BILL NUMBER: SB 1356	CHAPTERED  07/07/00

	CHAPTER   101
	FILED WITH SECRETARY OF STATE   JULY 7, 2000
	APPROVED BY GOVERNOR   JULY 6, 2000
	PASSED THE ASSEMBLY   JUNE 26, 2000
	PASSED THE SENATE   MAY 16, 2000
	AMENDED IN SENATE   MARCH 22, 2000

INTRODUCED BY   Senator Lewis

                        JANUARY 13, 2000

   An act to amend Section 18631 of the Financial Code, relating to
insurance premium financing.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1356, Lewis.  Industrial loan companies:  insurance premium
finance agreements:  dishonored check fee.
   Existing law provides for the regulation of industrial loan
companies by the Department of Financial Institutions.  Industrial
loan companies are authorized to operate as premium finance agencies
and engage in the financing of insurance premiums.  Existing law
provides that a premium finance agreement may impose a dishonored
check fee not to exceed $5 for actual expenses incurred in the
processing of a dishonored check.
   This bill would increase the amount of that fee to no more than
$15.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 18631 of the Financial Code is amended to read:

   18631.  (a) A premium finance agreement may provide for the
payment of a default charge of one dollar ($1) to a maximum of 5
percent of the delinquent installment, in the event of a default for
a period of not less than 10 days in the payment of any scheduled
installment under the terms of a premium finance agreement.  That
charge may not be collected more than once for the same default and
may be collected at the time of the default or at any time
thereafter.  If the default charge is deducted from any payment
received after default occurs, and the deduction results in the
default of a subsequent installment, no charge may be made for the
resulting default.
   (b) A premium finance agreement may provide for the payment of a
dishonored check fee not to exceed fifteen dollars ($15) for actual
expenses incurred in the processing of a dishonored check.