(a)This division shall be liberally construed and applied to promote its underlying purposes and policies, which are:

(1)To ensure an adequate supply of credit to borrowers in this state.

(2)To simplify, clarify, and modernize the law governing loans made by finance lenders.

(3)To foster competition among finance lenders.

(4)To protect borrowers against unfair practices by some lenders, having due regard for the interests of legitimate and scrupulous lenders.

(5)To permit and encourage the development of fair and economically sound lending practices.

(6)To encourage and foster a sound economic climate in this state.

(7)To protect property owners from deceptive and misleading practices that threaten the efficacy and viability of property assessed clean energy financing programs.

(8)To protect small businesses against unfair practices by some commercial financing providers, having due regard for the interest of legitimate and scrupulous commercial financing providers.

(b)Consumer loans, as defined in Sections 22203 and 22204, are subject to this chapter, Chapter 2 (commencing with Section 22200), Article 1 (commencing with Section 22700) of Chapter 4, and Article 2 (commencing with Section 22750) of Chapter 4.

(c)Commercial loans, as defined in Section 22502, are subject to this chapter, Chapter 3 (commencing with Section 22500), Article 1 (commencing with Section 22700) of Chapter 4, and Article 3 (commencing with Section 22780) of Chapter 4.

(d)A program administrator, as defined in Section 22018, is subject to this chapter, Chapter 3.5 (commencing with Section 22680), and Article 1 (commencing with Section 22700) of Chapter 4.

(e)Commercial financing, as defined in Section 22655, is subject to this chapter, Chapter 3.1 (commencing with Section 22655), and Article 1 (commencing with Section 22700) and Article 3 (commencing with Section 22780) of Chapter 4.

(f)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)Licensee means any finance lender, broker, commercial financing provider, commercial financing broker, or program administrator who receives a license in accordance with this division.

(b)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)Finance lender, broker, commercial financing provider, commercial financing broker, and program administrator do not include employees regularly employed at the location specified in the license of the finance lender, broker, commercial financing provider, commercial financing broker, or program administrator, except that an employee, when acting within the scope of the employees employment, shall be exempt from any other law from which the employees employer is exempt.

(b)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)Except in Section 22064, recipient has the same meaning as defined in Section 22655.

(b)This section shall become operative on January 1, 2026.

(a)Commercial financing, commercial financing provider, and commercial financing broker have the same meanings as defined in Section 22655.

(b)This section shall become operative on January 1, 2026.

(a)A person shall not engage in the business of a commercial financing provider or commercial financing broker without obtaining a license from the commissioner.

(b)This section shall become operative on January 1, 2026.

(a)An application for a license as a finance lender, broker, commercial financing provider, commercial financing broker, or program administrator under this division shall be in the form and contain the information that the commissioner may by rule or order require and shall be filed upon payment of the fee specified in Section 22103.

(b)Notwithstanding any other law, an applicant who does not currently hold a license as a finance lender, broker, commercial financing provider, commercial financing broker, or program administrator under this division shall furnish, with their application, a full set of fingerprints and related information for purposes of the commissioner conducting a criminal history record check. The commissioner shall obtain and receive criminal history information from the Department of Justice and the Federal Bureau of Investigation pursuant to Section 22101.5.

(c)This section does not prevent a licensee from engaging in the business of a finance lender or program administrator through a subsidiary corporation if the subsidiary corporation is licensed pursuant to this division.

(d)For purposes of this section, subsidiary corporation means a corporation that is wholly owned by a licensee.

(e)A new application shall not be required for a change in the address of an existing location previously licensed under this division. However, the licensee shall comply with the requirements of Section 22153.

(f)Notwithstanding subdivisions (a) to (e), inclusive, the commissioner may by rule require an application to be made through the Nationwide Mortgage Licensing System and Registry, and may require fees, fingerprints, financial statements, supporting documents, changes of address, and any other information, and amendments or modifications thereto, to be submitted in the same manner.

(g)Notwithstanding any other law, the commissioner may by rule or order prescribe circumstances under which to accept electronic records or electronic signatures. This section does not require the commissioner to accept electronic records or electronic signatures.

(h)For purposes of this section, the following terms have the following meanings:

(1)Electronic record means an initial license application, or material modification of that license application, and any other record created, generated, sent, communicated, received, or stored by electronic means. Electronic records also includes, but is not limited to, all of the following:

(A)An application, amendment, supplement, and exhibit, filed for any license, consent, or other authority.

(B)A financial statement, a report, or advertising.

(C)An order, license, consent, or other authority.

(D)A notice of public hearing, accusation, and statement of issues in connection with any application, license, consent, or other authority.

(E)A proposed decision of a hearing officer and a decision of the commissioner.

(F)The transcripts of a hearing and correspondence between a party and the commissioner directly relating to the record.

(G)A release, newsletter, interpretive opinion, determination, or specific ruling.

(H)Correspondence between a party and the commissioner directly relating to any document listed in subparagraphs (A) to (G), inclusive.

(2)Electronic signature means an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record.

(i)The Legislature finds and declares that the Department of Financial Protection and Innovation has continuously implemented methods to accept records filed electronically, and is encouraged to continue to expand its use of electronic filings to the extent feasible, as budget, resources, and equipment are made available to accomplish that goal.

(j)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)The commissioner shall submit to the Department of Justice fingerprint images and related information required by the Department of Justice of all finance lender, broker, commercial financing provider, commercial financing broker, or program administrator license candidates, as defined by subdivision (a) of Section 22101, for purposes of obtaining information as to the existence and content of a record of state or federal convictions, state or federal arrests, and information as to the existence and content of a record of state or federal arrests for which the Department of Justice establishes that the person is free on bail or on the persons own recognizance pending trial or appeal.

