPTEMBER 10, 2001
	PASSED THE SENATE  SEPTEMBER 4, 2001
	AMENDED IN SENATE  AUGUST 30, 2001
	AMENDED IN SENATE  JULY 3, 2001
	AMENDED IN SENATE  JUNE 18, 2001
	AMENDED IN ASSEMBLY  APRIL 24, 2001
	AMENDED IN ASSEMBLY  MARCH 28, 2001

INTRODUCED BY   Assembly Member Papan

                        FEBRUARY 23, 2001

   An act to amend Sections 22105 and 22109 of the Financial Code,
relating to finance lenders.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1230, Papan.  Finance lenders.
   Existing law, the California Finance Lenders Law, requires the
licensure of a person by the Commissioner of Corporations to engage
in the business of a finance lender or broker.  Existing law requires
the commissioner to investigate specified individuals if an
applicant for licensure is a corporation, trust, or association.
   This bill would require the commissioner, if an applicant is a
corporation, trust, or association, to investigate the applicant's
principal officers, as defined.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 22105 of the Financial Code is amended to read:

   22105.  (a) Upon the filing of an application pursuant to Section
22101 or 22102 and the payment of the fees, the commissioner shall
investigate the applicant, and its general partners and persons
owning or controlling, directly or indirectly, 10 percent or more of
the outstanding interests if the applicant is a partnership.  If the
applicant is a corporation, trust, or association, including an
unincorporated organization, the commissioner shall investigate its
principal officers, directors, and persons owning or controlling,
directly or indirectly, 10 percent or more of the outstanding equity
securities.  If the commissioner determines that the applicant has
satisfied this division and does not find facts constituting reasons
for denial under Section 22109, the commissioner shall issue and
deliver a license to the applicant.
   For the purposes of this section, "principal officers" shall mean
president, chief executive officer, treasurer, and chief financial
officer, as may be applicable, and any other officer with direct
responsibility for the conduct of the applicant's lending activities
within the state.
   (b) For purposes of subdivision (a), the investigation in
connection with an application described in Section 22102 may be
limited to the information not already included in previous
applications filed pursuant to this division.
  SEC. 2.  Section 22109 of the Financial Code is amended to read:
   22109.  (a) Upon reasonable notice and opportunity to be heard,
the commissioner may deny the application for any of the following
reasons:
   (1) A false statement of a material fact has been made in the
application.
   (2) Any officer, director, general partner, or person owning or
controlling, directly or indirectly, 10 percent or more of the
outstanding interests or equity securities of the applicant has,
within the last 10 years (A) been convicted of or pleaded nolo
contendere to a crime, or (B) committed any act involving dishonesty,
fraud, or deceit, if the crime or act is substantially related to
the qualifications, functions, or duties of a person engaged in
business in accordance with this division.
   (3) The applicant or any officer, director, general partner, or
person owning or controlling, directly or indirectly, 10 percent or
more of the outstanding interests or equity securities of the
applicant has violated any provision of this division or the rules
thereunder or any similar regulatory scheme of a foreign
jurisdiction.
   (b) The application shall be considered withdrawn within the
meaning of this section if the applicant fails to respond to a
written notification of a deficiency in the application within 90
days of the date of the notification.
   (c) The commissioner shall, within  60 days from the filing of a
full and complete application for a license with the fees, either
issue a license or file a statement of issues prepared in accordance
with Chapter 5 (commencing with Section 11500) of Part 1 of Division
3 of Title 2 of the Government Code.