BILL NUMBER: AB 7 CHAPTERED
BILL TEXT
CHAPTER 358
FILED WITH SECRETARY OF STATE OCTOBER 9, 2007
APPROVED BY GOVERNOR OCTOBER 9, 2007
PASSED THE SENATE SEPTEMBER 11, 2007
PASSED THE ASSEMBLY SEPTEMBER 12, 2007
AMENDED IN SENATE SEPTEMBER 7, 2007
AMENDED IN SENATE SEPTEMBER 6, 2007
AMENDED IN SENATE JUNE 28, 2007
AMENDED IN ASSEMBLY APRIL 9, 2007
AMENDED IN ASSEMBLY MARCH 19, 2007
INTRODUCED BY Assembly Members Lieu and Saldana
(Coauthors: Assembly Members Beall, Horton, Huff, Jeffries, Laird,
and Wolk)
DECEMBER 4, 2006
An act to add Sections 1241, 14960, 22345, and 23038 to the
Financial Code, and to amend Section 394 of the Military and Veterans
Code, relating to consumer loans, and declaring the urgency thereof,
to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 7, Lieu. Armed services members: consumer loans.
The California Finance Lenders Law provides, among other things,
for the licensure and regulation by the Commissioner of Corporations
of persons engaged in the business of making consumer loans and
governs the terms that may be included in those loans. The California
Deferred Deposit Transaction Law provides for the licensure and
regulation by the commissioner of persons engaged in the business of
making or negotiating deferred deposit transactions, which are
transactions in which the lender defers depositing a consumer's
personal check until a specified date pursuant to a written
agreement. A willful violation of either the California Finance
Lenders Law or the California Deferred Deposit Transaction Law is a
crime.
This bill would require any state-chartered bank or credit union
that makes a refund anticipation loan to a covered borrower, as
defined, to comply with specified provisions of federal law relating
to terms of consumer credit extended to armed services members and
dependents of armed services members. The bill would, on and after
October 1, 2007, make it unlawful under the California Finance
Lenders Law and the California Deferred Deposit Transaction Law to
violate specified provisions of the John Warner National Defense
Authorization Act for Fiscal Year 2007, relating to the Armed Forces.
Because this bill would make a willful violation of those provisions
a crime, it would impose a state-mandated local program.
Existing law provides that any person who violates specified
provisions prohibiting discrimination against a member of the
military or naval forces of this state or the United States,
including discrimination with respect to the terms of a loan or
financing based on that person's membership in the military or naval
forces of this state or of the United States, is guilty of a
misdemeanor.
This bill would exempt from the discrimination provisions, with
respect to loans and transactions covered by the John Warner National
Defense Authorization Act for Fiscal Year 2007, any person who does
not market or extend consumer loans to specified covered borrowers,
and any person who does not market deferred deposit transactions to,
or enter into such transactions with, specified covered borrowers.
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.
This bill would declare that it is to take effect immediately as
an urgency statute.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1241 is added to the Financial Code, to read:
1241. (a) Any state-chartered bank that makes a refund
anticipation loan to a covered borrower, as defined in Section 232 of
Title 32 of the Code of Federal Regulations, as published on August
31, 2007, in Volume 72 of the Federal Register, shall comply with the
provisions of Section 670 of Public Law 109-364 and Section 232 of
Title 32 of the Code of Federal Regulations, as published on August
31, 2007, in Volume 72 of the Federal Register pertaining to refund
anticipation loans.
(b) With respect to any refund anticipation loan covered by
Section 670 of Public Law 109-364 and Section 232 of Title 32 of the
Code of Federal Regulations, as published on August 31, 2007, in
Volume 72 of the Federal Register, a person that does not market or
extend those loans to covered borrowers shall not be in violation of
Section 394 of the Military and Veterans Code.
SEC. 2. Section 14960 is added to the Financial Code, to read:
14960. (a) Any credit union that makes a refund anticipation loan
to a covered borrower, as defined in Section 232 of Title 32 of the
Code of Federal Regulations, as published on August 31, 2007, in
Volume 72 of the Federal Register, shall comply with the provisions
of Section 670 of Public Law 109-364 and Section 232 of Title 32 of
the Code of Federal Regulations, as published on August 31, 2007, in
Volume 72 of the Federal Register pertaining to refund anticipation
loans.
(b) With respect to any refund anticipation loan covered by
Section 670 of Public Law 109-364 and Section 232 of Title 32 of the
Code of Federal Regulations, as published on August 31, 2007, in
Volume 72 of the Federal Register, a person that does not market or
extend those loans to covered borrowers shall not be in violation of
Section 394 of the Military and Veterans Code.
SEC. 3. Section 22345 is added to the Financial Code, to read:
22345. (a) Any person who violates any provision of Section 670
of the John Warner National Defense Authorization Act for Fiscal Year
2007 (Public Law 109-364) or any provision of Section 232 of Title
32 of the Code of Federal Regulations, as published on August 31,
2007, in Volume 72 of the Federal Register, violates this chapter.