(b)When received, the Department of Justice shall forward to the Federal Bureau of Investigation requests for federal summary criminal history information received pursuant to this section. The Department of Justice shall review the information returned from the Federal Bureau of Investigation and compile and disseminate a response to the commissioner.

(c)The Department of Justice shall provide a response to the commissioner pursuant to paragraph (1) of subdivision (p) of Section 11105 of the Penal Code.

(d)The commissioner shall request from the Department of Justice subsequent arrest notification service, as provided pursuant to Section 11105.2 of the Penal Code, for license candidates described in subdivision (a).

(e)The Department of Justice shall charge a fee sufficient to cover the costs of processing the requests pursuant to this section.

(f)Notwithstanding subdivisions (a) to (e), inclusive, the commissioner may by rule require fingerprints submitted by an applicant to be submitted to the Nationwide Mortgage Licensing System and Registry in addition to the Department of Justice.

(g)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)A finance lender, broker, commercial financing provider, commercial financing broker, or program administrator licensee seeking to engage in business at a new location shall submit an application for a branch office license to the commissioner at least 10 days before engaging in business at a new location and pay the fee required by Section 22103. The commissioner may require an applicant seeking to engage in business at a new location to submit its application, or parts thereof, through the Nationwide Mortgage Licensing System and Registry.

(b)The licensee may engage in business at the new location 10 days after the date of submission of a branch office application.

(c)(1)The commissioner shall approve or deny the person responsible for the lending or financing activity at the new location in accordance with Section 22109, and shall notify the licensee of this decision within 90 days of the date of receipt of the application.

(2)If the commissioner denies the application, the licensee shall, within 10 days of the date of receipt of notification of the commissioners denial, submit a new application to the commissioner designating a different person responsible for the lending or financing activity at the new location. The commissioner shall approve or deny the different person as provided in paragraph (1).

(d)A licensee shall not engage in business at a new location in a name other than a name approved by the commissioner.

(e)The commissioner may adopt regulations to implement the requirements of this section.

(f)A branch office license to engage in business at a new location shall be issued in accordance with this section. A change of street address of a place of business designated in a license shall be made in accordance with Section 22153 and shall not constitute a new location subject to the requirements of this section.

(g)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)At the time of filing the application for a finance lender, broker, commercial financing provider, commercial financing broker, program administrator, or branch office license, the applicant shall pay to the commissioner the sum of one hundred dollars ($100) as a fee for investigating the application, plus the cost of fingerprint processing and the criminal history record check under Section 22101.5, and two hundred dollars ($200) as an application fee. The investigation fee, including the amount for the criminal history record check, and the application fee are not refundable if an application is denied or withdrawn.

(b)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)The applicant shall file with the application for a finance lender, broker, commercial financing provider, commercial financing broker, or program administrator license financial statements prepared in accordance with generally accepted accounting principles and acceptable to the commissioner that indicate a net worth of at least twenty-five thousand dollars ($25,000). Except as provided in subdivisions (b) and (c), a licensee shall maintain a net worth of at least twenty-five thousand dollars ($25,000) at all times.

(b)A licensed finance lender or broker, that employs one or more mortgage loan originators and that makes residential mortgage loans, shall continuously maintain a minimum net worth of at least two hundred fifty thousand dollars ($250,000).

(c)A licensed finance broker, that employs one or more mortgage loan originators and that arranges, but does not make, residential mortgage loans, shall continuously maintain a minimum net worth of at least fifty thousand dollars ($50,000).

(d)The commissioner may promulgate rules or regulations with respect to the requirements for minimum net worth, as are necessary to accomplish the purposes of this division and comply with the SAFE Act.

(e)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)Upon the filing of an application pursuant to Section 22101 and the payment of the fees, the commissioner shall investigate the applicant and its general partners and persons owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or any person responsible for the conduct of the applicants lending, financing, or program administration activities in this state, if the applicant is a partnership. If the applicant is a corporation, trust, limited liability company, or association, including an unincorporated organization, the commissioner shall investigate the applicant, its principal officers, directors, managing members, and persons owning or controlling, directly or indirectly, 10 percent or more of the outstanding equity securities or any person responsible for the conduct of the applicants lending or financing activities or for administering PACE programs for the applicant in this state. Upon the filing of an application pursuant to Section 22102 and the payment of the fees, the commissioner shall investigate the person responsible for the lending or financing activity of the licensee, or for administering one or more PACE programs for the licensee, at the new location described in the application. The investigation may be limited to information that was not included in prior applications filed pursuant to this division. If the commissioner determines that the applicant has satisfied this division and does not find facts constituting reasons for denial under Section 22109, the commissioner shall issue and deliver a license to the applicant.

(b)For the purposes of this section, principal officers shall mean president, chief executive officer, treasurer, and chief financial officer, as may be applicable, and any other officer with direct responsibility for the conduct of the applicants lending or financing activities or for PACE program administration for the applicant within the state.

(c)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)The finance lender, broker, commercial financing provider, commercial financing broker, or program administrator license shall state the name of the licensee, and if the licensee is a partnership, the names of its general partners, and if a corporation or an association, the date and place of its incorporation or organization, and the address of the licensees principal business location. On the approval and licensing of a location pursuant to Section 22101 or 22102, the commissioner shall issue an original license endorsed to show the address of the authorized location and, if applicable, the name of the subsidiary corporation licensed to operate the location. The license shall state whether the licensee is licensed as a finance lender, broker, commercial financing provider, commercial financing broker, or program administrator.

(b)(1)An application for a license for a business location outside this state shall constitute an agreement by the applicant to do all of the following:

(A)Make the licensees books, accounts, papers, records, and files available to the commissioner or the commissioners representatives in this state.

