| 57 | | - | |
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| 58 | | - | 94918.5. (a) The bureaus administration of this article or Article 13 (commencing with Section 94919) shall not preclude the authority of the Department of Financial Protection and Innovation over, and application of the California Consumer Financial Protection Law to, any covered persons as defined by subdivision (f) of Section 90005 of the Financial Code, including, but not limited to, private postsecondary educational institutions.(b) Nothing in this chapter shall constitute regulation of an institutions financial product or service pursuant to subparagraph (B) of paragraph (2) of subdivision (a) of Section 90009 of the Financial Code, or shall otherwise be construed to limit the Department of Financial Protection and Innovations jurisdiction with respect to an institutions financial product or service.(c) An institution subject to this chapter shall not be considered acting under the authority of its status with the bureau pursuant to subdivision (a) of Section 90002 of the Financial Code when offering financial products or services. |
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| 59 | | - | |
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| 60 | | - | 94918.5. (a) The bureaus administration of this article or Article 13 (commencing with Section 94919) shall not preclude the authority of the Department of Financial Protection and Innovation over, and application of the California Consumer Financial Protection Law to, any covered persons as defined by subdivision (f) of Section 90005 of the Financial Code, including, but not limited to, private postsecondary educational institutions.(b) Nothing in this chapter shall constitute regulation of an institutions financial product or service pursuant to subparagraph (B) of paragraph (2) of subdivision (a) of Section 90009 of the Financial Code, or shall otherwise be construed to limit the Department of Financial Protection and Innovations jurisdiction with respect to an institutions financial product or service.(c) An institution subject to this chapter shall not be considered acting under the authority of its status with the bureau pursuant to subdivision (a) of Section 90002 of the Financial Code when offering financial products or services. |
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| 61 | | - | |
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| 62 | | - | 94918.5. (a) The bureaus administration of this article or Article 13 (commencing with Section 94919) shall not preclude the authority of the Department of Financial Protection and Innovation over, and application of the California Consumer Financial Protection Law to, any covered persons as defined by subdivision (f) of Section 90005 of the Financial Code, including, but not limited to, private postsecondary educational institutions.(b) Nothing in this chapter shall constitute regulation of an institutions financial product or service pursuant to subparagraph (B) of paragraph (2) of subdivision (a) of Section 90009 of the Financial Code, or shall otherwise be construed to limit the Department of Financial Protection and Innovations jurisdiction with respect to an institutions financial product or service.(c) An institution subject to this chapter shall not be considered acting under the authority of its status with the bureau pursuant to subdivision (a) of Section 90002 of the Financial Code when offering financial products or services. |
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| 63 | | - | |
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| 64 | | - | |
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| 65 | | - | |
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| 66 | | - | 94918.5. (a) The bureaus administration of this article or Article 13 (commencing with Section 94919) shall not preclude the authority of the Department of Financial Protection and Innovation over, and application of the California Consumer Financial Protection Law to, any covered persons as defined by subdivision (f) of Section 90005 of the Financial Code, including, but not limited to, private postsecondary educational institutions. |
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| 67 | | - | |
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| 68 | | - | (b) Nothing in this chapter shall constitute regulation of an institutions financial product or service pursuant to subparagraph (B) of paragraph (2) of subdivision (a) of Section 90009 of the Financial Code, or shall otherwise be construed to limit the Department of Financial Protection and Innovations jurisdiction with respect to an institutions financial product or service. |
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| 69 | | - | |
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| 70 | | - | (c) An institution subject to this chapter shall not be considered acting under the authority of its status with the bureau pursuant to subdivision (a) of Section 90002 of the Financial Code when offering financial products or services. |
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| 71 | | - | |
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| 72 | | - | SEC. 2. Section 90000 of the Financial Code is amended to read:90000. (a) The Legislature finds and declares all of the following:(1) California consumers are vulnerable to abuse if the state lacks a dedicated financial services regulator with broad authority over providers of financial products and services. The lack of such a regulator has left consumers vulnerable to abuse and forced California businesses to compete with unscrupulous providers. The financial victimization of economically vulnerable consumers, including individuals who lack a safety net, not only harms the individual but also has a broader social and economic cost on all of California, and could lead to increased caseloads for social safety net programs. These problems become even more acute in times of crisis, including the global Covid-19 COVID-19 pandemic and economic fallout. Consequently, where feasible, the Legislature should enact statutory measures to protect California residents from financial abuses in the marketplace for financial products and services.(2) Robust consumer protections enable wealth building and promote a vibrant economy. They are especially important among various populations, including, but not limited to, military service members, seniors, students, and new Californians. Unfair, deceptive, or abusive practices in the provision of financial products and services undermine the public confidence that is essential to the continued functioning of the financial system and sound extensions of credit to consumers.(3) Technological innovation offers great promise to the more effective and efficient provision of consumer financial products and services to the population of California and also poses risks to consumers and challenges to law enforcement in addressing those risks.(4) Small business owners are often similarly situated as consumers with regards to their sophistication and bargaining power relative to providers of financial services and products. Many of the rationales supporting legal protections for consumers apply also to small business owners. Small businesses have a better chance to survive and grow if they are able to access safe and effective financial products and are protected from unfair, deceptive, or abusive practices when accessing financial products and services. (4)(5) It is the intent of the Legislature to enact the California Consumer Financial Protection Law to strengthen consumer protections by expanding the ability of the Department of Financial Protection and Innovation to improve accountability and transparency in the California financial system, provide consumer financial education, and protect consumers and small businesses from abusive financial practices, while prioritizing the prevention of unethical businesses from harming the most vulnerable populations including military service members, seniors, students, low- and moderate-income individuals, and new Californians.(b) The purpose of the California Consumer Financial Protection Law shall be to promote consumer welfare, fair competition, and wealth creation in this state by doing all of the following:(1) Promoting nondiscriminatory access to responsible, affordable credit on terms that reasonably reflect consumers ability to repay.(2) Promoting nondiscriminatory access to consumer financial products and services that are understandable and not unfair, deceptive, or abusive.(3) Protecting consumers from discrimination and unfair, deceptive, and abusive acts and practices in connection with financial practices and services.(4) Promoting nondiscriminatory consumer-protective innovation in consumer financial products and services.(5) Promoting the interests of small businesses and protecting them from harm in connection with financial practices and services, in manners similar to those undertaken for consumers. |
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| 73 | | - | |
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| 74 | | - | SEC. 2. Section 90000 of the Financial Code is amended to read: |
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| 75 | | - | |
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| 76 | | - | ### SEC. 2. |
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| 77 | | - | |
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| 78 | | - | 90000. (a) The Legislature finds and declares all of the following:(1) California consumers are vulnerable to abuse if the state lacks a dedicated financial services regulator with broad authority over providers of financial products and services. The lack of such a regulator has left consumers vulnerable to abuse and forced California businesses to compete with unscrupulous providers. The financial victimization of economically vulnerable consumers, including individuals who lack a safety net, not only harms the individual but also has a broader social and economic cost on all of California, and could lead to increased caseloads for social safety net programs. These problems become even more acute in times of crisis, including the global Covid-19 COVID-19 pandemic and economic fallout. Consequently, where feasible, the Legislature should enact statutory measures to protect California residents from financial abuses in the marketplace for financial products and services.(2) Robust consumer protections enable wealth building and promote a vibrant economy. They are especially important among various populations, including, but not limited to, military service members, seniors, students, and new Californians. Unfair, deceptive, or abusive practices in the provision of financial products and services undermine the public confidence that is essential to the continued functioning of the financial system and sound extensions of credit to consumers.(3) Technological innovation offers great promise to the more effective and efficient provision of consumer financial products and services to the population of California and also poses risks to consumers and challenges to law enforcement in addressing those risks.(4) Small business owners are often similarly situated as consumers with regards to their sophistication and bargaining power relative to providers of financial services and products. Many of the rationales supporting legal protections for consumers apply also to small business owners. Small businesses have a better chance to survive and grow if they are able to access safe and effective financial products and are protected from unfair, deceptive, or abusive practices when accessing financial products and services. (4)(5) It is the intent of the Legislature to enact the California Consumer Financial Protection Law to strengthen consumer protections by expanding the ability of the Department of Financial Protection and Innovation to improve accountability and transparency in the California financial system, provide consumer financial education, and protect consumers and small businesses from abusive financial practices, while prioritizing the prevention of unethical businesses from harming the most vulnerable populations including military service members, seniors, students, low- and moderate-income individuals, and new Californians.(b) The purpose of the California Consumer Financial Protection Law shall be to promote consumer welfare, fair competition, and wealth creation in this state by doing all of the following:(1) Promoting nondiscriminatory access to responsible, affordable credit on terms that reasonably reflect consumers ability to repay.(2) Promoting nondiscriminatory access to consumer financial products and services that are understandable and not unfair, deceptive, or abusive.(3) Protecting consumers from discrimination and unfair, deceptive, and abusive acts and practices in connection with financial practices and services.(4) Promoting nondiscriminatory consumer-protective innovation in consumer financial products and services.(5) Promoting the interests of small businesses and protecting them from harm in connection with financial practices and services, in manners similar to those undertaken for consumers. |
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| 79 | | - | |
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| 80 | | - | 90000. (a) The Legislature finds and declares all of the following:(1) California consumers are vulnerable to abuse if the state lacks a dedicated financial services regulator with broad authority over providers of financial products and services. The lack of such a regulator has left consumers vulnerable to abuse and forced California businesses to compete with unscrupulous providers. The financial victimization of economically vulnerable consumers, including individuals who lack a safety net, not only harms the individual but also has a broader social and economic cost on all of California, and could lead to increased caseloads for social safety net programs. These problems become even more acute in times of crisis, including the global Covid-19 COVID-19 pandemic and economic fallout. Consequently, where feasible, the Legislature should enact statutory measures to protect California residents from financial abuses in the marketplace for financial products and services.(2) Robust consumer protections enable wealth building and promote a vibrant economy. They are especially important among various populations, including, but not limited to, military service members, seniors, students, and new Californians. Unfair, deceptive, or abusive practices in the provision of financial products and services undermine the public confidence that is essential to the continued functioning of the financial system and sound extensions of credit to consumers.(3) Technological innovation offers great promise to the more effective and efficient provision of consumer financial products and services to the population of California and also poses risks to consumers and challenges to law enforcement in addressing those risks.(4) Small business owners are often similarly situated as consumers with regards to their sophistication and bargaining power relative to providers of financial services and products. Many of the rationales supporting legal protections for consumers apply also to small business owners. Small businesses have a better chance to survive and grow if they are able to access safe and effective financial products and are protected from unfair, deceptive, or abusive practices when accessing financial products and services. (4)(5) It is the intent of the Legislature to enact the California Consumer Financial Protection Law to strengthen consumer protections by expanding the ability of the Department of Financial Protection and Innovation to improve accountability and transparency in the California financial system, provide consumer financial education, and protect consumers and small businesses from abusive financial practices, while prioritizing the prevention of unethical businesses from harming the most vulnerable populations including military service members, seniors, students, low- and moderate-income individuals, and new Californians.(b) The purpose of the California Consumer Financial Protection Law shall be to promote consumer welfare, fair competition, and wealth creation in this state by doing all of the following:(1) Promoting nondiscriminatory access to responsible, affordable credit on terms that reasonably reflect consumers ability to repay.(2) Promoting nondiscriminatory access to consumer financial products and services that are understandable and not unfair, deceptive, or abusive.(3) Protecting consumers from discrimination and unfair, deceptive, and abusive acts and practices in connection with financial practices and services.(4) Promoting nondiscriminatory consumer-protective innovation in consumer financial products and services.(5) Promoting the interests of small businesses and protecting them from harm in connection with financial practices and services, in manners similar to those undertaken for consumers. |
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| 81 | | - | |
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| 82 | | - | 90000. (a) The Legislature finds and declares all of the following:(1) California consumers are vulnerable to abuse if the state lacks a dedicated financial services regulator with broad authority over providers of financial products and services. The lack of such a regulator has left consumers vulnerable to abuse and forced California businesses to compete with unscrupulous providers. The financial victimization of economically vulnerable consumers, including individuals who lack a safety net, not only harms the individual but also has a broader social and economic cost on all of California, and could lead to increased caseloads for social safety net programs. These problems become even more acute in times of crisis, including the global Covid-19 COVID-19 pandemic and economic fallout. Consequently, where feasible, the Legislature should enact statutory measures to protect California residents from financial abuses in the marketplace for financial products and services.(2) Robust consumer protections enable wealth building and promote a vibrant economy. They are especially important among various populations, including, but not limited to, military service members, seniors, students, and new Californians. Unfair, deceptive, or abusive practices in the provision of financial products and services undermine the public confidence that is essential to the continued functioning of the financial system and sound extensions of credit to consumers.(3) Technological innovation offers great promise to the more effective and efficient provision of consumer financial products and services to the population of California and also poses risks to consumers and challenges to law enforcement in addressing those risks.(4) Small business owners are often similarly situated as consumers with regards to their sophistication and bargaining power relative to providers of financial services and products. Many of the rationales supporting legal protections for consumers apply also to small business owners. Small businesses have a better chance to survive and grow if they are able to access safe and effective financial products and are protected from unfair, deceptive, or abusive practices when accessing financial products and services. (4)(5) It is the intent of the Legislature to enact the California Consumer Financial Protection Law to strengthen consumer protections by expanding the ability of the Department of Financial Protection and Innovation to improve accountability and transparency in the California financial system, provide consumer financial education, and protect consumers and small businesses from abusive financial practices, while prioritizing the prevention of unethical businesses from harming the most vulnerable populations including military service members, seniors, students, low- and moderate-income individuals, and new Californians.(b) The purpose of the California Consumer Financial Protection Law shall be to promote consumer welfare, fair competition, and wealth creation in this state by doing all of the following:(1) Promoting nondiscriminatory access to responsible, affordable credit on terms that reasonably reflect consumers ability to repay.(2) Promoting nondiscriminatory access to consumer financial products and services that are understandable and not unfair, deceptive, or abusive.(3) Protecting consumers from discrimination and unfair, deceptive, and abusive acts and practices in connection with financial practices and services.(4) Promoting nondiscriminatory consumer-protective innovation in consumer financial products and services.(5) Promoting the interests of small businesses and protecting them from harm in connection with financial practices and services, in manners similar to those undertaken for consumers. |
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| 83 | | - | |
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| 84 | | - | |
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| 85 | | - | |
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| 86 | | - | 90000. (a) The Legislature finds and declares all of the following: |
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| 87 | | - | |
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| 88 | | - | (1) California consumers are vulnerable to abuse if the state lacks a dedicated financial services regulator with broad authority over providers of financial products and services. The lack of such a regulator has left consumers vulnerable to abuse and forced California businesses to compete with unscrupulous providers. The financial victimization of economically vulnerable consumers, including individuals who lack a safety net, not only harms the individual but also has a broader social and economic cost on all of California, and could lead to increased caseloads for social safety net programs. These problems become even more acute in times of crisis, including the global Covid-19 COVID-19 pandemic and economic fallout. Consequently, where feasible, the Legislature should enact statutory measures to protect California residents from financial abuses in the marketplace for financial products and services. |
