Amended in Senate June 13, 2016

Amended in Assembly May 31, 2016

Amended in Assembly May 10, 2016

Amended in Assembly April 20, 2016

Amended in Assembly March 28, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2251

Introduced by Assembly Member Mark Stone

(Coauthors: Assembly Members Dababneh and Gonzalez)

(Coauthor: Senator Leno)

February 18, 2016

An act to add Division 12.5 (commencing with Section 28100) to the Financial Code, relating to student loan servicers.

LEGISLATIVE COUNSEL’S DIGEST

AB 2251, as amended, Mark Stone. Student loan servicers: licensing and regulation: Student Loan Borrower’s Bill of Rights.

(1) Existing law establishes the Department of Business Oversight as headed by the Commissioner of Business begin delete Oversight end delete begin insert Oversight, end insert who, among other things, generally provides for the licensure and regulation of persons who are engaged in various consumer financial businesses, including, but not limited to, the business of making consumer or commercial loans.

This bill would enact the Student Loan Borrower’s Bill of Rights providing for the licensure, regulation, and oversight of student loan servicers begin delete engaging in the servicing of student loans for borrowers, as those terms are defined, end delete by the begin delete commissioner. end delete begin insert commissioner and would define terms for its purposes. end insert The bill would prohibit a person from acting as a student loan servicer without a license, unless exempt from the licensing requirement, and would require a licensee to provide specific services to a student loan begin delete borrower. end delete begin insert borrower and comply with reporting, auditing, and other oversight by the commissioner. end insert The bill would require a person applying for a license to, among other things, pay begin delete the actual costs for processing an application and the investigation of the application, end delete begin insert an application fee, end insert sign the application under penalty of perjury, and submit to a criminal background check by the Department of Justice. By expanding the scope of the crime of perjury and increasing who is authorized to receive criminal record information, this bill would impose a state-mandated local program. The bill would specify the basis for the commissioner to deny, revoke, or suspend a license that includes, among other bases, a failure to comply with an investigation by the commissioner. The bill would make legislative findings in support of its provisions. begin insert The bill would require each licensee to pay to the commissioner its pro rata share of all costs and expenses reasonably incurred in the administration of these provisions, as estimated by the commissioner, and would authorize the commissioner to enforce these provisions by, among other things, promulgating regulations, performing investigations, and enforcing the provisions in a hearing or court, as specified. The bill would prohibit the public disclosure of specific information provided by a licensee to the commissioner. end insert

(2) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

begin insert

(3)Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

end insert begin insert

This bill would make legislative findings to that effect.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

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

SECTION 1.  

The Legislature finds and declares all of the
following:

(a) Student loan debt is a national crisis. More than 40,000,000
people in the United States owe some amount of student
educational loan debt. Total student educational debt in the United
States currently exceeds $1.2 trillion, surpassing both the amount
of credit card debt and car loans. With college costs continuing to
rise, student educational debt continues to rise, and there is no
reduction in sight.

(b) While California’s financial aid programs are some of the
strongest in the nation and our state’s college graduates have among
the lowest educational debt burdens, California students and
graduates still incur significant debt. According to begin delete The end delete begin insert the end insert Institute
for College Access & Success, 55 percent of California’s
graduating class of 2014 has student educational loan debt.
According to the United States Department of Education, as of
January 2015, there were approximately 4,156,000 student
educational loan borrowers in California, and the total student
educational loan debt outstanding for Californians was
approximately $1.2 billion.

(c) Student educational loan debt is a hindrance on the state’s
economy, preventing borrowers from achieving financial
independence, buying property, and starting businesses.

(d) Student educational loan servicers administer student loans,
serving as a critical link between borrowers and lenders in
managing accounts, processing payments, and communicating
directly with borrowers. Despite this critical relationship, according
to the federal Consumer Financial Protection Bureau (CFPB), there
are no consistent, marketwide federal standards for student
educational loan servicing.

(e) The CFPB released a report in September 2015 that found
that student educational loan borrowers encounter servicers that
discourage borrower-friendly alternative payment plans, fail to
respond to questions and payment processing errors, and fail to
provide sufficient information to borrowers regarding payments,
benefits, interest rates, and other charges.

(f) It is the intent of the Legislature to promote all of the
following:

(1) Meaningful access to federal affordable repayment and loan
forgiveness benefits.

(2) Reliable information about student educational loans and
loan repayment options.

(3) Quality customer service and fair treatment.

SEC. 2.  

Division 12.5 (commencing with Section 28100) is
added to the Financial Code, to read:

 

Division 12.5.  California Student Loan
Borrower’s Bill of Rights

 

Chapter  1. General Provisions

 

Article 1.  Short Title

 

28100.  

This division may be known and cited as the “California
Student Loan Borrower’s Bill of Rights.”

 

Article 2.  Requirement for License

 

begin delete 28102. end delete

begin insert 28106. end insert   

(a) A person shall only begin delete act as a student loan servicer, end delete
begin insert engage in the business of servicing a student loan within this state, end insert
directly or indirectly, as a licensee pursuant to this division. A
license shall not be transferable or assignable.

(b) Notwithstanding subdivision (a), any of the following shall
not be required to be a licensee to engage in servicing a student
loan begin delete to borrowers: end delete begin insert within this state: end insert

begin delete

(1) A person authorized to service student loans to borrowers
pursuant to federal law.

end delete begin delete

(2)

end delete

begin insert ( end insert begin insert 1) end insert  A bank, trust company, insurance company, or industrial
loan company doing business under the authority of, or in
accordance with, a license, certificate, or charter issued by the
United States or any state, district, territory, or commonwealth of
the United States that is authorized to transact business in this
state.

begin delete

(3)

end delete

begin insert (2) end insert  A federally chartered savings and loan association, federal
savings bank, or federal credit union that is authorized to transact
business in this state.

begin delete

(4)

end delete

begin insert (3) end insert  A savings and loan association, savings bank, or credit union
organized under the laws of this or any other state that is authorized
to transact business in this state.

begin delete

(5) A wholly owned service corporation of a savings and loan
association or savings bank organized under the laws of this state
or the wholly owned service corporation of a federally chartered
savings and loan association or savings bank that is authorized to
transact business in this state.

end delete begin insert

(4) A nonprofit postsecondary educational institution servicing
a student loan it extended to the borrower.

end insert begin insert

(5) A person who is licensed in good standing pursuant to the
California Finance Lenders Law (Division 9 (commencing with
Section 22000)) and services student loans pursuant to Section
22340.

end insert

 

Article 3.  Definitions

 

begin delete 28104. end delete

begin insert 28108. end insert   

For the purposes of this division, the following terms
have the following meanings:

(a) “Applicant” means a person applying for a license pursuant
to this division.