(B)Pay the reasonable expenses for travel, meals, and lodging of the commissioner or the commissioners representatives incurred during any investigation or examination made at the licensees location outside this state.

(2)A licensee located outside this state is not required to maintain books and records regarding licensed loans or licensed commercial financing transactions separate from those for other loans or other commercial financing transactions if the licensed loans or licensed commercial financing transactions can be readily identified.

(c)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)Each finance lender, broker, commercial financing provider, commercial financing broker, or program administrator licensee shall pay to the commissioner its pro rata share of all costs and expenses, including the costs and expenses associated with the licensing of mortgage loan originators it employs, reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made. The pro rata share shall be the proportion that a licensees gross income bears to the aggregate gross income of all licensees as shown by the annual financial reports to the commissioner, for the costs and expenses remaining after the amount assessed pursuant to subdivision (c).

(b)On or before September 30th in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid by October 31. If payment is not made by October 31, the commissioner shall assess and collect a penalty, in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.

(c)In the levying and collection of the assessment, a licensee shall neither be assessed for nor be permitted to pay less than two hundred fifty dollars ($250) per licensed location per year.

(d)If a licensee fails to pay the assessment on or before the October 31st, the commissioner may by order summarily suspend or revoke the certificate issued to the licensee. If, after an order is made, a request for a hearing is filed in writing within 30 days, and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a finance lender, broker, commercial financing provider, commercial financing broker, or program administrator licensee and any mortgage loan originator licensee employed by the finance lender or broker shall not conduct business pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.

(e)The commissioner shall, by rule, establish the timelines, fees, and assessments applicable to applicants for original mortgage loan originator licenses, license renewals, and license changes under this division.

(f)Notwithstanding subdivisions (a) to (e), inclusive, the commissioner may by rule require licensees to pay assessments through the Nationwide Mortgage Licensing System and Registry.

(g)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)Upon reasonable notice and opportunity to be heard, the commissioner may deny the application for a finance lender, broker, commercial financing provider, commercial financing broker, or program administrator license for any of the following reasons:

(1)A false statement of a material fact has been made in the application.

(2)The applicant or an officer, director, general partner, person responsible for the applicants lending or financing activities or administering PACE programs for the applicant in this state, or person owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant has, within the last 10 years, been convicted of or pleaded nolo contendere to a crime, or committed an act involving dishonesty, fraud, or deceit, if the crime or act is substantially related to the qualifications, functions, or duties of a person engaged in business in accordance with this division.

(3)The applicant or an officer, director, general partner, person responsible for the applicants lending or financing activities or administering PACE programs for the applicant in this state, or person owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant has violated any provision of this division or the rules thereunder or any similar regulatory scheme of the State of California or a foreign jurisdiction.

(4)The applicant employs a mortgage loan originator who is not licensed, or has not initiated an application to become licensed, pursuant to this division.

(b)The application shall be considered withdrawn within the meaning of this section if the applicant fails to respond to a written notification of a deficiency in the application within 90 days of the date of the notification.

(c)The commissioner shall, within 60 days from the filing of a full and complete application for a license with the fees, either issue a license or file a statement of issues prepared in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

(d)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)A licensee shall maintain a surety bond in accordance with this subdivision in a minimum amount of twenty-five thousand dollars ($25,000). The bond shall be payable to the commissioner and issued by an insurer authorized to do business in this state. An original surety bond, including any and all riders and endorsements executed subsequent to the effective date of the bond, shall be filed with the commissioner within 10 days of execution. For licensees with multiple licensed locations, only one surety bond is required. The bond shall be used for the recovery of expenses, fines, and fees levied by the commissioner in accordance with this division or for losses or damages incurred by borrowers, recipients, or consumers as the result of a licensees noncompliance with the requirements of this division.

(b)When an action is commenced on a licensees bond, the commissioner may require the filing of a new bond. Immediately upon recovery of any action on the bond, the licensee shall file a new bond. Failure to file a new bond within 10 days of the recovery on a bond, or within 10 days after notification by the commissioner that a new bond is required, constitutes sufficient grounds for the suspension or revocation of the license.

(c)The commissioner may by rule require a higher bond amount for a licensee who employs one or more mortgage loan originators and who makes or arranges residential mortgage loans, based on the dollar amount of residential mortgage loans originated by that licensee and any mortgage loan originators employed by that licensee. Every mortgage loan originator employed by the licensee shall be covered by the surety bond.

(d)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)A finance lender license, broker license, commercial financing provider license, commercial financing broker license, program administrator license, and the license of every mortgage loan originator employed by a lender or finance broker, along with any currently effective order of the commissioner approving a different name pursuant to Section 22155, shall be conspicuously posted in the place of business authorized by the license.

(b)A license is not transferable or assignable. A license issued to a partnership or a limited partnership is not transferred or assigned within the meaning of this section by the death, withdrawal, or admission of a partner, general partner, or limited partner, unless the death, withdrawal, or admission dissolves the partnership to which the license was issued.

(c)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)A finance lender, broker, commercial financing provider, commercial financing broker, or program administrator licensee shall maintain only one place of business under a duplicate or original license issued pursuant to Section 22101 or 22102. The commissioner may issue more than one license to the same licensee upon compliance with all the provisions of this division governing an original issuance of a license.

(b)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)If a finance lender, broker, commercial financing provider, commercial financing broker, or program administrator licensee seeks to change its place of business to a street address other than that designated in its license, the licensee shall provide notice to the commissioner at least 10 days before the change. The commissioner shall notify the licensee within 10 days if the commissioner disapproves the change, and if the commissioner does not notify the licensee of disapproval within 10 days, the change in address shall be deemed approved. The commissioner may require an applicant to submit its application to change its place of business through the Nationwide Mortgage Licensing System and Registry.