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| 89 | | - | |
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| 90 | | - | (2) Robust consumer protections enable wealth building and promote a vibrant economy. They are especially important among various populations, including, but not limited to, military service members, seniors, students, and new Californians. Unfair, deceptive, or abusive practices in the provision of financial products and services undermine the public confidence that is essential to the continued functioning of the financial system and sound extensions of credit to consumers. |
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| 91 | | - | |
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| 92 | | - | (3) Technological innovation offers great promise to the more effective and efficient provision of consumer financial products and services to the population of California and also poses risks to consumers and challenges to law enforcement in addressing those risks. |
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| 93 | | - | |
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| 94 | | - | (4) Small business owners are often similarly situated as consumers with regards to their sophistication and bargaining power relative to providers of financial services and products. Many of the rationales supporting legal protections for consumers apply also to small business owners. Small businesses have a better chance to survive and grow if they are able to access safe and effective financial products and are protected from unfair, deceptive, or abusive practices when accessing financial products and services. |
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| 95 | | - | |
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| 96 | | - | (4) |
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| 97 | | - | |
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| 98 | | - | |
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| 99 | | - | |
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| 100 | | - | (5) It is the intent of the Legislature to enact the California Consumer Financial Protection Law to strengthen consumer protections by expanding the ability of the Department of Financial Protection and Innovation to improve accountability and transparency in the California financial system, provide consumer financial education, and protect consumers and small businesses from abusive financial practices, while prioritizing the prevention of unethical businesses from harming the most vulnerable populations including military service members, seniors, students, low- and moderate-income individuals, and new Californians. |
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| 101 | | - | |
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| 102 | | - | (b) The purpose of the California Consumer Financial Protection Law shall be to promote consumer welfare, fair competition, and wealth creation in this state by doing all of the following: |
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| 103 | | - | |
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| 104 | | - | (1) Promoting nondiscriminatory access to responsible, affordable credit on terms that reasonably reflect consumers ability to repay. |
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| 105 | | - | |
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| 106 | | - | (2) Promoting nondiscriminatory access to consumer financial products and services that are understandable and not unfair, deceptive, or abusive. |
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| 107 | | - | |
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| 108 | | - | (3) Protecting consumers from discrimination and unfair, deceptive, and abusive acts and practices in connection with financial practices and services. |
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| 109 | | - | |
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| 110 | | - | (4) Promoting nondiscriminatory consumer-protective innovation in consumer financial products and services. |
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| 111 | | - | |
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| 112 | | - | (5) Promoting the interests of small businesses and protecting them from harm in connection with financial practices and services, in manners similar to those undertaken for consumers. |
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| 113 | | - | |
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| 114 | | - | SEC. 3. Section 90002 of the Financial Code is amended to read:90002. (a) This division shall not apply to a licensee, or an employee of a licensee, of any state agency other than the Department of Financial Protection and Innovation to the extent that licensee or employee is acting under the authority of the other state agencys license.(b) This division shall not apply to a person or employee of that person to the extent that person or employee is acting under the authority of one of the following licenses, certificates, or charters issued by the Department of Financial Protection and Innovation:(1) Any person licensed as an escrow agent under Division 6 (commencing with Section 17000) of the Financial Code.(2) Any person licensed as a finance lender, broker, program administrator, or mortgage loan originator under Division 9 (commencing with Section 22000) of the Financial Code.(3) Any person licensed as a broker-dealer or investment adviser under Division 1 (commencing with Section 25000) of Title 4 the Corporations Code.(4) Any person licensed as a residential mortgage lender, a mortgage servicer, or a mortgage loan originator under Division 20 (commencing with Section 50000) of the Financial Code.(5) Any person licensed as a check seller, bill payer, or prorater under Division 3 (commencing with Section 12000) of the Financial Code.(6) Any person licensed as a capital access company under Division 3 (commencing with Section 28000) of Title 4 of the Corporations Code.(7) Any person doing business under a license, charter, or certificate issued under the Financial Institutions Law, including Division 1 (commencing with Section 99), Division 1.1 (commencing with Section 1000), Division 1.2 (commencing with Section 2000), Division 1.6 (commencing with Section 4800), Division 2 (commencing with Section 5000), Division 5 (commencing with Section 14000), Division 7 (commencing with Section 18000), and Division 15 (commencing with Section 31000) of the Financial Code.(c) This division shall not apply to a bank, bank holding company, trust company, savings and loan association, savings and loan holding company, credit union, or an organization subject to oversight of the Farm Credit Administration, when acting under the authority of a license, certificate, or charter under federal law or the laws of another state.(d) This division applies to all other covered persons, as defined in subdivision (f) of Section 90005. |
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| 115 | | - | |
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| 116 | | - | SEC. 3. Section 90002 of the Financial Code is amended to read: |
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| 117 | | - | |
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| 118 | | - | ### SEC. 3. |
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| 119 | | - | |
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| 120 | | - | 90002. (a) This division shall not apply to a licensee, or an employee of a licensee, of any state agency other than the Department of Financial Protection and Innovation to the extent that licensee or employee is acting under the authority of the other state agencys license.(b) This division shall not apply to a person or employee of that person to the extent that person or employee is acting under the authority of one of the following licenses, certificates, or charters issued by the Department of Financial Protection and Innovation:(1) Any person licensed as an escrow agent under Division 6 (commencing with Section 17000) of the Financial Code.(2) Any person licensed as a finance lender, broker, program administrator, or mortgage loan originator under Division 9 (commencing with Section 22000) of the Financial Code.(3) Any person licensed as a broker-dealer or investment adviser under Division 1 (commencing with Section 25000) of Title 4 the Corporations Code.(4) Any person licensed as a residential mortgage lender, a mortgage servicer, or a mortgage loan originator under Division 20 (commencing with Section 50000) of the Financial Code.(5) Any person licensed as a check seller, bill payer, or prorater under Division 3 (commencing with Section 12000) of the Financial Code.(6) Any person licensed as a capital access company under Division 3 (commencing with Section 28000) of Title 4 of the Corporations Code.(7) Any person doing business under a license, charter, or certificate issued under the Financial Institutions Law, including Division 1 (commencing with Section 99), Division 1.1 (commencing with Section 1000), Division 1.2 (commencing with Section 2000), Division 1.6 (commencing with Section 4800), Division 2 (commencing with Section 5000), Division 5 (commencing with Section 14000), Division 7 (commencing with Section 18000), and Division 15 (commencing with Section 31000) of the Financial Code.(c) This division shall not apply to a bank, bank holding company, trust company, savings and loan association, savings and loan holding company, credit union, or an organization subject to oversight of the Farm Credit Administration, when acting under the authority of a license, certificate, or charter under federal law or the laws of another state.(d) This division applies to all other covered persons, as defined in subdivision (f) of Section 90005. |
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| 121 | | - | |
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| 122 | | - | 90002. (a) This division shall not apply to a licensee, or an employee of a licensee, of any state agency other than the Department of Financial Protection and Innovation to the extent that licensee or employee is acting under the authority of the other state agencys license.(b) This division shall not apply to a person or employee of that person to the extent that person or employee is acting under the authority of one of the following licenses, certificates, or charters issued by the Department of Financial Protection and Innovation:(1) Any person licensed as an escrow agent under Division 6 (commencing with Section 17000) of the Financial Code.(2) Any person licensed as a finance lender, broker, program administrator, or mortgage loan originator under Division 9 (commencing with Section 22000) of the Financial Code.(3) Any person licensed as a broker-dealer or investment adviser under Division 1 (commencing with Section 25000) of Title 4 the Corporations Code.(4) Any person licensed as a residential mortgage lender, a mortgage servicer, or a mortgage loan originator under Division 20 (commencing with Section 50000) of the Financial Code.(5) Any person licensed as a check seller, bill payer, or prorater under Division 3 (commencing with Section 12000) of the Financial Code.(6) Any person licensed as a capital access company under Division 3 (commencing with Section 28000) of Title 4 of the Corporations Code.(7) Any person doing business under a license, charter, or certificate issued under the Financial Institutions Law, including Division 1 (commencing with Section 99), Division 1.1 (commencing with Section 1000), Division 1.2 (commencing with Section 2000), Division 1.6 (commencing with Section 4800), Division 2 (commencing with Section 5000), Division 5 (commencing with Section 14000), Division 7 (commencing with Section 18000), and Division 15 (commencing with Section 31000) of the Financial Code.(c) This division shall not apply to a bank, bank holding company, trust company, savings and loan association, savings and loan holding company, credit union, or an organization subject to oversight of the Farm Credit Administration, when acting under the authority of a license, certificate, or charter under federal law or the laws of another state.(d) This division applies to all other covered persons, as defined in subdivision (f) of Section 90005. |
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| 123 | | - | |
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| 124 | | - | 90002. (a) This division shall not apply to a licensee, or an employee of a licensee, of any state agency other than the Department of Financial Protection and Innovation to the extent that licensee or employee is acting under the authority of the other state agencys license.(b) This division shall not apply to a person or employee of that person to the extent that person or employee is acting under the authority of one of the following licenses, certificates, or charters issued by the Department of Financial Protection and Innovation:(1) Any person licensed as an escrow agent under Division 6 (commencing with Section 17000) of the Financial Code.(2) Any person licensed as a finance lender, broker, program administrator, or mortgage loan originator under Division 9 (commencing with Section 22000) of the Financial Code.(3) Any person licensed as a broker-dealer or investment adviser under Division 1 (commencing with Section 25000) of Title 4 the Corporations Code.(4) Any person licensed as a residential mortgage lender, a mortgage servicer, or a mortgage loan originator under Division 20 (commencing with Section 50000) of the Financial Code.(5) Any person licensed as a check seller, bill payer, or prorater under Division 3 (commencing with Section 12000) of the Financial Code.(6) Any person licensed as a capital access company under Division 3 (commencing with Section 28000) of Title 4 of the Corporations Code.(7) Any person doing business under a license, charter, or certificate issued under the Financial Institutions Law, including Division 1 (commencing with Section 99), Division 1.1 (commencing with Section 1000), Division 1.2 (commencing with Section 2000), Division 1.6 (commencing with Section 4800), Division 2 (commencing with Section 5000), Division 5 (commencing with Section 14000), Division 7 (commencing with Section 18000), and Division 15 (commencing with Section 31000) of the Financial Code.(c) This division shall not apply to a bank, bank holding company, trust company, savings and loan association, savings and loan holding company, credit union, or an organization subject to oversight of the Farm Credit Administration, when acting under the authority of a license, certificate, or charter under federal law or the laws of another state.(d) This division applies to all other covered persons, as defined in subdivision (f) of Section 90005. |
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| 125 | | - | |
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| 126 | | - | |
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| 127 | | - | |
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| 128 | | - | 90002. (a) This division shall not apply to a licensee, or an employee of a licensee, of any state agency other than the Department of Financial Protection and Innovation to the extent that licensee or employee is acting under the authority of the other state agencys license. |
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| 129 | | - | |
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| 130 | | - | (b) This division shall not apply to a person or employee of that person to the extent that person or employee is acting under the authority of one of the following licenses, certificates, or charters issued by the Department of Financial Protection and Innovation: |
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| 131 | | - | |
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| 132 | | - | (1) Any person licensed as an escrow agent under Division 6 (commencing with Section 17000) of the Financial Code. |
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| 133 | | - | |
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| 134 | | - | (2) Any person licensed as a finance lender, broker, program administrator, or mortgage loan originator under Division 9 (commencing with Section 22000) of the Financial Code. |
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| 135 | | - | |
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| 136 | | - | (3) Any person licensed as a broker-dealer or investment adviser under Division 1 (commencing with Section 25000) of Title 4 the Corporations Code. |
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| 137 | | - | |
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| 138 | | - | (4) Any person licensed as a residential mortgage lender, a mortgage servicer, or a mortgage loan originator under Division 20 (commencing with Section 50000) of the Financial Code. |
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| 139 | | - | |
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| 140 | | - | (5) Any person licensed as a check seller, bill payer, or prorater under Division 3 (commencing with Section 12000) of the Financial Code. |
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| 141 | | - | |
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| 142 | | - | (6) Any person licensed as a capital access company under Division 3 (commencing with Section 28000) of Title 4 of the Corporations Code. |
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| 143 | | - | |
|---|
| 144 | | - | (7) Any person doing business under a license, charter, or certificate issued under the Financial Institutions Law, including Division 1 (commencing with Section 99), Division 1.1 (commencing with Section 1000), Division 1.2 (commencing with Section 2000), Division 1.6 (commencing with Section 4800), Division 2 (commencing with Section 5000), Division 5 (commencing with Section 14000), Division 7 (commencing with Section 18000), and Division 15 (commencing with Section 31000) of the Financial Code. |
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| 145 | | - | |
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| 146 | | - | (c) This division shall not apply to a bank, bank holding company, trust company, savings and loan association, savings and loan holding company, credit union, or an organization subject to oversight of the Farm Credit Administration, when acting under the authority of a license, certificate, or charter under federal law or the laws of another state. |
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| 147 | | - | |
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| 148 | | - | (d) This division applies to all other covered persons, as defined in subdivision (f) of Section 90005. |
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| 149 | | - | |
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| 150 | | - | SEC. 4. Section 90003 of the Financial Code is amended to read:90003. (a) It is unlawful for a covered person or service provider, as defined in subdivision (f) of Section 90005, to do any of the following:(1) Engage, have engaged, or propose to engage in any unlawful, unfair, deceptive, or abusive act or practice with respect to consumer financial products or services.(2) Offer or provide to a consumer any financial product or service not in conformity with any consumer financial law or otherwise commit any act or omission in violation of a consumer financial law.(3) Fail or refuse, as required by a consumer financial law or any rule or order issued by the department thereunder, to do any of the following:(A) Permit the department access to or copying of records.(B) Establish or maintain records.(C) Make reports or provide information to the department.(b) For any person who knowingly or recklessly provides substantial assistance to a covered person or service provider in violation of subdivision (a) or any rule or order issued thereunder, the provider of that substantial assistance shall be deemed to be in violation of that section to the same extent as the person to whom that assistance is provided.(c) Notwithstanding subdivision (b), a person shall not be held to have violated paragraph (1) of subdivision (a) solely by virtue of providing or selling time or space to a covered person or service provider placing an advertisement. |
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| 151 | | - | |
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| 152 | | - | SEC. 4. Section 90003 of the Financial Code is amended to read: |
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| 154 | | - | ### SEC. 4. |
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| 156 | | - | 90003. (a) It is unlawful for a covered person or service provider, as defined in subdivision (f) of Section 90005, to do any of the following:(1) Engage, have engaged, or propose to engage in any unlawful, unfair, deceptive, or abusive act or practice with respect to consumer financial products or services.(2) Offer or provide to a consumer any financial product or service not in conformity with any consumer financial law or otherwise commit any act or omission in violation of a consumer financial law.(3) Fail or refuse, as required by a consumer financial law or any rule or order issued by the department thereunder, to do any of the following:(A) Permit the department access to or copying of records.(B) Establish or maintain records.(C) Make reports or provide information to the department.(b) For any person who knowingly or recklessly provides substantial assistance to a covered person or service provider in violation of subdivision (a) or any rule or order issued thereunder, the provider of that substantial assistance shall be deemed to be in violation of that section to the same extent as the person to whom that assistance is provided.(c) Notwithstanding subdivision (b), a person shall not be held to have violated paragraph (1) of subdivision (a) solely by virtue of providing or selling time or space to a covered person or service provider placing an advertisement. |
