Amended in Senate March 28, 2016

Senate Bill No. 1290

Introduced by Senator Mendoza

February 19, 2016

begin delete An act to amend Section 22701 of the Financial Code, relating to finance lenders. end delete begin insert An act to add Sections 22701.5 and 23046.5 to the Financial Code, relating to the Commissioner of Business Oversight. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 1290, as amended, Mendoza. begin insert Commissioner of Business Oversight: end insert California Finance Lenders Law: begin delete Commissioner of Business Oversight: duties. end delete begin insert California Deferred Deposit Transaction Law. end insert

begin insert

Existing law, the California Finance Lenders Law, provides for the licensure and regulation of finance lenders and brokers by the Commissioner of Business Oversight. Existing law, the California Deferred Deposit Transaction Law, provides for the licensure and regulation by the commissioner of persons engaged in the business of making or arranging deferred deposit transactions.

end insert begin insert

For the purpose of discovering violations of the law or for enforcement purposes, the commissioner is authorized to investigate the business of these licensees, and examine the books, accounts, records, and files used in the business, of every person engaged in those business activities, whether the person acts or claims to act as principal or agent, or under or without the authority of those laws. For the purpose of examination, the commissioner is required to have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of all these persons.

end insert begin insert

When conducting an examination or investigation of a licensee that is under common ownership with one or more other persons licensed under the law, the bill would require the commissioner to conduct a single consolidated examination that includes all licensees that share the same common ownership, as defined. The bill would authorize all books, accounts, papers, records, and files required by the commissioner in connection with a consolidated examination to be provided in electronic format.

end insert begin delete

The California Finance Lenders Law generally provides for the licensure and regulation of finance lenders and brokers by the Commissioner of Business Oversight. The law authorizes the commissioner, for the purpose of discovering violations of the law or securing information required by him or her in the administration and enforcement of the law, to investigate the loans and business, and examine the books, accounts, records, and files used in the business of every person engaged in the business of a finance lender or broker.

end delete begin delete

This bill would require the commissioner to establish protocols that allow a licensee under this law to comply with the commissioner’s investigations by using an electronic filing program.

end delete

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

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 22701.5 is added to the end insert begin insert Financial Code end insert begin insert ,
to read: end insert

begin insert

begin insert 22701.5. end insert   

(a) When conducting an examination of a finance
lender or broker that is under common ownership with one or
more other persons licensed under this division, the commissioner
shall conduct a single consolidated examination that includes all
persons licensed under this division that share the same common
ownership. For purposes of this section, “common ownership”
means two or more licensees that are wholly owned by the same
person.

(b) All books, accounts, papers, records, and files required by
the commissioner in connection with a consolidated examination
may be provided to the commissioner in electronic format.

(c) Notwithstanding subdivisions (a) and (b), the commissioner
shall retain the right to conduct periodic onsite investigations and
examinations of a licensee’s physical location for business to
ensure compliance with this division.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 23046.5 is added to the end insert begin insert Financial Code end insert begin insert , to
read: end insert

begin insert

begin insert 23046.5. end insert   

(a) When conducting an investigation of a licensee
that is under common ownership with one or more other persons
licensed under this division, the commissioner shall conduct a
single consolidated examination that includes all persons licensed
under this division that share the same common ownership. For
purposes of this section, “common ownership” means two or more
licensees that are wholly owned by the same person.

(b) All books, accounts, papers, records, and files required by
the commissioner in connection with a consolidated examination
may be provided to the commissioner in electronic format.

(c) Notwithstanding subdivisions (a) and (b), the commissioner
shall retain the right to conduct periodic onsite investigations and
examinations of a licensee’s physical location for business to
ensure compliance with this division.

end insert

begin delete

SECTION 1.  

Section 22701 of the Financial Code is amended
to read:

22701.  

(a) For the purpose of discovering violations of this
division or securing information required by him or her in the
administration and enforcement of this division, the commissioner
may at any time investigate the loans and business, and examine
the books, accounts, records, and files used in the business, of
every person engaged in the business of a finance lender or broker,
whether the person acts or claims to act as principal or agent, or
under or without the authority of this division. For the purpose of
examination, the commissioner and his or her representatives shall
have free access to the offices and places of business, books,
accounts, papers, records, files, safes, and vaults of all these
persons.

(b) The commissioner shall establish protocols that allow a
licensee to comply with the commissioner’s investigations pursuant
to subdivision (a) by using an electronic filing program.

end delete