AB 2708: Contracts: translation.
- Session Year: 2017-2018
- House: Assembly
- Latest Version Date: 2018-04-18
Existing law requires a person engaged in a trade or business, or a supervised financial organization, that negotiates primarily in one of specified languages other than English in the course of entering into certain contracts or agreements to deliver to the other party a translation of the contract or agreement into the language other than English, as specified.
This bill would also require a person engaged in a trade or business, or a supervised financial organization, that negotiates with a person who negotiates primarily in one of specified languages other than English to deliver to the other party a translation of the contract or agreement into the language other than English. The bill would make related conforming changes. to provide a translation of a contract or agreement to a consumer who primarily speaks one of specified foreign languages if the transaction is negotiated in English by a minor on behalf of the consumer.
Existing law requires a person engaged in a trade or business, or a supervised financial organization, that negotiates primarily in one of specified languages other than English in the course of entering into certain contracts or agreements to deliver to the other party a translation of the contract or agreement into the language other than English, as specified.
This bill would also require a person engaged in a trade or business, or a supervised financial organization, that negotiates with a person who negotiates primarily in one of specified languages other than English to deliver to the other party a translation of the contract or agreement into the language other than English. The bill would make related conforming changes.
(a)The Legislature hereby finds and declares all of the following:
(1)This section was enacted in 1976 to increase consumer information and protections for the states sizeable and growing Spanish-speaking population.
(2)Since 1976, the states population has become increasingly diverse and the number of Californians who speak languages other than English as their primary language at home has increased dramatically.
(3)According to data from the American Community Survey, which has replaced the decennial census for detailed socioeconomic information about United States residents, approximately 15.2 million Californians speak a language other than English at home, based on data from combined years 2009 through 2011. This compares to approximately 19.6 million people who speak only English at home. Among the Californians who speak a language other than English at home, approximately 8.4 million speak English very well, and another 3 million speak English well. The remaining 3.8 million Californians surveyed do not speak English well or do not speak English at all. Among this group, the five languages other than English that are most widely spoken at home are Spanish, Chinese, Tagalog, Vietnamese, and Korean. These five languages are spoken at home by approximately 3.5 million of the 3.8 million Californians with limited or no English proficiency, who speak a language other than English at home.
(b)Any person engaged in a trade or business who negotiates primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, orally or in writing, in the course of entering into any of the following, shall deliver to the other party to the contract or agreement and prior to the execution thereof, a translation of the contract or agreement in the language in which the contract or agreement was negotiated, that includes a translation of every term and condition in that contract or agreement:
(1)A contract or agreement subject to the provisions of Title 2 (commencing with Section 1801) of, and Chapter 2b (commencing with Section 2981) and Chapter 2d (commencing with Section 2985.7) of Title 14 of, Part 4 of Division 3.
(2)A loan or extension of credit secured other than by real property, or unsecured, for use primarily for personal, family, or household purposes.
(3)A lease, sublease, rental contract or agreement, or other term of tenancy contract or agreement, for a period of longer than one month, covering a dwelling, an apartment, or mobilehome, or other dwelling unit normally occupied as a residence.
(4)Notwithstanding paragraph (2), a loan or extension of credit for use primarily for personal, family, or household purposes in which the loan or extension of credit is subject to the provisions of Article 7 (commencing with Section 10240) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code, or Division 7 (commencing with Section 18000), or Division 9 (commencing with Section 22000) of the Financial Code.
(5)Notwithstanding paragraph (2), a reverse mortgage as described in Chapter 8 (commencing with Section 1923) of Title 4 of Part 4 of Division 3.
(6)A contract or agreement, containing a statement of fees or charges, entered into for the purpose of obtaining legal services, when the person who is engaged in business is currently licensed to practice law pursuant to Chapter 4 (commencing with Section 6000) of Division 3 of the Business and Professions Code.
(7)A foreclosure consulting contract subject to Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3.
(c)Notwithstanding subdivision (b), for a loan subject to this part and to Article 7 (commencing with Section 10240) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code, the delivery of a translation of the statement to the borrower required by Section 10240 of the Business and Professions Code in any of the languages specified in subdivision (b) in which the contract or agreement was negotiated, is in compliance with subdivision (b).
(d)At the time and place where a lease, sublease, or rental contract or agreement described in subdivision (b) is executed, notice in any of the languages specified in subdivision (b) in which the contract or agreement was negotiated shall be provided to the lessee or tenant.
(e)Provision by a supervised financial organization of a translation of the disclosures required by Regulation M or Regulation Z, and, if applicable, Division 7 (commencing with Section 18000) or Division 9 (commencing with Section 22000) of the Financial Code in any of the languages specified in subdivision (b) in which the contract or agreement was negotiated, prior to the execution of the contract or agreement, shall also be deemed in compliance with the requirements of subdivision (b) with regard to the original contract or agreement.
(1)Regulation M and Regulation Z mean any rule, regulation, or interpretation promulgated by the Board of Governors of the Federal Reserve System and any interpretation or approval issued by an official or employee duly authorized by the board to issue interpretations or approvals dealing with, respectively, consumer leasing or consumer lending, pursuant to the Federal Truth in Lending Act, as amended (15 U.S.C. Sec. 1601 et seq.).
(2)As used in this section, supervised financial organization means a bank, savings association as defined in Section 5102 of the Financial Code, credit union, or holding company, affiliate, or subsidiary thereof, or any person subject to Article 7 (commencing with Section 10240) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code, or Division 7 (commencing with Section 18000) or Division 9 (commencing with Section 22000) of the Financial Code.
(f)At the time and place where a contract or agreement described in paragraph (1) or (2) of subdivision (b) is executed, a notice in any of the languages specified in subdivision (b) in which the contract or agreement was negotiated shall be conspicuously displayed to the effect that the person described in subdivision (b) is required to provide a contract or agreement in the language in which the contract or agreement was negotiated, or a translation of the disclosures required by law in the language in which the contract or agreement was negotiated, as the case may be. If a person described in subdivision (b) does business at more than one location or branch, the requirements of this section shall apply only with respect to the location or branch at which the language in which the contract or agreement was negotiated is used.
(g)The term contract or agreement, as used in this section, means the document creating the rights and obligations of the parties and includes any subsequent document making substantial changes in the rights and obligations of the parties. The term contract or agreement does not include any subsequent documents authorized or contemplated by the original document such as periodic statements, sales slips or invoices representing purchases made pursuant to a credit card agreement, a retail installment contract or account or other revolving sales or loan account, memoranda of purchases in an add-on sale, or refinancing of a purchase as provided by, or pursuant to, the original document.
The term contract or agreement does not include a home improvement contract as defined in Sections 7151.2 and 7159 of the Business and Professions Code, nor does it include plans, specifications, description of work to be done and materials to be used, or collateral security taken or to be taken for the retail buyers obligation contained in a contract for the installation of goods by a contractor licensed pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code, if the home improvement contract or installation contract is otherwise a part of a contract described in subdivision (b).
Matters ordinarily incorporated by reference in contracts or agreements as described in paragraph (3) of subdivision (b), including, but not limited to, rules and regulations governing a tenancy and inventories of furnishings to be provided by the person described in subdivision (b), are not included in the term contract or agreement.
(h)This section does not apply to any person engaged in a trade or business who negotiates primarily in a language other than English, as described by subdivision (b), if the party with whom he or she is negotiating is a buyer of goods or services, or receives a loan or extension of credit, or enters an agreement obligating himself or herself as a tenant, lessee, or sublessee, or similarly obligates himself or herself by contract or lease, and the party negotiates the terms of the contract, lease, or other obligation through his or her own interpreter.
