| 1 | | - | Amended IN Assembly March 24, 2025 CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Assembly Bill No. 743Introduced by Assembly Member Michelle Rodriguez(Coauthor: Assembly Member Nguyen)February 18, 2025 An act to amend Section 14950 of Sections 22007, 22112, 22502, 22753, and 22780 of, and to add Sections 22021, 22022, 22100.6, and 22780.2 to, the Financial Code, relating to financial institutions. LEGISLATIVE COUNSEL'S DIGESTAB 743, as amended, Michelle Rodriguez. Credit unions. California Financing Law: lawsuit financiers.The California Financing Law generally regulates the business of finance lenders and brokers and prohibits any person from engaging in those businesses without obtaining a license from the Commissioner of Financial Protection and Innovation. The law also imposes various requirements on licensees who offer or sell commercial loans, as defined.This bill would prohibit a person from engaging in the business of lawsuit financing, as defined, without obtaining a license from the commissioner. The bill would require a licensee who is a lawsuit financier, as defined, to maintain a surety bond, as prescribed. The bill would include lawsuit financing in the definition of commercial loan. The bill would make willful violations of the California Financing Law by a licensee who is a lawsuit financier subject to a civil penalty, as specified.The California Credit Union Law provides for the regulation of credit unions within the state by the Commissioner of Financial Protection and Innovation. Existing law authorizes a credit union to enter into obligations with its members upon the approval of the credit committee or the credit manager, subject to the terms and conditions established by the board of directors, but prohibits a credit union from accepting notes receivable from nonmembers as consideration for the sale of assets owned by the credit union, except as specified. This bill would make a nonsubstantive change to that provision.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NOYES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares:(a) According to a 2022 United States congressional Government Accountability Office report, the global lawsuit financing industry conducts multibillions of dollars in loans and investments in the United States alone.(b) Lawsuit financing threatens the ability of California consumers to recover award moneys to which they are entitled.(c) Many lawsuit financiers are hedge funds, sovereign wealth funds, and other financiers based outside of the United States, including in Russia and China.(d) A March 2024 Bloomberg Law investigation revealed that sanctioned Russian oligarchs have been using litigation funding to evade United States sanctions.(e) A subsidiary of the Russian conglomerate Alfa Group has funded lawsuits prior to and following sanctions imposed on three of its billionaire founders in the wake of the 2022 Ukraine invasion.(f) Another investigative report found that international gangs and the Russian mob have worked with third-party litigation financiers to arrange fraudulent lawsuits.(g) California has the fourth largest economy in the world.(h) Lawsuit financiers are an unregulated, shadow financial sector in California.(i) Licensing will help to ensure only financially responsible, law-abiding financiers can operate in California and prevent exploitative practices, market manipulation, and fraud.(j) It is in the best interests of consumers to authorize the Department of Financial Protection and Innovation to license and regulate lawsuit financiers.SEC. 2. Section 22007 of the Financial Code is amended to read:22007. (a)Licensee means any finance lender, broker, lawsuit financier, or program administrator who receives a license in accordance with this division.(b)This section shall become operative on January 1, 2019.SEC. 3. Section 22021 is added to the Financial Code, to read:22021. Lawsuit financier means a person engaged in lawsuit financing.SEC. 4. Section 22022 is added to the Financial Code, to read:22022. Lawsuit financing means a transaction in which a person provides, with or without recourse, money, services, or anything else having value to any person in return for a contingent right to receive an amount out of the proceeds of any realized judgment, award, settlement, or verdict a person may receive on an underlying civil claim or action, or in return for interest, fees, or other consideration.SEC. 5. Section 22100.6 is added to the Financial Code, to read:22100.6. (a) A person shall not engage in the business of lawsuit financing without obtaining a license from the commissioner.(b) The commissioner shall include lawsuit financing as an industry category on the licensee search page of the departments internet website.SEC. 6. Section 22112 of the Financial Code is amended to read:22112. (a) A Except as provided in subdivision (d), a licensee shall maintain a surety bond in accordance with this subdivision in a minimum amount of twenty-five thousand dollars ($25,000). The bond shall be payable to the commissioner and issued by an insurer authorized to do business in this state. An original surety bond, including any and all riders and endorsements executed subsequent to the effective date of the bond, shall be filed with the commissioner within 10 days of execution. For licensees with multiple licensed locations, only one surety bond is required. The bond shall be used for the recovery of expenses, fines, and fees levied by the commissioner in accordance with this division or for losses or damages incurred by borrowers or consumers as the result of a licensees noncompliance with the requirements of this division.(b) When an action is commenced on a licensees bond, the commissioner may require the filing of a new bond. Immediately upon recovery of any action on the bond, the licensee shall file a new bond. Failure to file a new bond within 10 days of the recovery on a bond, or within 10 days after notification by the commissioner that a new bond is required, constitutes sufficient grounds for the suspension or revocation of the license.(c) The commissioner may by rule require a higher bond amount for a licensee who employs one or more mortgage loan originators and who makes or arranges residential mortgage loans, based on the dollar amount of residential mortgage loans originated by that licensee and any mortgage loan originators employed by that licensee. Every mortgage loan originator employed by the licensee shall be covered by the surety bond.(d) (1) A licensee who is a lawsuit financier shall maintain a surety in a minimum amount of two hundred fifty thousand dollars ($250,000).