(b)If notice is not given at least 10 days before the change of a street address of a place of business, as required by subdivision (a), or notice is not given at least 10 days before engaging in business at a new location, as required by Section 22102, the commissioner may assess a civil or administrative penalty on the licensee not to exceed five hundred dollars ($500).

(c)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)Subject to Section 22157.1, a licensee shall not conduct the business of making loans or commercial financing transactions or administering a PACE program under this division within any office, room, or place of business in which any other business is solicited or engaged in, or in association or conjunction therewith, except as is authorized in writing by the commissioner upon the commissioners finding that the character of the other business is such that the granting of the authority would not facilitate evasions of this division or of the rules and regulations made pursuant to this division. An authorization, once granted, remains in effect until revoked by the commissioner. The commissioner may authorize the other business through the Nationwide Mortgage Licensing System and Registry.

(b)The products or services of an affiliated corporation of the licensee that is a supervised financial institution, or a parent or subsidiary of a supervised financial institution that is an affiliate of the licensee, may be provided, offered, or sold at the licensed location of the licensee without authorization by the commissioner pursuant to subdivision (a) if both of the following are met:

(1)The activity is not prohibited by, or in violation of, the laws applicable to the affiliate or supervised financial institution.

(2)The products and services are not offered and sold in a manner that restricts the ability of the borrower, recipient, or customer to individually select or reject a product or service that is offered.

(c)The following definitions govern the construction of this section:

(1)Affiliated or affiliate means the following: A corporation is an affiliate of, or a corporation is affiliated with, another specified corporation if it directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the other specified corporation.

(2)Supervised financial institution means any commercial bank, industrial bank, credit card bank, trust company, savings and loan association, savings bank, credit union, California finance lender, residential mortgage lender or servicer, or insurer, provided that the institution is subject to supervision by an official or agency of this state or of the United States.

(d)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)Subject to Section 22157.1, a finance lender, broker, commercial financing provider, commercial financing broker, mortgage loan originator, or program administrator licensee shall not transact the business licensed or make any loan or commercial financing transaction or administer any PACE program provided for by this division under any other name or at any other place of business than that named in the license except pursuant to a currently effective written order of the commissioner authorizing the other name or other place of business. The commissioners order, while effective, shall be deemed to amend the original license issued pursuant to Section 22105 or 22109.1.

(b)Notwithstanding subdivision (a), a finance lender, program administrator, broker, commercial financing provider, commercial financing broker, or mortgage loan originator licensee may make any loan or commercial financing transaction and engage in any other business provided for by this division, other than the business described in subdivision (b) of Section 22154, at a place other than the licensed location under either of the following conditions:

(1)The borrower or recipient requests, either orally or in writing, that a loan or commercial financing transaction be initiated or made at a location other than the licensees licensed location. The use by the licensee of a preprinted solicitation form returned to the licensee by the borrower or recipient shall not constitute a request by the borrower or recipient that a loan or commercial financing transaction be initiated or made at a location other than the licensees licensed location.

(2)The licensee makes a solicitation or advertises for, or makes an offer of, a loan, commercial financing transaction, or assessment contract displayed on home pages or similar methods by the licensee on the internet, the World Wide Web, or similar proprietary or common carrier electronic systems, and the prospective borrower, recipient, or property owner may transmit information over these electronic systems to the licensee in connection with the licensees offer to make a loan, commercial financing transaction, or assessment contract.

(c)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)Finance lender, broker, commercial financing provider, commercial financing broker, program administrator, and mortgage loan originator licensees shall keep and use in their business, books, accounts, and records which will enable the commissioner to determine if the licensee is complying with the provisions of this division and with the rules and regulations made by the commissioner. On any loan secured by real property in which loan proceeds were disbursed to an independent escrowholder, the licensee shall retain records and documents as set forth by rules of the commissioner adopted pursuant to Section 22150. Upon request of the commissioner, licensees shall file an authorization for disclosure to the commissioner of financial records of the licensed business pursuant to Section 7473 of the Government Code.

(b)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)Finance lender, broker, commercial financing provider, commercial financing broker, and mortgage loan originator licensees shall preserve their books, accounts, and records, if any, for at least three years after making the final entry on any loan or commercial financing transaction recorded therein.

(b)Except as otherwise specified by applicable law, including paragraph (3) of subdivision (b) of Section 5913 of the Streets and Highways Code, program administrator licensees shall preserve their books, accounts, and records for at least three years after the extinguishment of a PACE assessment is recorded therein.

(c)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)For purposes of this section:

(1)Encrypted has the same meaning as provided in paragraph (4) of subdivision (i) of Section 1798.82 of the Civil Code.

(2)Remote location means a personal residence or a temporary, nonpublic location not owned or leased by the licensee or an affiliate of the licensee that is not simultaneously accessible by anyone other than a single employee and individuals who maintain a common household with the employee.

(b)A licensee may designate an employee, when acting within the scope of employment, to perform work on the licensees behalf at a remote location if the licensee does all of the following:

(1)Prohibits in-person consumer interactions, including the physical receipt of cash or other monetary value or the disbursement of loan or commercial financing transaction proceeds, at a remote location and does not designate a remote location to the public as a business location.

(2)Prohibits records required pursuant to Section 22156 from being physically mailed to, shipped to, or stored at a remote location except for storage on an encrypted device or encrypted media.

(3)Prohibits the physical receipt of mail related to the licensees licensed business at a remote location.

(4)Prohibits a consumers personal information from being physically stored at a remote location except for storage on an encrypted device or encrypted media.

