Bill Text - AB-2839 California Financing Law: Pilot Program for Increased Access to Responsible Small Dollar Loans: Department of Financial Protection and Innovation. - California Legislative Information

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

An act to amend Sections 22365, 22373, and 22380.5 of the Financial Code, relating to financial institutions.

LEGISLATIVE COUNSEL'S DIGEST

AB 2839, as introduced, Villapudua. California Financing Law: Pilot Program for Increased Access to Responsible Small Dollar Loans: Department of Financial Protection and Innovation.

Previous law established the Department of Business Oversight in the Business, Consumer Services, and Housing Agency, headed by the Commissioner of Business Oversight. In 2019 the department was renamed the as the “Department of Financial Protection and Innovation.”

Under existing law, the department has the charge of the execution of specified laws relating to various financial institutions and financial services, including banks, trust companies, credit unions, finance lenders, and residential mortgage lenders.

Existing law, the California Financing Law, establishes, until January 1, 2028, the Pilot Program for Increased Access to Responsible Small Dollar Loans, which requires licensees and other entities that wish to participate in the program to file an application and pay a specified fee to the Commissioner of Business Oversight. Existing law requires a statement to be provided to an applicant in connection with that program, as specified, which contains, among other things, the phone number and internet website address of the Department of Business Oversight. Existing law abolishes the Pilot Program for Affordable Credit-Building Opportunities, as specified, and transfers licensees approved to participate under that program to the provisions of the Pilot Program for Increased Access to Responsible Small Dollar Loans.

This bill would update references and information in these provisions to reflect the change from the “Department of Business Oversight” to the “Department of Financial Protection and Innovation.” The bill would make conforming changes.

Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO

The people of the State of California do enact as follows:

22365.

(a) The Pilot Program for Increased Access to Responsible Small Dollar Loans is hereby established.

(b) For purposes of this article:

(2) “Program” means the Pilot Program for Increased Access to Responsible Small Dollar Loans.

(3) Pursuant to Section 22380.5, “licensee” also includes a licensee approved to participate in the former Pilot Program for Affordable Credit-Building Opportunities as described in Article 3.5 (commencing with Section 22348).

(c) This article does not apply to either of the following:

(1) A licensee that has not been accepted to participate in the program.

(2) A licensee that has been accepted to participate in the program that chooses to lend pursuant to provisions of this division that are outside of the program.

SEC. 2.

Section 22373 of the Financial Code is amended to read:

22373.

(a) At the time the finder receives or processes an application for a program loan, the finder shall provide the following statement to the applicant, on behalf of the licensee, in no smaller than 10-point type, and shall ask the applicant to acknowledge receipt of the statement in writing:

“Your loan application has been referred to us by [Name of Finder]. We may pay a fee to [Name of Finder] for the successful referral of your loan application. IF YOU ARE APPROVED FOR THE LOAN, [NAME OF LICENSEE] WILL BECOME YOUR LENDER, AND YOU WILL BE BUILDING A RELATIONSHIP WITH [NAME OF LICENSEE]. If you have any questions about your loan, now or in the future, you should direct those questions to [name of licensee] by [insert at least two different ways in which a borrower may contact the licensee]. If you wish to report a complaint about [Name of Finder] or [Name of Licensee] regarding this loan transaction, you may contact the Department of Business Oversight Financial Protection and Innovation at 866-275-2677, or file your complaint online at www.dbo.ca.gov.” www.dfpi.ca.gov.”

(b) If the loan applicant has questions about the loan that the finder is not permitted to answer, the finder shall make a good faith effort to assist the applicant in making direct contact with the lender before the loan is consummated. This good faith effort shall, at a minimum, consist of assisting the applicant in communicating with the licensee as soon as reasonably practicable, which shall at a minimum include a “two-way communication.” For purposes of this section, “two-way communication” includes telephone, electronic mail, or another form of communication that allows the applicant to communicate with the licensee.

(c) Using the policies developed pursuant to subdivision (f) of Section 22370, the licensee shall ensure that a loan is not consummated until the licensee has completed a “two-way communication” with the applicant. Sending a voicemail or electronic message to the applicant, without a prior or subsequent response from the applicant, shall not constitute a “two-way communication.”

(d) If the loan is consummated, the licensee shall provide the borrower a written copy of the disclosure notice within two weeks following the date of the loan consummation. A licensee may include the disclosure within its loan contract, or may provide it as a separate document to the borrower, via any means acceptable to the borrower.

22380.5.

(a) The Pilot Program for Affordable Credit-Building Opportunities as described in Article 3.5 (commencing with Section 22348) is abolished.

(b) All powers, duties, purposes, jurisdiction, responsibilities, and functions of the Commissioner of Corporations with respect to the former Article 3.5 (commencing with Section 22348) are transferred to the Commissioner of Business Oversight. Financial Protection and Innovation.

(c) Any licensee approved to participate in the Pilot Program for Affordable Credit-Building Opportunities as described in the former Article 3.5 (commencing with Section 22348) shall be transferred to, and subject to, the provisions of this article.

(d) Any outstanding loans made under the former Pilot Program for Affordable Credit-Building Opportunities as described in Article 3.5 (commencing with Section 22348) shall continue in existence and be valid on and after January 1, 2014, subject to those terms and conditions that existed at the time the loan was made pursuant to the former Article 3.5 (commencing with Section 22348).

(e) Data submitted to the commissioner by licensees accepted to the former Pilot Program for Affordable Credit-Building Opportunities shall be summarized by the commissioner in the report due to the Legislature on or before July 1, 2015, pursuant to subdivision (a) of Section 22380.

source: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220AB2839

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