(2) The commissioner may by rule increase the bond amount required by paragraph (1) based on the dollar amount of lawsuit financing originated by the lawsuit financier.SEC. 7. Section 22502 of the Financial Code is amended to read:22502. (a) (1) Commercial loan means a loan of a principal amount of five thousand dollars ($5,000) or more, or any loan under an open-end credit program, whether secured by either real or personal property, or both, or unsecured, the proceeds of which are intended by the borrower for use primarily for other than personal, family, or household purposes.(2) Commercial loan includes, but is not limited to, lawsuit financing that otherwise meets the definition in paragraph (1). For(b) For purposes of determining whether a loan is a commercial loan, the lender may rely on any written statement of intended purposes signed by the borrower. The statement may be a separate statement signed by the borrower or may be contained in a loan application or other document signed by the borrower. The lender shall not be required to ascertain that the proceeds of the loan are used in accordance with the statement of intended purposes.SEC. 8. Section 22753 of the Financial Code is amended to read:22753. Except as provided in Section 22696, Sections 22696 and 22780.2, any person who willfully violates any provision of this division or who willfully violates any rule or order adopted pursuant to this division, shall, upon conviction, be punished by a fine of not more than ten thousand dollars ($10,000), by imprisonment in a county jail for not more than one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment. However, no person may be imprisoned for the violation of any rule or order unless he or she the person had knowledge of the rule or order. Conviction under this section shall not preclude the commissioner from exercising the authority in Section 22713.SEC. 9. Section 22780 of the Financial Code is amended to read:22780. Except as provided in Section 22696, Sections 22696 and 22780.2, any person who willfully violates any provision of this division, or who willfully violates any rule or order adopted pursuant to this division, shall, upon conviction, be punished by a fine of not more than ten thousand dollars ($10,000), by imprisonment in a county jail for not more than one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment. However, no person may be imprisoned for the violation of any rule or order unless he or she the person had knowledge of the rule or order. Conviction under this section shall not preclude the commissioner from exercising the authority provided in Section 22713.This article does not apply to a program administrator or PACE solicitor.SEC. 10. Section 22780.2 is added to the Financial Code, to read:22780.2. A licensee who is a lawsuit financier and who willfully violates any provision of this division, or who willfully violates any rule or order adopted pursuant to this division, shall be subject to a civil penalty of not more than one hundred thousand dollars ($100,000) for a first violation and not more than two hundred fifty thousand ($250,000) for each repeat violation.SECTION 1.Section 14950 of the Financial Code is amended to read:14950.(a)Every credit union may enter into obligations with its members upon the approval of the credit committee or, in the alternative, the credit manager, subject to the terms and conditions established by the board of directors pursuant to Section 15100.(b)(1)The board of directors of a credit union shall adopt a policy governing the acceptance by the credit union of notes receivable from nonmembers as consideration for the sale of assets owned by the credit union through bona fide transactions.(2)A credit union shall not accept notes receivable from nonmembers as consideration for the sale of assets owned by the credit union except in accordance with a policy adopted by the board of directors pursuant to paragraph (1).(3)Transactions subject to this subdivision shall not be deemed to be loans to nonmembers for purposes of Section 14750.(c)Notwithstanding subdivision (a), a credit union may permit a nonmember to participate in an obligation or extension of credit to a member as a joint applicant, co-obligor, coborrower, surety, or guarantor. An obligation or extension of credit made pursuant to this subdivision shall not be deemed a violation of subdivision (b) of Section 14800. Except as otherwise permitted by statute or regulation, the credit union shall not extend any other benefit or service of the credit union to the nonmember solely as a result of participation as a joint applicant, co-obligor, coborrower, surety, or guarantor unless the nonmember is thereafter admitted to membership. |
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| 1 | + | CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Assembly Bill No. 743Introduced by Assembly Member Michelle RodriguezFebruary 18, 2025 An act to amend Section 14950 of the Financial Code, relating to financial institutions. LEGISLATIVE COUNSEL'S DIGESTAB 743, as introduced, Michelle Rodriguez. Credit unions. The California Credit Union Law provides for the regulation of credit unions within the state by the Commissioner of Financial Protection and Innovation. Existing law authorizes a credit union to enter into obligations with its members upon the approval of the credit committee or the credit manager, subject to the terms and conditions established by the board of directors, but prohibits a credit union from accepting notes receivable from nonmembers as consideration for the sale of assets owned by the credit union, except as specified. This bill would make a nonsubstantive change to that provision.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 14950 of the Financial Code is amended to read:14950. (a) Every credit union may enter into obligations with its members upon the approval of the credit committee or, in the alternative, the credit manager, subject to the terms and conditions established by the board of directors pursuant to Section 15100.(b) (1) The board of directors of a credit union shall adopt a policy governing the acceptance by the credit union of notes receivable from nonmembers as consideration for the sale of assets owned by the credit union through bona fide transactions.(2) No credit union may A credit union shall not accept notes receivable from nonmembers as consideration for the sale of assets owned by the credit union except in accordance with a policy adopted by the board of directors pursuant to paragraph (1).(3) Transactions subject to this subdivision shall not be deemed to be loans to nonmembers for purposes of Section 14750.(c) Notwithstanding subdivision (a), a credit union may permit a nonmember to participate in an obligation or extension of credit to a member as a joint applicant, co-obligor, coborrower, surety, or guarantor. An obligation or extension of credit made pursuant to this subdivision shall not be deemed a violation of subdivision (b) of Section 14800. Except as otherwise permitted by statute or regulation, the credit union shall not extend any other benefit or service of the credit union to the nonmember solely as a result of participation as a joint applicant, co-obligor, coborrower, surety, or guarantor unless the nonmember is thereafter admitted to membership. |