(5)Provides an employee working at a remote location with appropriate equipment, which may include encrypted devices, virtual private networks, and similar technology, to perform work and safeguard licensee records and consumer personal information.

(6)Adopts and adheres to appropriate, as determined by the department, written policies and procedures to supervise and maintain appropriate control over the work of employees at remote locations and safeguard the licensees records and consumer personal information in connection with work at a remote location, including, but not limited to, all of the following elements:

(A)Employee data security training.

(B)Maintenance of security logs of remote logins.

(C)Procedures designed to detect suspicious logins or attempted logins and to suspend access by potentially compromised accounts or equipment.

(D)Data breach response procedures.

(7)(A)Records telephone calls with consumers conducted from a remote location to the same extent as telephone calls with consumers conducted from licensed locations.

(B)This paragraph does not require telephone call recording if the licensee does not do so in the normal course of business for the employee or business in question.

(8)All books, records, and persons that the commissioner is entitled to examine, inspect, or interview shall be made available to the commissioner at a licensed location.

(c)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)(1)Each finance lender, broker, commercial financing provider, commercial financing broker, and program administrator licensee shall file an annual report with the commissioner, on or before March 15th, giving the relevant information that the commissioner reasonably requires concerning the business and operations conducted by the licensee or authorized by the program administrator licensee within the state during the preceding calendar year for each licensed place of business. The individual annual reports filed pursuant to this section shall be made available to the public for inspection except, upon request in the annual report to the commissioner, the balance sheet contained in the annual report of a sole proprietor or any other nonpublicly traded person. The report shall be made under oath and in the form prescribed by the commissioner.

(2)As used in this subdivision, nonpublicly traded person means a person with securities owned by 35 or fewer individuals.

(b)A licensee shall make other special reports required by the commissioner.

(c)The commissioner may require a licensee that employs one or more mortgage loan originators to submit to the Nationwide Mortgage Licensing System and Registry reports of condition, which shall be in the form and shall contain the information as the Nationwide Mortgage Licensing System and Registry may require.

(d)The commissioner may by rule or order require a mortgage loan originator to submit reports of condition to the Nationwide Mortgage Licensing System and Registry, in lieu of the reports of condition required of the mortgage loan originators employer pursuant to subdivision (c).

(e)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)A person subject to this division shall not do any of the following:

(1)Make a materially false or misleading statement or representation to a borrower or recipient about the terms or conditions of that borrowers loan or that recipients commercial financing transaction when making or brokering the loan or commercial financing transaction.

(2)Make a materially false or misleading statement or representation to a property owner about the terms or conditions of an assessment contract.

(3)Advertise, print, display, publish, distribute, or broadcast, or cause or permit to be advertised, printed, displayed, published, distributed, or broadcast in any manner, any statement or representation with regard to the business subject to the provisions of this division, including the rates, terms, or conditions for making or negotiating loans, making or negotiating commercial financing transactions, or for making or negotiating assessment contracts, that is false, misleading, or deceptive, or that omits material information that is necessary to make the statements not false, misleading, or deceptive, or in the case of a licensee, that refers to the supervision of the business by the state or any department or official of the state.

(4)Commit an act in violation of Section 1695.13 of the Civil Code.

(5)Engage in any act in violation of Section 17200 of the Business and Professions Code.

(6)Knowingly misrepresent, circumvent, or conceal, through subterfuge or device, any material aspect or information regarding a transaction to which the person is a party.

(7)Commit an act that constitutes fraud or dishonest dealings.

(b)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)A finance lender, broker, commercial financing provider, commercial financing broker, or mortgage loan originator licensee shall not place an advertisement disseminated primarily in this state for a loan or commercial financing transaction unless the licensee discloses in the printed text of the advertisement, or in the oral text in the case of a radio or television advertisement, the license under which the loan or commercial financing transaction would be made or arranged.

(b)A program administrator licensee shall not place an advertisement disseminated primarily in this state for an assessment contract unless the licensee discloses in the printed text of the advertisement, or in the oral text in the case of a radio or television advertisement, the license under which the assessment contract would be administered.

(c)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)The commissioner may require that rates of charge, if stated by a licensee, be stated fully and clearly in the manner that the commissioner deems necessary to prevent misunderstanding by prospective borrowers, recipients, or property owners.

(b)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)If any person engaged in the business regulated by this division refers in any advertising to rates of interest, charges, or cost of loans, commercial financing transactions, or assessment contracts, the commissioner shall require that the rates, charges, or costs are stated fully and clearly in the manner that the commissioner deems necessary to give adequate information to prospective borrowers or property owners. If the rates or costs advertised do not apply to loans or assessment contracts of all classes made or negotiated by the person, this fact shall be clearly indicated in the advertisement.

(b)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)A licensed commercial financing provider may act as a commercial financing broker, as defined in Section 22655, at its licensed place of business without obtaining an additional license as a commercial financing broker under this division only if the licensee has notified the commissioner of the action in writing.

(b)This section shall become operative on January 1, 2026.

(a)The commissioner may, after appropriate notice and opportunity for hearing, suspend for a period not to exceed 12 months or bar a person from any position of employment with a licensee if the commissioner finds that the person has willfully used or claimed without authority a designation or certification of special education, practice, or skill that the person has not attained, or willfully held out to the public a confusingly similar designation or certification for the purpose of misleading the public regarding the persons qualifications or experience.

(b)Within 15 days from the date of a notice of intention to issue an order pursuant to subdivision (a), the person may request a hearing under the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code). Upon receiving a request, the matter shall be set for hearing to commence within 30 days after receipt unless the person subject to this division consents to a later date. If no hearing is requested within 15 days after the mailing or service of the notice and none is ordered by the commissioner, the failure to request a hearing shall constitute a waiver of the right to a hearing.

