Legislation & Policy — Summary of Legislation
First Half of the 2007-2008 - Regular Legislative Session
Below is a summary of legislation enacted
during the First Half of the 2007-2008 Regular Legislative
Session that have a direct or indirect impact on the laws
and programs administered by the Department of Corporations.
All bills become effective January 1, 2008,
except as specified. Bills with an urgency clause become
effective upon the Governor's signature. To view a specific
bill, please click on the link below, or you may view all
of the bills on this page by scrolling.
CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW (Financial Code Section 23000 et seq.)
AB 7 (Lieu)
Chapter 358, Statutes of 2007
Urgency – Effective October 1, 2007
Amends lending laws administered by the Department of Corporations to require finance lenders and payday lenders to comply with new federal military financial protections added by HR 5122 (National Defense Authorization Act); amends existing lending laws to confirm that a lender’s failure to make a payday or other consumer loan to a military member does not violate specified anti-discrimination laws that are designed to protect military members from discrimination in the marketing and selling of financial products; makes similar law changes to laws administered by the Department of Financial Institutions in connection with refund anticipation loans made by state-chartered banks and credit unions; and adds an urgency clause and makes the bill’s lending provisions operative on October 1, 2007.
AB 634 (Calderon)
Chapter 235, Statutes of 2007
Clarifies the definition of a “deferred deposit transaction” under the California Deferred Deposit Transaction Law to provide that the California Deferred Deposit Transaction Law does not apply to businesses engaged in deferring the deposit of checks as part of a sales transaction when no fee or other charge is charged to the customer for the deferral.
AB 1528 (A. Banking & Finance Committee)
Chapter 363, Statutes of 2007
Amends existing law to prohibit persons from marketing financial products in a misleading or deceptive manner that suggests military affiliation, as specified. AB 1528 is intended to help curb deceptive sales of financial products by unscrupulous operators who represent that the products are sponsored by or otherwise affiliated with the branch of armed forces.
SB 998 (Cox)
Chapter 101, Statutes of 2007
This bill: 1) clarifies an exemption for state banks under the California Finance Lenders Law, 2) revises the California Residential Mortgage Lending Act to allow for the expedited surrender of a license, 3) clarifies licensing and application denial procedures under the California Finance Lenders Law, 4) exempts California limited liability companies and California limited partnerships from the requirement to file notarized consents to service of process, 5) prohibits false statements by any licensee in the course of an examination or investigation, 6) bars persons from holding licenses or from offering securities or franchises in the state, and 7) makes other technical changes to laws administered by the Department of Corporations and the Secretary of State.
CALIFORNIA FINANCE LENDERS LAW (Financial Code Section 22000 et seq.)
AB 7 (Lieu)
Chapter 358, Statutes of 2007
Urgency – Effective October 1, 2007
Amends lending laws administered by the Department of Corporations to require finance lenders and payday lenders to comply with new federal military financial protections added by HR 5122 (National Defense Authorization Act); amends existing lending laws to confirm that a lender’s failure to make a payday or other consumer loan to a military member does not violate specified anti-discrimination laws that are designed to protect military members from discrimination in the marketing and selling of financial products; makes similar law changes to laws administered by the Department of Financial Institutions in connection with refund anticipation loans made by state-chartered banks and credit unions; and adds an urgency clause and makes the bill’s lending provisions operative on October 1, 2007.
AB 1528 (A. Banking & Finance Committee)
Chapter 363, Statutes of 2007
Amends existing law to prohibit persons from marketing financial products in a misleading or deceptive manner that suggests military affiliation, as specified. AB 1528 is intended to help curb deceptive sales of financial products by unscrupulous operators who represent that the products are sponsored by or otherwise affiliated with the branch of armed forces.
SB 223 (Machado)
Chapter 291, Statutes of 2007
Urgency – Effective October 5, 2007
Prohibits a licensed appraiser from engaging in any appraisal activity in connection with the purchase, sale, transfer, financing, or development of real property if his or her compensation is dependent on or affected by the value conclusion generated by the appraisal. This bill also prohibits anyone with an interest in a real estate transaction involving an appraisal from improperly influencing the reporting, result, or review of a real estate appraisal sought in connection with a mortgage loan. If a person who violates these provisions is licensed by a state licensing law and the violation occurs within the course and scope of the person’s duties as a licensee, that violation shall be deemed a violation of that state licensing law.
SB 385 (Machado)
Chapter 301, Statutes of 2007
This bill: (1) requires the Commissioners of the Department of Financial Institutions, the Department of Real Estate, and the Department of Corporations to apply the Guidance on Nontraditional Mortgage Product Risks and the Statement on Subprime Mortgage Lending (collectively the “Guidance”), published by the Conference of State Bank Supervisors’ and the American Association of Residential Mortgage Regulators, to their licensees making or brokering residential mortgage loans, (2) authorizes these Commissioners to adopt and issue emergency and final regulations to clarify the application of the bill, (3) requires these licensees to adopt and adhere to policies and procedures that are reasonably intended to achieve the objectives set forth in the Guidance, (4) requires the Secretary of Business, Transportation and Housing Agency to ensure that the Commissioners coordinate their policymaking and rulemaking efforts, and (5) expands the definition of a real estate broker under the Real Estate Law to include a person who engages as a principal in the business of making loans, as defined.
