Amended in Assembly March 19, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 844

Introduced by Assembly Member Dickinson

February 21, 2013

An act to amend begin delete Section 2944.7 of end delete begin insert Sections 1747.02, 1747.08, 1747.09, and 1748.30 of, and to add Section 1747.08.1 to, end insert the Civil Code, begin insert and to amend Section 99030 of the Education Code, end insert relating to begin delete mortgages end delete begin insert credit and debit cards end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 844, as amended, Dickinson. begin delete Mortgage loan modification. end delete begin insert Credit and debit cards: transactions: personal information. end insert

begin insert

Existing state and federal law regulate the provision of credit and the use of credit cards. Existing state law prohibits a person, firm, partnership, association, or corporation that accepts credit cards for the transaction of business from requesting or requiring the cardholder to provide personal identification information, which is then recorded, as a condition to accepting the credit card as payment in full or in part for goods or services, but provides various exceptions to this prohibition.

end insert begin insert

Under existing law, a person who violates the above provisions is subject to specified civil penalties, an action for injunctive relief, or both.

end insert begin insert

This bill would extend the above restrictions regarding the collection of personal identification information to debit cards. The bill would define “debit card” and related terms for these purposes, and would make conforming changes.

end insert begin insert

This bill would prohibit the operator of a commercial Internet Web site or online service that collects personal identifiable information from requiring a credit cardholder or debit cardholder to provide any information other than a ZIP Code to complete the Internet credit card or debit card transaction, except under specified circumstances. The bill would authorize the assessment of civil penalties or an action for injunctive relief, or both, for a violation of these provisions.

end insert begin insert

Existing law prohibits a person, firm, partnership, association, corporation, or limited liability company that accepts credit or debit cards for the transaction of business from printing more than the last 5 digits of an individual’s credit card or debit card number, or the expiration date, on a transaction receipt, as specified.

end insert begin insert

This bill would revise the above provisions to remove specific references to printed receipts, and would make other conforming changes.

end insert begin delete

Existing law, applicable to residential mortgages, prohibits a person who negotiates, arranges, or otherwise offers to perform a mortgage loan modification or other form of mortgage loan forbearance for a fee or other compensation from, among other things, demanding or receiving any compensation until every service that the person contracted to perform or represented that he or she would perform is accomplished.

end delete begin delete

This bill would make technical, nonsubstantive changes to these provisions.

end delete

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 1747.02 of the end insert begin insert Civil Code end insert begin insert is amended to
read: end insert

1747.02.  

As used in this title:

(a) “Credit card” means any card, plate, coupon book, or other
single credit device existing for the purpose of being used from
time to time begin delete upon presentation end delete to obtain money, property, labor,
or services on credit. “Credit card” does not mean any of the
following:

(1) Any single credit device used to obtain telephone property,
labor, or services in any transaction under public utility tariffs.

(2) Any device that may be used to obtain credit pursuant to an
electronic fund transfer, but only if the credit is obtained under an
agreement between a consumer and a financial institution to extend
credit when the consumer’s asset account is overdrawn or to
maintain a specified minimum balance in the consumer’s asset
account.

(3) Any key or card key used at an automated dispensing outlet
to obtain or purchase petroleum products, as defined in subdivision
(c) of Section 13401 of the Business and Professions Code, that
will be used primarily for business rather than personal or family
purposes.

(b) “Accepted credit card” means any credit card that the
cardholder has requested or applied for and received or has signed,
or has used, or has authorized another person to use, for the purpose
of obtaining money, property, labor, or services on credit. Any
credit card issued in renewal of, or in substitution for, an accepted
credit card becomes an accepted credit card when received by the
cardholder, whether the credit card is issued by the same or a
successor card issuer.

begin insert

(c) “Debit card” means an accepted debit card or other means
of access to a debit cardholder’s account that may be used to
initiate electronic funds transfers and may be used without unique
identifying information such as a personal identification number
to initiate access to the debit cardholder’s account.

end insert begin insert

(d) “Accepted debit card” means a debit card that the debit
cardholder has requested and received or has signed, or has used,
or has authorized another person to use, for the purpose of
obtaining money, property, labor, or services. Any debit card
issued in renewal of, or in substitution for, an accepted debit card
becomes an accepted debit card when received by the debit
cardholder, whether the debit card is issued by the same or by a
successor card issuer.

