California Legislature—2015–16 Regular Session

Assembly Bill No. 2149

Introduced by Assembly Member Bonilla

February 17, 2016

An act to amend Section 22380 of the Financial Code, relating to consumer loans.

LEGISLATIVE COUNSEL’S DIGEST

AB 2149, as introduced, Bonilla. Consumer loans: Pilot Program for Increased Access to Responsible Small Dollar 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, 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. Existing law, on or before January 1, 2017, requires the commissioner to post a report on his or her Internet Web site containing specified information including a recommendation whether the program should be continued after January 1, 2018.

This bill would require, on or before January 1, 2018, the commissioner to also post a report that provides the number of borrowers who were students and obtained loans for specified purposes.

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.  

Section 22380 of the Financial Code is amended
to read:

22380.  

(a)  begin insert (1) end insert begin insert   end insert On or before July 1, 2015, and again, on or
before January 1, 2017, the commissioner shall post a report on
his or her Internet Web site summarizing utilization of the Pilot
Program for Increased Access to Responsible Small Dollar Loans.
The report required to be submitted on or before July 1, 2015, shall
additionally include the information required by former Section
22361, summarizing utilization of the Pilot Program for Affordable
Credit-Building Opportunities, which was created by Chapter 640
of the Statutes of 2010.

begin insert

(2) On or before January 1, 2018, the commissioner shall post
a report on the same Internet Web site that provides the number
of borrowers who were students and obtained a loan for school
textbooks, materials, and electronics, along with the time period
to which the report corresponds.

end insert

(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 begin delete this section end delete begin insert paragraph (1)
of subdivision (a) end insert shall specify the time period to which the report
corresponds, and shall include, but not be limited to, the following
for that time period:

(1) The number of entities that applied to participate in the
program.

(2) The number of entities accepted to participate in the program.

(3) The reason or reasons for rejecting applications for
participation, if applicable. This information shall be provided in
a manner that does not identify the entity or entities rejected.

(4) 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, the distribution of loan
lengths upon origination, and the distribution of interest rates and
principal amounts upon origination among those loans.

(5) The number of borrowers who obtained more than one
program loan and the distribution of the number of loans per
borrower.

(6) 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.

(7) The income distribution of borrowers upon loan origination,
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.

(8) 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) For other than personal, family, or household purposes.

(J) Other.

(9) The number of borrowers who self-report that they had a
bank account at the time of their loan application, the number of
borrowers who self-report that they had a bank account and used
check-cashing services, and the number of borrowers who
self-report that they did not have a bank account at the time of
their loan application.

(10) With respect to refinance loans, the report shall specifically
include the following information:

(A) The number and percentage of borrowers who applied for
a refinance loan.

(B) Of those borrowers who applied for a refinance loan, the
number and percentage of borrowers who obtained a refinance
loan.

(C) Of those borrowers who obtained a refinance loan:

(i) The percentage of borrowers who refinanced once.

(ii) The percentage of borrowers who refinanced twice.

(iii) The percentage of borrowers who refinanced more than
twice.

(D) Of those borrowers who obtained a refinance loan, the
average percentage of principal paid down before obtaining a
refinance loan.

(E) Of those borrowers who obtained a refinance loan, the
average amount of additional principal extended.

(F) Of those borrowers who obtained a refinance loan, the
average number of late payments made on the loan that was
refinanced.

(11) The number and type of finders used by licensees and the
relative performance of loans consummated by finders compared
to the performance of loans consummated without a finder.

(12) 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.

(13) (A) The performance of loans under this article, as reflected
by all of the following:

(i) The number and percentage of pilot program borrowers who
experienced at least one delinquency lasting between begin delete 7 end delete begin insert seven end insert and
29 days, and the distribution of principal loan amounts
corresponding to those delinquencies.

(ii) The number and percentage of pilot program borrowers who
experienced at least one delinquency lasting between 30 and 59
days, and the distribution of principal loan amounts corresponding
to those delinquencies.

(iii) The number and percentage of pilot program borrowers
who experienced at least one delinquency lasting 60 days or more,
and the distribution of principal loan amounts corresponding to
those delinquencies.

(iv) The number and percentage of pilot program borrowers
who experienced at least one delinquency of greater than begin delete 7 end delete begin insert seven end insert
days and who did not subsequently bring their loan current.

(v) Among loans that were ever delinquent for begin delete 7 end delete begin insert seven end insert days or
more, the average number of times borrowers experienced a
delinquency of begin delete 7 end delete begin insert seven end insert days or more.

(B) To the extent data are readily available to the commissioner,
the commissioner shall include in his or her report comparable
delinquency data for unsecured loans made by persons licensed
under Chapter 2 (commencing with Section 22365) of Division 9
in principal amounts between two thousand five hundred dollars
($2,500) and four thousand nine hundred ninety-nine dollars
($4,999), and in principal amounts between five thousand dollars
($5,000) and nine thousand nine hundred ninety-nine dollars
($9,999), and for unsecured extensions of credit made by
state-chartered banks and credit unions under the commissioner’s
jurisdiction, in principal amounts between two thousand five
hundred dollars ($2,500) and four thousand nine hundred
ninety-nine dollars ($4,999), and in principal amounts between
five thousand dollars ($5,000) and nine thousand nine hundred
ninety-nine dollars ($9,999).

(14) The number and types of violations of this article by finders,
which were documented by the commissioner.

(15) The number and types of violations of this article by
licensees, which were documented by the commissioner.

(16) 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.

(17) The number of complaints received by the commissioner
about a licensee or a finder, and the nature of those complaints.

(18) Recommendations for improving the program.

(19) Recommendations regarding whether the program should
be continued after January 1, 2018.

(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.