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| 94 | | - | 22007. (a)Licensee means any finance lender, broker, lawsuit financier, or program administrator who receives a license in accordance with this division. |
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| 95 | | - | |
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| 96 | | - | (b)This section shall become operative on January 1, 2019. |
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| 98 | | - | |
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| 99 | | - | |
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| 100 | | - | SEC. 3. Section 22021 is added to the Financial Code, to read:22021. Lawsuit financier means a person engaged in lawsuit financing. |
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| 101 | | - | |
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| 102 | | - | SEC. 3. Section 22021 is added to the Financial Code, to read: |
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| 103 | | - | |
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| 104 | | - | ### SEC. 3. |
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| 105 | | - | |
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| 106 | | - | 22021. Lawsuit financier means a person engaged in lawsuit financing. |
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| 107 | | - | |
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| 108 | | - | 22021. Lawsuit financier means a person engaged in lawsuit financing. |
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| 109 | | - | |
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| 110 | | - | 22021. Lawsuit financier means a person engaged in lawsuit financing. |
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| 111 | | - | |
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| 112 | | - | |
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| 113 | | - | |
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| 114 | | - | 22021. Lawsuit financier means a person engaged in lawsuit financing. |
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| 115 | | - | |
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| 116 | | - | SEC. 4. Section 22022 is added to the Financial Code, to read:22022. Lawsuit financing means a transaction in which a person provides, with or without recourse, money, services, or anything else having value to any person in return for a contingent right to receive an amount out of the proceeds of any realized judgment, award, settlement, or verdict a person may receive on an underlying civil claim or action, or in return for interest, fees, or other consideration. |
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| 117 | | - | |
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| 118 | | - | SEC. 4. Section 22022 is added to the Financial Code, to read: |
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| 119 | | - | |
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| 120 | | - | ### SEC. 4. |
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| 121 | | - | |
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| 122 | | - | 22022. Lawsuit financing means a transaction in which a person provides, with or without recourse, money, services, or anything else having value to any person in return for a contingent right to receive an amount out of the proceeds of any realized judgment, award, settlement, or verdict a person may receive on an underlying civil claim or action, or in return for interest, fees, or other consideration. |
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| 123 | | - | |
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| 124 | | - | 22022. Lawsuit financing means a transaction in which a person provides, with or without recourse, money, services, or anything else having value to any person in return for a contingent right to receive an amount out of the proceeds of any realized judgment, award, settlement, or verdict a person may receive on an underlying civil claim or action, or in return for interest, fees, or other consideration. |
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| 125 | | - | |
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| 126 | | - | 22022. Lawsuit financing means a transaction in which a person provides, with or without recourse, money, services, or anything else having value to any person in return for a contingent right to receive an amount out of the proceeds of any realized judgment, award, settlement, or verdict a person may receive on an underlying civil claim or action, or in return for interest, fees, or other consideration. |
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| 127 | | - | |
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| 128 | | - | |
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| 129 | | - | |
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| 130 | | - | 22022. Lawsuit financing means a transaction in which a person provides, with or without recourse, money, services, or anything else having value to any person in return for a contingent right to receive an amount out of the proceeds of any realized judgment, award, settlement, or verdict a person may receive on an underlying civil claim or action, or in return for interest, fees, or other consideration. |
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| 131 | | - | |
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| 132 | | - | SEC. 5. Section 22100.6 is added to the Financial Code, to read:22100.6. (a) A person shall not engage in the business of lawsuit financing without obtaining a license from the commissioner.(b) The commissioner shall include lawsuit financing as an industry category on the licensee search page of the departments internet website. |
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| 133 | | - | |
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| 134 | | - | SEC. 5. Section 22100.6 is added to the Financial Code, to read: |
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| 135 | | - | |