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| 158 | | - | 90003. (a) It is unlawful for a covered person or service provider, as defined in subdivision (f) of Section 90005, to do any of the following:(1) Engage, have engaged, or propose to engage in any unlawful, unfair, deceptive, or abusive act or practice with respect to consumer financial products or services.(2) Offer or provide to a consumer any financial product or service not in conformity with any consumer financial law or otherwise commit any act or omission in violation of a consumer financial law.(3) Fail or refuse, as required by a consumer financial law or any rule or order issued by the department thereunder, to do any of the following:(A) Permit the department access to or copying of records.(B) Establish or maintain records.(C) Make reports or provide information to the department.(b) For any person who knowingly or recklessly provides substantial assistance to a covered person or service provider in violation of subdivision (a) or any rule or order issued thereunder, the provider of that substantial assistance shall be deemed to be in violation of that section to the same extent as the person to whom that assistance is provided.(c) Notwithstanding subdivision (b), a person shall not be held to have violated paragraph (1) of subdivision (a) solely by virtue of providing or selling time or space to a covered person or service provider placing an advertisement. |
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| 160 | | - | 90003. (a) It is unlawful for a covered person or service provider, as defined in subdivision (f) of Section 90005, to do any of the following:(1) Engage, have engaged, or propose to engage in any unlawful, unfair, deceptive, or abusive act or practice with respect to consumer financial products or services.(2) Offer or provide to a consumer any financial product or service not in conformity with any consumer financial law or otherwise commit any act or omission in violation of a consumer financial law.(3) Fail or refuse, as required by a consumer financial law or any rule or order issued by the department thereunder, to do any of the following:(A) Permit the department access to or copying of records.(B) Establish or maintain records.(C) Make reports or provide information to the department.(b) For any person who knowingly or recklessly provides substantial assistance to a covered person or service provider in violation of subdivision (a) or any rule or order issued thereunder, the provider of that substantial assistance shall be deemed to be in violation of that section to the same extent as the person to whom that assistance is provided.(c) Notwithstanding subdivision (b), a person shall not be held to have violated paragraph (1) of subdivision (a) solely by virtue of providing or selling time or space to a covered person or service provider placing an advertisement. |
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| 164 | | - | 90003. (a) It is unlawful for a covered person or service provider, as defined in subdivision (f) of Section 90005, to do any of the following: |
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| 166 | | - | (1) Engage, have engaged, or propose to engage in any unlawful, unfair, deceptive, or abusive act or practice with respect to consumer financial products or services. |
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| 168 | | - | (2) Offer or provide to a consumer any financial product or service not in conformity with any consumer financial law or otherwise commit any act or omission in violation of a consumer financial law. |
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| 170 | | - | (3) Fail or refuse, as required by a consumer financial law or any rule or order issued by the department thereunder, to do any of the following: |
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| 172 | | - | (A) Permit the department access to or copying of records. |
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| 174 | | - | (B) Establish or maintain records. |
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| 176 | | - | (C) Make reports or provide information to the department. |
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| 178 | | - | (b) For any person who knowingly or recklessly provides substantial assistance to a covered person or service provider in violation of subdivision (a) or any rule or order issued thereunder, the provider of that substantial assistance shall be deemed to be in violation of that section to the same extent as the person to whom that assistance is provided. |
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| 180 | | - | (c) Notwithstanding subdivision (b), a person shall not be held to have violated paragraph (1) of subdivision (a) solely by virtue of providing or selling time or space to a covered person or service provider placing an advertisement. |
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| 182 | | - | SEC. 5. Section 90005 of the Financial Code is amended to read:90005. The definitions in this section apply throughout this division, except as otherwise provided in this division or if the context clearly indicates otherwise:(a) Affiliate means any person that controls, is controlled by, or is under common control with another person. For purposes of this definition, control means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person.(b)Department means the Department of Financial Protection and Innovation.(b) California resident has the same meaning as resident as that term is defined in Section 17014 of the Revenue and Taxation Code.(c) Commercial financing has the same meaning as that term is defined in Section 22800.(d) (1) Commercial financing brokerage services means the following acts in connection with a commercial financing transaction:(A) Transmitting sensitive data about a prospective recipient to a commercial financing provider with the expectation of compensation in connection with making a referral.(B) Making a referral to a commercial financing provider under an agreement with the commercial financing provider that a prospective recipient referred by the person to the commercial financing provider meets certain criteria involving sensitive data.(C) Participating in a commercial financing negotiation between a commercial financing provider and prospective recipient.(D) Counseling, advising, or making recommendations to a prospective recipient about a commercial financing transaction based on the prospective recipients sensitive data.(E) (i) Participating in the preparation of commercial financing documents, including commercial financing applications, other than providing a prospective recipient blank copies of commercial financing documents.(ii) Transmitting information that is not sensitive data to a commercial financing provider at the request of a prospective recipient shall not, by itself, constitute participation in the preparation of commercial financing documents within the meaning of this subparagraph.(F) Communicating to a prospective recipient a commercial financing providers commercial financing approval decisions.(G) Charging a fee to a prospective recipient for services related to a prospective recipients application for a commercial financing transaction from a commercial financing provider.(2) Notwithstanding paragraph (1), the following acts in connection with a commercial financing transaction do not constitute commercial financing brokerage services:(A) Performing support tasks, including, but not limited to, typing, word processing, data entry, filing, billing, answering telephone calls, taking and receiving messages, and scheduling, in support of the performance by a broker of any of the activities described in subparagraphs (E) to (G), inclusive, of paragraph (1).(B) Furnishing a consumer report to a covered person by a consumer reporting agency in accordance with subsection (a) or (c) of Section 1681b of Title 15 of the United States Code.(C) Furnishing a consumer credit report, as defined in Section 1785.3 of the Civil Code, to a covered person by a consumer credit reporting agency in accordance with subdivision (a) or paragraph (1) of subdivision (b) of Section 1785.11 of the Civil Code.(D) Furnishing a prequalifying report, as defined in Section 1785.3 of the Civil Code, to a covered person by a consumer credit reporting agency in accordance with paragraph (2) of subdivision (b) of Section 1785.11 of the Civil Code.(E) Distributing or disseminating to a prospective recipient of a providers marketing materials or factual information about the provider, its lending activities, or its loan products, including, but not limited to, the providers interest rates, the providers minimum or maximum loan amounts or loan periods, or a general description of the providers underwriting criteria.(3) For purposes of this subdivision, sensitive data means any of the following:(A) A bank account number.(B) A bank statement.(C) A credit or debit card account number.(D) A credit score, as defined in Section 1785.15.1 of the Civil Code.(4) For purposes of this subdivision, referral means the introduction of a prospective recipient to a commercial financing provider, or the delivery of a prospective recipients contact information to a commercial financing provider, for the purposes of making an introduction.(e) Commercial financing product means either of the following products or services:(1) Commercial financing transactions as defined in this section.(2) Commercial financing brokerage services as defined in this section.(f) Commercial financing transaction means a consummated commercial financing transaction for which a disclosure is provided in accordance with subsection (a) of Section 920 of Title 10 of the California Code of Regulations. (c)(g) Consumer means an individual or an agent, trustee, or representative acting on behalf of an individual or the estate, trust, or joint trust of an individual, however denominated.(d)(h) Consumer financial law means a federal or California law that directly and specifically regulates the manner, content, or terms and conditions of any financial transaction, or any account, product, or service related thereto, with respect to a consumer.(e)(i) Consumer financial product or service means either of the following:(1) A financial product or service that is delivered, offered, or provided for use by consumers primarily for personal, family, or household purposes.(2) A financial product or service as described in paragraph (11) of subdivision (k). (p).(f)(j) Covered person means, to the extent not preempted by federal law, any of the following:(1) Any person that engages in offering or providing a consumer financial product or service to a resident of this state.(2) Any affiliate of a person described in this subdivision if the affiliate acts as a service provider to the person.(3) Any service provider to the extent that the person engages in the offering or provision of its own consumer financial product or service.(g)(k) Credit means the right granted by a person to another person to defer payment of a debt, incur debt and defer its payment, or purchase property or services and defer payment for those purchases.(h)(l) Debt means any obligation of a person to pay another person money regardless of whether the obligation is absolute or contingent, has been reduced to judgment, is fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured and includes any obligation that gives rise to right of an equitable remedy for breach of performance if the breach gives rise to a right to payment.(m) Department means the Department of Financial Protection and Innovation. (i)(n) Deposit-taking activity means any of the following:(1) The acceptance of deposits, maintenance of deposit accounts, or the provision of services related to the acceptance of deposits or the maintenance of deposit accounts.(2) The acceptance of funds, the provision of other services related to the acceptance of funds, or the maintenance of member share accounts by a credit union.(3) The receipt of funds or the equivalent thereof, as the department may determine by rule or order, received or held by a covered person or an agent for a covered person for the purpose of facilitating a payment or transferring funds or value of funds between a consumer and a third party.(j)(o) Commissioner means the Commissioner of Financial Protection and Innovation.(k)(p) Financial product or service means:(1) Extending credit and servicing extensions of credit, including acquiring, purchasing, selling, brokering extensions of credit, other than solely extending commercial credit to a person who originates consumer credit transactions.(2) Extending or brokering leases of personal or real property that are the functional equivalent of purchase finance arrangements, if all of the following:(A) The lease is on a nonoperating basis.(B) The initial term of the lease is at least 90 days.(C) In the case of a lease involving real property, at the inception of the initial lease, the transaction is intended to result in ownership of the leased property to be transferred to the lessee, subject to standards prescribed by the department.(3) Providing real estate settlement services.(4) Engaging in deposit-taking activities, transmitting or exchanging funds, or otherwise acting as a custodian of funds or any financial instrument for use by or on behalf of a consumer.(5) Selling, providing, or issuing stored value or payment instruments, except that, in the case of a sale of, or transaction to reload, stored value, only if the seller exercises substantial control over the terms or conditions of the stored value provided to the consumer where, for purposes of this paragraph, both:(A) A seller shall not be found to exercise substantial control over the terms or conditions of the stored value if the seller is not a party to the contract with the consumer for the stored value product, and another person is principally responsible for establishing the terms or conditions of the stored value.(B) Advertising the nonfinancial goods or services of the seller on the stored value card or device is not in itself an exercise of substantial control over the terms or conditions.(6) Providing check cashing, check collection, or check guaranty services.(7) Providing payments or other financial data processing products or services to a consumer by any technological means, including processing or storing financial or banking data for any payment instrument, or through any payment system or networks used for processing payment data, including payments made through an online banking system or mobile telecommunications network, except that a person shall not be deemed to be a covered person with respect to financial data processing solely because the person either:(A) Is a merchant, retailer, or seller of any nonfinancial good or service who engages in financial data processing by transmitting or storing payment data about a consumer exclusively for purpose of initiating payment instructions by the consumer to pay that person for the purchase of, or to complete a commercial transaction for, the nonfinancial good or service sold directly by that person to the consumer.(B) Provides access to a host server to a person for purposes of enabling that person to establish and maintain a website.(8) Providing financial advisory services other than services relating to securities provided by a person regulated by the Securities Exchange Commission or a person regulated by a state securities commission, but only to the extent that such person acts in a regulated capacity, to consumers on individual financial matters or relating to proprietary financial products or services (other than by publishing any bona fide newspaper, news magazine, or business or financial publication of general and regular circulation, including publishing market data, news, or data analytics or investment information or recommendations that are not tailored to the individual needs of a particular consumer) including both of the following:(A) Providing credit counseling to any consumer.(B) Providing services to assist a consumer with debt management or debt settlement, modifying the terms of any extension of credit, or avoiding foreclosure.(9) Collecting, analyzing, maintaining, or providing consumer report information or other account information, including information relating to the credit history of consumers, used or expected to be used in connection with any decision regarding the offering or provision of a consumer financial product or service, except to the extent that:(A) A person does any of the following:(i) Collects, analyzes, or maintains information that relates solely to the transactions between a consumer and that person.(ii) Provides information to an affiliate of the person, as described in subdivision (a).(iii) Provides information that is used or expected to be used solely in any decision regarding the offering or provision of a product or service that is not a consumer financial product or service.(B) The information described in clause (i) of subparagraph (A) is not used by the person or affiliate in connection with any decision regarding the offering or provision of a consumer financial product or service to the consumer, other than credit described in subparagraph (A) of paragraph (1) of subdivision (e) of Section 90006.(10) Collecting debt related to any consumer financial product or service.(11) Directly or indirectly brokering the offer or sale of a franchise in this state on behalf of another.(12) Offering another financial product or service as may be defined by the department, by regulation, for purposes of this division, if the department finds that the financial product or service is either:(A) Entered into or conducted as a subterfuge or with a purpose to evade any consumer financial law.(B) Permissible for a bank or for a financial holding company to offer or to provide under any provision of law or regulation applicable to a bank or a financial holding company, and has, or likely will have, a material impact on consumers, excluding, however, solely from the departments authority to define additional financial products and services under this subparagraph and not the exercise of any other authority it may have, the following activities provided to a covered person:(i) Providing information products or services to a covered person for identity authentication.(ii) Providing information products or services for fraud or identify theft detection, prevention, or investigation.(iii) Providing document retrieval or delivery services.(iv) Providing public records information retrieval.(v) Providing information products or services for anti-money laundering activities.(13) The term financial product or service does not include either of the following:(A) Insurance, as defined in Section 22 of the Insurance Code, regulated by the Department of Insurance.(B) The provision, by a person, of electronic data transmission, routing, intermediate or transient storage, or connections to a telecommunications system or network, not including a person that provides those electronic conduit services if, when providing those services, the person does any of the following:(i) Selects or modifies the content of the electronic data.(ii) Transmits, routes, stores, or provides connections for electronic data, including financial data, in a manner that the financial data is differentiated from other types of data of the same form that the person transmits, routes, or stores, or with respect to which, provides connections.(iii) Is a payee, payor, correspondent, or similar party to a payment transaction with a consumer.(l)(q) Payment instrument means a check, draft, warrant, money order, travelers check, electronic instrument, or other instrument, payment of funds, or monetary value, other than currency.(m)(r) Person means an individual, corporation, business trust, estate, trust, partnership, proprietorship, syndicate, limited liability company, association, joint venture, government, governmental subdivision, agency or instrumentality, public corporation or joint stock company, or any other organization or legal or commercial entity.(s) (1) Recipient means a small business whose activities are principally directed or managed from California.(2) For purposes of determining whether activities are principally directed or managed from California, a registrant may rely on any relevant written representation by the small business, nonprofit, or family farm, including a business address provided in any application or agreement for commercial financing or other financial product or service. (n)(t) (1) Service provider means any person that provides a material service to a covered person in connection with the offering or provision by that covered person of a consumer financial product or service, including a person that either:(A) Participates in designing, operating, or maintaining the consumer financial product or service.(B) Processes transactions relating to the consumer financial product or service, other than unknowingly or incidentally transmitting or processing financial data in a manner that the data is undifferentiated from other types of data of the same form as the person transmits or processes.(2) The term service provider does not include a person solely by virtue of that person offering or providing to a covered person either:(A) A support service of a type provided to businesses generally or a similar ministerial service.(B) Time or space for an advertisement for a consumer financial product or service through print, newspaper, or electronic media.(u) (1) Small business means a business entity organized for profit with annual gross receipts of no more than sixteen million dollars ($16,000,000) or the annual gross receipt level as biennially adjusted by the Department of General Services in accordance with Section 14837 of the Government Code, whichever is greater.(2) For purposes of determining a business entitys annual gross receipts, a covered provider may rely on any relevant written representation by the business entity, including information provided in any application or agreement for commercial financing. (o)(v) (1) Stored value means funds or monetary value represented in any electronic format, whether or not specially encrypted, and stored or capable of storage on electronic media in such a way as to be retrievable and transferred electronically, and includes a prepaid debit card or product, or any other similar product, regardless of whether the amount of the funds or monetary value may be increased or reloaded.(2) Notwithstanding paragraph (1), the term stored value does not include a special purpose card or certificate, which shall be defined for purposes of this paragraph as funds or monetary value represented in any electronic format, whether or not specially encrypted, that is all of the following:(A) Issued by a merchant, retailer, or other seller of nonfinancial goods or services.(B) Redeemable only for transactions with the merchant, retailer, or seller of nonfinancial goods or services or with an affiliate of such person, which affiliate itself is a merchant, retailer, or seller of nonfinancial goods or services.(C) Issued in a specified amount that, except in the case of a card or product used solely for telephone services, may not be increased or reloaded.(D) Purchased on a prepaid basis in exchange for payment.(E) Honored upon presentation to the merchant, retailer, or seller of nonfinancial goods or services or an affiliate of such person, which affiliate itself is a merchant, retailer, or seller of nonfinancial goods or services, only for any nonfinancial goods or services(p)(w) These definitions shall be interpreted consistently with the definitions in the Consumer Financial Protection Act of 2010 (12 U.S.C. Sec. 5481). Any inconsistency or ambiguity shall be resolved in favor of greater protections to the consumer and more expansive coverage. |