end insert begin delete

(c)

end delete

begin insert (e) end insert  “Card issuer” means any person who issues a credit card or
the agent of that person for that purpose with respect to the credit
card.

begin delete

(d)

end delete

begin insert (f) end insert  “Cardholder” means a natural person to whom a credit card
is issued for consumer credit purposes, or a natural person who
has agreed with the card issuer to pay consumer credit obligations
arising from the issuance of a credit card to another natural person.
For purposes of Sections 1747.05, 1747.10, and 1747.20, the term
includes any person to whom a credit card is issued for any
purpose, including business, commercial, or agricultural use, or a
person who has agreed with the card issuer to pay obligations
arising from the issuance of that credit card to another person.

begin insert

(g) “Debit card issuer” means any person who issues a debit
card or the agent of that person for that purpose.

end insert begin insert

(h) “Debit cardholder” means a natural person to whom a debit
card is issued.

end insert begin delete

(e)

end delete

begin insert (i) end insert  “Retailer” means every person other than a card issuer begin insert or
debit card end insert issuer who furnishes money, goods, services, or anything
else of value upon presentation of a credit card begin insert or debit card end insert by a
cardholder begin insert or debit cardholder end insert . “Retailer” shall not mean the state,
a county, city, city and county, or any other public agency.

begin delete

(f)

end delete

begin insert (j) end insert  “Unauthorized use” means the use of a credit card begin insert or debit
card end insert by a person, other than the cardholder begin insert or debit cardholder end insert ,
(1) who does not have actual, implied, or apparent authority for
that use and (2) from which the cardholder begin insert or debit card holder end insert
receives no benefit. “Unauthorized use” does not include the use
of a credit card begin insert or debit card end insert by a person who has been given
authority by the cardholder begin insert or debit cardholder end insert to use the credit
card begin insert or debit card end insert . Any attempted termination by the cardholder
begin insert or debit cardholder end insert of the person’s authority is ineffective as
against the card issuer begin insert or debit card issuer end insert until the cardholder begin insert or
debit cardholder end insert complies with the procedures required by the
card issuer begin insert or debit card issuer end insert to terminate that authority.
Notwithstanding the above, following the card issuer’s begin insert or debit
card issuer’s end insert receipt of oral or written notice from a cardholder
begin insert or debit cardholder end insert indicating that it wishes to terminate the
authority of a previously authorized user of a credit card begin insert or debit
card end insert , the card issuer begin insert or debit card issuer end insert shall follow its usual
procedures for precluding any further use of a credit card begin insert or debit
card end insert by an unauthorized person.

begin delete

(g)

end delete

begin insert (k) end insert  An “inquiry” is a writing that is posted by mail to the address
of the card issuer begin insert or debit card issuer end insert to which payments are
normally tendered, unless another address is specifically indicated
on the statement for that purpose, then to that other address, and
that is received by the card issuer begin insert or debit card issuer end insert no later than
60 days after the card issuer transmitted the first periodic statement
that reflects the alleged billing error, and that does all of the
following:

(1) Sets forth sufficient information to enable the card issuer begin insert or
debit card issuer end insert to identify the cardholder begin insert or debit cardholder end insert
and the account.

(2) Sufficiently identifies the billing error.

(3) Sets forth information providing the basis for the
cardholder’s begin insert or debit cardholder’s end insert belief that the billing error
exists.

begin delete

(h)

end delete

begin insert (l) end insert  A “response” is a writing that is responsive to an inquiry and
mailed to the cardholder’s begin insert or debit cardholder’s end insert address last known
to the card issuer begin insert or debit card issuer end insert .

begin delete

(i)

end delete

begin insert (m) end insert  A “timely response” is a response that is mailed within two
complete billing cycles, but in no event later than 90 days, after
the card issuer begin insert or debit card issuer end insert receives an inquiry.

begin delete

(j)

end delete

begin insert (n) end insert  A “billing error” means an error by omission or commission
in (1) posting any debit or credit, or (2) in computation or similar
error of an accounting nature contained in a statement given to the
cardholder begin insert or debit cardholder end insert by the card issuer begin insert or debit card
issuer end insert . A “billing error” does not mean any dispute with respect
to value, quality, or quantity of goods, services, or other benefit
obtained through use of a credit card begin insert end insert begin insert or debit card end insert .

