Bill Text: CA AB2981 | 2023-2024 | Regular Session | Amended

---

Bill Title: Finance lenders: exemption from licensure.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2024-05-16 - In committee: Held under submission. [AB2981 Detail]

Download: California-2023-AB2981-Amended.html

---

Amended  IN  Assembly  April 08, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill

No. 2981

---

Introduced by Assembly Member Chen

February 16, 2024

---

An act to amend Section 22100 of the Financial Code, relating to finance lenders.

LEGISLATIVE COUNSEL'S DIGEST

AB 2981, as amended, Chen. Finance lenders: exemption from licensure.

Existing law, the California Financing Law, prohibits a person from engaging in the business of a finance lender or broker without obtaining a license from the Commissioner of Financial Protection and Innovation.

This bill would, notwithstanding those provisions, authorize a person to engage in the business of a finance lender or broker without obtaining a license if the person, in the preceding year, has not made a consumer loan and has made fewer than 4 commercial loans, or if the principal amount of every loan made by the person in the preceding calendar year has each exceeded the highest conforming loan limit value in any county for mortgages that finance single-family, one-unit properties, as calculated under the permanent formula established under the federal Housing and Economic Recovery Act of 2008.

This bill would deem a lender to be a licensed finance lender or broker without obtaining a license if the lender does not make or broker residential mortgage loans or consumer loans, makes 5 or fewer commercial loans annually, and the principal amount of all loans made by the lender in the preceding and current calendar year have each exceeded $350,000.

Digest Key

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

---

Bill Text

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

SECTION 1.

 Section 22100 of the Financial Code is amended to read:

22100.

 (a) No person shall engage in the business of a finance lender or broker without obtaining a license from the commissioner.

(b) Every licensee engaging in the business of making or brokering residential mortgage loans shall require that every mortgage loan originator employed or compensated by that licensee obtains and maintains a mortgage loan originator license from the commissioner under this division or Division 20 (commencing with Section 50000), or has first obtained a license endorsement from the Commissioner of Real Estate pursuant to Article 2.1 (commencing with Section 10166.01) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code.

(c) A finance lender or broker shall not employ a mortgage loan originator whose license or license endorsement has lapsed.

(d) A finance lender or broker may not make or broker a residential mortgage loan unless that loan is offered by, negotiated by, or applied for through a licensed mortgage loan originator.

(e) Every licensee engaged in the business of making or brokering residential mortgage loans and every mortgage loan originator licensed under this division shall register with and maintain a valid unique identifier issued by the Nationwide Mortgage Licensing System and Registry.

(f) An individual shall not engage in the business of a mortgage loan originator with respect to any dwelling located in this state without first obtaining and maintaining annually a license in accordance with the requirements of this division and any rules promulgated by the commissioner under this chapter.

(g) A registered mortgage loan originator, as defined in subdivision (c) of Section 22013, is exempt from licensure under this section when they are employed by:

(1) A depository institution.

(2) A subsidiary of a depository institution that is owned and controlled by a depository institution and regulated by a federal banking agency.

(3) An institution regulated by the Farm Credit Administration.

(h)Notwithstanding any provision of law, a person is exempt from licensure under this section if the person meets either of the following conditions:

(1)In the preceding calendar year, the person has not made a consumer loan and has made fewer than four commercial loans.

(2)The principal amount of every loan made by the person in the preceding calendar year has each exceeded the highest conforming loan limit value in any county for mortgages that finance single-family, one-unit properties, as calculated under the permanent formula established under the federal Housing and Economic Recovery Act of 2008 (Public Law 110-289).

(h) A lender that does not make or broker residential mortgage loans or consumer loans shall be deemed a licensee under this article when the lender makes five or fewer commercial loans annually and the principal amount of all loans made by the lender in the preceding and current calendar year have each exceeded three hundred fifty thousand dollars ($350,000).