BILL NUMBER: AB 645 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JANUARY 4, 2012
INTRODUCED BY Assembly Member Davis
FEBRUARY 16, 2011
An act to amend Section 2923.1 of the Civil Code,
relating to real property transactions. add Section
66024.5 to the Education Code, relating to postsecondary education.
LEGISLATIVE COUNSEL'S DIGEST
AB 645, as amended, Davis. Real property transactions.
Postsecondary education: ethnic studies.
Existing law establishes the segments of the public postsecondary
education system in the state, including, but not limited to, the
University of California administered by the Regents of the
University of California and the California State University
administered by the Trustees of the California State University.
This bill would require the California State University, and
request the University of California, commencing with the 2013-14
academic year, to require students entering the university during or
after the 2013-14 academic year to complete 2 courses in ethnic
studies prior to graduation, regardless of major.
Existing law provides that a mortgage broker, as defined, who
provides mortgage brokerage services to a borrower is the fiduciary
of the borrower and any violation of the broker's fiduciary duty is a
violation of the broker's license law. Existing law provides that
this fiduciary duty includes a requirement that the mortgage broker
place the economic interest of the borrower ahead of his or her own
economic interest. Under existing law, a violation of the licensing
laws of certain mortgage brokers is a crime
This bill would provide that the fiduciary duty owed to a borrower
includes a requirement that the mortgage broker provide information
to a borrower regarding the advantages and disadvantages of the loan
options available to the borrower based upon the borrower's income
and credit rating. The bill would also provide that the fiduciary
duty owed to a borrower includes, if a broker arranges a loan that is
less advantageous than a loan for which the borrower is otherwise
qualified and the borrower defaults on the loan, sending a letter to
any consumer reporting agency indicating that the broker arranged the
loan and that the loan was less advantageous than a loan the broker
could have arranged for which the borrower was otherwise qualified.
Because a violation of this requirement by certain mortgage brokers
would be a crime, this bill would impose a state-mandated local
program.
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.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 66024.5 is added to the
Education Code , to read:
66024.5. (a) Commencing with the 2013-14 academic year, the
California State University shall, and the University of California
is requested to, require students, regardless of major, to complete
two courses in ethnic studies prior to graduation.
(b) The requirement imposed pursuant to subdivision (a) shall only
apply to students entering the university during or after the
2013-14 academic year.
SECTION 1. Section 2923.1 of the Civil Code is
amended to read:
2923.1. (a) A mortgage broker providing mortgage brokerage
services to a borrower is the fiduciary of the borrower, and any
violation of the broker's fiduciary duties shall be a violation of
the mortgage broker's license law. This fiduciary duty includes a
requirement that the mortgage broker place the economic interest of
the borrower ahead of his or her own economic interest and a
requirement that the mortgage broker provide information to the
borrower regarding the advantages and disadvantages of the loan
options available to the borrower based upon the borrower's income
and credit rating. If, after providing this information to a
borrower, a mortgage broker arranges a loan that is less advantageous
than a loan for which the borrower is otherwise qualified and the
borrower defaults on the loan, the mortgage broker shall also have a
fiduciary duty to send a letter to any consumer credit reporting
agency, as defined in Section 1785.3, indicating that the broker
arranged the loan and that loan was less advantageous than a loan the
broker could have arranged for which the borrower was otherwise
qualified. A mortgage broker who provides mortgage brokerage services
to the borrower owes this fiduciary duty to the borrower regardless
of whether the mortgage broker is acting as an agent for any other
party in connection with the residential mortgage loan transaction.
(b) For purposes of this section, the following definitions apply:
(1) "Licensed person" means a real estate broker licensed under
the Real Estate Law (Part 1 (commencing with Section 10000) of
Division 4 of the Business and Professions Code), a finance lender or
broker licensed under the California Finance Lenders Law (Division 9
(commencing with Section 22000) of the Financial Code), a
residential mortgage lender licensed under the California Residential
Mortgage Lending Act (Division 20 (commencing with Section 50000) of
the Financial Code), a commercial or industrial bank organized under
the Banking Law (Division 1 (commencing with Section 99) of the
Financial Code), a savings association organized under the Savings
Association Law (Division 2 (commencing with Section 5000) of the
Financial Code), and a credit union organized under the California
Credit Union Law (Division 5 (commencing with Section 14000) of the
Financial Code).
(2) "Mortgage broker" means a licensed person who provides
mortgage brokerage services. For purposes of this section, a licensed
person who makes a residential mortgage loan is a "mortgage broker,"
and subject to the requirements of this section applicable to
mortgage brokers, only with respect to transactions in which the
licensed person provides mortgage brokerage services.
(3) "Mortgage brokerage services" means arranging or attempting to
arrange, as exclusive agent for the borrower or as dual agent for
the borrower and lender, for compensation or in expectation of
compensation, paid directly or indirectly, a residential mortgage
loan made by an unaffiliated third party.
(4) "Residential mortgage loan" means a consumer credit
transaction that is secured by residential real property that is
improved by four or fewer residential units.
(c) The duties set forth in this section shall not be construed to
limit or narrow any other fiduciary duty of a mortgage broker.
SEC. 2. 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.