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| 184 | | - | SEC. 5. Section 90005 of the Financial Code is amended to read: |
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| 186 | | - | ### SEC. 5. |
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| 188 | | - | 90005. The definitions in this section apply throughout this division, except as otherwise provided in this division or if the context clearly indicates otherwise:(a) Affiliate means any person that controls, is controlled by, or is under common control with another person. For purposes of this definition, control means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person.(b)Department means the Department of Financial Protection and Innovation.(b) California resident has the same meaning as resident as that term is defined in Section 17014 of the Revenue and Taxation Code.(c) Commercial financing has the same meaning as that term is defined in Section 22800.(d) (1) Commercial financing brokerage services means the following acts in connection with a commercial financing transaction:(A) Transmitting sensitive data about a prospective recipient to a commercial financing provider with the expectation of compensation in connection with making a referral.(B) Making a referral to a commercial financing provider under an agreement with the commercial financing provider that a prospective recipient referred by the person to the commercial financing provider meets certain criteria involving sensitive data.(C) Participating in a commercial financing negotiation between a commercial financing provider and prospective recipient.(D) Counseling, advising, or making recommendations to a prospective recipient about a commercial financing transaction based on the prospective recipients sensitive data.(E) (i) Participating in the preparation of commercial financing documents, including commercial financing applications, other than providing a prospective recipient blank copies of commercial financing documents.(ii) Transmitting information that is not sensitive data to a commercial financing provider at the request of a prospective recipient shall not, by itself, constitute participation in the preparation of commercial financing documents within the meaning of this subparagraph.(F) Communicating to a prospective recipient a commercial financing providers commercial financing approval decisions.(G) Charging a fee to a prospective recipient for services related to a prospective recipients application for a commercial financing transaction from a commercial financing provider.(2) Notwithstanding paragraph (1), the following acts in connection with a commercial financing transaction do not constitute commercial financing brokerage services:(A) Performing support tasks, including, but not limited to, typing, word processing, data entry, filing, billing, answering telephone calls, taking and receiving messages, and scheduling, in support of the performance by a broker of any of the activities described in subparagraphs (E) to (G), inclusive, of paragraph (1).(B) Furnishing a consumer report to a covered person by a consumer reporting agency in accordance with subsection (a) or (c) of Section 1681b of Title 15 of the United States Code.(C) Furnishing a consumer credit report, as defined in Section 1785.3 of the Civil Code, to a covered person by a consumer credit reporting agency in accordance with subdivision (a) or paragraph (1) of subdivision (b) of Section 1785.11 of the Civil Code.(D) Furnishing a prequalifying report, as defined in Section 1785.3 of the Civil Code, to a covered person by a consumer credit reporting agency in accordance with paragraph (2) of subdivision (b) of Section 1785.11 of the Civil Code.(E) Distributing or disseminating to a prospective recipient of a providers marketing materials or factual information about the provider, its lending activities, or its loan products, including, but not limited to, the providers interest rates, the providers minimum or maximum loan amounts or loan periods, or a general description of the providers underwriting criteria.(3) For purposes of this subdivision, sensitive data means any of the following:(A) A bank account number.(B) A bank statement.(C) A credit or debit card account number.(D) A credit score, as defined in Section 1785.15.1 of the Civil Code.(4) For purposes of this subdivision, referral means the introduction of a prospective recipient to a commercial financing provider, or the delivery of a prospective recipients contact information to a commercial financing provider, for the purposes of making an introduction.(e) Commercial financing product means either of the following products or services:(1) Commercial financing transactions as defined in this section.(2) Commercial financing brokerage services as defined in this section.(f) Commercial financing transaction means a consummated commercial financing transaction for which a disclosure is provided in accordance with subsection (a) of Section 920 of Title 10 of the California Code of Regulations. (c)(g) Consumer means an individual or an agent, trustee, or representative acting on behalf of an individual or the estate, trust, or joint trust of an individual, however denominated.(d)(h) Consumer financial law means a federal or California law that directly and specifically regulates the manner, content, or terms and conditions of any financial transaction, or any account, product, or service related thereto, with respect to a consumer.(e)(i) Consumer financial product or service means either of the following:(1) A financial product or service that is delivered, offered, or provided for use by consumers primarily for personal, family, or household purposes.(2) A financial product or service as described in paragraph (11) of subdivision (k). (p).(f)(j) Covered person means, to the extent not preempted by federal law, any of the following:(1) Any person that engages in offering or providing a consumer financial product or service to a resident of this state.(2) Any affiliate of a person described in this subdivision if the affiliate acts as a service provider to the person.(3) Any service provider to the extent that the person engages in the offering or provision of its own consumer financial product or service.(g)(k) Credit means the right granted by a person to another person to defer payment of a debt, incur debt and defer its payment, or purchase property or services and defer payment for those purchases.(h)(l) Debt means any obligation of a person to pay another person money regardless of whether the obligation is absolute or contingent, has been reduced to judgment, is fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured and includes any obligation that gives rise to right of an equitable remedy for breach of performance if the breach gives rise to a right to payment.(m) Department means the Department of Financial Protection and Innovation. (i)(n) Deposit-taking activity means any of the following:(1) The acceptance of deposits, maintenance of deposit accounts, or the provision of services related to the acceptance of deposits or the maintenance of deposit accounts.(2) The acceptance of funds, the provision of other services related to the acceptance of funds, or the maintenance of member share accounts by a credit union.(3) The receipt of funds or the equivalent thereof, as the department may determine by rule or order, received or held by a covered person or an agent for a covered person for the purpose of facilitating a payment or transferring funds or value of funds between a consumer and a third party.(j)(o) Commissioner means the Commissioner of Financial Protection and Innovation.(k)(p) Financial product or service means:(1) Extending credit and servicing extensions of credit, including acquiring, purchasing, selling, brokering extensions of credit, other than solely extending commercial credit to a person who originates consumer credit transactions.(2) Extending or brokering leases of personal or real property that are the functional equivalent of purchase finance arrangements, if all of the following:(A) The lease is on a nonoperating basis.(B) The initial term of the lease is at least 90 days.(C) In the case of a lease involving real property, at the inception of the initial lease, the transaction is intended to result in ownership of the leased property to be transferred to the lessee, subject to standards prescribed by the department.(3) Providing real estate settlement services.(4) Engaging in deposit-taking activities, transmitting or exchanging funds, or otherwise acting as a custodian of funds or any financial instrument for use by or on behalf of a consumer.(5) Selling, providing, or issuing stored value or payment instruments, except that, in the case of a sale of, or transaction to reload, stored value, only if the seller exercises substantial control over the terms or conditions of the stored value provided to the consumer where, for purposes of this paragraph, both:(A) A seller shall not be found to exercise substantial control over the terms or conditions of the stored value if the seller is not a party to the contract with the consumer for the stored value product, and another person is principally responsible for establishing the terms or conditions of the stored value.(B) Advertising the nonfinancial goods or services of the seller on the stored value card or device is not in itself an exercise of substantial control over the terms or conditions.(6) Providing check cashing, check collection, or check guaranty services.(7) Providing payments or other financial data processing products or services to a consumer by any technological means, including processing or storing financial or banking data for any payment instrument, or through any payment system or networks used for processing payment data, including payments made through an online banking system or mobile telecommunications network, except that a person shall not be deemed to be a covered person with respect to financial data processing solely because the person either:(A) Is a merchant, retailer, or seller of any nonfinancial good or service who engages in financial data processing by transmitting or storing payment data about a consumer exclusively for purpose of initiating payment instructions by the consumer to pay that person for the purchase of, or to complete a commercial transaction for, the nonfinancial good or service sold directly by that person to the consumer.(B) Provides access to a host server to a person for purposes of enabling that person to establish and maintain a website.(8) Providing financial advisory services other than services relating to securities provided by a person regulated by the Securities Exchange Commission or a person regulated by a state securities commission, but only to the extent that such person acts in a regulated capacity, to consumers on individual financial matters or relating to proprietary financial products or services (other than by publishing any bona fide newspaper, news magazine, or business or financial publication of general and regular circulation, including publishing market data, news, or data analytics or investment information or recommendations that are not tailored to the individual needs of a particular consumer) including both of the following:(A) Providing credit counseling to any consumer.(B) Providing services to assist a consumer with debt management or debt settlement, modifying the terms of any extension of credit, or avoiding foreclosure.(9) Collecting, analyzing, maintaining, or providing consumer report information or other account information, including information relating to the credit history of consumers, used or expected to be used in connection with any decision regarding the offering or provision of a consumer financial product or service, except to the extent that:(A) A person does any of the following:(i) Collects, analyzes, or maintains information that relates solely to the transactions between a consumer and that person.(ii) Provides information to an affiliate of the person, as described in subdivision (a).(iii) Provides information that is used or expected to be used solely in any decision regarding the offering or provision of a product or service that is not a consumer financial product or service.(B) The information described in clause (i) of subparagraph (A) is not used by the person or affiliate in connection with any decision regarding the offering or provision of a consumer financial product or service to the consumer, other than credit described in subparagraph (A) of paragraph (1) of subdivision (e) of Section 90006.(10) Collecting debt related to any consumer financial product or service.(11) Directly or indirectly brokering the offer or sale of a franchise in this state on behalf of another.(12) Offering another financial product or service as may be defined by the department, by regulation, for purposes of this division, if the department finds that the financial product or service is either:(A) Entered into or conducted as a subterfuge or with a purpose to evade any consumer financial law.(B) Permissible for a bank or for a financial holding company to offer or to provide under any provision of law or regulation applicable to a bank or a financial holding company, and has, or likely will have, a material impact on consumers, excluding, however, solely from the departments authority to define additional financial products and services under this subparagraph and not the exercise of any other authority it may have, the following activities provided to a covered person:(i) Providing information products or services to a covered person for identity authentication.(ii) Providing information products or services for fraud or identify theft detection, prevention, or investigation.(iii) Providing document retrieval or delivery services.(iv) Providing public records information retrieval.(v) Providing information products or services for anti-money laundering activities.(13) The term financial product or service does not include either of the following:(A) Insurance, as defined in Section 22 of the Insurance Code, regulated by the Department of Insurance.(B) The provision, by a person, of electronic data transmission, routing, intermediate or transient storage, or connections to a telecommunications system or network, not including a person that provides those electronic conduit services if, when providing those services, the person does any of the following:(i) Selects or modifies the content of the electronic data.(ii) Transmits, routes, stores, or provides connections for electronic data, including financial data, in a manner that the financial data is differentiated from other types of data of the same form that the person transmits, routes, or stores, or with respect to which, provides connections.(iii) Is a payee, payor, correspondent, or similar party to a payment transaction with a consumer.(l)(q) Payment instrument means a check, draft, warrant, money order, travelers check, electronic instrument, or other instrument, payment of funds, or monetary value, other than currency.(m)(r) Person means an individual, corporation, business trust, estate, trust, partnership, proprietorship, syndicate, limited liability company, association, joint venture, government, governmental subdivision, agency or instrumentality, public corporation or joint stock company, or any other organization or legal or commercial entity.(s) (1) Recipient means a small business whose activities are principally directed or managed from California.(2) For purposes of determining whether activities are principally directed or managed from California, a registrant may rely on any relevant written representation by the small business, nonprofit, or family farm, including a business address provided in any application or agreement for commercial financing or other financial product or service. (n)(t) (1) Service provider means any person that provides a material service to a covered person in connection with the offering or provision by that covered person of a consumer financial product or service, including a person that either:(A) Participates in designing, operating, or maintaining the consumer financial product or service.(B) Processes transactions relating to the consumer financial product or service, other than unknowingly or incidentally transmitting or processing financial data in a manner that the data is undifferentiated from other types of data of the same form as the person transmits or processes.(2) The term service provider does not include a person solely by virtue of that person offering or providing to a covered person either:(A) A support service of a type provided to businesses generally or a similar ministerial service.(B) Time or space for an advertisement for a consumer financial product or service through print, newspaper, or electronic media.(u) (1) Small business means a business entity organized for profit with annual gross receipts of no more than sixteen million dollars ($16,000,000) or the annual gross receipt level as biennially adjusted by the Department of General Services in accordance with Section 14837 of the Government Code, whichever is greater.(2) For purposes of determining a business entitys annual gross receipts, a covered provider may rely on any relevant written representation by the business entity, including information provided in any application or agreement for commercial financing. (o)(v) (1) Stored value means funds or monetary value represented in any electronic format, whether or not specially encrypted, and stored or capable of storage on electronic media in such a way as to be retrievable and transferred electronically, and includes a prepaid debit card or product, or any other similar product, regardless of whether the amount of the funds or monetary value may be increased or reloaded.(2) Notwithstanding paragraph (1), the term stored value does not include a special purpose card or certificate, which shall be defined for purposes of this paragraph as funds or monetary value represented in any electronic format, whether or not specially encrypted, that is all of the following:(A) Issued by a merchant, retailer, or other seller of nonfinancial goods or services.(B) Redeemable only for transactions with the merchant, retailer, or seller of nonfinancial goods or services or with an affiliate of such person, which affiliate itself is a merchant, retailer, or seller of nonfinancial goods or services.(C) Issued in a specified amount that, except in the case of a card or product used solely for telephone services, may not be increased or reloaded.(D) Purchased on a prepaid basis in exchange for payment.(E) Honored upon presentation to the merchant, retailer, or seller of nonfinancial goods or services or an affiliate of such person, which affiliate itself is a merchant, retailer, or seller of nonfinancial goods or services, only for any nonfinancial goods or services(p)(w) These definitions shall be interpreted consistently with the definitions in the Consumer Financial Protection Act of 2010 (12 U.S.C. Sec. 5481). Any inconsistency or ambiguity shall be resolved in favor of greater protections to the consumer and more expansive coverage. |