(c)Upon receipt of a notice of intention to issue an order pursuant to subdivision (a), the person who is the subject of the proposed order is immediately prohibited from engaging in any activities subject to licensure under this division.

(d)Persons suspended or barred under this section are prohibited from participating in any business activity of a licensed finance lender, broker, commercial financing provider, commercial financing broker, program administrator, or mortgage loan originator, and from engaging in any business activity on the premises where a licensed finance lender, broker, commercial financing provider, commercial financing broker, program administrator, or mortgage loan originator is conducting its business. This subdivision does not prohibit suspended or barred persons from having their personal transactions processed by a licensed finance lender, broker, commercial financing provider, commercial financing broker, mortgage loan originator, or program administrator.

(e)The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

(a)The commissioner may, after appropriate notice and opportunity for hearing, by order, censure or suspend for a period not exceeding 12 months, or bar a person, including a mortgage loan originator, from any position of employment with, or management or control of, any finance lender, broker, commercial financing provider, commercial financing broker, program administrator, or any other person, if the commissioner finds either of the following:

(1)That the censure, suspension, or bar is in the public interest and that the person has committed or caused a violation of this division or rule or order of the commissioner, which violation was either known or should have been known by the person committing or causing it or has caused material damage to the finance lender, broker, commercial financing provider, commercial financing broker, program administrator, or mortgage loan originator, or to the public.

(2)That the person has been convicted of or pleaded nolo contendere to any crime, or has been held liable in any civil action by final judgment, or any administrative judgment by any public agency, if that crime or civil or administrative judgment involved any offense involving dishonesty, fraud, or deceit, or any other offense reasonably related to the qualifications, functions, or duties of a person engaged in the business in accordance with the provisions of this division.

(b)Within 15 days from the date of a notice of intention to issue an order pursuant to subdivision (a), the person may request a hearing under the Administrative Procedure Act (Chapter 4.5 (commencing with Section 11400) of Part 1 of Division 3 of Title 2 of the Government Code). Upon receipt of a request, the matter shall be set for hearing to commence within 30 days after such receipt unless the person subject to this division consents to a later date. If no hearing is requested within 15 days after the mailing or service of such notice and none is ordered by the commissioner, the failure to request a hearing shall constitute a waiver of the right to a hearing.

(c)Upon receipt of a notice of intention to issue an order pursuant to this section, the person who is the subject of the proposed order is immediately prohibited from engaging in any activities subject to licensure under the law.

(d)Persons suspended or barred under this section are prohibited from participating in any business activity of a finance lender, broker, commercial financing provider, commercial financing broker, program administrator, or mortgage loan originator, and from engaging in any business activity on the premises where a finance lender, broker, program administrator, or mortgage loan originator is conducting business.

(a)Finance lender, broker, commercial financing provider, commercial financing broker, and program administrator licenses issued under this division shall remain in effect until they are surrendered, revoked, or suspended.

(b)Mortgage loan originator licenses issued under this division shall be renewed annually upon the payment of an annual assessment, and, if renewed by the licensee, shall remain in effect until they are surrendered, revoked, or suspended.

(c)Surrender of a license becomes effective 30 days after receipt of an application to surrender the license or within a shorter period of time that the commissioner may determine, unless a revocation or suspension proceeding is pending when the application is filed or a proceeding to revoke or suspend or to impose conditions upon the surrender is instituted within 30 days after the application is filed. If a proceeding is pending or instituted, surrender of a license becomes effective at the time and upon the conditions that the commissioner determines.

(a)For the purpose of discovering violations of this division or securing information required by him or her the commissioner in the administration and enforcement of this division, the commissioner may at any time investigate the loans, commercial financing transactions, assessment contracts, and business, and examine the books, accounts, records, and files used in the business, of every person engaged in the business of a finance lender, broker, commercial financing provider, commercial financing broker, or program administrator, whether the person acts or claims to act as principal or agent, or under or without the authority of this division. For the purpose of examination, the commissioner and his or her the commissioners representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of all these persons.

(a)(1)Whenever, in the opinion of the commissioner, any person is engaged or has engaged in business as a finance lender, broker, commercial financing provider, commercial financing broker, program administrator, or mortgage loan originator, as defined in this division, without a license from the commissioner, or any licensee is violating or has violated any provision of this division, any provision of an order, or any regulation adopted pursuant to this division, the commissioner may order that person or licensee to desist and to refrain from engaging in the business or further continuing that violation. In addition, the commissioner may include a claim for ancillary relief. The ancillary relief may include, but not be limited to, refunds, restitution or disgorgement, or damages on behalf of the persons injured by the act or practice constituting the subject matter of the action. If, within 30 days after the order is served, a written request for a hearing is filed and no hearing is held within 30 days thereafter, the order is rescinded. For purposes of this section, licensee includes a mortgage loan originator.

(b)Notwithstanding subdivision (a), if, after an investigation, the commissioner has reasonable grounds to believe that a person is conducting or has conducted business in an unsafe or injurious manner, the commissioner shall, by written order addressed to that person, direct the discontinuance of the unsafe or injurious practices. The order shall be effective immediately, immediately but shall not become final except in accordance with the provisions of Section 22717.

(a)The commissioner shall suspend or revoke any license, upon notice and reasonable opportunity to be heard, if the commissioner finds any of the following:

(1)The licensee has failed to comply with any demand, ruling, or requirement of the commissioner made pursuant to and within the authority of this division.

(2)The licensee has violated any provision of this division or any rule or regulation made by the commissioner under and within the authority of this division.

(3)A fact or condition exists that, if it had existed at the time of the original application for the license, reasonably would have warranted the commissioner in refusing to issue the license originally.