As used in this subdivision, his or her own interpreter means a person, not a minor, able to speak fluently and read with full understanding both the English language and any of the languages specified in subdivision (b) in which the contract or agreement was negotiated, and who is not employed by, or whose service is made available through, the person engaged in the trade or business.
(i)Notwithstanding subdivision (b), a translation may retain the following elements of the executed English-language contract or agreement without translation: names and titles of individuals and other persons, addresses, brand names, trade names, trademarks, registered service marks, full or abbreviated designations of the make and model of goods or services, alphanumeric codes, numerals, dollar amounts expressed in numerals, dates, and individual words or expressions having no generally accepted non-English translation. It is permissible, but not required, that this translation be signed.
(j)The terms of the contract or agreement that is executed in the English language shall determine the rights and obligations of the parties. However, the translation of the contract or the disclosures required by subdivision (e) in any of the languages specified in subdivision (b) in which the contract or agreement was negotiated shall be admissible in evidence only to show that no contract was entered into because of a substantial difference in the material terms and conditions of the contract and the translation.
(k)Upon a failure to comply with the provisions of this section, the person aggrieved may rescind the contract or agreement in the manner provided by this chapter. If the contract for a consumer credit sale or consumer lease that has been sold and assigned to a financial institution is rescinded pursuant to this subdivision, the consumer shall make restitution to and have restitution made by the person with whom he or she made the contract, and shall give notice of rescission to the assignee. Notwithstanding that the contract was assigned without recourse, the assignment shall be deemed rescinded and the assignor shall promptly repurchase the contract from the assignee.
(l)Notwithstanding any other law, if a minor negotiates a transaction identified in subdivision (b) in English for a consumer who primarily speaks Spanish, Chinese, Tagalog, Vietnamese, or Korean, the seller shall provide a translation of the contract or agreement to the consumer in the language primarily spoken by the consumer before the contract or agreement is executed in accordance with this section.
SEC. 2.Section 1632.5 of the Civil Code is amended to read:1632.5.(a)A supervised financial organization that negotiates primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, whether orally or in writing, in the course of entering into a contract or agreement for a loan or extension of credit secured by residential real property, shall deliver to the other party to that contract or agreement prior to the execution of the contract or agreement the form described in subdivision (i) for that language.
(b)For purposes of this section:
(1)Contract or agreement shall have the same meaning as defined in subdivision (g) of Section 1632.
(2)Supervised financial organization means a bank, savings association, as defined in Section 5102 of the Financial Code, credit union, or holding company, affiliate, or subsidiary thereof, or any person subject to Division 7 (commencing with Section 18000), Division 9 (commencing with Section 22000), or Division 20 (commencing with Section 50000) of the Financial Code.
(c)(1)With respect to a contract or agreement for a loan or extension of credit secured by residential real property as described in subdivision (a), a supervised financial organization that complies with this section shall be deemed in compliance with Section 1632.
(2)A supervised financial organization that complies with Section 1632, with respect to a contract or agreement for a loan or extension of credit secured by residential real property as described in subdivision (a), shall be deemed in compliance with this section.
(d)The supervised financial organization shall provide the form described in subdivision (i) to the borrower no later than three business days after receipt of the written application, and if any of the loan terms summarized materially change after provision of the translated form but prior to consummation of the loan, the supervised financial organization shall provide an updated version of the translated form prior to consummation of the loan.
(e)(1)This section does not apply to a supervised financial organization that negotiates primarily in a language other than English, as described by subdivision (a), if the party with whom the supervised financial organization is negotiating, negotiates the terms of the contract through his or her own interpreter.
(2)For purposes of this subdivision, his or her own interpreter means a person, not a minor, able to speak fluently and read with full understanding both the English language and one of the languages specified in subdivision (a) that is the language in which the contract was negotiated, who is not employed by, and whose services are not made available through, the person engaged in the trade or business.
(f)Notwithstanding subdivision (a), a translated form may retain any of the following elements of the executed English language contract or agreement without translation:
(1)Names and titles of individuals and other persons.
(2)Addresses, brand names, trade names, trademarks, or registered service marks.
(3)Full or abbreviated designations of the make and model of goods or services.
(4)Alphanumeric codes.
(5)Individual words or expressions having no generally accepted non-English translation.
(g)The terms of the contract or agreement which is executed in the English language shall determine the rights and obligations of the parties. However, the translation of the form described in subdivision (i) and required by subdivision (a) shall be admissible in evidence only to show that no contract or agreement was entered into because of a substantial difference in the material terms and conditions of the contract or agreement and the prior translated form provided to the borrower.
(h)(1)A licensing agency may, by order, after appropriate notice and opportunity for hearing, levy administrative penalties against a supervised financial organization that violates any provision of this section, and the supervised financial organization may be liable for administrative penalties, up to the amounts of two thousand five hundred dollars ($2,500) for the first violation, five thousand dollars ($5,000) for the second violation, and ten thousand dollars ($10,000) for each subsequent violation. Except for licensing agencies exempt from the provisions of the Administrative Procedure Act, any hearing shall be held in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and the licensing agency shall have all the powers granted under that act.
(2)A licensing agency may exercise any and all authority and powers available to it under any other provisions of law to administer and enforce this section, including, but not limited to, investigating and examining the licensed persons books and records, and charging and collecting the reasonable costs for these activities. The licensing agency shall not charge a licensed person twice for the same service. Any civil, criminal, and administrative authority and remedies available to the licensing agency pursuant to its licensing law may be sought and employed in any combination deemed advisable by the licensing agency to enforce the provisions of this section.
(3)Any supervised financial organization that violates any provision of this section shall be deemed to have violated its licensing law.
(4)Nothing in this section shall be construed to impair or impede the Attorney General from bringing an action to enforce this division.
(i)The Department of Business Oversight shall create a form to be made available in each of the languages set forth in subdivision (a) for use by a supervised financial organization to summarize the terms of a mortgage loan pursuant to subdivision (a). In creating the form, the Department of Business Oversight may use as guidance the United States Department of Housing and Urban Developments Good Faith Estimate disclosure form.
(j)This section shall not apply to federally chartered banks, credit unions, savings banks, or thrifts.
(k)Except as otherwise provided in subdivision (h), this section shall not be construed to create or enhance any claim, right of action, or civil liability that did not previously exist under state law, or limit any claim, right of action, or civil liability that otherwise exists under state law.
(l)An action against a supervised financial organization for a violation of this section may only be brought by a licensing agency or by the Attorney General.
(m)This section shall become operative beginning on July 1, 2010, or 90 days following the issuance of a form by the Department of Business Oversight pursuant to subdivision (i), whichever occurs later.
(n)Notwithstanding any other law, if a minor negotiates a transaction identified in subdivision (b) in English for a consumer who primarily speaks Spanish, Chinese, Tagalog, Vietnamese, or Korean, the seller shall provide a translation of the contract or agreement to the consumer in the language primarily spoken by the consumer before the contract or agreement is executed in accordance with this section.