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| 190 | | - | 90005. The definitions in this section apply throughout this division, except as otherwise provided in this division or if the context clearly indicates otherwise:(a) Affiliate means any person that controls, is controlled by, or is under common control with another person. For purposes of this definition, control means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person.(b)Department means the Department of Financial Protection and Innovation.(b) California resident has the same meaning as resident as that term is defined in Section 17014 of the Revenue and Taxation Code.(c) Commercial financing has the same meaning as that term is defined in Section 22800.(d) (1) Commercial financing brokerage services means the following acts in connection with a commercial financing transaction:(A) Transmitting sensitive data about a prospective recipient to a commercial financing provider with the expectation of compensation in connection with making a referral.(B) Making a referral to a commercial financing provider under an agreement with the commercial financing provider that a prospective recipient referred by the person to the commercial financing provider meets certain criteria involving sensitive data.(C) Participating in a commercial financing negotiation between a commercial financing provider and prospective recipient.(D) Counseling, advising, or making recommendations to a prospective recipient about a commercial financing transaction based on the prospective recipients sensitive data.(E) (i) Participating in the preparation of commercial financing documents, including commercial financing applications, other than providing a prospective recipient blank copies of commercial financing documents.(ii) Transmitting information that is not sensitive data to a commercial financing provider at the request of a prospective recipient shall not, by itself, constitute participation in the preparation of commercial financing documents within the meaning of this subparagraph.(F) Communicating to a prospective recipient a commercial financing providers commercial financing approval decisions.(G) Charging a fee to a prospective recipient for services related to a prospective recipients application for a commercial financing transaction from a commercial financing provider.(2) Notwithstanding paragraph (1), the following acts in connection with a commercial financing transaction do not constitute commercial financing brokerage services:(A) Performing support tasks, including, but not limited to, typing, word processing, data entry, filing, billing, answering telephone calls, taking and receiving messages, and scheduling, in support of the performance by a broker of any of the activities described in subparagraphs (E) to (G), inclusive, of paragraph (1).(B) Furnishing a consumer report to a covered person by a consumer reporting agency in accordance with subsection (a) or (c) of Section 1681b of Title 15 of the United States Code.(C) Furnishing a consumer credit report, as defined in Section 1785.3 of the Civil Code, to a covered person by a consumer credit reporting agency in accordance with subdivision (a) or paragraph (1) of subdivision (b) of Section 1785.11 of the Civil Code.(D) Furnishing a prequalifying report, as defined in Section 1785.3 of the Civil Code, to a covered person by a consumer credit reporting agency in accordance with paragraph (2) of subdivision (b) of Section 1785.11 of the Civil Code.(E) Distributing or disseminating to a prospective recipient of a providers marketing materials or factual information about the provider, its lending activities, or its loan products, including, but not limited to, the providers interest rates, the providers minimum or maximum loan amounts or loan periods, or a general description of the providers underwriting criteria.(3) For purposes of this subdivision, sensitive data means any of the following:(A) A bank account number.(B) A bank statement.(C) A credit or debit card account number.(D) A credit score, as defined in Section 1785.15.1 of the Civil Code.(4) For purposes of this subdivision, referral means the introduction of a prospective recipient to a commercial financing provider, or the delivery of a prospective recipients contact information to a commercial financing provider, for the purposes of making an introduction.(e) Commercial financing product means either of the following products or services:(1) Commercial financing transactions as defined in this section.(2) Commercial financing brokerage services as defined in this section.(f) Commercial financing transaction means a consummated commercial financing transaction for which a disclosure is provided in accordance with subsection (a) of Section 920 of Title 10 of the California Code of Regulations. (c)(g) Consumer means an individual or an agent, trustee, or representative acting on behalf of an individual or the estate, trust, or joint trust of an individual, however denominated.(d)(h) Consumer financial law means a federal or California law that directly and specifically regulates the manner, content, or terms and conditions of any financial transaction, or any account, product, or service related thereto, with respect to a consumer.(e)(i) Consumer financial product or service means either of the following:(1) A financial product or service that is delivered, offered, or provided for use by consumers primarily for personal, family, or household purposes.(2) A financial product or service as described in paragraph (11) of subdivision (k). (p).(f)(j) Covered person means, to the extent not preempted by federal law, any of the following:(1) Any person that engages in offering or providing a consumer financial product or service to a resident of this state.(2) Any affiliate of a person described in this subdivision if the affiliate acts as a service provider to the person.(3) Any service provider to the extent that the person engages in the offering or provision of its own consumer financial product or service.(g)(k) Credit means the right granted by a person to another person to defer payment of a debt, incur debt and defer its payment, or purchase property or services and defer payment for those purchases.(h)(l) Debt means any obligation of a person to pay another person money regardless of whether the obligation is absolute or contingent, has been reduced to judgment, is fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured and includes any obligation that gives rise to right of an equitable remedy for breach of performance if the breach gives rise to a right to payment.(m) Department means the Department of Financial Protection and Innovation. (i)(n) Deposit-taking activity means any of the following:(1) The acceptance of deposits, maintenance of deposit accounts, or the provision of services related to the acceptance of deposits or the maintenance of deposit accounts.(2) The acceptance of funds, the provision of other services related to the acceptance of funds, or the maintenance of member share accounts by a credit union.(3) The receipt of funds or the equivalent thereof, as the department may determine by rule or order, received or held by a covered person or an agent for a covered person for the purpose of facilitating a payment or transferring funds or value of funds between a consumer and a third party.(j)(o) Commissioner means the Commissioner of Financial Protection and Innovation.(k)(p) Financial product or service means:(1) Extending credit and servicing extensions of credit, including acquiring, purchasing, selling, brokering extensions of credit, other than solely extending commercial credit to a person who originates consumer credit transactions.(2) Extending or brokering leases of personal or real property that are the functional equivalent of purchase finance arrangements, if all of the following:(A) The lease is on a nonoperating basis.(B) The initial term of the lease is at least 90 days.(C) In the case of a lease involving real property, at the inception of the initial lease, the transaction is intended to result in ownership of the leased property to be transferred to the lessee, subject to standards prescribed by the department.(3) Providing real estate settlement services.(4) Engaging in deposit-taking activities, transmitting or exchanging funds, or otherwise acting as a custodian of funds or any financial instrument for use by or on behalf of a consumer.(5) Selling, providing, or issuing stored value or payment instruments, except that, in the case of a sale of, or transaction to reload, stored value, only if the seller exercises substantial control over the terms or conditions of the stored value provided to the consumer where, for purposes of this paragraph, both:(A) A seller shall not be found to exercise substantial control over the terms or conditions of the stored value if the seller is not a party to the contract with the consumer for the stored value product, and another person is principally responsible for establishing the terms or conditions of the stored value.(B) Advertising the nonfinancial goods or services of the seller on the stored value card or device is not in itself an exercise of substantial control over the terms or conditions.(6) Providing check cashing, check collection, or check guaranty services.(7) Providing payments or other financial data processing products or services to a consumer by any technological means, including processing or storing financial or banking data for any payment instrument, or through any payment system or networks used for processing payment data, including payments made through an online banking system or mobile telecommunications network, except that a person shall not be deemed to be a covered person with respect to financial data processing solely because the person either:(A) Is a merchant, retailer, or seller of any nonfinancial good or service who engages in financial data processing by transmitting or storing payment data about a consumer exclusively for purpose of initiating payment instructions by the consumer to pay that person for the purchase of, or to complete a commercial transaction for, the nonfinancial good or service sold directly by that person to the consumer.(B) Provides access to a host server to a person for purposes of enabling that person to establish and maintain a website.(8) Providing financial advisory services other than services relating to securities provided by a person regulated by the Securities Exchange Commission or a person regulated by a state securities commission, but only to the extent that such person acts in a regulated capacity, to consumers on individual financial matters or relating to proprietary financial products or services (other than by publishing any bona fide newspaper, news magazine, or business or financial publication of general and regular circulation, including publishing market data, news, or data analytics or investment information or recommendations that are not tailored to the individual needs of a particular consumer) including both of the following:(A) Providing credit counseling to any consumer.(B) Providing services to assist a consumer with debt management or debt settlement, modifying the terms of any extension of credit, or avoiding foreclosure.(9) Collecting, analyzing, maintaining, or providing consumer report information or other account information, including information relating to the credit history of consumers, used or expected to be used in connection with any decision regarding the offering or provision of a consumer financial product or service, except to the extent that:(A) A person does any of the following:(i) Collects, analyzes, or maintains information that relates solely to the transactions between a consumer and that person.(ii) Provides information to an affiliate of the person, as described in subdivision (a).(iii) Provides information that is used or expected to be used solely in any decision regarding the offering or provision of a product or service that is not a consumer financial product or service.(B) The information described in clause (i) of subparagraph (A) is not used by the person or affiliate in connection with any decision regarding the offering or provision of a consumer financial product or service to the consumer, other than credit described in subparagraph (A) of paragraph (1) of subdivision (e) of Section 90006.(10) Collecting debt related to any consumer financial product or service.(11) Directly or indirectly brokering the offer or sale of a franchise in this state on behalf of another.(12) Offering another financial product or service as may be defined by the department, by regulation, for purposes of this division, if the department finds that the financial product or service is either:(A) Entered into or conducted as a subterfuge or with a purpose to evade any consumer financial law.(B) Permissible for a bank or for a financial holding company to offer or to provide under any provision of law or regulation applicable to a bank or a financial holding company, and has, or likely will have, a material impact on consumers, excluding, however, solely from the departments authority to define additional financial products and services under this subparagraph and not the exercise of any other authority it may have, the following activities provided to a covered person:(i) Providing information products or services to a covered person for identity authentication.(ii) Providing information products or services for fraud or identify theft detection, prevention, or investigation.(iii) Providing document retrieval or delivery services.(iv) Providing public records information retrieval.(v) Providing information products or services for anti-money laundering activities.(13) The term financial product or service does not include either of the following:(A) Insurance, as defined in Section 22 of the Insurance Code, regulated by the Department of Insurance.(B) The provision, by a person, of electronic data transmission, routing, intermediate or transient storage, or connections to a telecommunications system or network, not including a person that provides those electronic conduit services if, when providing those services, the person does any of the following:(i) Selects or modifies the content of the electronic data.(ii) Transmits, routes, stores, or provides connections for electronic data, including financial data, in a manner that the financial data is differentiated from other types of data of the same form that the person transmits, routes, or stores, or with respect to which, provides connections.(iii) Is a payee, payor, correspondent, or similar party to a payment transaction with a consumer.(l)(q) Payment instrument means a check, draft, warrant, money order, travelers check, electronic instrument, or other instrument, payment of funds, or monetary value, other than currency.(m)(r) Person means an individual, corporation, business trust, estate, trust, partnership, proprietorship, syndicate, limited liability company, association, joint venture, government, governmental subdivision, agency or instrumentality, public corporation or joint stock company, or any other organization or legal or commercial entity.(s) (1) Recipient means a small business whose activities are principally directed or managed from California.(2) For purposes of determining whether activities are principally directed or managed from California, a registrant may rely on any relevant written representation by the small business, nonprofit, or family farm, including a business address provided in any application or agreement for commercial financing or other financial product or service. (n)(t) (1) Service provider means any person that provides a material service to a covered person in connection with the offering or provision by that covered person of a consumer financial product or service, including a person that either:(A) Participates in designing, operating, or maintaining the consumer financial product or service.(B) Processes transactions relating to the consumer financial product or service, other than unknowingly or incidentally transmitting or processing financial data in a manner that the data is undifferentiated from other types of data of the same form as the person transmits or processes.(2) The term service provider does not include a person solely by virtue of that person offering or providing to a covered person either:(A) A support service of a type provided to businesses generally or a similar ministerial service.(B) Time or space for an advertisement for a consumer financial product or service through print, newspaper, or electronic media.(u) (1) Small business means a business entity organized for profit with annual gross receipts of no more than sixteen million dollars ($16,000,000) or the annual gross receipt level as biennially adjusted by the Department of General Services in accordance with Section 14837 of the Government Code, whichever is greater.(2) For purposes of determining a business entitys annual gross receipts, a covered provider may rely on any relevant written representation by the business entity, including information provided in any application or agreement for commercial financing. (o)(v) (1) Stored value means funds or monetary value represented in any electronic format, whether or not specially encrypted, and stored or capable of storage on electronic media in such a way as to be retrievable and transferred electronically, and includes a prepaid debit card or product, or any other similar product, regardless of whether the amount of the funds or monetary value may be increased or reloaded.(2) Notwithstanding paragraph (1), the term stored value does not include a special purpose card or certificate, which shall be defined for purposes of this paragraph as funds or monetary value represented in any electronic format, whether or not specially encrypted, that is all of the following:(A) Issued by a merchant, retailer, or other seller of nonfinancial goods or services.(B) Redeemable only for transactions with the merchant, retailer, or seller of nonfinancial goods or services or with an affiliate of such person, which affiliate itself is a merchant, retailer, or seller of nonfinancial goods or services.(C) Issued in a specified amount that, except in the case of a card or product used solely for telephone services, may not be increased or reloaded.(D) Purchased on a prepaid basis in exchange for payment.(E) Honored upon presentation to the merchant, retailer, or seller of nonfinancial goods or services or an affiliate of such person, which affiliate itself is a merchant, retailer, or seller of nonfinancial goods or services, only for any nonfinancial goods or services(p)(w) These definitions shall be interpreted consistently with the definitions in the Consumer Financial Protection Act of 2010 (12 U.S.C. Sec. 5481). Any inconsistency or ambiguity shall be resolved in favor of greater protections to the consumer and more expansive coverage. |
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| 192 | | - | 90005. The definitions in this section apply throughout this division, except as otherwise provided in this division or if the context clearly indicates otherwise:(a) Affiliate means any person that controls, is controlled by, or is under common control with another person. For purposes of this definition, control means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person.(b)Department means the Department of Financial Protection and Innovation.(b) California resident has the same meaning as resident as that term is defined in Section 17014 of the Revenue and Taxation Code.(c) Commercial financing has the same meaning as that term is defined in Section 22800.(d) (1) Commercial financing brokerage services means the following acts in connection with a commercial financing transaction:(A) Transmitting sensitive data about a prospective recipient to a commercial financing provider with the expectation of compensation in connection with making a referral.(B) Making a referral to a commercial financing provider under an agreement with the commercial financing provider that a prospective recipient referred by the person to the commercial financing provider meets certain criteria involving sensitive data.(C) Participating in a commercial financing negotiation between a commercial financing provider and prospective recipient.(D) Counseling, advising, or making recommendations to a prospective recipient about a commercial financing transaction based on the prospective recipients sensitive data.(E) (i) Participating in the preparation of commercial financing documents, including commercial financing applications, other than providing a prospective recipient blank copies of commercial financing documents.(ii) Transmitting information that is not sensitive data to a commercial financing provider at the request of a prospective recipient shall not, by itself, constitute participation in the preparation of commercial financing documents within the meaning of this subparagraph.(F) Communicating to a prospective recipient a commercial financing providers commercial financing approval decisions.(G) Charging a fee to a prospective recipient for services related to a prospective recipients application for a commercial financing transaction from a commercial financing provider.(2) Notwithstanding paragraph (1), the following acts in connection with a commercial financing transaction do not constitute commercial financing brokerage services:(A) Performing support tasks, including, but not limited to, typing, word processing, data entry, filing, billing, answering telephone calls, taking and receiving messages, and scheduling, in support of the performance by a broker of any of the activities described in subparagraphs (E) to (G), inclusive, of paragraph (1).(B) Furnishing a consumer report to a covered person by a consumer reporting agency in accordance with subsection (a) or (c) of Section 1681b of Title 15 of the United States Code.(C) Furnishing a consumer credit report, as defined in Section 1785.3 of the Civil Code, to a covered person by a consumer credit reporting agency in accordance with subdivision (a) or paragraph (1) of subdivision (b) of Section 1785.11 of the Civil Code.(D) Furnishing a prequalifying report, as defined in Section 1785.3 of the Civil Code, to a covered person by a consumer credit reporting agency in accordance with paragraph (2) of subdivision (b) of Section 1785.11 of the Civil Code.(E) Distributing or disseminating to a prospective recipient of a providers marketing materials or factual information about the provider, its lending activities, or its loan products, including, but not limited to, the providers interest rates, the providers minimum or maximum loan amounts or loan periods, or a general description of the providers underwriting criteria.