(b) “Borrower” means either of the following:

(1) A person who begin delete is a resident of the state who end delete has received or
agreed to pay a student loan.

(2) A person who begin delete is a resident of the state who end delete shares
responsibility for repaying a student loan with a person described
in paragraph (1).

(c) “Commissioner” means the Commissioner of Business
Oversight.

begin delete

(d) “Control” means the possession, directly or indirectly, of
the power to direct, or cause the direction of, the management and
policies of a licensee under this division, whether through voting
or through the ownership of voting power of an entity that
possesses voting power of the licensee, or otherwise. Control is
presumed to exist if a person, directly or indirectly, owns, controls,
or holds 10 percent or more of the voting power of a licensee or
of an entity that owns, controls, or holds, with power to vote, 10
percent or more of the voting power of a licensee. A person shall
not be deemed to control a licensee solely by reason of his or her
status as an officer or director of the licensee.

end delete begin delete

(e)

end delete

begin insert (d) end insert  “Department” means the Department of Business Oversight.

begin insert

(e) “Engage in the business” means the dissemination to the
public, or any part of the public, by means of written, printed, or
electronic communication or any communication by means of
recorded telephone messages or spoken on radio, television, or
similar communications media, of any information relating to the
servicing of student loans. “Engage in the business” also means,
without limitation, servicing student loans.

end insert begin insert

(f) “In this state” means any activity of a person relating to
servicing student loans that originates from this state and is
directed to persons outside this state, or that originates from
outside this state and is directed to persons inside this state, or
that originates inside this state and is directed to persons inside
this state, or that leads to the formation of a contract and the offer
or acceptance thereof is directed to a person in this state, whether
from inside or outside this state and whether the offer was made
inside or outside this state.

end insert begin delete

(f)

end delete

begin insert (g) end insert  “Licensee” means a begin delete natural end delete person licensed begin delete under end delete begin insert pursuant
to end insert this division.

begin delete

(g)

end delete

begin insert (h) end insert  “Person” means begin delete a natural person, a sole proprietorship, end delete begin insert an
individual, end insert a corporation, a partnership, a limited liability company,
begin delete an association, a trust, end delete a joint venture, begin insert an association, a joint stock
company, a trust, end insert an unincorporated organization, begin delete a joint stock
company, end delete a government, or a political subdivision of a government,
and any other entity.

begin delete

(h)

end delete

begin insert (i) end insert  “Qualified written request” means a written correspondence
made by a borrower, other than notice on a payment medium
supplied by a licensee, begin insert that is end insert transmitted by mail, facsimile, or
electronically through an email address or Internet Web site
designated by the licensee to receive communications from
begin delete borrowers end delete begin insert a borrower end insert that does all of the following:

(1) Enables the licensee to identify the name and account of the
borrower.

(2)  begin delete Includes, end delete begin insert Requests, in sufficient detail, end insert to the extent
applicable, begin delete either end delete begin insert any end insert of the following:

(A)  begin delete Sufficient detail regarding the information end delete begin insert Information end insert
sought by the begin delete borrower. end delete begin insert borrower, including, but not limited to, a
complete payment history of the student loan or the borrower’s
account, the promissory note, and the contact information for the
creditor to whom the student loan is owed. end insert

(B) A statement of the reasons for the belief of the borrower
that there is an error regarding the account of the borrower.

begin delete

(i)

end delete

begin insert (j) end insert  “Servicing” means any of the following activities related to
a student loan of a borrower:

(1) Performing both of the following:

(A) Receiving any scheduled periodic payments from a borrower
or any notification that a borrower made a scheduled periodic
payment.

(B) Applying payments to the borrower’s account pursuant to
the terms of the student loan or the contract governing the
servicing.

(2) During a period when no payment is required on a student
loan, performing both of the following:

(A) Maintaining account records for the student loan.

(B) Communicating with the borrower regarding the student
loan on behalf of the student loan’s holder.

(3) Interactions with a borrower, including, but not limited to,
activities to help prevent default on obligations arising from a
student loan or conducted to facilitate the activities described in
paragraph (1) or (2).

begin delete

(j)

end delete

begin insert (k) end insert  “Student loan” means any loan primarily for begin delete personal end delete use
to finance begin insert a postsecondary end insert education begin delete or other school-related
expenses. end delete begin insert and costs of attendance at the postsecondary institution,
including, but not limited to, tuition, fees, books and supplies, room
and board, transportation, and miscellaneous personal expenses. end insert

begin delete

(k) “Student loan servicer” means, to the extent authorized by
federal law, a person responsible for servicing a student loan for
a borrower.

end delete begin insert

(l) “Student loan servicer” means any person engaged in the
business of servicing student loans.

end insert

 

Chapter  2. Licensing

 

Article 1.  Commissioner of Business Oversight

 

begin delete 28108. end delete

begin insert 28110. end insert   

(a) The commissioner shall administer the provisions
of this division.

(b) The commissioner may promulgate regulations and issue
orders to further the purposes of this division.

begin insert

(c) Without limitation, the functions, powers, and duties of the
commissioner include all of the following:

end insert begin insert

(1) To issue or refuse to issue a license as provided by this
division.

end insert begin insert

(2) To revoke or suspend for cause any license as provided by
this division.

end insert begin insert

(3) To keep records of licenses issued under this division.

end insert begin insert

(4) To receive, consider, investigate, and act upon complaints
made in connection with a licensee.

end insert begin insert

(5) To prescribe the forms of and receive (A) applications for
licenses and (B) reports, books, and records required to be made
by a licensee under this division, including annual audited financial
statements.

end insert begin insert

(6) To subpoena documents and witnesses and compel their
attendance and production, to administer oaths, and to require
the production of books, papers, or other materials relevant to any
inquiry authorized by this division.

end insert begin insert

(7) To require information with regard to an applicant that the
commissioner may deem necessary, with regard for the paramount
public interest in ascertaining the experience, background, honesty,
truthfulness, integrity, and competency of an applicant for servicing
student loans, and if an applicant is an entity other than an
individual, in ascertaining the honesty, truthfulness, integrity, and
competency of an officer or director of the corporation,
association, or other entity, or the members of a partnership.

end insert begin insert

(8) To enforce by order any provision of this division.

end insert begin insert

(9) To levy fees, fines, and charges in an amount sufficient to
cover the cost of the services performed in administering this
division, as set forth by rule.

end insert begin insert

(10) To appoint examiners, supervisors, experts, and special
assistants as needed to effectively and efficiently administer this
division.

end insert

begin delete 28110. end delete

begin insert 28112. end insert   

(a) The commissioner shall have the authority to
conduct investigations and examinations of an applicant or licensee
as follows:

(1) For purposes of determining whether an applicant is eligible
for a license, or that a licensee is complying with the provisions
of this division or any regulation or order of the commissioner,
the commissioner may access, receive, and use any books,
accounts, records, files, documents, information, or evidence,
including, but not limited to, any of the following relating to the
intent to, or the practice of, servicing student loans for borrowers:

(A) Criminal, civil, and administrative history information.