SB 659 (Calderon)
Chapter 192, Statutes of 2007
Amends the Collateral Recovery Act and related lending and vehicle laws to clarify definitions, set forth notification requirements in the case of a violent incident involving a repossessor, and exempt tow companies from liability for improperly releasing impounded vehicles
SB 998 (Cox)
Chapter 101, Statutes of 2007
This bill: 1) clarifies an exemption for state banks under the California Finance Lenders Law, 2) revises the California Residential Mortgage Lending Act to allow for the expedited surrender of a license, 3) clarifies licensing and application denial procedures under the California Finance Lenders Law, 4) exempts California limited liability companies and California limited partnerships from the requirement to file notarized consents to service of process, 5) prohibits false statements by any licensee in the course of an examination or investigation, 6) bars persons from holding licenses or from offering securities or franchises in the state, and 7) makes other technical changes to laws administered by the Department of Corporations and the Secretary of State.
CALIFORNIA RESIDENTIAL MORTGAGE LENDING ACT (Financial Code Section 50000 et seq.)
AB 1528 (A. Banking & Finance Committee)
Chapter 363, Statutes of 2007
Amends existing law to prohibit persons from marketing financial products in a misleading or deceptive manner that suggests military affiliation, as specified. AB 1528 is intended to help curb deceptive sales of financial products by unscrupulous operators who represent that the products are sponsored by or otherwise affiliated with the branch of armed forces.
SB 223 (Machado)
Chapter 291, Statutes of 2007
Urgency – Effective October 5, 2007
Prohibits a licensed appraiser from engaging in any appraisal activity in connection with the purchase, sale, transfer, financing, or development of real property if his or her compensation is dependent on or affected by the value conclusion generated by the appraisal. This bill also prohibits anyone with an interest in a real estate transaction involving an appraisal from improperly influencing the reporting, result, or review of a real estate appraisal sought in connection with a mortgage loan. If a person who violates these provisions is licensed by a state licensing law and the violation occurs within the course and scope of the person’s duties as a licensee, that violation shall be deemed a violation of that state licensing law.
SB 385 (Machado)
Chapter 301, Statutes of 2007
This bill: (1) requires the Commissioners of the Department of Financial Institutions, the Department of Real Estate, and the Department of Corporations to apply the Guidance on Nontraditional Mortgage Product Risks and the Statement on Subprime Mortgage Lending (collectively the “Guidance”), published by the Conference of State Bank Supervisors’ and the American Association of Residential Mortgage Regulators, to their licensees making or brokering residential mortgage loans, (2) authorizes these Commissioners to adopt and issue emergency and final regulations to clarify the application of the bill, (3) requires these licensees to adopt and adhere to policies and procedures that are reasonably intended to achieve the objectives set forth in the Guidance, (4) requires the Secretary of Business, Transportation and Housing Agency to ensure that the Commissioners coordinate their policymaking and rulemaking efforts, and (5) expands the definition of a real estate broker under the Real Estate Law to include a person who engages as a principal in the business of making loans, as defined.
SB 998 (Cox)
Chapter 101, Statutes of 2007
This bill: 1) clarifies an exemption for state banks under the California Finance Lenders Law, 2) revises the California Residential Mortgage Lending Act to allow for the expedited surrender of a license, 3) clarifies licensing and application denial procedures under the California Finance Lenders Law, 4) exempts California limited liability companies and California limited partnerships from the requirement to file notarized consents to service of process, 5) prohibits false statements by any licensee in the course of an examination or investigation, 6) bars persons from holding licenses or from offering securities or franchises in the state, and 7) makes other technical changes to laws administered by the Department of Corporations and the Secretary of State.
CHECK SELLERS, BILL PAYERS AND PRORATERS LAW (Financial Code Section 12000 et seq.
AB 1528 (A. Banking & Finance Committee)
Chapter 363, Statutes of 2007
Amends existing law to prohibit persons from marketing financial products in a misleading or deceptive manner that suggests military affiliation, as specified. AB 1528 is intended to help curb deceptive sales of financial products by unscrupulous operators who represent that the products are sponsored by or otherwise affiliated with the branch of armed forces.