SECTION 1.Section 1632 of the Civil Code is amended to read:1632.(a)The Legislature hereby finds and declares all of the following:(1)This section was enacted in 1976 to increase consumer information and protections for the states sizeable and growing Spanish-speaking population.(2)Since 1976, the states population has become increasingly diverse and the number of Californians who speak languages other than English as their primary language at home has increased dramatically.(3)According to data from the American Community Survey, which has replaced the decennial census for detailed socioeconomic information about United States residents, approximately 15.2 million Californians speak a language other than English at home, based on data from combined years 2009 through 2011. This compares to approximately 19.6 million people who speak only English at home. Among the Californians who speak a language other than English at home, approximately 8.4 million speak English very well, and another 3 million speak English well. The remaining 3.8 million Californians \surveyed do not speak English well or do not speak English at all. Among this group, the five languages other than English that are most widely spoken at home are Spanish, Chinese, Tagalog, Vietnamese, and Korean. These five languages are spoken at home by approximately 3.5 million of the 3.8 million Californians with limited or no English proficiency, who speak a language other than English at home.(b)Any person engaged in a trade or business who negotiates primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, or who negotiates with a party who negotiates primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, orally or in writing, in the course of entering into any of the following, shall deliver to the other party to the contract or agreement and prior to the execution thereof, a translation of the contract or agreement in the language in which the contract or agreement was negotiated, or the language in which the other party to the contract or agreement primarily negotiates, that includes a translation of every term and condition in that contract or agreement:(1)A contract or agreement subject to the provisions of Title 2 (commencing with Section 1801) of, and Chapter 2b (commencing with Section 2981) and Chapter 2d (commencing with Section 2985.7) of Title 14 of, Part 4 of Division 3.(2)A loan or extension of credit secured other than by real property, or unsecured, for use primarily for personal, family, or household purposes.(3)A lease, sublease, rental contract or agreement, or other term of tenancy contract or agreement, for a period of longer than one month, covering a dwelling, an apartment, or mobilehome, or other dwelling unit normally occupied as a residence.(4)Notwithstanding paragraph (2), a loan or extension of credit for use primarily for personal, family, or household purposes in which the loan or extension of credit is subject to the provisions of Article 7 (commencing with Section 10240) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code, or Division 7 (commencing with Section 18000), or Division 9 (commencing with Section 22000) of the Financial Code.(5)Notwithstanding paragraph (2), a reverse mortgage as described in Chapter 8 (commencing with Section 1923) of Title 4 of Part 4 of Division 3.(6)A contract or agreement, containing a statement of fees or charges, entered into for the purpose of obtaining legal services, when the person who is engaged in business is currently licensed to practice law pursuant to Chapter 4 (commencing with Section 6000) of Division 3 of the Business and Professions Code.(7)A foreclosure consulting contract subject to Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3.(c)Notwithstanding subdivision (b), for a loan subject to this part and to Article 7 (commencing with Section 10240) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code, the delivery of a translation of the statement to the borrower required by Section 10240 of the Business and Professions Code in the language specified in subdivision (b) is in compliance with subdivision (b).(d)At the time and place where a lease, sublease, or rental contract or agreement described in subdivision (b) is executed, notice in the language specified in subdivision (b) shall be provided to the lessee or tenant.(e)Provision by a supervised financial organization of a translation of the disclosures required by Regulation M or Regulation Z, and, if applicable, Division 7 (commencing with Section 18000) or Division 9 (commencing with Section 22000) of the Financial Code in the language specified in subdivision (b) prior to the execution of the contract or agreement, shall also be deemed in compliance with the requirements of subdivision (b) with regard to the original contract or agreement.(1)Regulation M and Regulation Z mean any rule, regulation, or interpretation promulgated by the Board of Governors of the Federal Reserve System and any interpretation or approval issued by an official or employee duly authorized by the board to issue interpretations or approvals dealing with, respectively, consumer leasing or consumer lending, pursuant to the federal Truth in Lending Act, as amended (15 U.S.C. Sec. 1601 et seq.).(2)As used in this section, supervised financial organization means a bank, savings association as defined in Section 5102 of the Financial Code, credit union, or holding company, affiliate, or subsidiary thereof, or any person subject to Article 7 (commencing with Section 10240) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code, or Division 7 (commencing with Section 18000) or Division 9 (commencing with Section 22000) of the Financial Code.(f)At the time and place where a contract or agreement described in paragraph (1) or (2) of subdivision (b) is executed, a notice in the language specified in subdivision (b) shall be conspicuously displayed to the effect that the person described in subdivision (b) is required to provide a contract or agreement in the language in which the contract or agreement was negotiated or the language in which the party primarily negotiates, or a translation of the disclosures required by law in the language in which the contract or agreement was negotiated or the language in which the party primarily negotiates, as the case may be. If a person described in subdivision (b) does business at more than one location or branch, the requirements of this section shall apply only with respect to the location or branch at which the contract or agreement was executed.(g)The term contract or agreement, as used in this section, means the document creating the rights and obligations of the parties and includes any subsequent document making substantial changes in the rights and obligations of the parties. The term contract or agreement does not include any subsequent documents authorized or contemplated by the original document such as periodic statements, sales slips or invoices representing purchases made pursuant to a credit card agreement, a retail installment contract or account or other revolving sales or loan account, memoranda of purchases in an add-on sale, or refinancing of a purchase as provided by, or pursuant to, the original document.The term contract or agreement does not include a home improvement contract as defined in Sections 7151.2 and 7159 of the Business and Professions Code, nor does it include plans, specifications, description of work to be done and materials to be used, or collateral security taken or to be taken for the retail buyers obligation contained in a contract for the installation of goods by a contractor licensed pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code, if the home improvement contract or installation contract is otherwise a part of a contract described in subdivision (b).Matters ordinarily incorporated by reference in contracts or agreements as described in paragraph (3) of subdivision (b), including, but not limited to, rules and regulations governing a tenancy and inventories of furnishings to be provided by the person described in subdivision (b), are not included in the term contract or agreement.(h)(1)This section does not apply to any person engaged in a trade or business who negotiates primarily in a language other than English, or a person who negotiates with a party who negotiates primarily in a language other than English, as described in subdivision (b), if the party with whom he or she is negotiating is a buyer of goods or services, or receives a loan or extension of credit, or enters an agreement obligating himself or herself as a tenant, lessee, or sublessee, or similarly obligates himself or herself by contract or lease, and the party negotiates the terms of the contract, lease, or other obligation through his or her own interpreter.(2)As used in this subdivision, his or her own interpreter means a person, not a minor, able to speak fluently and read with full understanding both the English language and the language specified in subdivision (b), and who is not employed by, or whose service is made available through, the person engaged in the trade or business.(i)Notwithstanding subdivision (b), a translation may retain the following elements of the executed English-language contract or agreement without translation: names and titles of individuals and other persons, addresses, brand names, trade names, trademarks, registered service marks, full or abbreviated designations of the make and model of goods or services, alphanumeric codes, numerals, dollar amounts expressed in numerals, dates, and individual words or expressions having no generally accepted non-English translation. It is permissible, but not required, that this translation be signed.(j)The terms of the contract or agreement that is executed in the English language shall determine the rights and obligations of the parties. However, the translation of the contract or the disclosures required by subdivision (e) in the languages specified in subdivision (b) shall be admissible in evidence only to show that no contract was entered into because of a substantial difference in the material terms and conditions of the contract and the translation.(k)Upon a failure to comply with the provisions of this section, the person aggrieved may rescind the contract or agreement in the manner provided by this chapter. If the contract for a consumer credit sale or consumer lease that has been sold and assigned to a financial institution is rescinded pursuant to this subdivision, the consumer shall make restitution to and have restitution made by the person with whom he or she made the contract, and shall give notice of rescission to the assignee. Notwithstanding that the contract was assigned without recourse, the assignment shall be deemed rescinded and the assignor shall promptly repurchase the contract from the assignee.