begin delete

(k)

end delete

begin insert (o) end insert  “Adequate notice” means a printed notice to a cardholder
begin insert or debit cardholder end insert that sets forth the pertinent facts clearly and
conspicuously so that a person against whom it is to operate could
reasonably be expected to have noticed it and understood its
meaning.

begin delete

(l)

end delete

begin insert (p) end insert  “Secured credit card” means any credit card issued under
an agreement or other instrument that pledges, hypothecates, or
places a lien on real property or money or other personal property
to secure the cardholder’s obligations to the card issuer.

begin delete

(m)

end delete

begin insert (q) end insert  “Student credit card” means any credit card that is provided
to a student at a public or private college or university and is
provided to that student solely based on his or her enrollment in a
public or private university, or is provided to a student who would
not otherwise qualify for that credit card on the basis of his or her
income. A “student credit card” does not include a credit card
issued to a student who has a cocardholder or cosigner who would
otherwise qualify for a credit card other than a student credit card.

begin delete

(n)

end delete

begin insert (r) end insert  “Retail motor fuel dispenser” means a device that dispenses
fuel that is used to power internal combustion engines, including
motor vehicle engines, that processes the sale of fuel through a
remote electronic payment system, and that is in a location where
an employee or other agent of the seller is not present.

begin delete

(o)

end delete

begin insert (s) end insert  “Retail motor fuel payment island automated cashier” means
a remote electronic payment processing station that processes the
retail sale of fuel that is used to power internal combustion engines,
including motor vehicle engines, that is in a location where an
employee or other agent of the seller is not present, and that is
located in close proximity to a retail motor fuel dispenser.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 1747.08 of the end insert begin insert Civil Code end insert begin insert is amended to read: end insert

1747.08.  

(a) Except as provided in subdivision (c), no person,
firm, partnership, association, or corporation that accepts credit
cards begin insert or debit cards end insert for the transaction of business shall do any of
the following:

(1) Request, or require as a condition to accepting the credit
card begin insert or debit card end insert as payment in full or in part for goods or
services, the cardholder begin insert or debit cardholder end insert to begin delete write end delete begin insert provide end insert any
personal identification information begin delete upon the credit card transaction
form or otherwise end delete .

(2) Request, or require as a condition to accepting the credit
card begin insert or debit card end insert as payment in full or in part for goods or
services, the cardholder begin insert or debit cardholder end insert to provide personal
identification information, which the person, firm, partnership,
association, or corporation accepting the credit card begin delete writes end delete begin insert or debit
card collects end insert , causes to be begin delete written end delete begin insert collected end insert , or otherwise records
upon the credit card begin insert or debit card end insert transaction begin delete form end delete begin insert template end insert or
otherwise.

(3) Utilize, in any credit card begin insert or debit card end insert transaction, a credit
card begin delete form end delete begin insert or debit card template end insert which contains begin delete preprinted end delete spaces
specifically designated for filling in any personal identification
information of the cardholder begin insert or debit cardholder end insert .

(b) For purposes of this section “personal identification
information,” means information concerning the cardholder begin insert or
debit cardholder end insert , other than information set forth on the credit
card begin insert or debit card end insert , and including, but not limited to, the
cardholder’s begin insert or debit cardholder’s end insert address and telephone number.

(c) Subdivision (a) does not apply in the following instances:

(1) If the credit card begin insert or debit card end insert is being used as a deposit to
secure payment in the event of default, loss, damage, or other
similar occurrence.

(2) Cash advance transactions.

(3) If any of the following applies:

(A) The person, firm, partnership, association, or corporation
accepting the credit card begin insert or debit card end insert is contractually obligated
to provide personal identification information in order to complete
the credit card begin insert or debit card end insert transaction.

(B) The person, firm, partnership, association, or corporation
accepting the credit card in a sales transaction at a retail motor fuel
dispenser or retail motor fuel payment island automated cashier
uses the begin delete Zip end delete begin insert ZIP end insert Code information solely for prevention of fraud,
theft, or identity theft.

(C) The person, firm, partnership, association, or corporation
accepting the credit card begin insert or debit card end insert is obligated to collect and
record the personal identification information by federal or state
law or regulation.