(4)There has been repeated failure by the finance lender, when making or negotiating loans, to take into consideration in determining the size and duration of loans, the financial ability of the borrower to repay the loan in the time and manner provided in the loan contract, or to refinance the loan at maturity.

(5)There has been repeated failure by the program administrator, when administering assessment contracts, to take into consideration in determining the size and duration of the assessment contracts, the property owners ability to meet the annual PACE obligations in the time and manner provided in the contract.

(b)A master license shall not be suspended or revoked pursuant to this section as a result of any action or failure to act by a subsidiary licensee unless grounds exist for the suspension or revocation of the master license pursuant to this section. An order suspending or revoking a license or imposing sanctions against a licensee shall not affect other licensed locations unless expressly stated in the order.

(a)This division shall be liberally construed and applied to promote its underlying purposes and policies, which are:

(1)To ensure an adequate supply of credit to borrowers in this state.

(2)To simplify, clarify, and modernize the law governing loans made by finance lenders.

(3)To foster competition among finance lenders.

(4)To protect borrowers against unfair practices by some lenders, having due regard for the interests of legitimate and scrupulous lenders.

(5)To permit and encourage the development of fair and economically sound lending practices.

(6)To encourage and foster a sound economic climate in this state.

(7)To protect property owners from deceptive and misleading practices that threaten the efficacy and viability of property assessed clean energy financing programs.

(b)Consumer loans, as defined in Sections 22203 and 22204, are subject to this chapter, Chapter 2 (commencing with Section 22200), Article 1 (commencing with Section 22700) of Chapter 4, and Article 2 (commencing with Section 22750) of Chapter 4.

(c)Commercial loans, as defined in Section 22502, are subject to this chapter, Chapter 3 (commencing with Section 22500), Article 1 (commencing with Section 22700) of Chapter 4, and Article 3 (commencing with Section 22780) of Chapter 4.

(d)A program administrator, as defined in Section 22018, is subject to this chapter, Chapter 3.5 (commencing with Section 22680), and Article 1 (commencing with Section 22700) of Chapter 4.

(a)Licensee means any finance lender, broker, commercial financing provider, commercial financing broker, or program administrator who receives a license in accordance with this division.

(a)Finance lender, broker, commercial financing provider, commercial financing broker, and program administrator do not include employees regularly employed at the location specified in the license of the finance lender, broker, commercial financing provider, commercial financing broker, or program administrator, except that an employee, when acting within the scope of his or her the employees employment, shall be exempt from any other law from which his or her the employees employer is exempt.

(a)An application for a license as a finance lender, broker, commercial financing provider, commercial financing broker, or program administrator under this division shall be in the form and contain the information that the commissioner may by rule or order require and shall be filed upon payment of the fee specified in Section 22103.

(b)Notwithstanding any other law, an applicant who does not currently hold a license as a finance lender, broker, commercial financing provider, commercial financing broker, or program administrator under this division shall furnish, with their application, a full set of fingerprints and related information for purposes of the commissioner conducting a criminal history record check. The commissioner shall obtain and receive criminal history information from the Department of Justice and the Federal Bureau of Investigation pursuant to Section 22101.5.

(c)This section does not prevent a licensee from engaging in the business of a finance lender or program administrator through a subsidiary corporation if the subsidiary corporation is licensed pursuant to this division.

(d)For purposes of this section, subsidiary corporation means a corporation that is wholly owned by a licensee.

(e)A new application shall not be required for a change in the address of an existing location previously licensed under this division. However, the licensee shall comply with the requirements of Section 22153.

(f)Notwithstanding subdivisions (a) to (e), inclusive, the commissioner may by rule require an application to be made through the Nationwide Mortgage Licensing System and Registry, and may require fees, fingerprints, financial statements, supporting documents, changes of address, and any other information, and amendments or modifications thereto, to be submitted in the same manner.

(g)Notwithstanding any other law, the commissioner may by rule or order prescribe circumstances under which to accept electronic records or electronic signatures. This section does not require the commissioner to accept electronic records or electronic signatures.

(h)For purposes of this section, the following terms have the following meanings:

(1)Electronic record means an initial license application, or material modification of that license application, and any other record created, generated, sent, communicated, received, or stored by electronic means. Electronic records also includes, but is not limited to, all of the following:

(A)An application, amendment, supplement, and exhibit, filed for any license, consent, or other authority.

(B)A financial statement, a report, or advertising.

(C)An order, license, consent, or other authority.

(D)A notice of public hearing, accusation, and statement of issues in connection with any application, license, consent, or other authority.

(E)A proposed decision of a hearing officer and a decision of the commissioner.

(F)The transcripts of a hearing and correspondence between a party and the commissioner directly relating to the record.

(G)A release, newsletter, interpretive opinion, determination, or specific ruling.

(H)Correspondence between a party and the commissioner directly relating to any document listed in subparagraphs (A) to (G), inclusive.

(2)Electronic signature means an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record.

(i)The Legislature finds and declares that the Department of Financial Protection and Innovation has continuously implemented methods to accept records filed electronically, and is encouraged to continue to expand its use of electronic filings to the extent feasible, as budget, resources, and equipment are made available to accomplish that goal.

(a)The commissioner shall submit to the Department of Justice fingerprint images and related information required by the Department of Justice of all finance lender, broker, commercial financing provider, commercial financing broker, or program administrator license candidates, as defined by subdivision (a) of Section 22101, for purposes of obtaining information as to the existence and content of a record of state or federal convictions, state or federal arrests, and information as to the existence and content of a record of state or federal arrests for which the Department of Justice establishes that the person is free on bail or on his or her the persons own recognizance pending trial or appeal.