(l)As used in this section, language specified in subdivision (b) means the language listed in subdivision (b) in which the contract or agreement was negotiated or the language listed in subdivision (b) in which the other party to the contract primarily negotiates.SEC. 2.Section 1632.5 of the Civil Code is amended to read:1632.5.(a)A supervised financial organization that negotiates primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, or that negotiates with a party who negotiates primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, whether orally or in writing, in the course of entering into a contract or agreement for a loan or extension of credit secured by residential real property, shall deliver to the other party to that contract or agreement prior to the execution of the contract or agreement the form described in subdivision (i) for that language.(b)For purposes of this section:(1)Contract or agreement shall have the same meaning as defined in subdivision (g) of Section 1632.(2)Supervised financial organization means a bank, savings association, as defined in Section 5102 of the Financial Code, credit union, or holding company, affiliate, or subsidiary thereof, or any person subject to Division 7 (commencing with Section 18000), Division 9 (commencing with Section 22000), or Division 20 (commencing with Section 50000) of the Financial Code.(c)(1)With respect to a contract or agreement for a loan or extension of credit secured by residential real property as described in subdivision (a), a supervised financial organization that complies with this section shall be deemed in compliance with Section 1632.(2)A supervised financial organization that complies with Section 1632, with respect to a contract or agreement for a loan or extension of credit secured by residential real property as described in subdivision (a), shall be deemed in compliance with this section.(d)The supervised financial organization shall provide the form described in subdivision (i) to the borrower no later than three business days after receipt of the written application, and if any of the loan terms summarized materially change after provision of the translated form but prior to consummation of the loan, the supervised financial organization shall provide an updated version of the translated form prior to consummation of the loan.(e)(1)This section does not apply to a supervised financial organization that negotiates primarily in a language other than English, as described by subdivision (a), or a person who negotiates with a party who negotiates primarily in a language other than English, if the party with whom the supervised financial organization is negotiating, negotiates the terms of the contract through his or her own interpreter.(2)For purposes of this subdivision, his or her own interpreter means a person, not a minor, able to speak fluently and read with full understanding both the English language and the language specified in subdivision (a) that is the language in which the contract was negotiated, or the language in which the party primarily negotiates, who is not employed by, and whose services are not made available through, the person engaged in the trade or business.(f)Notwithstanding subdivision (a), a translated form may retain any of the following elements of the executed English language contract or agreement without translation:(1)Names and titles of individuals and other persons.(2)Addresses, brand names, trade names, trademarks, or registered service marks.(3)Full or abbreviated designations of the make and model of goods or services.(4)Alphanumeric codes.(5)Individual words or expressions having no generally accepted non-English translation.(g)The terms of the contract or agreement which is executed in the English language shall determine the rights and obligations of the parties. However, the translation of the form described in subdivision (i) and required by subdivision (a) shall be admissible in evidence only to show that no contract or agreement was entered into because of a substantial difference in the material terms and conditions of the contract or agreement and the prior translated form provided to the borrower.(h)(1)A licensing agency may, by order, after appropriate notice and opportunity for hearing, levy administrative penalties against a supervised financial organization that violates any provision of this section, and the supervised financial organization may be liable for administrative penalties, up to the amounts of two thousand five hundred dollars ($2,500) for the first violation, five thousand dollars ($5,000) for the second violation, and ten thousand dollars ($10,000) for each subsequent violation. Except for licensing agencies exempt from the provisions of the Administrative Procedure Act, any hearing shall be held in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and the licensing agency shall have all the powers granted under that act.(2)A licensing agency may exercise any and all authority and powers available to it under any other provisions of law to administer and enforce this section, including, but not limited to, investigating and examining the licensed persons books and records, and charging and collecting the reasonable costs for these activities. The licensing agency shall not charge a licensed person twice for the same service. Any civil, criminal, and administrative authority and remedies available to the licensing agency pursuant to its licensing law may be sought and employed in any combination deemed advisable by the licensing agency to enforce the provisions of this section.(3)Any supervised financial organization that violates any provision of this section shall be deemed to have violated its licensing law.(4)Nothing in this section shall be construed to impair or impede the Attorney General from bringing an action to enforce this division.(i)The Department of Business Oversight shall create a form to be made available in each of the languages set forth in subdivision (a) for use by a supervised financial organization to summarize the terms of a mortgage loan pursuant to subdivision (a). In creating the form, the Department of Business Oversight may use as guidance the United States Department of Housing and Urban Developments Good Faith Estimate disclosure form.(j)This section shall not apply to federally chartered banks, credit unions, savings banks, or thrifts.(k)Except as otherwise provided in subdivision (h), this section shall not be construed to create or enhance any claim, right of action, or civil liability that did not previously exist under state law, or limit any claim, right of action, or civil liability that otherwise exists under state law.(l)An action against a supervised financial organization for a violation of this section may only be brought by a licensing agency or by the Attorney General.(m)This section shall become operative beginning on July 1, 2010, or 90 days following the issuance of a form by the Department of Business Oversight pursuant to subdivision (i), whichever occurs later.(a)The Legislature hereby finds and declares all of the following:
(1)This section was enacted in 1976 to increase consumer information and protections for the states sizeable and growing Spanish-speaking population.
(2)Since 1976, the states population has become increasingly diverse and the number of Californians who speak languages other than English as their primary language at home has increased dramatically.
(3)According to data from the American Community Survey, which has replaced the decennial census for detailed socioeconomic information about United States residents, approximately 15.2 million Californians speak a language other than English at home, based on data from combined years 2009 through 2011. This compares to approximately 19.6 million people who speak only English at home. Among the Californians who speak a language other than English at home, approximately 8.4 million speak English very well, and another 3 million speak English well. The remaining 3.8 million Californians \ surveyed
surveyed do not speak English well or do not speak English at all. Among this group, the five languages other than English that are most widely spoken at home are Spanish, Chinese, Tagalog, Vietnamese, and Korean. These five languages are spoken at home by approximately 3.5 million of the 3.8 million Californians with limited or no English proficiency, who speak a language other than English at home.
(b)Any person engaged in a trade or business who negotiates primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, or who negotiates with a party who negotiates primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, orally or in writing, in the course of entering into any of the following, shall deliver to the other party to the contract or agreement and prior to the execution thereof, a translation of the contract or agreement in the language in which the contract or agreement was negotiated, or the language in which the other party to the contract or agreement primarily negotiates, that includes a translation of every term and condition in that contract or agreement:
(1)A contract or agreement subject to the provisions of Title 2 (commencing with Section 1801) of, and Chapter 2b (commencing with Section 2981) and Chapter 2d (commencing with Section 2985.7) of Title 14 of, Part 4 of Division 3.
(2)A loan or extension of credit secured other than by real property, or unsecured, for use primarily for personal, family, or household purposes.
(3)A lease, sublease, rental contract or agreement, or other term of tenancy contract or agreement, for a period of longer than one month, covering a dwelling, an apartment, or mobilehome, or other dwelling unit normally occupied as a residence.
(4)Notwithstanding paragraph (2), a loan or extension of credit for use primarily for personal, family, or household purposes in which the loan or extension of credit is subject to the provisions of Article 7 (commencing with Section 10240) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code, or Division 7 (commencing with Section 18000), or Division 9 (commencing with Section 22000) of the Financial Code.
(5)Notwithstanding paragraph (2), a reverse mortgage as described in Chapter 8 (commencing with Section 1923) of Title 4 of Part 4 of Division 3.
(6)A contract or agreement, containing a statement of fees or charges, entered into for the purpose of obtaining legal services, when the person who is engaged in business is currently licensed to practice law pursuant to Chapter 4 (commencing with Section 6000) of Division 3 of the Business and Professions Code.
(7)A foreclosure consulting contract subject to Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3.
