BILL NUMBER: AB 2161	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 22, 2008
	AMENDED IN ASSEMBLY  MARCH 28, 2008

INTRODUCED BY   Assembly Member Swanson

                        FEBRUARY 20, 2008

    An act to amend Section 4979.8 of, and to add Sections
4979.9, 22346, and 50210 to, the Financial Code, relating to
mortgages.   An act to add and r   epeal
Sections 22171.5 and 50333.5 of the Financial Code, relating to
loans. 



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2161, as amended, Swanson.  Mortgages.  
Commissioner of Corporations: consumer complaints. 
    (1)    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. The California Residential
Mortgage Lending Act provides for the licensure and regulation by the
commissioner of persons engaged in the business of making and
servicing residential mortgage loans.  A willful violation of
the California Finance Lenders Law or the California Residential
Mortgage Lending Act is a crime.   Existing law requires
the commissioner to apply the guidance on nontraditional mortgage
product risks, as   specified, to these licensees and
authorizes the commissioner to adopt regulations in this regard.

   This bill would require  these licensees to establish, by
January 1, 2010, a grievance resolution system that shall provide
procedures to receive, review, and resolve grievances filed by
consumers or borrowers within 30 calendar days of receipt, as
specified. The bill would impose requirements on licensees with
respect to establishing the grievance system and responding to
grievances. The bill would require the department to establish a
review process for these grievances and grievance systems and would
authorize certain grievances to be referred to the department. The
bill would specify that if a consumer or borrower defaults in his or
her loan while participating in the grievance resolution system, all
fees, penalties, and foreclosure actions shall be stayed until the
grievance has been resolved.   the commissioner, on or
before January 1, 2010, and annually thereafter, until January 1,
2012, to submit a written report to the Legislature regarding the
aggregated data the commissioner receives pursuant to the consumer
complaint process involving loans covered by the guidance implemented
pursuant to these regulations.  
   Because a willful violation of the bill's provisions by a licensee
would be a crime, this bill would impose a state-mandated local
program.  
   (2) Existing law imposes certain limitations and prohibitions on
licensed persons, including real estate brokers, finance lenders,
residential mortgage lenders, and financial institutions, with
respect to consumer loans and covered loans. Existing law defines a
"consumer loan" as a consumer credit transaction secured by
residential real property, subject to certain exceptions, and defines
a "covered loan" as a consumer loan that meets certain other
requirements. Existing law prohibits the imposition of liability on
an assignee of a covered loan that is a holder in due course, as
defined.  
   This bill would subject any person who purchases or is otherwise
assigned a consumer loan, as defined, to all affirmative claims and
defenses with respect to the loan that the consumer could assert
against the person who originated the loan.  
   (3) 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. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program:  yes   no  .


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

   SECTION 1.    Section 22171.5 is added to the 
 Financial Code  , to read:  
   22171.5.  (a) On or before January 1, 2010, and annually
thereafter, the commissioner shall submit a written report to the
Legislature regarding the aggregated data the commissioner receives
pursuant to the consumer complaint process implemented pursuant to
Section 1436 of Title 10 of the California Code of Regulations. The
written report shall contain all of the following:
   (1) The number of complaints reported.
   (2) The number of resolved complaints.
   (3) The number of unresolved complaints.
   (b)The written report shall not contain personal or confidential
information with respect to any consumer.
   (c) This section shall remain in effect only until January 1, 2012
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2012 deletes or extends that date.

   SEC. 2.    Section 50333.5 is added to the  
Financial Code   , to read:  
   50333.5.  (a) On or before January 1, 2010, and annually
thereafter, the commissioner shall submit a written report to the
Legislature regarding the aggregated data the commissioner receives
pursuant to the consumer complaint process implemented pursuant to
Section 1950.314.8 of Title 10 of the California Code of Regulations.
The written report shall contain all of the following:
   (1) The number of complaints reported.
   (2) The number of resolved complaints.
   (3) The number of unresolved complaints.
   (b)The written report shall not contain personal or confidential
information with respect to any borrower.
   (c) This section shall remain in effect only until January 1, 2012
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2012 deletes or extends that date.
 All matter omitted in this version of the bill appears in the
bill as amended in the Assembly, March 28, 2008. (JR11)