(4) If personal identification information is required for a special
purpose incidental but related to the individual credit card begin insert or debit
card end insert transaction, including, but not limited to, information relating
to shipping, delivery, servicing, or installation of the purchased
merchandise, or for special orders.

(d) This section does not prohibit any person, firm, partnership,
association, or corporation from requiring the cardholder begin insert or debit
cardholder end insert , as a condition to accepting the credit card begin insert or debit
card end insert as payment in full or in part for goods or services, to provide
reasonable forms of positive identification, which may include a
driver’s license or a California state identification card, or where
one of these is not available, another form of photo identification,
provided that none of the information contained thereon is begin delete written end delete
begin insert collected end insert or recorded on the credit card begin insert or debit card end insert transaction
begin delete form end delete begin insert template end insert or otherwise. If the cardholder begin insert or debit cardholder end insert
pays for the transaction with a credit card begin insert or debit card end insert number
and does not make the credit card begin insert or debit card end insert available upon
request to verify the number, the cardholder’s begin insert or debit cardholder’s end insert
driver’s license number or identification card number may be
recorded on the credit card transaction begin delete form end delete or otherwise.

(e) Any person who violates this section shall be subject to a
civil penalty not to exceed two hundred fifty dollars ($250) for the
first violation and one thousand dollars ($1,000) for each
subsequent violation, to be assessed and collected in a civil action
brought by the person paying with a credit card begin insert or debit card end insert , by
the Attorney General, or by the district attorney or city attorney
of the county or city in which the violation occurred. However,
no civil penalty shall be assessed for a violation of this section if
the defendant shows by a preponderance of the evidence that the
violation was not intentional and resulted from a bona fide error
made notwithstanding the defendant’s maintenance of procedures
reasonably adopted to avoid that error. When collected, the civil
penalty shall be payable, as appropriate, to the person paying with
a credit card begin insert or debit card end insert who brought the action, or to the general
fund of whichever governmental entity brought the action to assess
the civil penalty.

(f) The Attorney General, or any district attorney or city attorney
within his or her respective jurisdiction, may bring an action in
the superior court in the name of the people of the State of
California to enjoin violation of subdivision (a) and, upon notice
to the defendant of not less than five days, to temporarily restrain
and enjoin the violation. If it appears to the satisfaction of the court
that the defendant has, in fact, violated subdivision (a), the court
may issue an injunction restraining further violations, without
requiring proof that any person has been damaged by the violation.
In these proceedings, if the court finds that the defendant has
violated subdivision (a), the court may direct the defendant to pay
any or all costs incurred by the Attorney General, district attorney,
or city attorney in seeking or obtaining injunctive relief pursuant
to this subdivision.

(g) Actions for collection of civil penalties under subdivision
(e) and for injunctive relief under subdivision (f) may be
consolidated.

(h) The changes made to this section by Chapter 458 of the
Statutes of 1995 apply only to credit card transactions entered into
on and after January 1, 1996. Nothing in those changes shall be
construed to affect any civil action which was filed before January
1, 1996.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 1747.08.1 is added to the end insert begin insert Civil Code end insert begin insert , to read: end insert

begin insert

begin insert 1747.08.1. end insert   

(a) An operator of a commercial Internet Web site
or online service that collects personal identifiable information
for a credit card or debit card transaction shall not require a
cardholder or a debit cardholder to provide any information other
than their ZIP Code to complete the credit card or debit card
transaction through the Internet.

(b) Subdivision (a) does not apply to any of the following:

(1) Instances in which the credit card is being used as a deposit
to secure payment in the event of default, loss, damage, or other
similar occurrence.

(2) Cash advance transactions.

(3) Instances in which either of the following applies:

(A) An operator of a commercial Internet Web site or online
service is contractually obligated to provide personal identifiable
information in order to complete the credit card or debit card
transaction.

(B) An operator of a commercial Internet Web site or online
service is obligated to collect and record the personal identifiable
information by federal or state law or regulation.

(4) Instances in which personal identifiable information is
required for a special purpose incidental but related to the
individual credit card or debit card transaction, including, but not
limited to, information relating to shipping, delivery, servicing,
or installation of the purchased merchandise, or for special orders.

(c) For purposes of this section, the following definitions apply:

(1) “Personal identifiable information” means individually
identifiable information about an individual consumer, collected
online by the operator from that individual, and maintained by the
operator in an accessible form, an includes any of the following:

(A) First and last name.