(c)Notwithstanding subdivision (b), for a loan subject to this part and to Article 7 (commencing with Section 10240) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code, the delivery of a translation of the statement to the borrower required by Section 10240 of the Business and Professions Code in any of the languages the language specified in subdivision (b) in which the contract or agreement was negotiated, is in compliance with subdivision (b).
(d)At the time and place where a lease, sublease, or rental contract or agreement described in subdivision (b) is executed, notice in any of the languages the language specified in subdivision (b) in which the contract or agreement was negotiated shall be provided to the lessee or tenant.
(e)Provision by a supervised financial organization of a translation of the disclosures required by Regulation M or Regulation Z, and, if applicable, Division 7 (commencing with Section 18000) or Division 9 (commencing with Section 22000) of the Financial Code in any of the languages the language specified in subdivision (b) in which the contract or agreement was negotiated, (b) prior to the execution of the contract or agreement, shall also be deemed in compliance with the requirements of subdivision (b) with regard to the original contract or agreement.
(1)Regulation M and Regulation Z mean any rule, regulation, or interpretation promulgated by the Board of Governors of the Federal Reserve System and any interpretation or approval issued by an official or employee duly authorized by the board to issue interpretations or approvals dealing with, respectively, consumer leasing or consumer lending, pursuant to the Federal federal Truth in Lending Act, as amended (15 U.S.C. Sec. 1601 et seq.).
(2)As used in this section, supervised financial organization means a bank, savings association as defined in Section 5102 of the Financial Code, credit union, or holding company, affiliate, or subsidiary thereof, or any person subject to Article 7 (commencing with Section 10240) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code, or Division 7 (commencing with Section 18000) or Division 9 (commencing with Section 22000) of the Financial Code.
(f)At the time and place where a contract or agreement described in paragraph (1) or (2) of subdivision (b) is executed, a notice in any of the languages the language specified in subdivision (b) in which the contract or agreement was negotiated shall be conspicuously displayed to the effect that the person described in subdivision (b) is required to provide a contract or agreement in the language in which the contract or agreement was negotiated, negotiated or the language in which the party primarily negotiates, or a translation of the disclosures required by law in the language in which the contract or agreement was negotiated, negotiated or the language in which the party primarily negotiates, as the case may be. If a person described in subdivision (b) does business at more than one location or branch, the requirements of this section shall apply only with respect to the location or branch at which the language in which the contract or agreement was negotiated is used. executed.
(g)The term contract or agreement, as used in this section, means the document creating the rights and obligations of the parties and includes any subsequent document making substantial changes in the rights and obligations of the parties. The term contract or agreement does not include any subsequent documents authorized or contemplated by the original document such as periodic statements, sales slips or invoices representing purchases made pursuant to a credit card agreement, a retail installment contract or account or other revolving sales or loan account, memoranda of purchases in an add-on sale, or refinancing of a purchase as provided by, or pursuant to, the original document.
The term contract or agreement does not include a home improvement contract as defined in Sections 7151.2 and 7159 of the Business and Professions Code, nor does it include plans, specifications, description of work to be done and materials to be used, or collateral security taken or to be taken for the retail buyers obligation contained in a contract for the installation of goods by a contractor licensed pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code, if the home improvement contract or installation contract is otherwise a part of a contract described in subdivision (b).
Matters ordinarily incorporated by reference in contracts or agreements as described in paragraph (3) of subdivision (b), including, but not limited to, rules and regulations governing a tenancy and inventories of furnishings to be provided by the person described in subdivision (b), are not included in the term contract or agreement.
(h)(1)This section does not apply to any person engaged in a trade or business who negotiates primarily in a language other than English, or a person who negotiates with a party who negotiates primarily in a language other than English, as described by in subdivision (b), if the party with whom he or she is negotiating is a buyer of goods or services, or receives a loan or extension of credit, or enters an agreement obligating himself or herself as a tenant, lessee, or sublessee, or similarly obligates himself or herself by contract or lease, and the party negotiates the terms of the contract, lease, or other obligation through his or her own interpreter.
As(2)As used in this subdivision, his or her own interpreter means a person, not a minor, able to speak fluently and read with full understanding both the English language and any of the languages the language specified in subdivision (b) in which the contract or agreement was negotiated, (b), and who is not employed by, or whose service is made available through, the person engaged in the trade or business.
(i)Notwithstanding subdivision (b), a translation may retain the following elements of the executed English-language contract or agreement without translation: names and titles of individuals and other persons, addresses, brand names, trade names, trademarks, registered service marks, full or abbreviated designations of the make and model of goods or services, alphanumeric codes, numerals, dollar amounts expressed in numerals, dates, and individual words or expressions having no generally accepted non-English translation. It is permissible, but not required, that this translation be signed.
(j)The terms of the contract or agreement that is executed in the English language shall determine the rights and obligations of the parties. However, the translation of the contract or the disclosures required by subdivision (e) in any of the languages the languages specified in subdivision (b) in which the contract or agreement was negotiated shall be admissible in evidence only to show that no contract was entered into because of a substantial difference in the material terms and conditions of the contract and the translation.
(k)Upon a failure to comply with the provisions of this section, the person aggrieved may rescind the contract or agreement in the manner provided by this chapter. If the contract for a consumer credit sale or consumer lease that has been sold and assigned to a financial institution is rescinded pursuant to this subdivision, the consumer shall make restitution to and have restitution made by the person with whom he or she made the contract, and shall give notice of rescission to the assignee. Notwithstanding that the contract was assigned without recourse, the assignment shall be deemed rescinded and the assignor shall promptly repurchase the contract from the assignee.
(l)As used in this section, language specified in subdivision (b) means the language listed in subdivision (b) in which the contract or agreement was negotiated or the language listed in subdivision (b) in which the other party to the contract primarily negotiates.
SEC. 2.Section 1632.5 of the Civil Code is amended to read:1632.5.(a)A supervised financial organization that negotiates primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, or that negotiates with a party who negotiates primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, whether orally or in writing, in the course of entering into a contract or agreement for a loan or extension of credit secured by residential real property, shall deliver to the other party to that contract or agreement prior to the execution of the contract or agreement the form described in subdivision (i) for that language.
(b)For purposes of this section:
(1)Contract or agreement shall have the same meaning as defined in subdivision (g) of Section 1632.
(2)Supervised financial organization means a bank, savings association, as defined in Section 5102 of the Financial Code, credit union, or holding company, affiliate, or subsidiary thereof, or any person subject to Division 7 (commencing with Section 18000), Division 9 (commencing with Section 22000), or Division 20 (commencing with Section 50000) of the Financial Code.
(c)(1)With respect to a contract or agreement for a loan or extension of credit secured by residential real property as described in subdivision (a), a supervised financial organization that complies with this section shall be deemed in compliance with Section 1632.
(2)A supervised financial organization that complies with Section 1632, with respect to a contract or agreement for a loan or extension of credit secured by residential real property as described in subdivision (a), shall be deemed in compliance with this section.
(d)The supervised financial organization shall provide the form described in subdivision (i) to the borrower no later than three business days after receipt of the written application, and if any of the loan terms summarized materially change after provision of the translated form but prior to consummation of the loan, the supervised financial organization shall provide an updated version of the translated form prior to consummation of the loan.
(e)(1)This section does not apply to a supervised financial organization that negotiates primarily in a language other than English, as described by subdivision (a), or a person who negotiates with a party who negotiates primarily in a language other than English, if the party with whom the supervised financial organization is negotiating, negotiates the terms of the contract through his or her own interpreter.