(3) For purposes of this subdivision, sensitive data means any of the following:(A) A bank account number.(B) A bank statement.(C) A credit or debit card account number.(D) A credit score, as defined in Section 1785.15.1 of the Civil Code.(4) For purposes of this subdivision, referral means the introduction of a prospective recipient to a commercial financing provider, or the delivery of a prospective recipients contact information to a commercial financing provider, for the purposes of making an introduction.(e) Commercial financing product means either of the following products or services:(1) Commercial financing transactions as defined in this section.(2) Commercial financing brokerage services as defined in this section.(f) Commercial financing transaction means a consummated commercial financing transaction for which a disclosure is provided in accordance with subsection (a) of Section 920 of Title 10 of the California Code of Regulations. (c)(g) Consumer means an individual or an agent, trustee, or representative acting on behalf of an individual or the estate, trust, or joint trust of an individual, however denominated.(d)(h) Consumer financial law means a federal or California law that directly and specifically regulates the manner, content, or terms and conditions of any financial transaction, or any account, product, or service related thereto, with respect to a consumer.(e)(i) Consumer financial product or service means either of the following:(1) A financial product or service that is delivered, offered, or provided for use by consumers primarily for personal, family, or household purposes.(2) A financial product or service as described in paragraph (11) of subdivision (k). (p).(f)(j) Covered person means, to the extent not preempted by federal law, any of the following:(1) Any person that engages in offering or providing a consumer financial product or service to a resident of this state.(2) Any affiliate of a person described in this subdivision if the affiliate acts as a service provider to the person.(3) Any service provider to the extent that the person engages in the offering or provision of its own consumer financial product or service.(g)(k) Credit means the right granted by a person to another person to defer payment of a debt, incur debt and defer its payment, or purchase property or services and defer payment for those purchases.(h)(l) Debt means any obligation of a person to pay another person money regardless of whether the obligation is absolute or contingent, has been reduced to judgment, is fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured and includes any obligation that gives rise to right of an equitable remedy for breach of performance if the breach gives rise to a right to payment.(m) Department means the Department of Financial Protection and Innovation. (i)(n) Deposit-taking activity means any of the following:(1) The acceptance of deposits, maintenance of deposit accounts, or the provision of services related to the acceptance of deposits or the maintenance of deposit accounts.(2) The acceptance of funds, the provision of other services related to the acceptance of funds, or the maintenance of member share accounts by a credit union.(3) The receipt of funds or the equivalent thereof, as the department may determine by rule or order, received or held by a covered person or an agent for a covered person for the purpose of facilitating a payment or transferring funds or value of funds between a consumer and a third party.(j)(o) Commissioner means the Commissioner of Financial Protection and Innovation.(k)(p) Financial product or service means:(1) Extending credit and servicing extensions of credit, including acquiring, purchasing, selling, brokering extensions of credit, other than solely extending commercial credit to a person who originates consumer credit transactions.(2) Extending or brokering leases of personal or real property that are the functional equivalent of purchase finance arrangements, if all of the following:(A) The lease is on a nonoperating basis.(B) The initial term of the lease is at least 90 days.(C) In the case of a lease involving real property, at the inception of the initial lease, the transaction is intended to result in ownership of the leased property to be transferred to the lessee, subject to standards prescribed by the department.(3) Providing real estate settlement services.(4) Engaging in deposit-taking activities, transmitting or exchanging funds, or otherwise acting as a custodian of funds or any financial instrument for use by or on behalf of a consumer.(5) Selling, providing, or issuing stored value or payment instruments, except that, in the case of a sale of, or transaction to reload, stored value, only if the seller exercises substantial control over the terms or conditions of the stored value provided to the consumer where, for purposes of this paragraph, both:(A) A seller shall not be found to exercise substantial control over the terms or conditions of the stored value if the seller is not a party to the contract with the consumer for the stored value product, and another person is principally responsible for establishing the terms or conditions of the stored value.(B) Advertising the nonfinancial goods or services of the seller on the stored value card or device is not in itself an exercise of substantial control over the terms or conditions.(6) Providing check cashing, check collection, or check guaranty services.(7) Providing payments or other financial data processing products or services to a consumer by any technological means, including processing or storing financial or banking data for any payment instrument, or through any payment system or networks used for processing payment data, including payments made through an online banking system or mobile telecommunications network, except that a person shall not be deemed to be a covered person with respect to financial data processing solely because the person either:(A) Is a merchant, retailer, or seller of any nonfinancial good or service who engages in financial data processing by transmitting or storing payment data about a consumer exclusively for purpose of initiating payment instructions by the consumer to pay that person for the purchase of, or to complete a commercial transaction for, the nonfinancial good or service sold directly by that person to the consumer.(B) Provides access to a host server to a person for purposes of enabling that person to establish and maintain a website.(8) Providing financial advisory services other than services relating to securities provided by a person regulated by the Securities Exchange Commission or a person regulated by a state securities commission, but only to the extent that such person acts in a regulated capacity, to consumers on individual financial matters or relating to proprietary financial products or services (other than by publishing any bona fide newspaper, news magazine, or business or financial publication of general and regular circulation, including publishing market data, news, or data analytics or investment information or recommendations that are not tailored to the individual needs of a particular consumer) including both of the following:(A) Providing credit counseling to any consumer.(B) Providing services to assist a consumer with debt management or debt settlement, modifying the terms of any extension of credit, or avoiding foreclosure.(9) Collecting, analyzing, maintaining, or providing consumer report information or other account information, including information relating to the credit history of consumers, used or expected to be used in connection with any decision regarding the offering or provision of a consumer financial product or service, except to the extent that:(A) A person does any of the following:(i) Collects, analyzes, or maintains information that relates solely to the transactions between a consumer and that person.(ii) Provides information to an affiliate of the person, as described in subdivision (a).(iii) Provides information that is used or expected to be used solely in any decision regarding the offering or provision of a product or service that is not a consumer financial product or service.(B) The information described in clause (i) of subparagraph (A) is not used by the person or affiliate in connection with any decision regarding the offering or provision of a consumer financial product or service to the consumer, other than credit described in subparagraph (A) of paragraph (1) of subdivision (e) of Section 90006.(10) Collecting debt related to any consumer financial product or service.(11) Directly or indirectly brokering the offer or sale of a franchise in this state on behalf of another.(12) Offering another financial product or service as may be defined by the department, by regulation, for purposes of this division, if the department finds that the financial product or service is either:(A) Entered into or conducted as a subterfuge or with a purpose to evade any consumer financial law.(B) Permissible for a bank or for a financial holding company to offer or to provide under any provision of law or regulation applicable to a bank or a financial holding company, and has, or likely will have, a material impact on consumers, excluding, however, solely from the departments authority to define additional financial products and services under this subparagraph and not the exercise of any other authority it may have, the following activities provided to a covered person:(i) Providing information products or services to a covered person for identity authentication.(ii) Providing information products or services for fraud or identify theft detection, prevention, or investigation.(iii) Providing document retrieval or delivery services.(iv) Providing public records information retrieval.(v) Providing information products or services for anti-money laundering activities.(13) The term financial product or service does not include either of the following:(A) Insurance, as defined in Section 22 of the Insurance Code, regulated by the Department of Insurance.(B) The provision, by a person, of electronic data transmission, routing, intermediate or transient storage, or connections to a telecommunications system or network, not including a person that provides those electronic conduit services if, when providing those services, the person does any of the following:(i) Selects or modifies the content of the electronic data.(ii) Transmits, routes, stores, or provides connections for electronic data, including financial data, in a manner that the financial data is differentiated from other types of data of the same form that the person transmits, routes, or stores, or with respect to which, provides connections.(iii) Is a payee, payor, correspondent, or similar party to a payment transaction with a consumer.(l)(q) Payment instrument means a check, draft, warrant, money order, travelers check, electronic instrument, or other instrument, payment of funds, or monetary value, other than currency.(m)(r) Person means an individual, corporation, business trust, estate, trust, partnership, proprietorship, syndicate, limited liability company, association, joint venture, government, governmental subdivision, agency or instrumentality, public corporation or joint stock company, or any other organization or legal or commercial entity.(s) (1) Recipient means a small business whose activities are principally directed or managed from California.(2) For purposes of determining whether activities are principally directed or managed from California, a registrant may rely on any relevant written representation by the small business, nonprofit, or family farm, including a business address provided in any application or agreement for commercial financing or other financial product or service. (n)(t) (1) Service provider means any person that provides a material service to a covered person in connection with the offering or provision by that covered person of a consumer financial product or service, including a person that either:(A) Participates in designing, operating, or maintaining the consumer financial product or service.(B) Processes transactions relating to the consumer financial product or service, other than unknowingly or incidentally transmitting or processing financial data in a manner that the data is undifferentiated from other types of data of the same form as the person transmits or processes.(2) The term service provider does not include a person solely by virtue of that person offering or providing to a covered person either:(A) A support service of a type provided to businesses generally or a similar ministerial service.(B) Time or space for an advertisement for a consumer financial product or service through print, newspaper, or electronic media.(u) (1) Small business means a business entity organized for profit with annual gross receipts of no more than sixteen million dollars ($16,000,000) or the annual gross receipt level as biennially adjusted by the Department of General Services in accordance with Section 14837 of the Government Code, whichever is greater.(2) For purposes of determining a business entitys annual gross receipts, a covered provider may rely on any relevant written representation by the business entity, including information provided in any application or agreement for commercial financing. (o)(v) (1) Stored value means funds or monetary value represented in any electronic format, whether or not specially encrypted, and stored or capable of storage on electronic media in such a way as to be retrievable and transferred electronically, and includes a prepaid debit card or product, or any other similar product, regardless of whether the amount of the funds or monetary value may be increased or reloaded.(2) Notwithstanding paragraph (1), the term stored value does not include a special purpose card or certificate, which shall be defined for purposes of this paragraph as funds or monetary value represented in any electronic format, whether or not specially encrypted, that is all of the following:(A) Issued by a merchant, retailer, or other seller of nonfinancial goods or services.(B) Redeemable only for transactions with the merchant, retailer, or seller of nonfinancial goods or services or with an affiliate of such person, which affiliate itself is a merchant, retailer, or seller of nonfinancial goods or services.(C) Issued in a specified amount that, except in the case of a card or product used solely for telephone services, may not be increased or reloaded.(D) Purchased on a prepaid basis in exchange for payment.(E) Honored upon presentation to the merchant, retailer, or seller of nonfinancial goods or services or an affiliate of such person, which affiliate itself is a merchant, retailer, or seller of nonfinancial goods or services, only for any nonfinancial goods or services(p)(w) These definitions shall be interpreted consistently with the definitions in the Consumer Financial Protection Act of 2010 (12 U.S.C. Sec. 5481). Any inconsistency or ambiguity shall be resolved in favor of greater protections to the consumer and more expansive coverage. |
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| 193 | | - | |
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| 194 | | - | |
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| 195 | | - | |
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| 196 | | - | 90005. The definitions in this section apply throughout this division, except as otherwise provided in this division or if the context clearly indicates otherwise: |
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| 197 | | - | |
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| 198 | | - | (a) Affiliate means any person that controls, is controlled by, or is under common control with another person. For purposes of this definition, control means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person. |
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| 199 | | - | |
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| 200 | | - | (b)Department means the Department of Financial Protection and Innovation. |
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| 201 | | - | |
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| 202 | | - | |
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| 203 | | - | |
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| 204 | | - | (b) California resident has the same meaning as resident as that term is defined in Section 17014 of the Revenue and Taxation Code. |
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| 205 | | - | |
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| 206 | | - | (c) Commercial financing has the same meaning as that term is defined in Section 22800. |
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| 207 | | - | |
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| 208 | | - | (d) (1) Commercial financing brokerage services means the following acts in connection with a commercial financing transaction: |
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| 209 | | - | |
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| 210 | | - | (A) Transmitting sensitive data about a prospective recipient to a commercial financing provider with the expectation of compensation in connection with making a referral. |
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| 211 | | - | |
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| 212 | | - | (B) Making a referral to a commercial financing provider under an agreement with the commercial financing provider that a prospective recipient referred by the person to the commercial financing provider meets certain criteria involving sensitive data. |
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| 213 | | - | |
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| 214 | | - | (C) Participating in a commercial financing negotiation between a commercial financing provider and prospective recipient. |
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| 215 | | - | |
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| 216 | | - | (D) Counseling, advising, or making recommendations to a prospective recipient about a commercial financing transaction based on the prospective recipients sensitive data. |
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| 217 | | - | |
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| 218 | | - | (E) (i) Participating in the preparation of commercial financing documents, including commercial financing applications, other than providing a prospective recipient blank copies of commercial financing documents. |
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| 219 | | - | |
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| 220 | | - | (ii) Transmitting information that is not sensitive data to a commercial financing provider at the request of a prospective recipient shall not, by itself, constitute participation in the preparation of commercial financing documents within the meaning of this subparagraph. |
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| 221 | | - | |
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| 222 | | - | (F) Communicating to a prospective recipient a commercial financing providers commercial financing approval decisions. |
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| 223 | | - | |
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| 224 | | - | (G) Charging a fee to a prospective recipient for services related to a prospective recipients application for a commercial financing transaction from a commercial financing provider. |
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| 225 | | - | |
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| 226 | | - | (2) Notwithstanding paragraph (1), the following acts in connection with a commercial financing transaction do not constitute commercial financing brokerage services: |
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| 227 | | - | |
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| 228 | | - | (A) Performing support tasks, including, but not limited to, typing, word processing, data entry, filing, billing, answering telephone calls, taking and receiving messages, and scheduling, in support of the performance by a broker of any of the activities described in subparagraphs (E) to (G), inclusive, of paragraph (1). |
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| 229 | | - | |
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| 230 | | - | (B) Furnishing a consumer report to a covered person by a consumer reporting agency in accordance with subsection (a) or (c) of Section 1681b of Title 15 of the United States Code. |
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| 231 | | - | |
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| 232 | | - | (C) Furnishing a consumer credit report, as defined in Section 1785.3 of the Civil Code, to a covered person by a consumer credit reporting agency in accordance with subdivision (a) or paragraph (1) of subdivision (b) of Section 1785.11 of the Civil Code. |
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| 233 | | - | |
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| 234 | | - | (D) Furnishing a prequalifying report, as defined in Section 1785.3 of the Civil Code, to a covered person by a consumer credit reporting agency in accordance with paragraph (2) of subdivision (b) of Section 1785.11 of the Civil Code. |
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| 235 | | - | |
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| 236 | | - | (E) Distributing or disseminating to a prospective recipient of a providers marketing materials or factual information about the provider, its lending activities, or its loan products, including, but not limited to, the providers interest rates, the providers minimum or maximum loan amounts or loan periods, or a general description of the providers underwriting criteria. |
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| 237 | | - | |
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| 238 | | - | (3) For purposes of this subdivision, sensitive data means any of the following: |