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| 136 | | - | ### SEC. 5. |
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| 137 | | - | |
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| 138 | | - | 22100.6. (a) A person shall not engage in the business of lawsuit financing without obtaining a license from the commissioner.(b) The commissioner shall include lawsuit financing as an industry category on the licensee search page of the departments internet website. |
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| 139 | | - | |
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| 140 | | - | 22100.6. (a) A person shall not engage in the business of lawsuit financing without obtaining a license from the commissioner.(b) The commissioner shall include lawsuit financing as an industry category on the licensee search page of the departments internet website. |
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| 141 | | - | |
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| 142 | | - | 22100.6. (a) A person shall not engage in the business of lawsuit financing without obtaining a license from the commissioner.(b) The commissioner shall include lawsuit financing as an industry category on the licensee search page of the departments internet website. |
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| 144 | | - | |
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| 145 | | - | |
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| 146 | | - | 22100.6. (a) A person shall not engage in the business of lawsuit financing without obtaining a license from the commissioner. |
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| 147 | | - | |
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| 148 | | - | (b) The commissioner shall include lawsuit financing as an industry category on the licensee search page of the departments internet website. |
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| 149 | | - | |
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| 150 | | - | SEC. 6. Section 22112 of the Financial Code is amended to read:22112. (a) A Except as provided in subdivision (d), a licensee shall maintain a surety bond in accordance with this subdivision in a minimum amount of twenty-five thousand dollars ($25,000). The bond shall be payable to the commissioner and issued by an insurer authorized to do business in this state. An original surety bond, including any and all riders and endorsements executed subsequent to the effective date of the bond, shall be filed with the commissioner within 10 days of execution. For licensees with multiple licensed locations, only one surety bond is required. The bond shall be used for the recovery of expenses, fines, and fees levied by the commissioner in accordance with this division or for losses or damages incurred by borrowers or consumers as the result of a licensees noncompliance with the requirements of this division.(b) When an action is commenced on a licensees bond, the commissioner may require the filing of a new bond. Immediately upon recovery of any action on the bond, the licensee shall file a new bond. Failure to file a new bond within 10 days of the recovery on a bond, or within 10 days after notification by the commissioner that a new bond is required, constitutes sufficient grounds for the suspension or revocation of the license.(c) The commissioner may by rule require a higher bond amount for a licensee who employs one or more mortgage loan originators and who makes or arranges residential mortgage loans, based on the dollar amount of residential mortgage loans originated by that licensee and any mortgage loan originators employed by that licensee. Every mortgage loan originator employed by the licensee shall be covered by the surety bond.(d) (1) A licensee who is a lawsuit financier shall maintain a surety in a minimum amount of two hundred fifty thousand dollars ($250,000).(2) The commissioner may by rule increase the bond amount required by paragraph (1) based on the dollar amount of lawsuit financing originated by the lawsuit financier. |
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| 151 | | - | |
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| 152 | | - | SEC. 6. Section 22112 of the Financial Code is amended to read: |
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| 153 | | - | |
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| 154 | | - | ### SEC. 6. |
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| 155 | | - | |
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| 156 | | - | 22112. (a) A Except as provided in subdivision (d), a licensee shall maintain a surety bond in accordance with this subdivision in a minimum amount of twenty-five thousand dollars ($25,000). The bond shall be payable to the commissioner and issued by an insurer authorized to do business in this state. An original surety bond, including any and all riders and endorsements executed subsequent to the effective date of the bond, shall be filed with the commissioner within 10 days of execution. For licensees with multiple licensed locations, only one surety bond is required. The bond shall be used for the recovery of expenses, fines, and fees levied by the commissioner in accordance with this division or for losses or damages incurred by borrowers or consumers as the result of a licensees noncompliance with the requirements of this division.(b) When an action is commenced on a licensees bond, the commissioner may require the filing of a new bond. Immediately upon recovery of any action on the bond, the licensee shall file a new bond. Failure to file a new bond within 10 days of the recovery on a bond, or within 10 days after notification by the commissioner that a new bond is required, constitutes sufficient grounds for the suspension or revocation of the license.(c) The commissioner may by rule require a higher bond amount for a licensee who employs one or more mortgage loan originators and who makes or arranges residential mortgage loans, based on the dollar amount of residential mortgage loans originated by that licensee and any mortgage loan originators employed by that licensee. Every mortgage loan originator employed by the licensee shall be covered by the surety bond.(d) (1) A licensee who is a lawsuit financier shall maintain a surety in a minimum amount of two hundred fifty thousand dollars ($250,000).(2) The commissioner may by rule increase the bond amount required by paragraph (1) based on the dollar amount of lawsuit financing originated by the lawsuit financier. |
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| 157 | | - | |