(2)For purposes of this subdivision, his or her own interpreter means a person, not a minor, able to speak fluently and read with full understanding both the English language and one of the languages the language specified in subdivision (a) that is the language in which the contract was negotiated, or the language in which the party primarily negotiates, who is not employed by, and whose services are not made available through, the person engaged in the trade or business.
(f)Notwithstanding subdivision (a), a translated form may retain any of the following elements of the executed English language contract or agreement without translation:
(1)Names and titles of individuals and other persons.
(2)Addresses, brand names, trade names, trademarks, or registered service marks.
(3)Full or abbreviated designations of the make and model of goods or services.
(4)Alphanumeric codes.
(5)Individual words or expressions having no generally accepted non-English translation.
(g)The terms of the contract or agreement which is executed in the English language shall determine the rights and obligations of the parties. However, the translation of the form described in subdivision (i) and required by subdivision (a) shall be admissible in evidence only to show that no contract or agreement was entered into because of a substantial difference in the material terms and conditions of the contract or agreement and the prior translated form provided to the borrower.
(h)(1)A licensing agency may, by order, after appropriate notice and opportunity for hearing, levy administrative penalties against a supervised financial organization that violates any provision of this section, and the supervised financial organization may be liable for administrative penalties, up to the amounts of two thousand five hundred dollars ($2,500) for the first violation, five thousand dollars ($5,000) for the second violation, and ten thousand dollars ($10,000) for each subsequent violation. Except for licensing agencies exempt from the provisions of the Administrative Procedure Act, any hearing shall be held in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and the licensing agency shall have all the powers granted under that act.
(2)A licensing agency may exercise any and all authority and powers available to it under any other provisions of law to administer and enforce this section, including, but not limited to, investigating and examining the licensed persons books and records, and charging and collecting the reasonable costs for these activities. The licensing agency shall not charge a licensed person twice for the same service. Any civil, criminal, and administrative authority and remedies available to the licensing agency pursuant to its licensing law may be sought and employed in any combination deemed advisable by the licensing agency to enforce the provisions of this section.
(3)Any supervised financial organization that violates any provision of this section shall be deemed to have violated its licensing law.
(4)Nothing in this section shall be construed to impair or impede the Attorney General from bringing an action to enforce this division.
(i)The Department of Business Oversight shall create a form to be made available in each of the languages set forth in subdivision (a) for use by a supervised financial organization to summarize the terms of a mortgage loan pursuant to subdivision (a). In creating the form, the Department of Business Oversight may use as guidance the United States Department of Housing and Urban Developments Good Faith Estimate disclosure form.
(j)This section shall not apply to federally chartered banks, credit unions, savings banks, or thrifts.
(k)Except as otherwise provided in subdivision (h), this section shall not be construed to create or enhance any claim, right of action, or civil liability that did not previously exist under state law, or limit any claim, right of action, or civil liability that otherwise exists under state law.
(l)An action against a supervised financial organization for a violation of this section may only be brought by a licensing agency or by the Attorney General.
(m)This section shall become operative beginning on July 1, 2010, or 90 days following the issuance of a form by the Department of Business Oversight pursuant to subdivision (i), whichever occurs later.
|
Date
|
Status
|
|---|---|
| Jun 13, 2018 | From committee: Without further action pursuant to Joint Rule 62(a). |
| May 23, 2018 | In committee: Set, final hearing. Hearing canceled at the request of author. |
| May 16, 2018 | In committee: Set, second hearing. Hearing canceled at the request of author. |
| May 9, 2018 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Apr 24, 2018 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 8. Noes 0.) (April 24). Re-referred to Com. on APPR. |
| Apr 19, 2018 | Re-referred to Com. on JUD. |
| Apr 18, 2018 | From committee chair, with author's amendments: Amend, and re-refer to Com. on JUD. Read second time and amended. |
| Apr 2, 2018 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Mar 8, 2018 | Referred to Com. on JUD. |
| Feb 16, 2018 | From printer. May be heard in committee March 18. |
| Feb 15, 2018 | Read first time. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Apr 24, 2018 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Judiciary |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Attorney General Xavier Becerra | ** Support | Apr 22, 2018 |
| California Apartment Association | * Against | Apr 24, 2018 |
| California Business Properties Association | ** Against | Apr 22, 2018 |
| California Immigrant Policy Center | ** Support | Apr 22, 2018 |
| Civil Justice Association | * Against | Apr 24, 2018 |
Date of Hearing: May 16, 2018
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez Fletcher, Chair
ABPCA Bill Id:AB 2708
Author:(Reyes) – As Amended Ver:April 18, 2018
Policy Committee: | Judiciary | Vote: | 8 - 0 |
|
| ||
|
|
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill requires a business or financial organization that negotiates a transaction with a minor who is translating on behalf of a customer who primarily speaks one of the following languages to provide a translation of the contract or agreement in the appropriate language: Chinese, Korean, Spanish, Tagalog, or Vietnamese.
FISCAL EFFECT:
Negligible state costs, if any.
COMMENTS:
- Purpose. According to the author:
The California Translation Act’s interpreter provision is open to misinterpretation that arguably undermines its original intent. A recent holding in Lopez v. Asbury Fresno Imports exemplifies how the statute’s unclear language can result in unintended consequences. That case held that the Spanish-speaking car buyers were not entitled to a translation of their contract where their minor child acted as the interpreter. We believe the court misinterpreted the statute in that case.
- Minors Cannot Negotiate Contracts, But…Statute requires a person in a trade or business who negotiates certain contracts or agreements primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean (the non-English languages spoken by the greatest number of Californians, in order of the number of speakers) to deliver to the other party an unexecuted translation of the contract or agreement in the language in which the contract or agreement was negotiated prior to its execution. Statute also asserts all persons are capable of contracting, except minors, persons of unsound mind, and persons deprived of civil rights.
Despite this statutory prohibition on contracting with minors, a recent court decision, in the case of “Lopez v. Asbury Fresno Imports,” found that a specific contract was not negotiated primarily in Spanish and the customer’s teenage son was the primary negotiator on behalf of the customer; therefore, the business was not required to translate the contract that resulted from the negotiation. The AG crafted this bill in response to the court decision.
- Reluctant to Bear the Burden. Opponents—the California Apartment Association and the California Business Properties Association—argue directly that the bill’s requirements will increase business costs. In addition, the Civil Justice Association of California makes a more-nuanced argument, contending the bill changes a “straight-forward, bright-line test” into one in which an “English-speaking-only party must determine how much of a negotiation is being conducted in which language.”
Analysis Prepared by: Jay Dickenson / APPR. / (916) 319-2081
Date of Hearing: April 24, 2018
ASSEMBLY COMMITTEE ON JUDICIARY
Mark Stone, Chair
ABPCA Bill Id:AB 2708
Author:(Reyes) – As Amended Ver:April 18, 2018
SUBJECT: CONTRACTS: TRANSLATION
KEY ISSUE: IN CASES WHERE A MINOR NEGOTIATES A CONTRACT ON BEHALF OF A CONSUMER WHO UNDERSTANDS ONLY SPANISH, CHINESE, TAGALOG, VIETNAMESE, OR KOREAN, shALL a translation of the cONTRACT BE required to be provided to the consumer in the applicable language he or she understands?
