BILL NUMBER: AB 129 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JANUARY 7, 2014
AMENDED IN ASSEMBLY MARCH 19, 2013
INTRODUCED BY Assembly Member Dickinson
JANUARY 15, 2013
An act to amend Sections 22361 and 22362 of the Financial
Code Section 107 of the Corporations Code ,
relating to finance lenders business
associations .
LEGISLATIVE COUNSEL'S DIGEST
AB 129, as amended, Dickinson. Finance lenders.
Lawful money: alternative currency.
Existing law prohibits a corporation, flexible purpose
corporation, association, or individual from issuing or putting in
circulation, as money, anything but the lawful money of the United
States.
This bill would specify that those provisions do not prohibit a
corporation, flexible purpose corporation, association, or individual
from issuing or using an alternative currency that is redeemable for
lawful money or that has value based on the value of lawful money.
This bill would also specify that a corporation, flexible purpose
corporation, association, or individual shall not be required to
accept alternative currency.
Existing law, the California Finance Lenders Law, provides for the
licensure and regulation by the Commissioner of Corporations until
July 1, 2013, and thereafter by the Deputy Commissioner of Business
Oversight for the Division of Corporations, of those engaged in
making consumer loans, as defined, and makes a willful violation of
its provisions a misdemeanor. Existing law, until January 1, 2015,
establishes the Pilot Program for Affordable Credit-Building
Opportunities for the purpose of increasing the availability of
credit-building opportunities to underbanked individuals seeking
low-dollar-value loans. Existing law requires licensees to file an
application with, and pay a fee to, the commissioner to participate
in the program. Existing law authorizes a licensee participating in
the program to use the services of a finder, as defined, and
regulates the activities and compensation of those finders. Existing
law requires the commissioner to examine the performance of each
licensee in the program at least once every 24 months, and requires
the costs of examination to be paid by the licensee to the
commissioner, as specified. Existing law also requires the
commissioner to conduct a random sample survey of borrowers under the
program and to report to specified legislative committees, by
January 1, 2014, summarizing utilization of the Pilot Program for
Affordable Credit-Building Opportunities, as specified. Existing law
provides that information provided by a licensee to the commissioner
for purposes of the report is exempt from public disclosure
requirements.
This bill would extend the pilot program until January 1, 2016,
and change the date for the committees to report to the legislative
committees to January 1, 2015. This bill would also provide
legislative findings demonstrating the need for the limitation on
disclosure of the information provided to the commissioner by a
licensee for purposes of preparing the report regarding the program.
Because a willful violation of certain provisions under the pilot
program would be a crime, 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.
Vote: majority. Appropriation: no. Fiscal committee: yes
no . State-mandated local program: yes
no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 107 of the
Corporations Code is amended to read:
107. No A corporation, flexible
purpose corporation, association association,
or individual shall not issue or put in
circulation, as money, anything but the lawful money of the United
States. Nothing in this section shall prohibit the issuance and
use of alternative currency that is redeemable for lawful
money or that has value based on the value of lawful money but a
corporation, flexible purpose corporation, association, or individual
shall not be required to accept alternative currency.
SECTION 1. Section 22361 of the Financial Code
is amended to read:
22361. (a) On or before January 1, 2015, the commissioner shall
submit a report to the Senate Committee on Banking, Finance and
Insurance, the Assembly Committee on Banking and Finance, and the
Senate and Assembly Committees on Judiciary, in compliance with
Section 9795 of the Government Code, summarizing utilization of the
Pilot Program for Affordable Credit-Building Opportunities and
including recommendations regarding whether the program should be
continued after January 1, 2016.
(b) The information disclosed to the commissioner for the
commissioner's use in preparing the report described in this section
is exempted from any requirement of public disclosure by paragraph
(2) of subdivision (d) of Section 6254 of the Government Code.
(c) If there is more than one licensee approved to participate in
the program under this article, the report required pursuant to
subdivision (a) shall state information in aggregate so as not to
identify data by specific licensee.
(d) The report required pursuant to this section shall include,
but not be limited to, the following:
(1) The number of finance lender licensees who applied to
participate in the program.
(2) The number of finance lender licensees accepted to participate
in the program.
(3) The number of program loan applications received by lenders
participating in the program, the number of loans made pursuant to
the program, the total amount loaned, and the distribution of
interest rates and principal amounts upon origination among those
loans.
(4) The number of borrowers who obtained more than one program
loan.
(5) Of the number of borrowers who obtained more than one program
loan, the percentage of those borrowers whose credit scores increased
between successive loans, based on information from at least one
major credit bureau, and the average size of the increase.
(6) The income distribution of borrowers, including the number of
borrowers who obtained at least one program loan and who resided in a
low-to-moderate-income census tract at the time of their loan
application.
(7) The number of borrowers who obtained loans for the following
purposes, based on borrower responses at the time of their loan
applications indicating the primary purpose for which the loan was
obtained:
(A) Medical.
(B) Other emergency.
(C) Vehicle repair.
(D) Vehicle purchase.
(E) To pay bills.
(F) To consolidate debt.
(G) To build or repair credit history.
(H) To finance a purchase of goods or services other than a
vehicle.
(I) Other.
(8) The number of borrowers who have a bank account, the number of
borrowers who have a bank account and use check-cashing services,
and the number of borrowers who do not have a bank account.
(9) The number and type of finders used by all licensees, the
amount of finder's fees paid by the type of finder, and the relative
performance of loans consummated by finders compared to the
performance of loans consummated without a finder.
(10) The number and percentage of borrowers who obtained one or
more program loans on which late fees were assessed, the total amount
of late fees assessed, and the average late fee assessed by dollar
amount and as a percentage of the principal amount loaned.
(11) The quality of underwriting and performance of loans under
this article consistent with the reporting standards applicable to
other loans and financial products, including, but not limited to,
credit cards and deferred deposit transactions.
(12) The number of times the commissioner found that a finder or
licensee had violated this article.
(13) The number of times that the commissioner disqualified a
finder from performing services, barred a finder from performing
services at one or more specific locations of the finder, terminated
a written agreement between a finder and a licensee, or imposed an
administrative penalty.
(14) Recommendations for improving the program.
(15) Recommendations regarding whether the program should be
continued after January 1, 2016.
(e) The commissioner shall conduct a random sample survey of
borrowers who have participated in the program to obtain information
regarding the borrowers' experience and licensees' compliance with
this article. The results of this survey shall be included in the
report required by this section.
SEC. 2. Section 22362 of the Financial Code is
amended to read:
22362. This article shall remain in effect only until January 1,
2016, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2016, deletes or extends
that date.
SEC. 3. The Legislature finds and declares that
Sections 1 and 2 of this act impose a limitation on the public's
right of access to documents in the possession of a public agency
within the meaning of Section 3 of Article I of the California
Constitution. Pursuant to that constitutional provision, the
Legislature makes the following finding to demonstrate the interest
protected by this limitation and the need for protecting that
interest:
The nondisclosure of information provided to the Deputy
Commissioner of Business Oversight for the Division of Corporations
is necessary to protect the proprietary information of the finance
lenders participating in the Pilot Program for Affordable
Credit-Building Opportunities.
SEC. 4. 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.