BILL NUMBER: SB 526	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 7, 2013
	AMENDED IN SENATE  APRIL 22, 2013
	AMENDED IN SENATE  APRIL 9, 2013

INTRODUCED BY   Senator Calderon

                        FEBRUARY 21, 2013

   An act to add Division 9.5 (commencing with Section 22900) to the
Financial Code, relating to lending practices.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 526, as amended, Calderon. Commissioner of Corporations:
lending practices: unlicensed activity report.
   Existing law, the California Finance Lenders Law, provides for the
licensure and regulation by the Commissioner of Corporations of
licensees engaged in making consumer loans, as defined. Existing law
requires these licensees to file an annual report with the
commissioner concerning their business and operations. Existing law
requires the commissioner to annually make and file with the
department a composite of those annual reports. Existing law, the
California Deferred Deposit Transaction Law, provides for the
licensure and regulation by the Commissioner of Corporations of
persons engaged in the business of originating or making deferred
deposit transactions, as defined. Existing law requires a licensee to
file an annual report with the commissioner. Existing law requires
the commissioner to prepare an annual consolidated report based upon
specified information received from licensees.
   The Governor's Reorganization Plan No. 2 of the 2011-12 Regular
Session provides that, on and after July 1, 2013, the
responsibilities of the Department of Corporations and the
Commissioner of Corporations shall be transferred to the Department
of Business Oversight and the Deputy Commissioner of Business
Oversight for the Division of Corporations.
   This bill would, on or before March 15 annually, require the
commissioner to prepare a specified report on the lending and
collection practices of unlicensed persons offering deferred deposit
transactions or installment loans, or both, in amounts under $2,500,
over the Internet, to persons in California, and on the enforcement
actions taken by the commissioner against these persons. The bill
would also require the commissioner to post on the department's
Internet Web site the company names and Internet Web site addresses
of unlicensed lenders offering those deferred deposit transactions or
installment loans without a license from the commissioner. The bill
would also require the commissioner to accompany this posting with a
consumer warning that alerts Californians to the unlicensed nature of
the activities being conducted by these lenders.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Division 9.5 (commencing with Section 22900) is added
to the Financial Code, to read:

      DIVISION 9.5.  Unlicensed Activity Report


   22900.  (a) In addition to the reports required by Sections 22160
and 23026, on or before March 15 of each year, the commissioner shall
report on the lending and collection practices of unlicensed persons
offering deferred deposit transactions or installment loans, or
both, in amounts under  $2,500,   two thousand
five hundred dollars ($2,500),  over the Internet, to persons in
California, and on the enforcement actions taken by the commissioner
against these persons.
   (b) To the extent information is available, the commissioner's
report shall include all of the following for the prior calendar
year:
   (1) The number of unlicensed lenders identified by the
commissioner as lending in California during the prior year, and the
company names and Internet Web site addresses these lenders used.
   (2) The state or country in which each of these Internet Web sites
was hosted.
   (3) The rates and terms offered by these lenders.
   (4) The collection practices of these lenders.
   (5) The extent to which these lenders complied with the provisions
of California law applicable to them.
   (6) The enforcement efforts taken against each of the unlicensed
lenders identified by the commissioner during the prior year.
   (7) Recommendations for changes to law that would improve the
department's ability to identify and take enforcement actions against
unlicensed persons lending in California over the Internet, and to
minimize consumer harm resulting from such lending. 
   (8) The differential impact, if any, that these deferred deposit
transactions or installment loans, or both, have on low-income
borrowers. 
   (c) Based on the findings of the report prepared pursuant to this
section, on the department's Internet Web site, the commissioner
shall on an ongoing basis post the company names and Internet Web
site addresses of unlicensed lenders offering deferred deposit
transactions or installment loans, or both, in amounts under 
$2,500,   two thousand five hundred dollars ($2,500),
 over the Internet, to persons in California, without a required
license from the commissioner to engage in those activities. The
commissioner shall accompany this posting with a consumer warning
that alerts Californians to the unlicensed nature of the activities
being conducted by these lenders via these Internet Web sites.
   (d) For purposes of this section, the following definitions shall
apply:
   (1)  "Commissioner"   "Commissioner" 
shall mean the Commissioner of Corporations.
   (2) "Department" shall mean the Department of Corporations.