(B) Personal history and experience information, including, but
not limited to, independent credit reports obtained from a consumer
credit reporting agency.

(C) Any other documents, information, or evidence that the
commissioner deems relevant to the inquiry or investigation
regardless of the location, possession, control, or custody of those
documents, information, or evidence.

(2) For the purposes of investigating violations or complaints
arising under this division, the commissioner may direct, subpoena,
or order the attendance of, and examine under oath, any person
whose testimony may be required about the student loan or account
of the borrower.

(b) In making any examination or investigation authorized by
this section, the commissioner may control access to any documents
and records of the licensee or person under examination or
investigation. The commissioner may take possession of the
documents and records or place a person in exclusive charge of
the documents and records in the place where they are usually
kept. During the period of control, no person shall remove or
attempt to remove any of the documents and records except
pursuant to a court order or with the consent of the commissioner.
Unless the commissioner has reasonable grounds to believe the
documents or records of begin delete a licensee end delete begin insert an applicant end insert have been, or are
at risk of being, altered or destroyed for purposes of concealing a
violation of this division, the licensee or owner of the documents
and records shall have access to the documents or records as
necessary to conduct its ordinary business affairs.

begin delete

(c) The commissioner may charge an applicant or a licensee the
actual costs for conducting an examination pursuant to this division.

end delete

begin insert

begin insert 28114. end insert   

(a) Notwithstanding any other law, the commissioner
may by rule or order prescribe circumstances under which to
accept electronic records or electronic signatures. This section
shall not be deemed to require the commissioner to accept
electronic records or electronic signatures.

(b) For purposes of this section, the following terms have the
following meanings:

(1) “Electronic record” means an initial license application,
or material modification of that license application, and any other
record created, generated, sent, communicated, received, or stored
by electronic means. “Electronic records” also includes, but is
not limited to, all of the following:

(A) An application, amendment, supplement, and exhibit, filed
for any license, consent, or other authority.

(B) A financial statement, report, or advertising.

(C) An order, license, consent, or other authority.

(D) A notice of public hearing, accusation, and statement of
issues in connection with any application, license, consent, or
other authority.

(E) A proposed decision of a hearing officer and a decision of
the commissioner.

(F) The transcripts of a hearing and correspondence between
a party and the commissioner directly relating to the record.

(G) A release, newsletter, interpretive opinion, determination,
or specific ruling.

(H) Correspondence between a party and the commissioner
directly relating to any document listed in subparagraphs (A) to
(G), inclusive.

(2) “Electronic signature” means an electronic sound, symbol,
or process attached to or logically associated with an electronic
record and executed or adopted by a person with the intent to sign
the electronic record.

(c) The Legislature finds and declares that the Department of
Business Oversight has continuously implemented methods to
accept records filed electronically, and is encouraged to continue
to expand its use of electronic filings to the extent feasible, as
budget, resources, and equipment are made available to
accomplish that goal.

end insert

 

Article 2.  Application for License

 

begin delete

28112.  

(a) Only a natural person is eligible to be an applicant
and be licensed pursuant to this division.

(b) 

end delete

begin insert

begin insert 28116. end insert   

end insert

An applicant shall apply for a license by submitting all
of the following to the commissioner:

begin delete

(1)

end delete

begin insert (a) end insert  A completed application for a license in a form prescribed
by the commissioner and signed under penalty of perjury.

begin delete

(2) A license fee determined by the commissioner that is
reasonable to pay the department’s actual costs to process and
investigate the application.

end delete begin insert

(b) The sum of one hundred dollars ($100) as a fee for
investigating the application, plus the cost of fingerprint processing
and the criminal history record check under Section 28118, and
two hundred dollars ($200) as an application fee. The investigation
fee, including the amount for the criminal history record check,
and the application fee are not refundable if an application is
denied or withdrawn.

end insert begin insert

(c) Financial statements prepared in accordance with generally
accepted accounting principles and acceptable to the commissioner
that indicate a net worth of at least two hundred fifty thousand
dollars ($250,000).

end insert

begin delete 28114. end delete

begin insert 28118. end insert   

(a) The commissioner shall submit to the Department
of Justice fingerprint images and related information required by
the Department of Justice of every applicant for a license begin delete pursuant
to Section 28112, end delete for purposes of obtaining information as to the
existence and content of a record of state or federal convictions,
state or federal arrests, and information as to the existence and
content of a record of state or federal arrests for which the
Department of Justice establishes that the person is free on bail or
on his or her own recognizance pending trial or appeal.

(b) When received, the Department of Justice shall forward to
the Federal Bureau of Investigation requests for federal summary
criminal history information received pursuant to this section. The
Department of Justice shall review the information returned from
the Federal Bureau of Investigation and compile and disseminate
a response to the commissioner.

(c) The Department of Justice shall provide a response to the
commissioner pursuant to paragraph (1) of subdivision (p) of
Section 11105 of the Penal Code.

(d) The commissioner shall request from the Department of
Justice subsequent arrest notification service, as provided pursuant
to Section 11105.2 of the Penal Code, for the license applicant
described in subdivision (a).

(e) The Department of Justice shall charge the begin delete department end delete
begin insert applicant end insert a fee sufficient to cover the costs of processing the
requests pursuant to this section.

begin insert

begin insert 28120. end insert   

(a) Upon the filing of an application for a license
pursuant to Section 28116 and the payment of the fees, the
commissioner shall investigate the applicant and its general
partners and persons owning or controlling, directly or indirectly,
10 percent or more of the outstanding interests or any person
responsible for the conduct of the applicant’s servicing activities
within this state, if the applicant is a partnership. If the applicant
is a corporation, trust, limited liability company, or association,
including an unincorporated organization, the commissioner shall
investigate the applicant, its principal officers, directors, managing
members, and persons owning or controlling, directly or indirectly,
10 percent or more of the outstanding equity securities or any
person responsible for the conduct of the applicant’s servicing
activities within this state.

