BILL NUMBER: SB 526	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Calderon

                        FEBRUARY 21, 2013

   An act to amend Section 2954.8 of the Civil Code, relating to
banks.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 526, as introduced, Calderon. Banks: mortgage loans: advance
payments.
   Existing state and federal law define and regulate banks. Existing
state law requires a financial institution that makes loans secured
by residential real property, as specified, that receives money in
advance for payment of taxes and assessments on the property, for
insurance, or for other purposes relating to the property, to pay
interest on the amount held to the borrower.
   This bill would make nonsubstantive, technical amendments to these
provisions.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


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

  SECTION 1.  Section 2954.8 of the Civil Code is amended to read:
   2954.8.  (a) Every financial institution that makes loans upon the
security of real property containing only a one- to four-family
residence and located in this state  ,  or purchases
obligations secured by  such   the 
property  ,  and that receives money in advance for payment
of taxes and assessments on the property, for insurance, or for other
purposes relating to the property, shall pay interest on the amount
 so  held to the borrower. The interest on 
such   these  amounts shall be at the rate of at
least 2 percent simple interest per annum.  Such 
 This  interest shall be credited to the borrower's account
annually or upon termination of  such   the
 account, whichever is earlier.
   (b) No financial institution subject to the provisions of this
section shall impose any fee or charge in connection with the
maintenance or disbursement of money received in advance for the
payment of taxes and assessments on real property securing loans made
by  such   the  financial institution, or
for the payment of insurance, or for other purposes relating to such
real property, that will result in an interest rate of less than 2
percent per annum being paid on the moneys so received.
   (c) For the purposes of this section, "financial institution"
means a bank, savings and loan association or credit union chartered
under the laws of this state or the United States, or any other
person or organization making loans upon the security of real
property containing only a one- to four-family residence.
   (d) The provisions of this section do not apply to any of the
following:
   (1) Loans executed prior to the effective date of this section.
   (2) Moneys  which   that  are required
by a state or federal regulatory authority to be placed by a
financial institution other than a bank in a non-interest-bearing
demand trust fund account of a bank.
   The amendment of this section made by the 1979-80 Regular Session
of the Legislature shall only apply to loans executed on or after
January 1, 1980.