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| 239 | | - | |
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| 240 | | - | (A) A bank account number. |
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| 241 | | - | |
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| 242 | | - | (B) A bank statement. |
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| 243 | | - | |
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| 244 | | - | (C) A credit or debit card account number. |
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| 245 | | - | |
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| 246 | | - | (D) A credit score, as defined in Section 1785.15.1 of the Civil Code. |
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| 247 | | - | |
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| 248 | | - | (4) For purposes of this subdivision, referral means the introduction of a prospective recipient to a commercial financing provider, or the delivery of a prospective recipients contact information to a commercial financing provider, for the purposes of making an introduction. |
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| 249 | | - | |
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| 250 | | - | (e) Commercial financing product means either of the following products or services: |
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| 251 | | - | |
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| 252 | | - | (1) Commercial financing transactions as defined in this section. |
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| 253 | | - | |
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| 254 | | - | (2) Commercial financing brokerage services as defined in this section. |
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| 255 | | - | |
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| 256 | | - | (f) Commercial financing transaction means a consummated commercial financing transaction for which a disclosure is provided in accordance with subsection (a) of Section 920 of Title 10 of the California Code of Regulations. |
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| 257 | | - | |
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| 258 | | - | (c) |
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| 259 | | - | |
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| 260 | | - | |
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| 261 | | - | |
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| 262 | | - | (g) Consumer means an individual or an agent, trustee, or representative acting on behalf of an individual or the estate, trust, or joint trust of an individual, however denominated. |
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| 263 | | - | |
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| 264 | | - | (d) |
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| 265 | | - | |
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| 266 | | - | |
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| 267 | | - | |
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| 268 | | - | (h) Consumer financial law means a federal or California law that directly and specifically regulates the manner, content, or terms and conditions of any financial transaction, or any account, product, or service related thereto, with respect to a consumer. |
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| 269 | | - | |
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| 270 | | - | (e) |
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| 271 | | - | |
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| 272 | | - | |
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| 273 | | - | |
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| 274 | | - | (i) Consumer financial product or service means either of the following: |
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| 275 | | - | |
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| 276 | | - | (1) A financial product or service that is delivered, offered, or provided for use by consumers primarily for personal, family, or household purposes. |
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| 277 | | - | |
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| 278 | | - | (2) A financial product or service as described in paragraph (11) of subdivision (k). (p). |
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| 279 | | - | |
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| 280 | | - | (f) |
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| 281 | | - | |
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| 282 | | - | |
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| 283 | | - | |
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| 284 | | - | (j) Covered person means, to the extent not preempted by federal law, any of the following: |
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| 285 | | - | |
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| 286 | | - | (1) Any person that engages in offering or providing a consumer financial product or service to a resident of this state. |
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| 287 | | - | |
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| 288 | | - | (2) Any affiliate of a person described in this subdivision if the affiliate acts as a service provider to the person. |
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| 289 | | - | |
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| 290 | | - | (3) Any service provider to the extent that the person engages in the offering or provision of its own consumer financial product or service. |
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| 291 | | - | |
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| 292 | | - | (g) |
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| 293 | | - | |
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| 294 | | - | |
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| 295 | | - | |
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| 296 | | - | (k) Credit means the right granted by a person to another person to defer payment of a debt, incur debt and defer its payment, or purchase property or services and defer payment for those purchases. |
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| 297 | | - | |
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| 298 | | - | (h) |
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| 299 | | - | |
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| 300 | | - | |
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| 301 | | - | |
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| 302 | | - | (l) Debt means any obligation of a person to pay another person money regardless of whether the obligation is absolute or contingent, has been reduced to judgment, is fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured and includes any obligation that gives rise to right of an equitable remedy for breach of performance if the breach gives rise to a right to payment. |
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| 303 | | - | |
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| 304 | | - | (m) Department means the Department of Financial Protection and Innovation. |
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| 305 | | - | |
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| 306 | | - | (i) |
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| 307 | | - | |
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| 308 | | - | |
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| 309 | | - | |
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| 310 | | - | (n) Deposit-taking activity means any of the following: |
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| 311 | | - | |
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| 312 | | - | (1) The acceptance of deposits, maintenance of deposit accounts, or the provision of services related to the acceptance of deposits or the maintenance of deposit accounts. |
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| 313 | | - | |
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| 314 | | - | (2) The acceptance of funds, the provision of other services related to the acceptance of funds, or the maintenance of member share accounts by a credit union. |
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| 315 | | - | |
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| 316 | | - | (3) The receipt of funds or the equivalent thereof, as the department may determine by rule or order, received or held by a covered person or an agent for a covered person for the purpose of facilitating a payment or transferring funds or value of funds between a consumer and a third party. |
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| 317 | | - | |
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| 318 | | - | (j) |
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| 319 | | - | |
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| 320 | | - | |
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| 321 | | - | |
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| 322 | | - | (o) Commissioner means the Commissioner of Financial Protection and Innovation. |
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| 323 | | - | |
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| 324 | | - | (k) |
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| 325 | | - | |
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| 326 | | - | |
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| 327 | | - | |
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| 328 | | - | (p) Financial product or service means: |
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| 329 | | - | |
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| 330 | | - | (1) Extending credit and servicing extensions of credit, including acquiring, purchasing, selling, brokering extensions of credit, other than solely extending commercial credit to a person who originates consumer credit transactions. |
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| 331 | | - | |
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| 332 | | - | (2) Extending or brokering leases of personal or real property that are the functional equivalent of purchase finance arrangements, if all of the following: |
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| 333 | | - | |
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| 334 | | - | (A) The lease is on a nonoperating basis. |
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| 335 | | - | |
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| 336 | | - | (B) The initial term of the lease is at least 90 days. |
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| 337 | | - | |
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| 338 | | - | (C) In the case of a lease involving real property, at the inception of the initial lease, the transaction is intended to result in ownership of the leased property to be transferred to the lessee, subject to standards prescribed by the department. |
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| 339 | | - | |
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| 340 | | - | (3) Providing real estate settlement services. |
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| 341 | | - | |
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| 342 | | - | (4) Engaging in deposit-taking activities, transmitting or exchanging funds, or otherwise acting as a custodian of funds or any financial instrument for use by or on behalf of a consumer. |
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| 343 | | - | |
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| 344 | | - | (5) Selling, providing, or issuing stored value or payment instruments, except that, in the case of a sale of, or transaction to reload, stored value, only if the seller exercises substantial control over the terms or conditions of the stored value provided to the consumer where, for purposes of this paragraph, both: |
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| 345 | | - | |
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| 346 | | - | (A) A seller shall not be found to exercise substantial control over the terms or conditions of the stored value if the seller is not a party to the contract with the consumer for the stored value product, and another person is principally responsible for establishing the terms or conditions of the stored value. |
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| 347 | | - | |
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| 348 | | - | (B) Advertising the nonfinancial goods or services of the seller on the stored value card or device is not in itself an exercise of substantial control over the terms or conditions. |
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| 349 | | - | |
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| 350 | | - | (6) Providing check cashing, check collection, or check guaranty services. |
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| 351 | | - | |
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| 352 | | - | (7) Providing payments or other financial data processing products or services to a consumer by any technological means, including processing or storing financial or banking data for any payment instrument, or through any payment system or networks used for processing payment data, including payments made through an online banking system or mobile telecommunications network, except that a person shall not be deemed to be a covered person with respect to financial data processing solely because the person either: |
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| 353 | | - | |
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| 354 | | - | (A) Is a merchant, retailer, or seller of any nonfinancial good or service who engages in financial data processing by transmitting or storing payment data about a consumer exclusively for purpose of initiating payment instructions by the consumer to pay that person for the purchase of, or to complete a commercial transaction for, the nonfinancial good or service sold directly by that person to the consumer. |
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| 355 | | - | |
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| 356 | | - | (B) Provides access to a host server to a person for purposes of enabling that person to establish and maintain a website. |
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| 357 | | - | |
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| 358 | | - | (8) Providing financial advisory services other than services relating to securities provided by a person regulated by the Securities Exchange Commission or a person regulated by a state securities commission, but only to the extent that such person acts in a regulated capacity, to consumers on individual financial matters or relating to proprietary financial products or services (other than by publishing any bona fide newspaper, news magazine, or business or financial publication of general and regular circulation, including publishing market data, news, or data analytics or investment information or recommendations that are not tailored to the individual needs of a particular consumer) including both of the following: |
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| 359 | | - | |
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| 360 | | - | (A) Providing credit counseling to any consumer. |
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| 361 | | - | |
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| 362 | | - | (B) Providing services to assist a consumer with debt management or debt settlement, modifying the terms of any extension of credit, or avoiding foreclosure. |
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| 363 | | - | |
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| 364 | | - | (9) Collecting, analyzing, maintaining, or providing consumer report information or other account information, including information relating to the credit history of consumers, used or expected to be used in connection with any decision regarding the offering or provision of a consumer financial product or service, except to the extent that: |
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| 365 | | - | |
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| 366 | | - | (A) A person does any of the following: |
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| 367 | | - | |
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| 368 | | - | (i) Collects, analyzes, or maintains information that relates solely to the transactions between a consumer and that person. |
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| 369 | | - | |
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| 370 | | - | (ii) Provides information to an affiliate of the person, as described in subdivision (a). |
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| 371 | | - | |
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| 372 | | - | (iii) Provides information that is used or expected to be used solely in any decision regarding the offering or provision of a product or service that is not a consumer financial product or service. |
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| 373 | | - | |
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| 374 | | - | (B) The information described in clause (i) of subparagraph (A) is not used by the person or affiliate in connection with any decision regarding the offering or provision of a consumer financial product or service to the consumer, other than credit described in subparagraph (A) of paragraph (1) of subdivision (e) of Section 90006. |
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| 375 | | - | |
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| 376 | | - | (10) Collecting debt related to any consumer financial product or service. |
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| 377 | | - | |
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| 378 | | - | (11) Directly or indirectly brokering the offer or sale of a franchise in this state on behalf of another. |
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| 379 | | - | |
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| 380 | | - | (12) Offering another financial product or service as may be defined by the department, by regulation, for purposes of this division, if the department finds that the financial product or service is either: |
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| 381 | | - | |
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| 382 | | - | (A) Entered into or conducted as a subterfuge or with a purpose to evade any consumer financial law. |
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| 383 | | - | |
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| 384 | | - | (B) Permissible for a bank or for a financial holding company to offer or to provide under any provision of law or regulation applicable to a bank or a financial holding company, and has, or likely will have, a material impact on consumers, excluding, however, solely from the departments authority to define additional financial products and services under this subparagraph and not the exercise of any other authority it may have, the following activities provided to a covered person: |
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| 385 | | - | |
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| 386 | | - | (i) Providing information products or services to a covered person for identity authentication. |
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| 387 | | - | |
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| 388 | | - | (ii) Providing information products or services for fraud or identify theft detection, prevention, or investigation. |
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| 389 | | - | |
|---|
| 390 | | - | (iii) Providing document retrieval or delivery services. |
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| 391 | | - | |
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| 392 | | - | (iv) Providing public records information retrieval. |
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| 393 | | - | |
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| 394 | | - | (v) Providing information products or services for anti-money laundering activities. |
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| 395 | | - | |
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| 396 | | - | (13) The term financial product or service does not include either of the following: |
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| 397 | | - | |
|---|
| 398 | | - | (A) Insurance, as defined in Section 22 of the Insurance Code, regulated by the Department of Insurance. |
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| 399 | | - | |
|---|
| 400 | | - | (B) The provision, by a person, of electronic data transmission, routing, intermediate or transient storage, or connections to a telecommunications system or network, not including a person that provides those electronic conduit services if, when providing those services, the person does any of the following: |
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| 401 | | - | |
|---|
| 402 | | - | (i) Selects or modifies the content of the electronic data. |
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| 403 | | - | |
|---|
| 404 | | - | (ii) Transmits, routes, stores, or provides connections for electronic data, including financial data, in a manner that the financial data is differentiated from other types of data of the same form that the person transmits, routes, or stores, or with respect to which, provides connections. |
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| 405 | | - | |
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| 406 | | - | (iii) Is a payee, payor, correspondent, or similar party to a payment transaction with a consumer. |