(b) Upon the filing of an application for a license pursuant to
Section 28130 and the payment of the fees, the commissioner shall
investigate the person responsible for the servicing activity of the
licensee at the new location described in the application. The
investigation may be limited to information that was not included
in prior applications filed pursuant to this division. If the
commissioner determines that the applicant has satisfied this
division and does not find facts constituting reasons for denial,
the commissioner shall issue and deliver a license to the applicant.

(c) For the purposes of this section, “principal officers” shall
mean president, chief executive officer, treasurer, and chief
financial officer, as may be applicable, and any other officer with
direct responsibility for the conduct of the applicant’s servicing
activities within the state.

end insert

begin delete 28116. end delete

begin insert 28122. end insert   

The commissioner shall, begin delete within 60 days from the date
an application pursuant to Section 28112 end delete begin insert when the application end insert is
complete, including having received the information from the
Department of begin delete Justice pursuant to Section 28114, end delete begin insert Justice, end insert either
grant a license pursuant to this division or provide a written
explanation for the denial.

begin delete 28118. end delete

begin insert 28124. end insert   

(a) The proceedings for a denial of a license shall be
conducted in accordance with Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code.

(b) The commissioner may deny an application for a license for
any of the following reasons:

(1) The applicant made a false statement of a material fact on
the application.

(2) The applicant or begin delete a person with control over the applicant, end delete
begin insert an individual specified in Section 28120 end insert within the last 10 years
of the date of begin delete application, end delete begin insert application end insert has committed any act
involving dishonesty, fraud, or deceit, or has been convicted of,
or pleaded nolo contendere to, a crime substantially related to the
qualifications, functions, or duties related to servicing.

(3) The applicant or begin delete a person with control over the applicant end delete begin insert an
individual specified in Section 28120 end insert has violated any provision
of this division.

begin delete 28120. end delete

begin insert 28126. end insert   

(a) The commissioner may deem an application for a
license abandoned if the applicant fails to respond to any request
for information required by the commissioner or department during
an investigation of the application.

(b) The commissioner shall notify the applicant, in writing, that
if the applicant fails to submit responsive information no later than
60 days after the date the commissioner sent the written request
for information, the commissioner shall deem the application
abandoned.

(c) An application fee paid prior to the date an application is
deemed abandoned shall not be refunded. Abandonment of an
application pursuant to this subdivision shall not preclude the
applicant from submitting a new application and fee for a license.

begin delete 28122. end delete

begin insert 28128. end insert   

A license shall remain effective until the license is
either suspended or revoked by the commissioner or surrendered
by the licensee.

begin delete

28124.  

The commissioner may suspend or revoke a license
issued under this division if the commissioner finds that the
licensee violated any provision of this division or if any fact or
condition exists that, if it had existed at the time of the initial
application for the license, clearly would have warranted a denial
of the license.

end delete begin delete

28126.  

A licensee that ceases to service student loans to
borrowers shall inform the commissioner in writing and surrender
the license and all other indicia of license to the commissioner.
The commissioner may require a licensee to file a plan for the
disposition of the servicing business that includes, but is not limited
to, a closing audit. Upon receipt of the written notice and plan, if
required, the commissioner shall determine whether the licensee
has violated this division. The commissioner shall give a licensee
notice of accepting a surrendered license, and a license shall not
be deemed surrendered until the commissioner accepts its tender
in writing.

end delete

 

Chapter  3. Licensee Duties

 

begin delete 28128. end delete

begin insert 28130. end insert   

begin insert (a) end insert begin insert   end insert A licensee shall notify the commissioner, in
writing, of any change in the information provided in the
application for a license, as applicable, not later than 10 business
days after the occurrence of the event that results in the information
becoming inaccurate or incomplete.

begin insert

(b) (1) If a licensee seeks to change its place of business to a
street address other than that designated in its license, the licensee
shall provide notice to the commissioner at least 10 days prior to
the change. The commissioner shall notify the licensee within 10
days if the commissioner disapproves the change, and if the
commissioner does not notify the licensee of disapproval within
10 days, the change in address shall be deemed approved.

end insert begin insert

(2) If notice is not given at least 10 days prior to the change of
a street address of a place of business, as required by subdivision
(b), or notice is not given at least 10 days prior to engaging in
business at a new location, the commissioner may assess a civil
or administrative penalty on the licensee not to exceed five hundred
dollars ($500).

end insert

begin delete

28130.  

A licensee shall only provide servicing at the place of
business on the license. A licensee shall obtain prior written
permission from the commissioner to add or change business
locations authorized to operate under the license.

end delete begin insert

begin insert 28132. end insert   

(a) A licensee seeking to engage in the business of
servicing at a new location shall submit an application for a branch
office license to the commissioner at least 10 days before engaging
in the business of servicing at a new location and pay the fee
required by Section 28116.

(b) The licensee may engage in the business of servicing at the
new location 10 days after the date of submission of a branch
office application.

(c) (1) The commissioner shall approve or deny the person
responsible for engaging in the business of servicing at the new
location in accordance with Article 2 of Chapter 2 (commencing
with Section 28116), and shall notify the licensee of this decision
within 90 days of the date of receipt of the application.

(2) If the commissioner denies the application, the licensee
shall, within 10 days of the date of receipt of notification of the
commissioner’s denial, submit a new application to the
commissioner designating a different person responsible for
engaging in the business of servicing at the new location. The
commissioner shall approve or deny the different person as
provided in paragraph (1).

(d) A licensee shall not engage in business at a new location in
a name other than a name approved by the commissioner.

(e) A branch office license to engage in the business of servicing
at a new location shall be issued in accordance with this section.
A change of street address of a place of business designated in a
license shall be made in accordance with Section 28130 and shall
not constitute a new location subject to the requirements of this
section.

end insert

begin delete 28132. end delete

begin insert 28134. end insert   

A licensee shall do all of the following:

(a) Maintain staff adequate to meet the requirements of this
division and every regulation and order of the commissioner.

(b) File with the commissioner any report required by regulation
or order of the commissioner.

(c) Comply with the provisions of this division and any
regulation or order of the commissioner.

(d) Submit to periodic examination by the commissioner as
required by this division and any regulation or order of the
commissioner.

(e) Advise the commissioner of filing a petition for bankruptcy
within five days of the filing.