SYNOPSIS
The California Translation Act requires a person in a trade or business who negotiates certain specified contracts or agreements primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean to deliver to the other party an unexecuted translation of the contract or agreement in the language in which the contract or agreement was negotiated prior to its execution. In a recent court case, the Court of Appeal found that the California Translation Act did not apply in an instance where an English-speaking minor negotiated on behalf of his non-English-speaking adult parents who purchased a car from a dealer who only used English in the transaction. The court found that, under the Act, no translation of the contract needed to be provided to the non-English-speaking parents, despite the fact that existing state law expressly prohibits minors from being a party to a contract or from serving as an interpreter for a contracting individual who does not understand English. This bill, sponsored by Attorney General Xavier Becerra, seeks to clarify existing law on contract translation to address situations where a minor negotiates a contract on behalf of a party who is not capable of negotiating in English. Specifically, this bill would amend Section 1632 (and its counterpart, Section 1632.5, for supervised financial organizations) to provide that if a minor negotiates a covered transaction in English for a consumer who primarily speaks Spanish, Chinese, Tagalog, Vietnamese, or Korean, then the seller shall provide a translation of the contract or agreement to the consumer in the language primarily spoken by the consumer before the contract or agreement is executed. This bill is opposed by business groups, including the California Apartment Association and the Civil Justice Association, who contend that the bill will force businesses to negotiate with minors, raise business costs for facilitating translations, and result in increased litigation.
SUMMARY: Requires that a translation of a contract is provided to a non-English speaking party in cases where a minor negotiates on behalf of said party that is not fluent in English. Specifically, this bill:
- Provides that notwithstanding any other law, if a minor negotiates an applicable transaction in English for a consumer who primarily speaks Spanish, Chinese, Tagalog, Vietnamese, or Korean, the seller shall provide a translation of the contract or agreement to the consumer in the language primarily spoken by the consumer before the contract or agreement is executed in accordance with this section.
- Applies the identical rule, in 1) above, to transactions negotiated with a supervised financial organization.
EXISTING LAW:
- Requires a person in a trade or business who negotiates certain specified contracts or agreements primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean to deliver to the other party an unexecuted translation of the contract or agreement in the language in which the contract or agreement was negotiated prior to its execution. The contracts covered by this requirement are:
- Retail installment or automobile conditional sales contracts.
- Unsecured loans or extensions of credit for use primarily for personal, family or household purposes.
- Leases, subleases, or rental contracts or agreements.
- Loans or extensions of credit for use primarily for personal, family or household purposes where the loan is subject to the Industrial Loan Law (involving industrial banks or industrial loan companies) or the California Finance Lenders Law (generally involving higher-end consumer loans, but may also include some home loans), or loans involving a real estate broker (in which case only specified information must be translated).
- Reverse mortgages.
- Legal services agreements.
- Foreclosure agreements. (Civil Code Section 1632 (b). Unless otherwise stated, all further statutory references are to that code.)
- Provides that the requirement to provide translated copies of agreements is deemed complied with if a supervised financial organization, which includes a bank, savings association or credit union, provides a translation of the disclosures required by Regulation M (consumer leasing) or Regulation Z (consumer lending) of the federal Truth in Lending Act. (Section 1632 (e).)
- Provides that the term "contract" or "agreement" includes any subsequent document making substantial changes in the rights and obligations of the parties, thus requiring any subsequent documents to also be translated. (Section 1632 (g).)
- Provides that the translation requirement does not apply to any person engaged in a trade or business who negotiates primarily in a language other than English if the party with whom he or she is negotiating is a buyer of goods or services, and the party negotiates the terms of the contract, lease, or other obligation through his or her own interpreter. (Section 1632 (h).)
- Defines “his or her own interpreter” to mean a person, not a minor, able to speak fluently and read with full understanding both the English language and any of the languages specified in which the contract or agreement was negotiated, and who is not employed by, or whose service is made available through, the person engaged in the trade or business. (Section 1632 (h).)
- Specifies that the executed English-language contract shall determine the rights and obligations of the parties, but provides that the translation may be admissible in evidence only to show that no contract was entered into because of a substantial difference between the contract and the translation. (Section 1632 (j).)
- Provides that the consumer may rescind the contract if a required translation is not provided. If the contract has been sold or assigned to a financial institution, the consumer must make restitution to, and have restitution made by, the person with whom he or she made the contract. In addition, the assignor is required to promptly repurchase the contract from the assignee. (Section 1632 (k).)
- Provides that all persons are capable of contracting, except minors, persons of unsound mind, and persons deprived of civil rights. (Section 1556.)
FISCAL EFFECT: As currently in print this bill is keyed fiscal.
COMMENTS: This bill, sponsored by Attorney General Xavier Becerra, seeks to clarify application of the California Translation Act ("the Act"), Section 1632 of the Civil Code. Specifically, the bill is intended to address the narrow issue of whether non-English speaking buyers are entitled to a translation of their contract where a minor acted as the interpreter in the transaction. The author and Attorney General believe the answer to that question is yes, and therefore seek to address legislatively what they perceive to be a misinterpretation of the statute by the court in a recent case, Lopez v. Asbury Fresno Imports (2015) 234 Cal. App.4th 71.
Author's Statement: The author explains the need for the bill as follows:
The California Translation Act’s interpreter provision is open to misinterpretation that arguably undermines its original intent. A recent holding in Lopez v. Asbury Fresno Imports exemplifies how the statute’s unclear language can result in unintended consequences. That case held that the Spanish-speaking car buyers were not entitled to a translation of their contract where their minor child acted as the interpreter. We believe the court misinterpreted the statute in that case.
In Lopez, car buyers brought an action against a car dealership for violation of a number of laws, including the California Translation Act. The Superior Court entered judgment for the dealership. Lopez appealed, and the Court of Appeal upheld the lower court decision holding that the buyers were not entitled to a translation under the Translation Act. Important for the purposes of this discussion, we believe that the Court of Appeal misconstrued the Translation Act and the interpreter exception in holding that a contract that was negotiated primarily in English took the contract outside of the requirements of the Translation Act ruling, in turn, that a minor child could legally act as an intermediary in a significant contract negotiation. AB 2708 would revise and recast the law to avoid future misinterpretations of the law.
Background on the California Translation Act. Current law requires a business that primarily negotiates certain consumer contracts in Spanish, Chinese, Tagalog, Vietnamese, or Korean to provide the consumer with a written translation of the contract in that language prior to the execution of the agreement. This requirement was established in 1974 to prevent certain trades or businesses from taking "unfair advantage" of non-English-speaking consumers. Contracts covered by this requirement include automobile sales and leases, consumer credit agreements, retail installment contracts, rental agreements, certain types of loans, and legal service contracts. The additional four languages were added in 2003, in response to the 2000 Census which revealed that approximately 4.3 million Californians speak a non-English language other than Spanish in their homes.
The author notes that the purpose of the law has been described by the Department of Consumer Affairs (DCA) as being "to ensure that Californians who speak a language other than English have a genuine opportunity to read the foreign-language translation of any proposed contract that has been negotiated primarily in that language, and to consult with others, before the contract is signed.” (Dept. of Consumer Affairs. Foreign Language Translation of Consumer Contracts: Legal Guide K-4. (Available at http://www.dca.ca.gov/publications/legal_guides/k_4.shtml.)
The Lopez court's construction of the Act, particularly the "interpreter provisions." As discussed previously, Section 1632 requires a business that primarily negotiates certain consumer contracts in Spanish, Chinese, Tagalog, Vietnamese, or Korean to provide the consumer with a written translation of the contract in that language prior to the execution of the agreement. Opponents of the bill, including the California Apartment Association, tend to take a very rigid view of this. CAA writes, "The current statute does not require a business to provide a contract in the language spoken by the consumer/tenant; the statute only requires a translated version of the contract if the business owner or agent negotiates in a language other than English." In the Lopez case, they contend, the business owner did not negotiate in a language other than English; instead, because the seller primarily negotiated in English with the Lopez' teenage son, they claim that the contract at that point was taken outside the purview of the Act. The Act's requirement for a translation automatically fails because, on its face, the business did not primarily negotiate the contract in Spanish or one of the five non-English languages, and no requirement for a translation applies.
