BILL NUMBER: AB 1160	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JULY 23, 2009
	AMENDED IN ASSEMBLY  JUNE 11, 2009
	AMENDED IN ASSEMBLY  JUNE 2, 2009
	AMENDED IN ASSEMBLY  MAY 5, 2009
	AMENDED IN ASSEMBLY  APRIL 22, 2009
	AMENDED IN ASSEMBLY  APRIL 2, 2009

INTRODUCED BY   Assembly Member Fong
   (Principal coauthor: Senator Cedillo)
   (Coauthors: Assembly Members Coto, Eng, Fuentes, Furutani, Lieu,
Nava, Torres, and Tran)
   (  Coauthor:   Senator  
Yee   Coauthors:   Senators   Correa
  and Yee  )

                        FEBRUARY 27, 2009

   An act to add Section 1632.5 to the Civil Code, relating to
contracts.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1160, as amended, Fong. Contracts: translation.
   Existing law requires a person in a trade or business who
negotiates specified contracts or agreements primarily in the
languages of Spanish, Chinese, Tagalog, Vietnamese, or Korean to
deliver to the other party, prior to execution of the contract or
agreement, a translation of the contract or agreement in the
applicable foreign language, except as specified. Under existing law,
failure to comply with these provisions entitles the aggrieved party
to rescind the contract or agreement. Under existing law, these
provisions apply to specified loans or extensions of credit subject
to the Industrial Loan Law and the California Finance Lenders Law.
   This bill would  expand the scope of those provisions to
  , in the alternative,  require a supervised
financial organization, as defined, that negotiates primarily in 
one of  those languages in the course of entering into a
contract or agreement for a loan or extension of credit secured by
residential real property, to deliver  a translation, as
described above, or a translation of one or more of the approved
disclosures or forms   , prior to the execution of the
contract or agreement, and no later than 3 business days after
receiving the written application, a specified form in that language
summarizing the terms of the contract or agreement  , as
specified.  The bill would provide that a supervised financial
organization that   complies with these provisions would be
deemed to be in compliance with the translation requirement in
existing law described above. The bill would also provide that a
supervised financial organization that complies with the translation
requirement in existing law would be in compliance with these
provisions.  The bill would provide for administrative penalties
against specified licensed persons for violations of these
provisions. The bill would require the Department of Corporations and
the Department of Financial Institutions to create  new
forms   a new form  for these purposes, as provided
 , and to make it available in each of the languages described
above  . 
   The bill would authorize an action against a supervised financial
organization for a violation of these provision to be brought only by
a licensing agency or by the Attorney General. 
   These provisions would become operative beginning on July 1, 2010,
or 90 days after issuance of  the forms,   a
form  as provided, whichever occurs later.
   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 1632.5 is added to the Civil Code, to read:
   1632.5.  (a) A supervised financial organization that negotiates
primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean,
whether orally or in writing, in the course of entering into a
contract or agreement for a loan or extension of credit secured by
residential real property, shall deliver to the other party to that
contract or agreement prior to the execution of the contract or
agreement the form described in subdivision (i) for that language.
   (b) For purposes of this section:
   (1) "Contract" or "agreement" shall have the same meaning as
defined in subdivision (g) of Section 1632.
   (2) "Supervised financial organization" means a bank, savings
association, as defined in Section 5102 of the Financial Code, credit
union, or holding company, affiliate, or subsidiary thereof, or any
person subject to Division 7 (commencing with Section 18000),
Division 9 (commencing with Section 22000), or Division 20
(commencing with Section 50000) of the Financial Code.
   (c)  (1)    With respect to a contract or
agreement for a loan or extension of credit secured by residential
real property as described in subdivision (a), a supervised financial
organization that complies with this section shall be deemed in
compliance with Section 1632. 
   (2) A supervised financial organization that complies with Section
1632, with respect to a contract or agreement for a loan or
extension of credit secured by residential real property as described
in subdivision (a), shall be deemed in compliance with this section.