(f) Comply with all applicable state and federal laws and tax
return filing requirements.

(g) Comply with any other requirement established by regulation
or order of the commissioner.

(h) Provide information on a publicly accessible Internet Web
site concerning affordable repayment and loan forgiveness options
that may be available to borrowers and provide to borrowers, at
least once per calendar year, a written correspondence or email
describing those options, as applicable.

(i) Appoint a single point of contact for a borrower wanting any
of the following:

begin delete

(1) Ability to enter into an agreement for, resolution on an issue
concerning, or general information about a repayment option that
requires subsequent submission of supporting documentation.

(2) Modification of the terms of repayment of the student
education loan because of hardship.

(j) If the sale, assignment, or other transfer of the servicing of
a student loan results in a change in the identity of the party to
whom the borrower is required to send payments, or direct any
communications concerning the student loan to, then the licensee
shall notify the borrower in writing at least 45 days before a
borrower is required to send a payment on the student loan of all
of the following:

(1) The identity of the new student loan servicer.

(2) The name and address of the new student loan servicer to
whom subsequent payments or communications are required to
be sent.

(3) The telephone numbers and Internet Web sites of the new
student loan servicer.

(4) The effective date of the sale, assignment, or transfer.

(5) The date on which the current student loan servicer will stop
accepting payments on the borrower’s student loan.

(6) The date on which the new student loan servicer will begin
accepting payments on the borrower’s student loan.

(k)

end delete

begin insert (j) end insert begin insert   end insert begin insert (1) end insert  Respond to a qualified written request by acknowledging
receipt of the request within five business days and within 30
business begin delete days provide, end delete begin insert days, end insert to the extent possible, begin insert provide end insert
information relating to the request and the applicable action the
licensee will take to correct the account or an explanation for the
licensee’s position that the borrower’s account is correct.

begin delete

(l) Unless otherwise directed by the borrower of a student loan,
upon receipt of a payment, the licensee shall apply amounts in
excess of the minimum payment amount first to the interest and
fees owed on the payment due date, next to the principal balance
of the student loan balance bearing the highest annual percentage
rate, and then to each successive interest and fees and principal
balance bearing the next highest annual percentage rate until the
payment is exhausted. A borrower may instruct or expressly
authorize a licensee to apply excess payments in a different manner.
A borrower may also voluntarily increase the periodic payment
amount by various means, including, but not limited to, increasing
his or her recurring electronic payment with the right to return to
the original amortization schedule at any time.

end delete begin insert

(2) The 30-day period described in paragraph (1) may be
extended for not more than 15 days if, before the end of the 30-day
period, the servicer notifies the borrower of the extension and the
reasons for the delay in responding.

end insert begin insert

(3) During the 60-business-day period starting on the date the
servicer received a qualified written request related to a dispute
on borrower’s payments, a servicer shall not provide adverse
information regarding any payment that is the subject of the
qualified written request to any consumer reporting agency.

end insert begin insert

(j) (1) Except as provided in federal law or required by a
student loan agreement, a servicer shall inquire of a borrower
how to apply an overpayment to a student loan. A borrower’s
direction on how to apply an overpayment to a student loan shall
stay in effect for any future overpayments during the term of a
student loan until the borrower provides different directions.

end insert begin insert

(2) For purposes of this subdivision, “overpayment” means a
payment on a student loan in excess of the amount due from a
borrower on a student loan on a monthly basis, also commonly
referred to as a prepayment.

end insert

begin insert

begin insert 28136. end insert   

(a) If the sale, assignment, or other transfer of the
servicing of a student loan results in a change in the identity of
the party to whom the borrower is required to send payments or
direct any communications concerning the student loan to, then
the licensee shall notify the borrower in writing at least 15 days
before a borrower is required to send a payment on the student
loan of all of the following:

(1) The identity of the new student loan servicer and the number
of the license of the new student loan servicer issued by the
commissioner.

(2) The name and address of the new student loan servicer to
whom subsequent payments or communications are required to
be sent.

(3) The telephone numbers and Internet Web sites of the new
student loan servicer.

(4) The effective date of the sale, assignment, or transfer.

(5) The date on which the licensee, as the current student loan
servicer, will stop accepting payments on the borrower’s student
loan.

(6) The date on which the new student loan servicer will begin
accepting payments on the borrower’s student loan.

(b) A licensee shall transfer all information regarding a
borrower, a borrower’s account, and a borrower’s student loan
to the new licensee servicing the borrower’s student loan within
45 calendar days.

end insert begin insert

begin insert 28138. end insert   

A licensee shall notify the commissioner before selling,
assigning, or otherwise transferring the servicing of a student loan
that results in a change in the identity of the party to whom a
borrower is required to send payments or direct any
communications concerning the student loan to, in a manner and
time prescribed by the commissioner.

end insert

begin delete 28134. end delete

begin insert 28140. end insert   

The licensee shall not do any of the following:

(a) Directly or indirectly employ any scheme, device, or artifice
to defraud or mislead a borrower.

(b) Engage in any unfair or deceptive practice toward any
borrower or misrepresent or omit any material information in
connection with the servicing of a student loan, including, but not
limited to, misrepresenting the amount, nature, or terms of any fee
or payment due or claimed to be due on a student loan, the terms
and conditions of the student loan agreement, or the borrower’s
obligations under the student loan.

(c) Obtain property of a borrower by fraud or misrepresentation.

(d)  begin delete Knowingly misapply or recklessly apply end delete begin insert Misapply end insert payments
made by a borrower to the outstanding balance of a student loan.

(e)  begin delete Knowingly or recklessly provide end delete begin insert Provide end insert inaccurate
information to a credit bureau regarding a borrower.

(f) Fail to report both the favorable and unfavorable payment
history of the borrower to a nationally recognized consumer credit
bureau at least annually if the licensee regularly reports information
to a credit bureau.

(g) Refuse to communicate with an authorized representative
of the borrower who provides a written authorization signed by
the borrower, provided the licensee may adopt procedures
reasonably related to verifying that the representative is in fact
authorized to act on behalf of the borrower.