Proponents of the bill contend that the analysis of the issue is not that simple, and does not achieve or further the true intent of the act. Subdivision (h) of the statute establishes an exception to the general rule, stating that the Section 1632 translation requirement does not apply to any person engaged in a trade or business who negotiates primarily in a language other than English, if the party with whom he or she is negotiating is a buyer of goods or services, and the party negotiates the terms of the contract, lease, or other obligation through "his or her own interpreter." As used in subdivision (h), “his or her own interpreter” is defined to mean a person, not a minor, able to speak fluently and read with full understanding both the English language and any of the languages specified in which the contract or agreement was negotiated, and who is not employed by, or whose service is made available through, the person engaged in the trade or business. (Section 1632 (h).)
In Lopez, the plaintiffs contend that the defendant violated the Act by failing to furnish plaintiffs with a Spanish translation of their purchase contract, which they assert was primarily negotiated between plaintiffs and defendant in Spanish. They further maintain that the subdivision (h) exception to the rule for bringing one's own interpreter, which might excuse the lack of a translation in this case, did not apply here because the interpreter—their teenage son David—was a minor, and the statute specifically excludes a minor from the definition of "his or her interpreter."
In short, the Court of Appeal (and the trial court below it) agreed with the defendant's argument, advanced by opponents of this bill, that the contract was not negotiated primarily in Spanish and therefore was not governed by the Act. The Court reasoned that the teenage son was the primary negotiator on behalf of the plaintiffs, and in fact he negotiated with the English-speaking representatives of the seller in English, making the Act inapplicable. As a result, the holding of Lopez is that no translation of a contract needs to be provided in a case where a person, even if a minor, negotiates on behalf of a party who speaks a non-English language.
The author and Attorney General believe the ruling of Lopez is contrary to the intent of the Translation Act, and that the court's "mechanical interpretation" of the Act, holding that it only applies where both parties negotiated in the foreign non-English language is misguided. Proponents explain:
We do not believe the exception in section 1632, subdivision (h), for a party who brings his or her own interpreter, applies when the seller negotiates in English and the buyer negotiates in English through the interpreter, as plaintiffs contend. The statute as a whole applies only when the “person engaged in a trade or business,” in this case the seller, negotiates primarily in a language other than English. If the buyer brings an interpreter who negotiates with the seller in English, then the seller does not negotiate primarily in the foreign language. (emphasis added.)
As we interpret the statute, the exception in section 1632, subdivision (h), applies when the parties negotiate in the foreign language, but the buyer is accompanied by an interpreter who can review the written contract in English and advise the buyer whether it accurately reflects the terms agreed to during negotiations in the foreign language. In that situation, the statute does not require the “person engaged in a trade or business” to provide the customer with whom it negotiates with a copy of the contract translated into the foreign language.
We believe that this ruling is contrary to the intent of the law. The purpose of the Act is to provide a consumer who is not comfortable speaking English with a real opportunity to understand the terms of a contract prior to entering into it. Where that consumer negotiates in her language, she is entitled to a translation of the contract. The only exception is where the consumer brings an adult who is fluent in both languages who can reliably translate the negotiations and the contract terms. Where a minor child acts as the intermediary – and necessarily negotiates with the seller in English -- the consumer is still in as much need of a translated copy of the contract.
This bill clarifies the application of the Act with respect to contracts with a minor intermediary. Accordingly, the bill would reverse the narrow holding of Lopez on this issue, and instead establish a rule consistent with the author's interpretation of the Act that a translation of the contract is required to be provided by the seller. Specifically, the bill amends Section 1632 (and its counterpart, Section 1632.5, for supervised financial organizations) to provide that, notwithstanding any other law, if a minor negotiates a covered transaction in English for a consumer who primarily speaks Spanish, Chinese, Tagalog, Vietnamese, or Korean, then the seller shall provide a translation of the contract or agreement to the consumer in the language primarily spoken by the consumer before the contract or agreement is executed.
Committee staff notes that while existing law prohibits minors from being a party to a contract or interpreting in the context of the Translation Act, this bill would seemingly codify the notion that minors can negotiate a contract on behalf of a party who is capable of contracting. It should be further noted, however, that under normal application of the Act, a minor would not be permitted to negotiate on behalf of a buyer. However, in order to conclude, as it did, that the contract in this case lies outside the purview of the Act (and thus no translation was needed), the Lopez court needed to establish the questionable line of reasoning that the terms of the sale were properly negotiated by the parties through the defendants' son, a minor. The Lopez court apparently reasoned that the son's age was not a factor, however, insomuch as the controlling issue was the fact that the sales contract was primarily negotiated by the seller in English, making the interpreter exception under subdivision (h) irrelevant (including its express exception for minors).
ARGUMENTS IN SUPPORT: The California Immigrant Policy Center writes in support:
California is a culturally rich state with strong language diversity. According to the US Census Bureau (2015), almost 44% of California households speak a language other than English. Among this group, the five languages other than English that are most widely spoken at home are Spanish, Chinese, Tagalog, Vietnamese, and Korean. These five languages are spoken at home by approximately 3.5 million of the 3.8 million Californians with limited or no English proficiency. Unfortunately, limited English proficiency can leave consumers vulnerable to fraud or exploitation.
AB 2708 enhances consumer protections by bringing language access into contract negotiations. The bill states that a translation of every term and condition in that contract or agreement must be included in the language in which the negotiating parties primarily speak. These protections are critical as negotiated agreements include every day contracts such as loans, leases, and rental agreements.
ARGUMENTS IN OPPOSITION: The California Apartment Association and the California Business Properties Association submitted a joint letter opposing the bill, citing the potential costs that the translation requirement would have for its members. They write:
The expense that AB 2708 will impose on businesses will be extraordinary. AB 2708 implies that the business owner/agent must allow the minor to negotiate the transaction. We fear that AB 2708 will reduce access to key services and housing because business owners without the means to hire expensive legal translation services will not negotiate with a non‐English speaking consumer or prospective tenant unless the consumer/tenant provides their own professional interpreter.
The bill is also opposed by the Civil Justice Association of California (CJAC), who object to the change that makes the current rule less certain in its estimation. CJAC states:
While efforts to make sure that Californians with limited or no English proficiency understand the terms of any contractual agreement are worthwhile and important to ensure proper contract formation, AB 2708 creates issues regarding contract formation, and the need to have one clear, identical and singular document that controls the relationship between the parties.
Under existing law, a contract negotiated in a language other than English requires a translation. This is a clear standard, that lets both parties know that a translation is needed. AB 2708 changes that status and requires a translation when one of the parties primarily negotiates in another language. This changes a relatively straight forward, bright-line test into one where an English-speaking only party needs to determine how much of the negotiation is being conducted in which language. It also puts limitations on who is a valid interpreter, including a fluency requirement that many small business owners may have no idea how to make that determination. These changes will create uncertainty around contract formation and encourage confusion, leading to unnecessary litigation.
REGISTERED SUPPORT / OPPOSITION:
Support
Attorney General Xavier Becerra (sponsor)
California Immigrant Policy Center
Opposition
California Apartment Association
California Business Properties Association
Civil Justice Association of California
Analysis Prepared by: Anthony Lew and Sandra Nakagawa / JUD. / (916) 319-2334
Discussed in Hearing
10MIN
Assembly Standing Committee on Judiciary
Bill Author
Bill Co-Author(s):