(B) Home or other physical address, including street name and
name of a city or town.

(C) E-mail address.

(D) Telephone number.

(2) “Operator” means a person or entity that owns an Internet
Web site or an online service that collects and maintains personal
identifiable information from a consumer residing in California
who uses or visits the Internet Web site or online service if the
Internet Web site or online service is operated for commercial
purposes.

(3) “Consumer” means an individual who seeks or acquires,
by purchase or lease, any goods, services, money, or credit for
personal, family, or household purposes.

(d) (1) A person who violates this section shall be subject to a
civil penalty not to exceed two hundred fifty dollars ($250) for the
first violation and one thousand dollars ($1,000) for each
subsequent violation, to be assessed and collected in a civil action
brought by the person paying with a credit card or debit card, by
the Attorney General, or by the district attorney or city attorney
of the county or city in which the violation occurred.

(2) Notwithstanding paragraph (1), a civil penalty shall not be
assessed for a violation of this section if the defendant shows, by
a preponderance of the evidence, that the violation was not
intentional and resulted from a bona fide error made
notwithstanding the defendant’s maintenance of procedures
reasonably adopted to avoid that error.

(3)  When collected, the civil penalty shall be payable, as
appropriate, to the person paying with a credit card or debit card
who brought the action, or to the general fund of the governmental
entity that brought the action to assess the civil penalty.

(e) The Attorney General, or any district attorney or city
attorney within his or her respective jurisdiction, may bring an
action in the superior court in the name of the people of the State
of California to enjoin violation of subdivision (a) and, upon notice
to the defendant of not less than five days, to temporarily restrain
and enjoin the violation. If it appears to the satisfaction of the
court that the defendant has, in fact, violated subdivision (a), the
court may issue an injunction restraining further violations, without
requiring proof that any person has been damaged by the violation.
In these proceedings, if the court finds that the defendant has
violated subdivision (a), the court may direct the defendant to pay
any or all costs incurred by the Attorney General, district attorney,
or city attorney in seeking or obtaining injunctive relief pursuant
to this subdivision.

(f) Actions for collection of civil penalties under subdivision (d)
and for injunctive relief under subdivision (e) may be consolidated.

(g) This section shall apply only to credit card and debit card
transactions entered into on and after January 1, 2014. This section
shall not be construed to affect any civil action that was filed before
January 1, 2014.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 1747.09 of the end insert begin insert Civil Code end insert begin insert is amended to read: end insert

1747.09.  

(a) Except as provided in this section, no person,
firm, partnership, association, corporation, or limited liability
company that accepts credit or debit cards for the transaction of
business shall begin delete print end delete begin insert display end insert more than the last five digits of the
credit or debit card account number or the expiration date upon
any of the following:

(1) Any receipt provided to the cardholder.

(2) Any receipt retained by the person, firm, partnership,
association, corporation, or limited liability company begin delete , which is
printed at the time of the purchase, exchange, refund, or return,
and is signed by the cardholder end delete .

(3) Any receipt retained by the person, firm, partnership,
association, corporation, or limited liability company begin delete , which is
printed end delete begin insert that end insert at the time of the purchase, exchange, refund, or return,
begin delete but end delete is not signed by the cardholder, because the cardholder begin insert or debit
cardholder end insert used a personal identification number to complete the
transaction.

(b) This section shall apply only to receipts that include a credit
or debit card account number that are electronically printed and
shall not apply to transactions in which the sole means of recording
the person’s credit or debit card account number is by handwriting
or by an imprint or copy of the credit or debit card.

(c) This section shall not apply to documents, other than the
receipts described in paragraphs (1) to (3), inclusive, of subdivision
(a), used for internal administrative purposes.

(d) Paragraphs (2) and (3) of subdivision (a) shall become
operative on January 1, 2009.

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 1748.30 of the end insert begin insert Civil Code end insert begin insert is amended to read: end insert

1748.30.  

For purposes of this title, the following definitions
shall apply:

(a) “Accepted debit card” means any debit card which the debit
cardholder has requested and received or has signed, or has used,
or has authorized another person to use, for the purpose of
obtaining money, property, labor, or services. Any debit card issued
in renewal of, or in substitution for, an accepted debit card becomes
an accepted debit card when received by the debit cardholder,
whether the debit card is issued by the same or by a successor card
issuer.