(h) Negligently or intentionally make any false statement or
knowingly and willfully make any omission of a material fact in
connection with any information or reports filed with the
commissioner, the department, or another governmental agency.

begin delete 28136. end delete

begin insert 28142. end insert   

The licensee shall retain and maintain its records of
servicing a borrower’s student loan for a minimum of three years
after the student loan has been transferred, assigned, or paid in
full.

begin insert

begin insert 28144. end insert   

A licensee shall continuously maintain a minimum net
worth of at least two hundred fifty thousand dollars ($250,000).

end insert begin insert

begin insert 28146. end insert   

(a) A licensee shall maintain a surety bond in
accordance with this section in a minimum amount of twenty-five
thousand dollars ($25,000). The bond shall be payable to the
commissioner and issued by an insurer authorized to do business
in this state. An original surety bond, including any and all riders
and endorsements executed subsequent to the effective date of the
bond, shall be filed with the commissioner within 10 days of
execution. For licensees with multiple licensed locations, only one
surety bond is required. The bond shall be used for the recovery
of expenses, fines, and fees levied by the commissioner in
accordance with this division or for losses or damages incurred
by borrowers as the result of a licensee’s noncompliance with the
requirements of this division.

(b) When an action is commenced on a licensee’s bond, the
commissioner may require the filing of a new bond. Immediately
upon recovery of any action on the bond, the licensee shall file a
new bond. Failure to file a new bond within 10 days of the recovery
on a bond, or within 10 days after notification by the commissioner
that a new bond is required, constitutes sufficient grounds for the
suspension or revocation of the license.

(c) The commissioner may by rule require a higher bond amount
for a licensee based on the dollar amount of servicing of student
loans by that licensee.

end insert begin insert

begin insert 28147. end insert   

(a) At the time of filing an application for a license
pursuant to this division, an applicant shall deposit with the
commissioner a bond satisfactory to the commissioner in the
amount of at least twenty-five thousand dollars ($25,000). The
bond required by this section shall run to the state for the use of
the state and for any person who has cause against a licensee
under any provision of this division. A deposit given instead of the
bond required by this section shall not be deemed an asset of the
applicant or licensee for the purpose of complying with Section
17210. An applicant or licensee may obtain an irrevocable letter
of credit approved by the commissioner in lieu of the bond.

(b) An applicant for a license pursuant to this division or a
licensee may, in lieu of and subject to the same conditions as the
bond required by subdivision (a), deposit with the commissioner
a cash bond in the sum specified in subdivision (a). Evidence of
the cash bond shall be a deposit in the amount specified in
subdivision (a) in a bank or investment certificates of industrial
loan companies, authorized to do business in this state and insured
by the Federal Deposit Insurance Corporation, or an investment
certificate or share account in the amount specified in subdivision
(a) issued by a savings and loan association doing business in this
state and insured by the Federal Savings and Loan Insurance
Corporation. Those deposits, certificates, or accounts shall be
assigned to and accepted and maintained by the commissioner,
upon those terms as the commissioner may prescribe, until released
by the commissioner, and shall not be deemed an asset of an
applicant or licensee for the purpose of complying with Section
28144.

(c) The bond shall be conditioned that the licensee will faithfully
conform to and abide by the provisions of this division and all the
rules made by the commissioner under this division. The bond
shall be conditioned that the licensee will honestly and faithfully
apply all funds received, will faithfully and honestly perform all
obligations and undertakings under this division, and will pay to
the state, borrower, and any person all amounts which become
due or owing to the state or to such borrower or person under the
provisions of this division. In determining the liability of the
principal and the sureties under the bond, money held in trust and
any money recovered to restore any deficiency in the trust shall
not be considered as an asset of the liquidation subject to
assessment for the cost of the liquidation. The surety under the
bond may pay the full amount of its liability thereunder to the
commissioner in lieu of payment to the state, borrower, or persons
having a cause of action against the licensee, and upon such
payment the surety is completely released from further liability
under the bond.

end insert begin insert

begin insert 28148. end insert   

(a) Each licensee shall pay to the commissioner its pro
rata share of all costs and expenses reasonably incurred in the
administration of this division, as estimated by the commissioner,
for the ensuing year and any deficit actually incurred or anticipated
in the administration of the division in the year in which the
assessment is made. The pro rata share shall be the proportion
that a licensee’s servicing activities within this state bears to the
costs and expenses remaining after the amount assessed pursuant
to subdivision (c).

(b) On or before the 30th day of September in each year, the
commissioner shall notify each licensee of the amount assessed
and levied against it and that amount shall be paid by October 31.
If payment is not made by October 31, the commissioner shall
assess and collect a penalty, in addition to the assessment, of 1
percent of the assessment for each month or part of a month that
the payment is delayed or withheld.

(c) In the levying and collection of the assessment, a licensee
shall neither be assessed for nor be permitted to pay less than two
hundred fifty dollars ($250) per licensed location per year.

(d) If a licensee fails to pay the assessment on or before the 31st
day of October, the commissioner may by order summarily suspend
or revoke the license issued to the licensee. If, after an order is
made, a request for hearing is filed in writing within 30 days, and
a hearing is not held within 60 days thereafter, the order is deemed
rescinded as of its effective date. During any period when the
license is revoked or suspended, a licensee shall not engage in the
business of servicing student loans within this state pursuant to
this division except as may be permitted by order of the
commissioner. However, the revocation, suspension, or surrender
of a license shall not affect the powers of the commissioner as
provided in this division.

(e) The commissioner shall, by rule, establish the timelines,
fees, and assessments applicable to applicants for licenses under
this division.

end insert begin insert

begin insert 28150. end insert   

(a) (1) A licensee shall file an annual report with the
commissioner, on or before the 15th day of March, giving the
relevant information that the commissioner reasonably requires
concerning the business and operations conducted by the licensee
within the state during the preceding calendar year. The individual
annual reports filed pursuant to this section shall be made
available to the public for inspection except, upon request in the
annual report to the commissioner, the balance sheet contained
in the annual report of a sole proprietor or any other nonpublicly
traded persons. The report shall be made under oath and in the
form prescribed by the commissioner.

(2) “Nonpublicly traded person” for purposes of this section
means persons with securities owned by 35 or fewer individuals.

(b) A licensee shall make other special reports that may be
required by the commissioner.

end insert begin insert

begin insert 28152. end insert   

A licensee that ceases to service student loans to
borrowers shall inform the commissioner in writing and surrender
the license and all other indicia of license to the commissioner.
The commissioner may require a licensee to file a plan for the
disposition of the servicing business that includes, but is not limited
to, a closing audit. Upon receipt of the written notice and plan, if
required, the commissioner shall determine whether the licensee
has violated this division. The commissioner shall give a licensee
notice of accepting a surrendered license, and a license shall not
be deemed surrendered until the commissioner accepts its tender
in writing.

end insert

 

begin insert

Chapter   begin insert 4. end insert begin insert Administration and Power of the
Commissioner end insert

end insert

 

begin insert

begin insert 28153. end insert   

(a)  Notwithstanding any provision of this division, the
commissioner shall have the authority to waive one or more branch
office examinations, if the commissioner deems that the branch
office examinations are not necessary for the protection of the
public, due to the centralized operations of the licensee or other
factors acceptable to the commissioner.