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| 158 | | - | 22112. (a) A Except as provided in subdivision (d), a licensee shall maintain a surety bond in accordance with this subdivision in a minimum amount of twenty-five thousand dollars ($25,000). The bond shall be payable to the commissioner and issued by an insurer authorized to do business in this state. An original surety bond, including any and all riders and endorsements executed subsequent to the effective date of the bond, shall be filed with the commissioner within 10 days of execution. For licensees with multiple licensed locations, only one surety bond is required. The bond shall be used for the recovery of expenses, fines, and fees levied by the commissioner in accordance with this division or for losses or damages incurred by borrowers or consumers as the result of a licensees noncompliance with the requirements of this division.(b) When an action is commenced on a licensees bond, the commissioner may require the filing of a new bond. Immediately upon recovery of any action on the bond, the licensee shall file a new bond. Failure to file a new bond within 10 days of the recovery on a bond, or within 10 days after notification by the commissioner that a new bond is required, constitutes sufficient grounds for the suspension or revocation of the license.(c) The commissioner may by rule require a higher bond amount for a licensee who employs one or more mortgage loan originators and who makes or arranges residential mortgage loans, based on the dollar amount of residential mortgage loans originated by that licensee and any mortgage loan originators employed by that licensee. Every mortgage loan originator employed by the licensee shall be covered by the surety bond.(d) (1) A licensee who is a lawsuit financier shall maintain a surety in a minimum amount of two hundred fifty thousand dollars ($250,000).(2) The commissioner may by rule increase the bond amount required by paragraph (1) based on the dollar amount of lawsuit financing originated by the lawsuit financier. |
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| 159 | | - | |
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| 160 | | - | 22112. (a) A Except as provided in subdivision (d), a licensee shall maintain a surety bond in accordance with this subdivision in a minimum amount of twenty-five thousand dollars ($25,000). The bond shall be payable to the commissioner and issued by an insurer authorized to do business in this state. An original surety bond, including any and all riders and endorsements executed subsequent to the effective date of the bond, shall be filed with the commissioner within 10 days of execution. For licensees with multiple licensed locations, only one surety bond is required. The bond shall be used for the recovery of expenses, fines, and fees levied by the commissioner in accordance with this division or for losses or damages incurred by borrowers or consumers as the result of a licensees noncompliance with the requirements of this division.(b) When an action is commenced on a licensees bond, the commissioner may require the filing of a new bond. Immediately upon recovery of any action on the bond, the licensee shall file a new bond. Failure to file a new bond within 10 days of the recovery on a bond, or within 10 days after notification by the commissioner that a new bond is required, constitutes sufficient grounds for the suspension or revocation of the license.(c) The commissioner may by rule require a higher bond amount for a licensee who employs one or more mortgage loan originators and who makes or arranges residential mortgage loans, based on the dollar amount of residential mortgage loans originated by that licensee and any mortgage loan originators employed by that licensee. Every mortgage loan originator employed by the licensee shall be covered by the surety bond.(d) (1) A licensee who is a lawsuit financier shall maintain a surety in a minimum amount of two hundred fifty thousand dollars ($250,000).(2) The commissioner may by rule increase the bond amount required by paragraph (1) based on the dollar amount of lawsuit financing originated by the lawsuit financier. |
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| 164 | | - | 22112. (a) A Except as provided in subdivision (d), a licensee shall maintain a surety bond in accordance with this subdivision in a minimum amount of twenty-five thousand dollars ($25,000). The bond shall be payable to the commissioner and issued by an insurer authorized to do business in this state. An original surety bond, including any and all riders and endorsements executed subsequent to the effective date of the bond, shall be filed with the commissioner within 10 days of execution. For licensees with multiple licensed locations, only one surety bond is required. The bond shall be used for the recovery of expenses, fines, and fees levied by the commissioner in accordance with this division or for losses or damages incurred by borrowers or consumers as the result of a licensees noncompliance with the requirements of this division. |
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| 165 | | - | |
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| 166 | | - | (b) When an action is commenced on a licensees bond, the commissioner may require the filing of a new bond. Immediately upon recovery of any action on the bond, the licensee shall file a new bond. Failure to file a new bond within 10 days of the recovery on a bond, or within 10 days after notification by the commissioner that a new bond is required, constitutes sufficient grounds for the suspension or revocation of the license. |
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| 167 | | - | |
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| 168 | | - | (c) The commissioner may by rule require a higher bond amount for a licensee who employs one or more mortgage loan originators and who makes or arranges residential mortgage loans, based on the dollar amount of residential mortgage loans originated by that licensee and any mortgage loan originators employed by that licensee. Every mortgage loan originator employed by the licensee shall be covered by the surety bond. |
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| 169 | | - | |
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| 170 | | - | (d) (1) A licensee who is a lawsuit financier shall maintain a surety in a minimum amount of two hundred fifty thousand dollars ($250,000). |
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| 171 | | - | |
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| 172 | | - | (2) The commissioner may by rule increase the bond amount required by paragraph (1) based on the dollar amount of lawsuit financing originated by the lawsuit financier. |