(b) “Account” means a demand deposit (checking), savings, or
other consumer asset account, other than an occasional or incidental
credit balance in a credit plan, established primarily for personal,
family, or household purposes.

(c) “Adequate notice” has the same meaning as found in
subdivision begin delete (k) end delete begin insert (o) end insert of Section 1747.02.

(d) “Debit card” means an accepted debit card or other means
of access to a debit cardholder’s account that may be used to initiate
electronic funds transfers and may be used without unique
identifying information such as a personal identification number
to initiate access to the debit cardholder’s account.

(e) “Debit card issuer” means any person who issues a debit
card or the agent of that person for that purpose.

(f) “Debit cardholder” means a natural person to whom a debit
card is issued.

(g) “Unauthorized use” means the use of a debit card by a
person, other than the debit cardholder, to initiate an electronic
fund transfer from the debit cardholder’s account without actual
authority to initiate the transfer and from which the debit cardholder
receives no benefit. The term does not include an electronic fund
transfer initiated in any of the following manners:

(1) By a person who was furnished the debit card to the debit
cardholder’s account by the debit cardholder, unless the debit
cardholder has notified the debit card issuer that transfers by that
person are no longer authorized.

(2) With fraudulent intent by the debit cardholder or any person
acting in concert with the debit cardholder.

(3) By the debit card issuer or its employee.

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 99030 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

99030.  

The Regents of the University of California and the
governing body of each accredited private or independent college
or university in the state are requested to, and the Trustees of the
California State University and the Board of Governors of the
California Community Colleges shall, adopt policies to regulate
the marketing practices used on campuses by credit card
companies. In adopting the policies, it is the intent of the
Legislature that those entities consider including all of the
following requirements:

(a) That sites at which student credit cards are marketed be
registered with the campus administration and that consideration
be given to limiting the number of sites allowed on a campus.

(b) That marketers of student credit cards be prohibited from
offering gifts to students for filling out credit card applications.

(c) That credit card and debt education and counseling sessions
become a regular part of campus orientation of new students. For
purposes of this section, colleges and universities shall utilize
existing debt education materials prepared by nonprofit entities
and thus not incur the expense of preparing new materials.

(d) For the purposes of this chapter, “student credit card” has
the meaning set forth in subdivision begin delete (m) end delete begin insert (q) end insert of Section 1747.02 of
the Civil Code.

begin delete

SECTION 1.  

Section 2944.7 of the Civil Code is amended to
read:

2944.7.  

(a) Notwithstanding any other law, it shall be unlawful
for a person who negotiates, attempts to negotiate, arranges,
attempts to arrange, or otherwise offers to perform a mortgage
loan modification or other form of mortgage loan forbearance for
a fee or other compensation paid by the borrower to do any of the
following:

(1) Claim, demand, charge, collect, or receive any compensation
until after the person has fully performed each and every service
the person contracted to perform or represented that he or she
would perform.

(2) Take any wage assignment, any lien of any type on real or
personal property, or other security to secure the payment of
compensation.

(3) Take any power of attorney from the borrower for any
purpose.

(b) A violation of this section by a natural person is a public
offense punishable by a fine not exceeding ten thousand dollars
($10,000), by imprisonment in the county jail for a term not to
exceed one year, or by both that fine and imprisonment, or if by
a business entity, the violation is punishable by a fine not exceeding
fifty thousand dollars ($50,000). These penalties are cumulative
to any other remedies or penalties provided by law.

(c) Nothing in this section precludes a person, or an agent acting
on that person’s behalf, who offers loan modification or other loan
forbearance services for a loan owned or serviced by that person,
from doing any of the following:

(1) Collecting principal, interest, or other charges under the
terms of a loan, before the loan is modified, including charges to
establish a new payment schedule for a nondelinquent loan, after
the borrower reduces the unpaid principal balance of that loan for
the express purpose of lowering the monthly payment due under
the terms of the loan.

(2) Collecting principal, interest, or other charges under the
terms of a loan, after the loan is modified.

(3) Accepting payment from a federal agency in connection
with the federal Making Home Affordable Plan or other federal
plan intended to help borrowers refinance or modify their loans
or otherwise avoid foreclosures.

(d) This section shall apply only to mortgages and deeds of trust
secured by residential real property containing four or fewer
dwelling units.

end delete