(b) The statement of the findings of an examination shall belong
to the commissioner and shall not be disclosed to anyone other
than the licensee, law enforcement officials, or other state or
federal regulatory agencies for further investigation and
enforcement. Reports required of licensees by the commissioner
under this division and results of examinations performed by the
commissioner under this division are the property of the
commissioner.

(c) Affiliates of a licensee are subject to examination by the
commissioner on the same terms as the licensee, but only when
reports from, or examination of, a licensee provides documented
evidence of unlawful activity between a licensee and affiliate
benefiting, affecting, or arising from the activities regulated by
this division.

(d) The cost of each examination of a licensee shall be paid to
the commissioner by the licensee examined, and the commissioner
may maintain an action for the recovery of the cost in any court
of competent jurisdiction. In determining the cost of the
examination, the commissioner may use the estimated average
hourly cost for all persons performing examinations of licensees
or other persons subject to this division for the fiscal year.

end insert begin insert

begin insert 28154. end insert   

(a) As often as the commissioner deems necessary and
appropriate, but at least once every 36 months, the commissioner
shall examine the affairs of each licensee for compliance with this
division. The commissioner shall appoint suitable persons to
perform the examination. The commissioner and his or her
appointees may examine the books, records, and documents of the
licensee, and may examine the licensee’s officers, directors,
employees, or agents under oath regarding the licensee’s
operations. The commissioner may cooperate with any agency of
the state, the federal government, or other state. The commissioner
may accept an examination conducted by one of these entities in
place of an examination by the commissioner under this law, unless
the commissioner determines that the examination does not provide
information necessary to enable the commissioner to fulfill his or
her responsibilities under this division.

(b) The commissioner shall provide a written statement of the
findings of the examination, issue a copy of that statement to each
licensee’s principals, officers, or directors, and take appropriate
steps to ensure correction of any violations of this division.

(c) The licensee shall pay, and the commissioner shall assess,
the reasonable expenses of any examination of the licensee and
affiliates.

end insert

 

Chapter   begin delete 4. end delete begin insert 5. end insert Enforcement

 

begin insert

begin insert 28156. end insert   

(a) The commissioner may, after notice and a
reasonable opportunity to be heard, deny, decline to renew,
suspend, or revoke any license if the commissioner finds that:

(1) The licensee has violated any provision of this division or
any rule or order of the commissioner thereunder.

(2) Any fact or condition exists that, if it had existed at the time
of the original application for the license, reasonably would have
warranted the commissioner in refusing to issue the license
originally.

(b) The power of investigation and examination by the
commissioner is not terminated by the denial, nonrenewal,
surrender, suspension, or revocation of any license issued by him
or her.

end insert begin insert

begin insert 28158. end insert   

(a) If a licensee fails to do either of the following, the
commissioner shall impose a penalty in a sum of up to one hundred
dollars ($100) for every day:

(1) To make any report required by law or by the commissioner
within 10 days from the day designated for the making of the
report, or within any extension of time granted by the
commissioner.

(2) To include therein any matter required by law or by the
commissioner.

(b) The commissioner may by order summarily suspend or
revoke the license if a licensee fails to file any report required by
this division.

end insert

begin delete 28138. end delete

begin insert 28160. end insert   

(a) If the commissioner has a reasonable basis to
believe that a licensee is violating or failing to comply with begin delete any
law of this state, including, but not limited to, end delete this division or any
regulation or order of the commissioner, or servicing student loans
in an unsafe or injurious manner, then the commissioner may direct
the licensee to comply with the law by an order issued by the
commissioner. The order shall require the licensee to show cause
before the commissioner, at a time and place to be fixed by the
commissioner, as to why the order should not be observed.

begin delete

(b) If, upon any hearing held pursuant to this section, the
commissioner finds that the licensee is violating or failing to
comply with any law of this state or servicing student loans in an
unsafe or injurious manner, the commissioner may make a final
order directing the licensee to comply with the law or discontinue
the unsafe or injurious practices. A licensee shall comply with the
final order unless, within 10 days after the issuance of the order,
its enforcement is restrained in a proceeding brought by the
licensee.

end delete begin insert

(b) If, after investigation, the commissioner has reasonable
grounds to believe that a licensee is conducting business in an
unsafe or injurious manner, the commissioner shall, by written
order addressed to the licensee, direct the discontinuance of the
unsafe or injurious practices. The order shall be effective
immediately, but shall not become final except in accordance with
the provisions of Section 21866.

end insert

begin insert

begin insert 28162. end insert   

Whenever, in the opinion of the commissioner, a person
is engaged in the business of servicing student loans within this
state, either actually or through subterfuge, without a license from
the commissioner, the commissioner may order that person to
desist and refrain. If, within 30 days after an order is served, a
request for a hearing is filed in writing and the hearing is not held
within 60 days of the filing, the order is rescinded. This section
does not apply to persons exempted under subdivision (b) of Section
28106.

end insert begin insert

begin insert 28164. end insert   

If, after investigation, the commissioner has reasonable
grounds to believe that a licensee has violated its articles of
incorporation or any law or rule binding upon it, the commissioner
shall, by written order addressed to the licensee, direct the
discontinuance of the violation. The order shall be effective
immediately, but shall not become final except in accordance with
the provisions of Section 28166.

end insert begin insert

begin insert 28166. end insert   

(a) No order issued pursuant to this chapter may
become final except after notice to the affected licensee of the
commissioner’s intention to make the order final and of the reasons
for the finding. The commissioner shall also notify the licensee
that upon receiving a request, the matter will be set for hearing
to commence within 15 business days after receipt. The licensee
may consent to have the hearing commence at a later date. If no
hearing is requested within 30 days after the mailing or service
of the required notice, and none is ordered by the commissioner,
the order may become final without hearing and the licensee shall
immediately discontinue the practices named in the order. If a
hearing is requested or ordered, it shall be held in accordance
with the provisions of the Administrative Procedure Act (Chapter
5 (commencing with Section 11500) of Part 1 of Division 3 of Title
2 of the Government Code), and the commissioner shall have all
of the powers granted under that act. If, upon the hearing, it
appears to the commissioner that the licensee is conducting
business in an unsafe and injurious manner or is violating its
articles of incorporation or any law of this division, or any rule
binding upon it, the commissioner shall make the order of
discontinuance final and the licensee shall immediately discontinue
the practices named in the order.

