Amended in Assembly August 11, 2016

Amended in Assembly August 4, 2016

Amended in Senate April 6, 2015

Senate BillNo. 777


Introduced by Senator Lara

February 27, 2015


An act tobegin delete amend Section 22050 ofend deletebegin insert add and repeal Section 22050.5 ofend insert the Financial Code, relating to finance lenders.

LEGISLATIVE COUNSEL’S DIGEST

SB 777, as amended, Lara. The California Finance Lenders Law: application.

Existing law, the California Finance Lenders Law, provides for the licensure and regulation of finance lenders and brokers. Existing law exempts from its provisions, among others, persons making 5 or fewer commercial loans in a 12-month period if the loans are incidental to the business of the person relying upon the exemption.

This bill would alsobegin delete exemptend deletebegin insert exempt, until January 1, 2022,end insert a person who makes one commercial loan in a 12-month period from regulation pursuant to the California Finance Lenders Law.

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

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

P1    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 22050.5 is added to the end insertbegin insertFinancial Codeend insertbegin insert,
2to read:end insert

begin insert
P2    1

begin insert22050.5.end insert  

(a) This division does not apply to any person who
2makes one loan in a 12-month period if that loan is a commercial
3loan as defined in Section 22502.

4
(b) This section shall remain in effect only until January 1, 2022,
5and as of that date is repealed.

end insert
begin delete
6

SECTION 1.  

Section 22050 of the Financial Code is amended
7to read:

8

22050.  

(a) This division does not apply to any person doing
9business under any law of any state or of the United States relating
10to banks, trust companies, savings and loan associations, insurance
11premium finance agencies, credit unions, small business investment
12companies, community advantage lenders, California business and
13industrial development corporations when acting under federal
14law or other state authority, or licensed pawnbrokers when acting
15under the authority of that license.

16“Community advantage lender” means an entity authorized by
17the United States Small Business Administration to deliver
18community advantage loans.

19(b) This division does not apply to a check casher who holds a
20valid permit issued pursuant to Section 1789.37 of the Civil Code
21when acting under the authority of that permit, and shall not apply
22to a person holding a valid license issued pursuant to Section 23005
23of the Financial Code when acting under the authority of that
24license.

25(c) This division does not apply to a college or university making
26a loan for the purpose of permitting a person to pursue a program
27or course of study leading to a degree or certificate.

28(d) This division does not apply to a broker-dealer acting
29pursuant to a certificate then in effect and issued pursuant to
30Section 25211 of the Corporations Code.

31(e) This division does not apply to any person who makes five
32or fewer loans in a 12-month period, these loans are commercial
33loans as defined in Section 22502, and the loans are incidental to
34the business of the person relying upon the exemption.

35(f) This division does not apply to any person who makes one
36loan in a 12-month period if that loan is a commercial loan as
37defined in Section 22502.

38(g) This division does not apply to any public corporation as
39defined in Section 67510 of the Government Code, any public
40entity other than the state as defined in Section 811.2 of the
P3    1Government Code, or any agency of any one or more of the
2foregoing, when making any loan so long as the public corporation,
3public entity, or agency of any one or more of the foregoing
4complies with all applicable federal and state laws and regulations.

end delete


O

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