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| 174 | | - | SEC. 7. Section 22502 of the Financial Code is amended to read:22502. (a) (1) Commercial loan means a loan of a principal amount of five thousand dollars ($5,000) or more, or any loan under an open-end credit program, whether secured by either real or personal property, or both, or unsecured, the proceeds of which are intended by the borrower for use primarily for other than personal, family, or household purposes.(2) Commercial loan includes, but is not limited to, lawsuit financing that otherwise meets the definition in paragraph (1). For(b) For purposes of determining whether a loan is a commercial loan, the lender may rely on any written statement of intended purposes signed by the borrower. The statement may be a separate statement signed by the borrower or may be contained in a loan application or other document signed by the borrower. The lender shall not be required to ascertain that the proceeds of the loan are used in accordance with the statement of intended purposes. |
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| 176 | | - | SEC. 7. Section 22502 of the Financial Code is amended to read: |
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| 177 | | - | |
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| 178 | | - | ### SEC. 7. |
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| 179 | | - | |
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| 180 | | - | 22502. (a) (1) Commercial loan means a loan of a principal amount of five thousand dollars ($5,000) or more, or any loan under an open-end credit program, whether secured by either real or personal property, or both, or unsecured, the proceeds of which are intended by the borrower for use primarily for other than personal, family, or household purposes.(2) Commercial loan includes, but is not limited to, lawsuit financing that otherwise meets the definition in paragraph (1). For(b) For purposes of determining whether a loan is a commercial loan, the lender may rely on any written statement of intended purposes signed by the borrower. The statement may be a separate statement signed by the borrower or may be contained in a loan application or other document signed by the borrower. The lender shall not be required to ascertain that the proceeds of the loan are used in accordance with the statement of intended purposes. |
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| 181 | | - | |
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| 182 | | - | 22502. (a) (1) Commercial loan means a loan of a principal amount of five thousand dollars ($5,000) or more, or any loan under an open-end credit program, whether secured by either real or personal property, or both, or unsecured, the proceeds of which are intended by the borrower for use primarily for other than personal, family, or household purposes.(2) Commercial loan includes, but is not limited to, lawsuit financing that otherwise meets the definition in paragraph (1). For(b) For purposes of determining whether a loan is a commercial loan, the lender may rely on any written statement of intended purposes signed by the borrower. The statement may be a separate statement signed by the borrower or may be contained in a loan application or other document signed by the borrower. The lender shall not be required to ascertain that the proceeds of the loan are used in accordance with the statement of intended purposes. |
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| 183 | | - | |
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| 184 | | - | 22502. (a) (1) Commercial loan means a loan of a principal amount of five thousand dollars ($5,000) or more, or any loan under an open-end credit program, whether secured by either real or personal property, or both, or unsecured, the proceeds of which are intended by the borrower for use primarily for other than personal, family, or household purposes.(2) Commercial loan includes, but is not limited to, lawsuit financing that otherwise meets the definition in paragraph (1). For(b) For purposes of determining whether a loan is a commercial loan, the lender may rely on any written statement of intended purposes signed by the borrower. The statement may be a separate statement signed by the borrower or may be contained in a loan application or other document signed by the borrower. The lender shall not be required to ascertain that the proceeds of the loan are used in accordance with the statement of intended purposes. |
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| 188 | | - | 22502. (a) (1) Commercial loan means a loan of a principal amount of five thousand dollars ($5,000) or more, or any loan under an open-end credit program, whether secured by either real or personal property, or both, or unsecured, the proceeds of which are intended by the borrower for use primarily for other than personal, family, or household purposes. |
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| 189 | | - | |
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| 190 | | - | (2) Commercial loan includes, but is not limited to, lawsuit financing that otherwise meets the definition in paragraph (1). |
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| 192 | | - | For |
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| 194 | | - | |
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| 195 | | - | |
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| 196 | | - | (b) For purposes of determining whether a loan is a commercial loan, the lender may rely on any written statement of intended purposes signed by the borrower. The statement may be a separate statement signed by the borrower or may be contained in a loan application or other document signed by the borrower. The lender shall not be required to ascertain that the proceeds of the loan are used in accordance with the statement of intended purposes. |
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| 197 | | - | |
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| 198 | | - | SEC. 8. Section 22753 of the Financial Code is amended to read:22753. Except as provided in Section 22696, Sections 22696 and 22780.2, any person who willfully violates any provision of this division or who willfully violates any rule or order adopted pursuant to this division, shall, upon conviction, be punished by a fine of not more than ten thousand dollars ($10,000), by imprisonment in a county jail for not more than one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment. However, no person may be imprisoned for the violation of any rule or order unless he or she the person had knowledge of the rule or order. Conviction under this section shall not preclude the commissioner from exercising the authority in Section 22713. |