(b) The licensee has 10 days after an order is made final to
commence an action to restrain enforcement of the order. If the
enforcement of the order is not enjoined within 10 days by the
court in which the action is brought, the licensee shall comply with
the order.

end insert

begin delete 28140. end delete

begin insert 28168. end insert   

(a) The commissioner may issue an order suspending
or revoking a license if, after notice and an opportunity for hearing,
the commissioner finds any of the following:

(1) The licensee is violating this division or a regulation adopted
or an order issued under this division.

(2) The licensee does not cooperate with an examination or
investigation by the commissioner.

(3) The licensee engages in fraud, intentional misrepresentation,
or gross negligence in servicing a student loan.

(4) The competence, experience, character, or general fitness
of the begin delete licensee, or any director, officer, employee, or person in
control of a licensee, end delete begin insert licensee, an individual specified in Section
28120, or any person responsible for servicing a student loan for
the licensee end insert indicates that it is not in the public interest to permit
the licensee to continue servicing student loans.

(5) The licensee engages in an unsafe or unsound practice.

(6) The licensee is insolvent, suspends payment of its
obligations, or makes a general assignment for the benefit of its
creditors.

(7) Any fact or condition exists that, if it had existed at the time
the licensee applied for the license, would have been grounds for
denying the application.

(b) In determining whether a licensee is engaging in an unsafe
or unsound practice, the commissioner may consider the size and
condition of the licensee’s provision of servicing, the magnitude
of the loss, the gravity of the violation of this division, and the
previous conduct of the persons involved.

begin delete

28142.  

The commissioner may assess a civil penalty against
a person that violates this division, or a regulation promulgated or
order issued by the commissioner pursuant to this division, in an
amount not to exceed one thousand dollars ($1,000) for each
violation or, in the case of a continuing violation, one thousand
dollars ($1,000) for each day or part thereof during which the
violation continues, plus the department’s actual costs and expenses
for the investigation and prosecution of the matter, including, but
not limited to, reasonable attorney’s fees.

end delete

begin insert

begin insert 28170. end insert   

(a) If, after investigation, the commissioner has
reasonable grounds to believe that a person has engaged or is
about to engage in any act or practice constituting a violation of
any provision of this division or any rule or order hereunder, the
commissioner may bring an action to enjoin the acts or practices
or to enforce compliance with this division or any rule or order
adopted under this division. The action shall be brought in the
name of the people of the State of California in the superior court.
Upon a proper showing, a permanent or preliminary injunction,
restraining order, or writ of mandate shall be granted. A receiver,
monitor, conservator, or other designated fiduciary or officer of
the court, which may include the commissioner, may be appointed
for the defendant or the defendant’s assets. Any other ancillary
relief may be granted as appropriate.

A receiver, monitor, conservator, or other designated fiduciary
or officer of the court appointed by the superior court pursuant to
this section may, with the approval of the court, exercise any or
all of the powers of the defendant’s officers, directors, partners,
trustees, or persons who exercise similar powers and perform
similar duties. The powers include the filing of a petition for
bankruptcy. No action at law or in equity may be maintained by
any party against the commissioner, or a receiver, monitor,
conservator, or other designated fiduciary or officer of the court,
by reason of their exercising these powers or performing these
duties pursuant to the order of, or with the approval of, the superior
court.

(b) If the commissioner determines it is in the public interest,
the commissioner may include in any action authorized by
subdivision (a) a claim for ancillary relief. The ancillary relief
may include, but not be limited to, restitution or disgorgement or
damages on behalf of the persons injured by the act or practice
constituting the subject matter of the action. The court shall have
jurisdiction to award additional relief.

end insert begin insert

begin insert 28172. end insert   

(a) Any person who violates a provision of this division,
or any rule or order under this division, shall be liable for a civil
penalty not to exceed two thousand five hundred dollars ($2,500)
for each violation. This penalty shall be assessed and recovered
in a civil action brought in the name of the people of the State of
California by the commissioner in any court of competent
jurisdiction.

(b) As applied to the penalties for acts in violation of this
division, the remedies provided by this section and by other
sections of this division are not exclusive, and may be sought and
employed in any combination to enforce the provisions of this
division.

end insert begin insert

begin insert 28174. end insert   

(a) The commissioner may refer the evidence that is
available concerning any violation of this division or of any rule
or order adopted under this division to the district attorney of the
county in which the violation occurred. The district attorney may,
with or without the commissioner’s referral, institute criminal
proceedings under this division. The commissioner and his or her
counsel, deputies, or assistants may, upon request of the district
attorney, assist the district attorney in presenting the law or facts
at the trial.

(b) After an examination, investigation, or hearing under this
division, if the commissioner deems it of public interest or
advantage, he or she may certify a record to the proper prosecuting
official of the county or city in which the act complained of,
examined, or investigated occurred.

end insert begin insert

begin insert 28176. end insert   

All hearings provided for in this division shall be
conducted in accordance with the provisions of Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title
2 of the Government Code. The commissioner has all the powers
granted therein.

end insert

 

Chapter   begin delete 5. end delete begin insert 6. end insert Miscellaneous

 

begin delete 28144. end delete

begin insert 28178. end insert   

If any provision of this division or the application
thereof to any person or circumstances is held invalid, illegal, or
unenforceable, such invalidity, illegality, or unenforceability shall
not affect other provisions or applications of this division which
can be given effect without the invalid, illegal, or unenforceable
provision or application, and, to this end, the provisions of this
division are declared to be severable.

begin delete 28146. end delete

begin insert 28180. end insert   

The rights and remedies provided in this division are
in addition to any other rights and remedies provided by law.

SEC. 3.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

begin insert

begin insert SEC. 4. end insert   

end insert begin insert

The Legislature finds and declares that Section 2 of
this act, which adds Sections 28150 and 28153 to the Financial
Code, imposes a limitation on the public’s right of access to the
meetings of public bodies or the writings of public officials and
agencies within the meaning of Section 3 of Article I of the
California Constitution. Pursuant to that constitutional provision,
the Legislature makes the following findings to demonstrate the
interest protected by this limitation and the need for protecting
that interest:

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Protecting from public disclosure limited confidential
information provided by licensees to the Commissioner of Business
Oversight properly balances protecting legitimate private economic
interests and public interests in effective regulation.

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