   (d) The supervised financial organization shall provide the form
 described in subdivision (i)  to the borrower no later than
three business days after receipt of the written application, and if
any of the loan terms summarized materially change after provision
of the  translation   translated form  but
prior to consummation of the loan, the supervised financial
organization shall provide an updated version of the  translated
 form prior to consummation of the loan.
   (e) (1) This section does not apply to a supervised financial
organization that negotiates primarily in a language other than
English, as described by subdivision (a), if the party with whom the
supervised financial organization is negotiating, negotiates the
terms of the contract through his or her own interpreter.
   (2) For purposes of this subdivision, "his or her own interpreter"
means a person, not a minor, able to speak fluently and read with
full understanding both the English language and one of the languages
specified in subdivision (a) that is the language in which the
contract was negotiated, who is not employed by, and whose services
are not made available through, the person engaged in the trade or
business.
   (f) Notwithstanding subdivision (a), a  translation
  translated form  may retain any of the following
elements of the executed English language contract or agreement
without translation:
   (1) Names and titles of individuals and other persons.
   (2) Addresses, brand names, trade names, trademarks, or registered
service marks.
   (3) Full or abbreviated designations of the make and model of
goods or services.
   (4) Alphanumeric codes.
   (5) Individual words or expressions having no generally accepted
non-English translation.
   (g) The terms of the contract or agreement which is executed in
the English language shall determine the rights and obligations of
the parties. However, the translation of the  contract or
forms   form described in subdivision (i) and 
required by subdivision (a) shall be admissible in evidence only to
show that no contract  or agreement  was entered into
because of a substantial difference in the material terms and
conditions of the contract  or agreement  and the 
translation   prior translated form provided to the
borrower  .
   (h) (1) A licensing agency may, by order, after appropriate notice
and opportunity for hearing, levy administrative penalties against a
supervised financial organization that violates any provision of
this section, and the supervised financial organization may be liable
for administrative penalties, up to the amounts of two thousand five
hundred dollars ($2,500) for the first violation, five thousand
dollars ($5,000) for the second violation, and ten thousand dollars
($10,000) for each subsequent violation. Except for licensing
agencies exempt from the provisions of the Administrative Procedure
Act, any hearing shall be held in accordance with 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 licensing
agency shall have all the powers granted under that act.
   (2) A licensing agency may exercise any and all authority and
powers available to it under any other provisions of law to
administer and enforce this section, including, but not limited to,
investigating and examining the licensed person's books and records,
and charging and collecting the reasonable costs for these
activities. The licensing agency shall not charge a licensed person
twice for the same service. Any civil, criminal, and administrative
authority and remedies available to the licensing agency pursuant to
its licensing law may be sought and employed in any combination
deemed advisable by the licensing agency to enforce the provisions of
this section.
   (3) Any supervised financial organization that violates any
provision of this section shall be deemed to have violated its
licensing law.
   (4) Nothing in this section shall be construed to impair or impede
the Attorney General from bringing an action to enforce this
division.
   (i) The Department of Corporations and the Department of Financial
Institutions shall create a form to be made available in each of the
languages set forth in subdivision (a) for use by a supervised
financial organization to summarize the terms of a mortgage loan
pursuant to subdivision (a). In creating the  forms 
 form  , the Department of Corporations and the Department
of Financial Institutions may use as guidance the United States
Department of Housing and Urban Development's Good Faith Estimate
disclosure form.
   (j) This section shall not apply to federally chartered banks,
credit unions, savings banks, or thrifts. 
   (k) Except as otherwise provided in subdivision (h), this section
shall not be construed to create or enhance any claim, right of
action, or civil liability that did not previously exist under state
law, or limit any claim, right of action, or civil liability that
otherwise exists under state law.  
   (l) An action against a supervised financial organization for a
violation of this section may only be brought by a licensing agency
or by the Attorney General.  
   SEC. 2. 
    (m)    This section shall become operative
beginning on July 1, 2010, or 90 days following the issuance of
 forms   a form  by both the Department of
Corporations and the Department of Financial Institutions pursuant to
subdivision (i), whichever occurs later.