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| 199 | | - | |
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| 200 | | - | SEC. 8. Section 22753 of the Financial Code is amended to read: |
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| 201 | | - | |
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| 202 | | - | ### SEC. 8. |
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| 203 | | - | |
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| 204 | | - | 22753. Except as provided in Section 22696, Sections 22696 and 22780.2, any person who willfully violates any provision of this division or who willfully violates any rule or order adopted pursuant to this division, shall, upon conviction, be punished by a fine of not more than ten thousand dollars ($10,000), by imprisonment in a county jail for not more than one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment. However, no person may be imprisoned for the violation of any rule or order unless he or she the person had knowledge of the rule or order. Conviction under this section shall not preclude the commissioner from exercising the authority in Section 22713. |
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| 205 | | - | |
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| 206 | | - | 22753. Except as provided in Section 22696, Sections 22696 and 22780.2, any person who willfully violates any provision of this division or who willfully violates any rule or order adopted pursuant to this division, shall, upon conviction, be punished by a fine of not more than ten thousand dollars ($10,000), by imprisonment in a county jail for not more than one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment. However, no person may be imprisoned for the violation of any rule or order unless he or she the person had knowledge of the rule or order. Conviction under this section shall not preclude the commissioner from exercising the authority in Section 22713. |
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| 207 | | - | |
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| 208 | | - | 22753. Except as provided in Section 22696, Sections 22696 and 22780.2, any person who willfully violates any provision of this division or who willfully violates any rule or order adopted pursuant to this division, shall, upon conviction, be punished by a fine of not more than ten thousand dollars ($10,000), by imprisonment in a county jail for not more than one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment. However, no person may be imprisoned for the violation of any rule or order unless he or she the person had knowledge of the rule or order. Conviction under this section shall not preclude the commissioner from exercising the authority in Section 22713. |
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| 209 | | - | |
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| 210 | | - | |
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| 211 | | - | |
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| 212 | | - | 22753. Except as provided in Section 22696, Sections 22696 and 22780.2, any person who willfully violates any provision of this division or who willfully violates any rule or order adopted pursuant to this division, shall, upon conviction, be punished by a fine of not more than ten thousand dollars ($10,000), by imprisonment in a county jail for not more than one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment. However, no person may be imprisoned for the violation of any rule or order unless he or she the person had knowledge of the rule or order. Conviction under this section shall not preclude the commissioner from exercising the authority in Section 22713. |
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| 213 | | - | |
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| 214 | | - | SEC. 9. Section 22780 of the Financial Code is amended to read:22780. Except as provided in Section 22696, Sections 22696 and 22780.2, any person who willfully violates any provision of this division, or who willfully violates any rule or order adopted pursuant to this division, shall, upon conviction, be punished by a fine of not more than ten thousand dollars ($10,000), by imprisonment in a county jail for not more than one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment. However, no person may be imprisoned for the violation of any rule or order unless he or she the person had knowledge of the rule or order. Conviction under this section shall not preclude the commissioner from exercising the authority provided in Section 22713.This article does not apply to a program administrator or PACE solicitor. |
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| 215 | | - | |
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| 216 | | - | SEC. 9. Section 22780 of the Financial Code is amended to read: |
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| 217 | | - | |
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| 218 | | - | ### SEC. 9. |
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| 219 | | - | |
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| 220 | | - | 22780. Except as provided in Section 22696, Sections 22696 and 22780.2, any person who willfully violates any provision of this division, or who willfully violates any rule or order adopted pursuant to this division, shall, upon conviction, be punished by a fine of not more than ten thousand dollars ($10,000), by imprisonment in a county jail for not more than one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment. However, no person may be imprisoned for the violation of any rule or order unless he or she the person had knowledge of the rule or order. Conviction under this section shall not preclude the commissioner from exercising the authority provided in Section 22713.This article does not apply to a program administrator or PACE solicitor. |
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| 221 | | - | |
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| 222 | | - | 22780. Except as provided in Section 22696, Sections 22696 and 22780.2, any person who willfully violates any provision of this division, or who willfully violates any rule or order adopted pursuant to this division, shall, upon conviction, be punished by a fine of not more than ten thousand dollars ($10,000), by imprisonment in a county jail for not more than one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment. However, no person may be imprisoned for the violation of any rule or order unless he or she the person had knowledge of the rule or order. Conviction under this section shall not preclude the commissioner from exercising the authority provided in Section 22713.This article does not apply to a program administrator or PACE solicitor. |