SB 998 (Cox)
Chapter 101, Statutes of 2007
This bill: 1) clarifies an exemption for state banks under the California Finance Lenders Law, 2) revises the California Residential Mortgage Lending Act to allow for the expedited surrender of a license, 3) clarifies licensing and application denial procedures under the California Finance Lenders Law, 4) exempts California limited liability companies and California limited partnerships from the requirement to file notarized consents to service of process, 5) prohibits false statements by any licensee in the course of an examination or investigation, 6) bars persons from holding licenses or from offering securities or franchises in the state, and 7) makes other technical changes to laws administered by the Department of Corporations and the Secretary of State.
CORPORATE SECURITIES LAW OF 1968 (Corporations Code Section 25000 et seq.)
AB 918 (Torrico)
Chapter 239, Statutes of 2007
Exempts securities transactions of certain telephone utilities from review by the Public Utilities Commission (PUC). AB 918 is intended to provide a statutory exemption from the PUC’s review and approval process for the sale of securities by telephone companies, thereby superceding the PUC’s current authority and practice to grant exemptions by rule or order (on a case-by-case basis).
AB 1528 (A. Banking & Finance Committee)
Chapter 363, Statutes of 2007
Amends existing law to prohibit persons from marketing financial products in a misleading or deceptive manner that suggests military affiliation, as specified. AB 1528 is intended to help curb deceptive sales of financial products by unscrupulous operators who represent that the products are sponsored by or otherwise affiliated with the branch of armed forces.
SB 998 (Cox)
Chapter 101, Statutes of 2007
This bill: 1) clarifies an exemption for state banks under the California Finance Lenders Law, 2) revises the California Residential Mortgage Lending Act to allow for the expedited surrender of a license, 3) clarifies licensing and application denial procedures under the California Finance Lenders Law, 4) exempts California limited liability companies and California limited partnerships from the requirement to file notarized consents to service of process, 5) prohibits false statements by any licensee in the course of an examination or investigation, 6) bars persons from holding licenses or from offering securities or franchises in the state, and 7) makes other technical changes to laws administered by the Department of Corporations and the Secretary of State.
SB 1037 (S. Banking, Finance & Insurance Committee)
Chapter 99, Statutes of 2007
Streamlines the securities approval process for state-chartered banks in the case of an acquisition of bank control or a merger, and makes other technical changes regarding trust activities and fiduciary activities of state-chartered trust companies;
ESCROW LAW (Financial Code Section 17000 et seq.)
AB 339 (Cook)
Chapter 543, Statutes of 2007
Relates to existing law that requires a mobilehome or manufactured home dealer, in selling or leasing with the option to buy, to accomplish specified actions, including establishing an escrow account with an escrow agent. Requires the agent, at the opening of escrow, and upon receiving written notice of a dispute from a party to the escrow, to inform the parties of their right to hold funds in escrow, and upon receipt of a party's request to do so, hold in escrow funds denoted as deposit, pending release
AB 804 (Huff)
Chapter 237, Statutes of 2007
This bill: (1) requires escrow agents to refer to the California Department of Corporations in their advertising, (2) streamlines the existing disclaimer statement in advertising referring to Escrow Agents’ Fidelity Corporation, (3) authorizes escrow agents to charge hold open fees under certain conditions, as specified, (4) modifies the license surrender procedures for escrow agents, and (5) makes a violation of the Real Estate Settlement Procedures Act a violation of the Escrow Law.
AB 1528 (A. Banking & Finance Committee)
Chapter 363, Statutes of 2007
Amends existing law to prohibit persons from marketing financial products in a misleading or deceptive manner that suggests military affiliation, as specified. AB 1528 is intended to help curb deceptive sales of financial products by unscrupulous operators who represent that the products are sponsored by or otherwise affiliated with the branch of armed forces.
SB 998 (Cox)
Chapter 101, Statutes of 2007
This bill: 1) clarifies an exemption for state banks under the California Finance Lenders Law, 2) revises the California Residential Mortgage Lending Act to allow for the expedited surrender of a license, 3) clarifies licensing and application denial procedures under the California Finance Lenders Law, 4) exempts California limited liability companies and California limited partnerships from the requirement to file notarized consents to service of process, 5) prohibits false statements by any licensee in the course of an examination or investigation, 6) bars persons from holding licenses or from offering securities or franchises in the state, and 7) makes other technical changes to laws administered by the Department of Corporations and the Secretary of State.
FRANCHISE INVESTMENT LAW (Corporations Code Section 31000 et seq.)
SB 998 (Cox)
Chapter 101, Statutes of 2007
This bill: 1) clarifies an exemption for state banks under the California Finance Lenders Law, 2) revises the California Residential Mortgage Lending Act to allow for the expedited surrender of a license, 3) clarifies licensing and application denial procedures under the California Finance Lenders Law, 4) exempts California limited liability companies and California limited partnerships from the requirement to file notarized consents to service of process, 5) prohibits false statements by any licensee in the course of an examination or investigation, 6) bars persons from holding licenses or from offering securities or franchises in the state, and 7) makes other technical changes to laws administered by the Department of Corporations and the Secretary of State. .