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| 407 | | - | |
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| 408 | | - | (l) |
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| 409 | | - | |
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| 410 | | - | |
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| 411 | | - | |
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| 412 | | - | (q) Payment instrument means a check, draft, warrant, money order, travelers check, electronic instrument, or other instrument, payment of funds, or monetary value, other than currency. |
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| 413 | | - | |
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| 414 | | - | (m) |
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| 415 | | - | |
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| 416 | | - | |
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| 417 | | - | |
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| 418 | | - | (r) Person means an individual, corporation, business trust, estate, trust, partnership, proprietorship, syndicate, limited liability company, association, joint venture, government, governmental subdivision, agency or instrumentality, public corporation or joint stock company, or any other organization or legal or commercial entity. |
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| 419 | | - | |
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| 420 | | - | (s) (1) Recipient means a small business whose activities are principally directed or managed from California. |
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| 421 | | - | |
|---|
| 422 | | - | (2) For purposes of determining whether activities are principally directed or managed from California, a registrant may rely on any relevant written representation by the small business, nonprofit, or family farm, including a business address provided in any application or agreement for commercial financing or other financial product or service. |
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| 423 | | - | |
|---|
| 424 | | - | (n) |
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| 425 | | - | |
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| 426 | | - | |
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| 427 | | - | |
|---|
| 428 | | - | (t) (1) Service provider means any person that provides a material service to a covered person in connection with the offering or provision by that covered person of a consumer financial product or service, including a person that either: |
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| 429 | | - | |
|---|
| 430 | | - | (A) Participates in designing, operating, or maintaining the consumer financial product or service. |
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| 431 | | - | |
|---|
| 432 | | - | (B) Processes transactions relating to the consumer financial product or service, other than unknowingly or incidentally transmitting or processing financial data in a manner that the data is undifferentiated from other types of data of the same form as the person transmits or processes. |
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| 433 | | - | |
|---|
| 434 | | - | (2) The term service provider does not include a person solely by virtue of that person offering or providing to a covered person either: |
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| 435 | | - | |
|---|
| 436 | | - | (A) A support service of a type provided to businesses generally or a similar ministerial service. |
|---|
| 437 | | - | |
|---|
| 438 | | - | (B) Time or space for an advertisement for a consumer financial product or service through print, newspaper, or electronic media. |
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| 439 | | - | |
|---|
| 440 | | - | (u) (1) Small business means a business entity organized for profit with annual gross receipts of no more than sixteen million dollars ($16,000,000) or the annual gross receipt level as biennially adjusted by the Department of General Services in accordance with Section 14837 of the Government Code, whichever is greater. |
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| 441 | | - | |
|---|
| 442 | | - | (2) For purposes of determining a business entitys annual gross receipts, a covered provider may rely on any relevant written representation by the business entity, including information provided in any application or agreement for commercial financing. |
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| 443 | | - | |
|---|
| 444 | | - | (o) |
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| 445 | | - | |
|---|
| 446 | | - | |
|---|
| 447 | | - | |
|---|
| 448 | | - | (v) (1) Stored value means funds or monetary value represented in any electronic format, whether or not specially encrypted, and stored or capable of storage on electronic media in such a way as to be retrievable and transferred electronically, and includes a prepaid debit card or product, or any other similar product, regardless of whether the amount of the funds or monetary value may be increased or reloaded. |
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| 449 | | - | |
|---|
| 450 | | - | (2) Notwithstanding paragraph (1), the term stored value does not include a special purpose card or certificate, which shall be defined for purposes of this paragraph as funds or monetary value represented in any electronic format, whether or not specially encrypted, that is all of the following: |
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| 451 | | - | |
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| 452 | | - | (A) Issued by a merchant, retailer, or other seller of nonfinancial goods or services. |
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| 453 | | - | |
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| 454 | | - | (B) Redeemable only for transactions with the merchant, retailer, or seller of nonfinancial goods or services or with an affiliate of such person, which affiliate itself is a merchant, retailer, or seller of nonfinancial goods or services. |
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| 455 | | - | |
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| 456 | | - | (C) Issued in a specified amount that, except in the case of a card or product used solely for telephone services, may not be increased or reloaded. |
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| 457 | | - | |
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| 458 | | - | (D) Purchased on a prepaid basis in exchange for payment. |
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| 459 | | - | |
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| 460 | | - | (E) Honored upon presentation to the merchant, retailer, or seller of nonfinancial goods or services or an affiliate of such person, which affiliate itself is a merchant, retailer, or seller of nonfinancial goods or services, only for any nonfinancial goods or services |
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| 461 | | - | |
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| 462 | | - | (p) |
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| 463 | | - | |
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| 464 | | - | |
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| 465 | | - | |
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| 466 | | - | (w) These definitions shall be interpreted consistently with the definitions in the Consumer Financial Protection Act of 2010 (12 U.S.C. Sec. 5481). Any inconsistency or ambiguity shall be resolved in favor of greater protections to the consumer and more expansive coverage. |
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| 467 | | - | |
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| 468 | | - | SEC. 6. Section 90004.1 is added to the Financial Code, to read:90004.1. (a) Commencing January 1, 2027, a person shall not engage in the business of offering to provide or providing commercial financing products to California residents without first registering with the commissioner in accordance with the rules prescribed pursuant to Section 90009.1.(b) A commercial financing provider or a commercial financing broker shall not take a confession of judgment or any power of attorney at any time before a default by a recipient under the terms of a commercial financing transaction agreement or contract.(c) A commercial financing provider or a commercial financing broker shall not include a provision in a commercial financing transaction agreement or contract that authorizes a commercial financing provider or commercial financing broker to attach or garnish any of a recipients money held in an account in a depository institution.(d) A commercial financing transaction found to be unconscionable pursuant to Section 1670.5 of the Civil Code shall be deemed to be in violation of this division and subject to the remedies specified in this division.(e) A commercial financing provider or a commercial financing broker shall not include a provision in a contract or agreement with a recipient that limits or restricts the recipient from disclosing information that the recipient gains from the recipients business activities with the registrant, including, but not limited to, terms or conditions of a product or service offered by the registrant.(f) A commercial financing broker shall clearly and conspicuously display on their internet website the average and maximum annual percentage rates for the commercial financing transactions facilitated by them in the most recent calendar year. |
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| 469 | | - | |
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| 470 | | - | SEC. 6. Section 90004.1 is added to the Financial Code, to read: |
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| 471 | | - | |
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| 472 | | - | ### SEC. 6. |
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| 473 | | - | |
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| 474 | | - | 90004.1. (a) Commencing January 1, 2027, a person shall not engage in the business of offering to provide or providing commercial financing products to California residents without first registering with the commissioner in accordance with the rules prescribed pursuant to Section 90009.1.(b) A commercial financing provider or a commercial financing broker shall not take a confession of judgment or any power of attorney at any time before a default by a recipient under the terms of a commercial financing transaction agreement or contract.(c) A commercial financing provider or a commercial financing broker shall not include a provision in a commercial financing transaction agreement or contract that authorizes a commercial financing provider or commercial financing broker to attach or garnish any of a recipients money held in an account in a depository institution.(d) A commercial financing transaction found to be unconscionable pursuant to Section 1670.5 of the Civil Code shall be deemed to be in violation of this division and subject to the remedies specified in this division.(e) A commercial financing provider or a commercial financing broker shall not include a provision in a contract or agreement with a recipient that limits or restricts the recipient from disclosing information that the recipient gains from the recipients business activities with the registrant, including, but not limited to, terms or conditions of a product or service offered by the registrant.(f) A commercial financing broker shall clearly and conspicuously display on their internet website the average and maximum annual percentage rates for the commercial financing transactions facilitated by them in the most recent calendar year. |
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| 475 | | - | |
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| 476 | | - | 90004.1. (a) Commencing January 1, 2027, a person shall not engage in the business of offering to provide or providing commercial financing products to California residents without first registering with the commissioner in accordance with the rules prescribed pursuant to Section 90009.1.(b) A commercial financing provider or a commercial financing broker shall not take a confession of judgment or any power of attorney at any time before a default by a recipient under the terms of a commercial financing transaction agreement or contract.(c) A commercial financing provider or a commercial financing broker shall not include a provision in a commercial financing transaction agreement or contract that authorizes a commercial financing provider or commercial financing broker to attach or garnish any of a recipients money held in an account in a depository institution.(d) A commercial financing transaction found to be unconscionable pursuant to Section 1670.5 of the Civil Code shall be deemed to be in violation of this division and subject to the remedies specified in this division.(e) A commercial financing provider or a commercial financing broker shall not include a provision in a contract or agreement with a recipient that limits or restricts the recipient from disclosing information that the recipient gains from the recipients business activities with the registrant, including, but not limited to, terms or conditions of a product or service offered by the registrant.(f) A commercial financing broker shall clearly and conspicuously display on their internet website the average and maximum annual percentage rates for the commercial financing transactions facilitated by them in the most recent calendar year. |
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| 477 | | - | |
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| 478 | | - | 90004.1. (a) Commencing January 1, 2027, a person shall not engage in the business of offering to provide or providing commercial financing products to California residents without first registering with the commissioner in accordance with the rules prescribed pursuant to Section 90009.1.(b) A commercial financing provider or a commercial financing broker shall not take a confession of judgment or any power of attorney at any time before a default by a recipient under the terms of a commercial financing transaction agreement or contract.(c) A commercial financing provider or a commercial financing broker shall not include a provision in a commercial financing transaction agreement or contract that authorizes a commercial financing provider or commercial financing broker to attach or garnish any of a recipients money held in an account in a depository institution.(d) A commercial financing transaction found to be unconscionable pursuant to Section 1670.5 of the Civil Code shall be deemed to be in violation of this division and subject to the remedies specified in this division.(e) A commercial financing provider or a commercial financing broker shall not include a provision in a contract or agreement with a recipient that limits or restricts the recipient from disclosing information that the recipient gains from the recipients business activities with the registrant, including, but not limited to, terms or conditions of a product or service offered by the registrant.(f) A commercial financing broker shall clearly and conspicuously display on their internet website the average and maximum annual percentage rates for the commercial financing transactions facilitated by them in the most recent calendar year. |
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| 479 | | - | |
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| 480 | | - | |
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| 481 | | - | |
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| 482 | | - | 90004.1. (a) Commencing January 1, 2027, a person shall not engage in the business of offering to provide or providing commercial financing products to California residents without first registering with the commissioner in accordance with the rules prescribed pursuant to Section 90009.1. |
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| 483 | | - | |
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| 484 | | - | (b) A commercial financing provider or a commercial financing broker shall not take a confession of judgment or any power of attorney at any time before a default by a recipient under the terms of a commercial financing transaction agreement or contract. |
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| 485 | | - | |
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| 486 | | - | (c) A commercial financing provider or a commercial financing broker shall not include a provision in a commercial financing transaction agreement or contract that authorizes a commercial financing provider or commercial financing broker to attach or garnish any of a recipients money held in an account in a depository institution. |
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| 487 | | - | |
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| 488 | | - | (d) A commercial financing transaction found to be unconscionable pursuant to Section 1670.5 of the Civil Code shall be deemed to be in violation of this division and subject to the remedies specified in this division. |
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| 489 | | - | |
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| 490 | | - | (e) A commercial financing provider or a commercial financing broker shall not include a provision in a contract or agreement with a recipient that limits or restricts the recipient from disclosing information that the recipient gains from the recipients business activities with the registrant, including, but not limited to, terms or conditions of a product or service offered by the registrant. |
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| 491 | | - | |
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| 492 | | - | (f) A commercial financing broker shall clearly and conspicuously display on their internet website the average and maximum annual percentage rates for the commercial financing transactions facilitated by them in the most recent calendar year. |
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| 493 | | - | |
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| 494 | | - | SEC. 7. Section 90009.1 is added to the Financial Code, to read:90009.1. On or before January 1, 2027, the department shall prescribe rules regarding registration requirements applicable to covered persons seeking to offer or provide commercial financing products, consistent with the requirements of Section 90009. The limitations imposed by Section 90009.5 on registration requirements prescribed by the department pursuant to Section 90009 do not apply to regulations adopted pursuant to this section. |
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| 495 | | - | |
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| 496 | | - | SEC. 7. Section 90009.1 is added to the Financial Code, to read: |
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| 497 | | - | |
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| 498 | | - | ### SEC. 7. |
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| 499 | | - | |
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| 500 | | - | 90009.1. On or before January 1, 2027, the department shall prescribe rules regarding registration requirements applicable to covered persons seeking to offer or provide commercial financing products, consistent with the requirements of Section 90009. The limitations imposed by Section 90009.5 on registration requirements prescribed by the department pursuant to Section 90009 do not apply to regulations adopted pursuant to this section. |
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| 501 | | - | |
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| 502 | | - | 90009.1. On or before January 1, 2027, the department shall prescribe rules regarding registration requirements applicable to covered persons seeking to offer or provide commercial financing products, consistent with the requirements of Section 90009. The limitations imposed by Section 90009.5 on registration requirements prescribed by the department pursuant to Section 90009 do not apply to regulations adopted pursuant to this section. |
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| 503 | | - | |
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| 504 | | - | 90009.1. On or before January 1, 2027, the department shall prescribe rules regarding registration requirements applicable to covered persons seeking to offer or provide commercial financing products, consistent with the requirements of Section 90009. The limitations imposed by Section 90009.5 on registration requirements prescribed by the department pursuant to Section 90009 do not apply to regulations adopted pursuant to this section. |
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| 505 | | - | |
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| 506 | | - | |
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| 507 | | - | |
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| 508 | | - | 90009.1. On or before January 1, 2027, the department shall prescribe rules regarding registration requirements applicable to covered persons seeking to offer or provide commercial financing products, consistent with the requirements of Section 90009. The limitations imposed by Section 90009.5 on registration requirements prescribed by the department pursuant to Section 90009 do not apply to regulations adopted pursuant to this section. |
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| 509 | | - | |
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| 510 | | - | |
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| 511 | | - | |
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| 512 | | - | It is the intent of the Legislature to enact legislation that would increase oversight of small business financing products not covered under the California Financing Law. |
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