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| 223 | | - | |
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| 224 | | - | 22780. Except as provided in Section 22696, Sections 22696 and 22780.2, any person who willfully violates any provision of this division, or who willfully violates any rule or order adopted pursuant to this division, shall, upon conviction, be punished by a fine of not more than ten thousand dollars ($10,000), by imprisonment in a county jail for not more than one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment. However, no person may be imprisoned for the violation of any rule or order unless he or she the person had knowledge of the rule or order. Conviction under this section shall not preclude the commissioner from exercising the authority provided in Section 22713.This article does not apply to a program administrator or PACE solicitor. |
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| 225 | | - | |
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| 226 | | - | |
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| 227 | | - | |
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| 228 | | - | 22780. Except as provided in Section 22696, Sections 22696 and 22780.2, any person who willfully violates any provision of this division, or who willfully violates any rule or order adopted pursuant to this division, shall, upon conviction, be punished by a fine of not more than ten thousand dollars ($10,000), by imprisonment in a county jail for not more than one year or pursuant to subdivision (h) of Section 1170 of the Penal Code, or by both that fine and imprisonment. However, no person may be imprisoned for the violation of any rule or order unless he or she the person had knowledge of the rule or order. Conviction under this section shall not preclude the commissioner from exercising the authority provided in Section 22713. |
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| 229 | | - | |
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| 230 | | - | This article does not apply to a program administrator or PACE solicitor. |
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| 231 | | - | |
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| 232 | | - | SEC. 10. Section 22780.2 is added to the Financial Code, to read:22780.2. A licensee who is a lawsuit financier and who willfully violates any provision of this division, or who willfully violates any rule or order adopted pursuant to this division, shall be subject to a civil penalty of not more than one hundred thousand dollars ($100,000) for a first violation and not more than two hundred fifty thousand ($250,000) for each repeat violation. |
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| 233 | | - | |
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| 234 | | - | SEC. 10. Section 22780.2 is added to the Financial Code, to read: |
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| 235 | | - | |
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| 236 | | - | ### SEC. 10. |
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| 237 | | - | |
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| 238 | | - | 22780.2. A licensee who is a lawsuit financier and who willfully violates any provision of this division, or who willfully violates any rule or order adopted pursuant to this division, shall be subject to a civil penalty of not more than one hundred thousand dollars ($100,000) for a first violation and not more than two hundred fifty thousand ($250,000) for each repeat violation. |
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| 239 | | - | |
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| 240 | | - | 22780.2. A licensee who is a lawsuit financier and who willfully violates any provision of this division, or who willfully violates any rule or order adopted pursuant to this division, shall be subject to a civil penalty of not more than one hundred thousand dollars ($100,000) for a first violation and not more than two hundred fifty thousand ($250,000) for each repeat violation. |
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| 241 | | - | |
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| 242 | | - | 22780.2. A licensee who is a lawsuit financier and who willfully violates any provision of this division, or who willfully violates any rule or order adopted pursuant to this division, shall be subject to a civil penalty of not more than one hundred thousand dollars ($100,000) for a first violation and not more than two hundred fifty thousand ($250,000) for each repeat violation. |
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| 243 | | - | |
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| 244 | | - | |
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| 245 | | - | |
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| 246 | | - | 22780.2. A licensee who is a lawsuit financier and who willfully violates any provision of this division, or who willfully violates any rule or order adopted pursuant to this division, shall be subject to a civil penalty of not more than one hundred thousand dollars ($100,000) for a first violation and not more than two hundred fifty thousand ($250,000) for each repeat violation. |
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| 247 | | - | |
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| 248 | | - | |
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| 249 | | - | |
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| 250 | | - | |
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| 251 | | - | |
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| 252 | | - | (a)Every credit union may enter into obligations with its members upon the approval of the credit committee or, in the alternative, the credit manager, subject to the terms and conditions established by the board of directors pursuant to Section 15100. |
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| 253 | | - | |
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| 254 | | - | |
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| 58 | + | 14950. (a) Every credit union may enter into obligations with its members upon the approval of the credit committee or, in the alternative, the credit manager, subject to the terms and conditions established by the board of directors pursuant to Section 15100. |
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