BILL NUMBER: SB 1280	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Hueso

                        FEBRUARY 21, 2014

   An act to add Article 3.8 (commencing with Section 22390) to
Chapter 2 of Division 9 of the Financial Code, relating to finance
lenders.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1280, as introduced, Hueso. Department of Business Oversight:
unsecured consumer loans.
   Existing law, the California Finance Lenders Law, provides for the
licensure and regulation of finance lenders and brokers by the
Commissioner of Business Oversight and makes a willful violation of
its provisions a crime. Existing law regulates the terms and
conditions under which a lender may make consumer loans. Under
existing law, "consumer loan" means a loan, whether secured by either
real or personal property, or both, or unsecured, the proceeds of
which are intended by the borrower for use primarily for personal,
family, or household purposes.
   Existing law, until January 1, 2018, establishes the Pilot Program
for Increased Access to Responsible Small Dollar Loans for the
purpose of allowing greater access for responsible installment loans
in principal amounts of at least $300 and less than $2,500.
   This bill would require the Department of Business Oversight to
establish a licensure program for the provision of unsecured consumer
loans in an amount up to $1,000, as specified.
   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.  Article 3.8 (commencing with Section 22390) is added to
Chapter 2 of Division 9 of the Financial Code, to read:

      Article 3.8.  Unsecured Consumer Loans


   22390.  (a) The Department of Business Oversight shall establish a
licensure program for the provision of unsecured consumer loans in
accordance with this article.
   (b) The principal amount of a loan made under this article shall
not exceed one thousand dollars ($1,000).
   (c) The program established under this article shall be designed
to ensure that the loan product allows the licensee to receive a
reasonable return on its investment, taking into account the needs of
the consumer.