(b) With respect to any consumer loans covered by Section 670 of
the John Warner National Defense Authorization Act for Fiscal Year
2007 (Public Law 109-364) or by Section 232 of Title 32 of the Code
of Federal Regulations, as published on August 31, 2007, in Volume 72
of the Federal Register, a person that does not market consumer
loans to, or does not extend those loans to, covered borrowers, as
that term is defined under Section 232 of Title 32 of the Code of
Federal Regulations, as published on August 31, 2007, in Volume 72 of
the Federal Register, shall not be in violation of Section 394 of
the Military and Veterans Code.
(c) This section shall become operative on October 1, 2007.
SEC. 4. Section 23038 is added to the Financial Code, to read:
23038. (a) Any person who violates any provision of Section 670
of the John Warner National Defense Authorization Act for Fiscal Year
2007 (Public Law 109-364) or any provision of Section 232 of Title
32 of the Code of Federal Regulations, as published on August 31,
2007, in Volume 72 of the Federal Register, violates this division.
(b) With respect to any deferred deposit transactions covered by
Section 670 of the John Warner National Defense Authorization Act for
Fiscal Year 2007 (Public Law 109-364) or by Section 232 of Title 32
of the Code of Federal Regulations, as published on August 31, 2007,
in Volume 72 of the Federal Register, a person that does not market
deferred deposit transactions to, or does not enter into those
transactions with, covered borrowers, as that term is defined under
Section 232 of Title 32 of the Code of Federal Regulations, as
published on August 31, 2007, in Volume 72 of the Federal Register,
shall not be in violation of Section 394 of the Military and Veterans
Code.
(c) This section shall become operative on October 1, 2007.
SEC. 5. Section 394 of the Military and Veterans Code is amended
to read:
394. (a) No person shall discriminate against any officer,
warrant officer or enlisted member of the military or naval forces of
the state or of the United States because of that membership. No
member of the military forces shall be prejudiced or injured by any
person, employer, or officer or agent of any corporation, company, or
firm with respect to that member's employment, position or status or
be denied or disqualified for employment by virtue of membership or
service in the military forces of this state or of the United States.
(b) No officer or employee of the state, or of any county, city
and county, municipal corporation, or district shall discriminate
against any officer, warrant officer or enlisted member of the
military or naval forces of the state or of the United States because
of that membership. No member of the military forces shall be
prejudiced or injured by any officer or employee of the state, or of
any county, city and county, municipal corporation, or district with
respect to that member's employment, appointment, position or status
or be denied or disqualified for or discharged from that employment
or position by virtue of membership or service in the military forces
of this state or of the United States.
(c) No person shall prohibit or refuse entrance to any officer or
enlisted member of the Army or Navy of the United States or of the
military or naval forces of this state into any public entertainment
or place of amusement or into any of the places described in Sections
51 and 52 of the Civil Code because that member wears the uniform of
the organization to which he or she belongs.
(d) No employer or officer or agent of any corporation, company,
or firm, or other person, shall discharge any person from employment
because of the performance of any ordered military duty or training
or by reason of being an officer, warrant officer, or enlisted member
of the military or naval forces of this state, or hinder or prevent
that person from performing any military service or from attending
any military encampment or place of drill or instruction he or she
may be called upon to perform or attend by proper authority;
prejudice or harm him or her in any manner in his or her employment,
position, or status by reason of performance of military service or
duty or attendance at military encampments or places of drill or
instruction; or dissuade, prevent, or stop any person from enlistment
or accepting a warrant or commission in the California National
Guard or Naval Militia by threat or injury to him or her in respect
to his or her employment, position, status, trade, or business
because of enlistment or acceptance of a warrant or commission.
(e) (1) No private employer or officer or agent of any
corporation, company, or firm, or other person, shall restrict or
terminate any collateral benefit for employees by reason of an
employee's temporary incapacitation incident to duty in the National
Guard or Naval Militia. As used in this subdivision, "temporary
incapacitation" means any period of incapacitation of 52 weeks or
less.
(2) As used in this subdivision, "benefit" includes, but is not
limited to, health care which may be continued at the employee's
expense, life insurance, disability insurance, and seniority status.
(f) No person who provides lending or financing shall discriminate
against any person with respect to the terms of a loan or financing,
including, but not limited to, the finance charge, based on that
person's membership in the military or naval forces of this state or
of the United States. With respect to any loan or credit transaction
covered by Section 670 of Public Law 109-364 and Section 232 of Title
32 of the Code of Federal Regulations, as published on August 31,
2007, in Volume 72 of the Federal Register, a person that does not
market or extend those transactions to covered borrowers shall not be
in violation of this section. For purposes of this section, a
covered borrower has the same meaning as provided for in Section 232
of Title 32 of the Code of Federal Regulations, as published on
August 31, 2007, in Volume 72 of the Federal Register.
(g) Any person violating this section is guilty of a misdemeanor.
In addition, any person violating any of the provisions of this
section shall be liable for actual damages and reasonable attorney's
fees incurred by the injured party.
(h) The remedies provided for in this section are not intended to
be exclusive but are in addition to the remedies provided for in
other laws, including Sections 51 and 52 of the Civil Code.
SEC. 6. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
SEC. 7. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
In order to protect armed service members and their families at
the earliest possible time, it is necessary that this act take effect
immediately.