California Senate Bill SB526 Introduced / Bill

 BILL NUMBER: SB 526INTRODUCED BILL TEXT INTRODUCED BY Senator Calderon FEBRUARY 21, 2013 An act to amend Section 2954.8 of the Civil Code, relating to banks. LEGISLATIVE COUNSEL'S DIGEST SB 526, as introduced, Calderon. Banks: mortgage loans: advance payments. Existing state and federal law define and regulate banks. Existing state law requires a financial institution that makes loans secured by residential real property, as specified, that receives money in advance for payment of taxes and assessments on the property, for insurance, or for other purposes relating to the property, to pay interest on the amount held to the borrower. This bill would make nonsubstantive, technical amendments to these provisions. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 2954.8 of the Civil Code is amended to read: 2954.8. (a) Every financial institution that makes loans upon the security of real property containing only a one- to four-family residence and located in this state  ,  or purchases obligations secured by  such   the  property  ,  and that receives money in advance for payment of taxes and assessments on the property, for insurance, or for other purposes relating to the property, shall pay interest on the amount  so  held to the borrower. The interest on  such   these  amounts shall be at the rate of at least 2 percent simple interest per annum.  Such   This  interest shall be credited to the borrower's account annually or upon termination of  such   the  account, whichever is earlier. (b) No financial institution subject to the provisions of this section shall impose any fee or charge in connection with the maintenance or disbursement of money received in advance for the payment of taxes and assessments on real property securing loans made by  such   the  financial institution, or for the payment of insurance, or for other purposes relating to such real property, that will result in an interest rate of less than 2 percent per annum being paid on the moneys so received. (c) For the purposes of this section, "financial institution" means a bank, savings and loan association or credit union chartered under the laws of this state or the United States, or any other person or organization making loans upon the security of real property containing only a one- to four-family residence. (d) The provisions of this section do not apply to any of the following: (1) Loans executed prior to the effective date of this section. (2) Moneys  which   that  are required by a state or federal regulatory authority to be placed by a financial institution other than a bank in a non-interest-bearing demand trust fund account of a bank. The amendment of this section made by the 1979-80 Regular Session of the Legislature shall only apply to loans executed on or after January 1, 1980.