(b)When received, the Department of Justice shall forward to the Federal Bureau of Investigation requests for federal summary criminal history information received pursuant to this section. The Department of Justice shall review the information returned from the Federal Bureau of Investigation and compile and disseminate a response to the commissioner.

(c)The Department of Justice shall provide a response to the commissioner pursuant to paragraph (1) of subdivision (p) of Section 11105 of the Penal Code.

(d)The commissioner shall request from the Department of Justice subsequent arrest notification service, as provided pursuant to Section 11105.2 of the Penal Code, for license candidates described in subdivision (a).

(e)The Department of Justice shall charge a fee sufficient to cover the costs of processing the requests pursuant to this section.

(f)Notwithstanding subdivisions (a) to (e), inclusive, the commissioner may by rule require fingerprints submitted by an applicant to be submitted to the Nationwide Mortgage Licensing System and Registry in addition to the Department of Justice.

(a)A finance lender, broker, commercial financing provider, commercial financing broker, or program administrator licensee seeking to engage in business at a new location shall submit an application for a branch office license to the commissioner at least 10 days before engaging in business at a new location and pay the fee required by Section 22103. The commissioner may require an applicant seeking to engage in business at a new location to submit its application, or parts thereof, through the Nationwide Mortgage Licensing System and Registry.

(b)The licensee may engage in business at the new location 10 days after the date of submission of a branch office application.

(c)(1)The commissioner shall approve or deny the person responsible for the lending or financing activity at the new location in accordance with Section 22109, and shall notify the licensee of this decision within 90 days of the date of receipt of the application.

(2)If the commissioner denies the application, the licensee shall, within 10 days of the date of receipt of notification of the commissioners denial, submit a new application to the commissioner designating a different person responsible for the lending or financing activity at the new location. The commissioner shall approve or deny the different person as provided in paragraph (1).

(d)A licensee shall not engage in business at a new location in a name other than a name approved by the commissioner.

(e)The commissioner may adopt regulations to implement the requirements of this section.

(f)A branch office license to engage in business at a new location shall be issued in accordance with this section. A change of street address of a place of business designated in a license shall be made in accordance with Section 22153 and shall not constitute a new location subject to the requirements of this section.

(a)At the time of filing the application for a finance lender, broker, commercial financing provider, commercial financing broker, program administrator, or branch office license, the applicant shall pay to the commissioner the sum of one hundred dollars ($100) as a fee for investigating the application, plus the cost of fingerprint processing and the criminal history record check under Section 22101.5, and two hundred dollars ($200) as an application fee. The investigation fee, including the amount for the criminal history record check, and the application fee are not refundable if an application is denied or withdrawn.

(a)The applicant shall file with the application for a finance lender, broker, commercial financing provider, commercial financing broker, or program administrator license financial statements prepared in accordance with generally accepted accounting principles and acceptable to the commissioner that indicate a net worth of at least twenty-five thousand dollars ($25,000). Except as provided in subdivisions (b) and (c), a licensee shall maintain a net worth of at least twenty-five thousand dollars ($25,000) at all times.

(b)A licensed finance lender or broker, that employs one or more mortgage loan originators and that makes residential mortgage loans, shall continuously maintain a minimum net worth of at least two hundred fifty thousand dollars ($250,000).

(c)A licensed finance broker, that employs one or more mortgage loan originators and that arranges, but does not make, residential mortgage loans, shall continuously maintain a minimum net worth of at least fifty thousand dollars ($50,000).

(d)The commissioner may promulgate rules or regulations with respect to the requirements for minimum net worth, as are necessary to accomplish the purposes of this division and comply with the SAFE Act.

(a)Upon the filing of an application pursuant to Section 22101 and the payment of the fees, the commissioner shall investigate the applicant and its general partners and persons owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or any person responsible for the conduct of the applicants lending lending, financing, or program administration activities in this state, if the applicant is a partnership. If the applicant is a corporation, trust, limited liability company, or association, including an unincorporated organization, the commissioner shall investigate the applicant, its principal officers, directors, managing members, and persons owning or controlling, directly or indirectly, 10 percent or more of the outstanding equity securities or any person responsible for the conduct of the applicants lending or financing activities or for administering PACE programs for the applicant in this state. Upon the filing of an application pursuant to Section 22102 and the payment of the fees, the commissioner shall investigate the person responsible for the lending or financing activity of the licensee, or for administering one or more PACE programs for the licensee, at the new location described in the application. The investigation may be limited to information that was not included in prior applications filed pursuant to this division. If the commissioner determines that the applicant has satisfied this division and does not find facts constituting reasons for denial under Section 22109, the commissioner shall issue and deliver a license to the applicant.

(b)For the purposes of this section, principal officers shall mean president, chief executive officer, treasurer, and chief financial officer, as may be applicable, and any other officer with direct responsibility for the conduct of the applicants lending or financing activities or for PACE program administration for the applicant within the state.

(a)The finance lender, broker, commercial financing provider, commercial financing broker, or program administrator license shall state the name of the licensee, and if the licensee is a partnership, the names of its general partners, and if a corporation or an association, the date and place of its incorporation or organization, and the address of the licensees principal business location. On the approval and licensing of a location pursuant to Section 22101 or 22102, the commissioner shall issue an original license endorsed to show the address of the authorized location and, if applicable, the name of the subsidiary corporation licensed to operate the location. The license shall state whether the licensee is licensed as a finance lender, broker, commercial financing provider, commercial financing broker, or program administrator.

(b)(1)An application for a license for a business location outside this state shall constitute an agreement by the applicant to do all of the following:

(A)Make the licensees books, accounts, papers, records, and files available to the commissioner or the commissioners representatives in this state.

(B)Pay the reasonable expenses for travel, meals, and lodging of the commissioner or the commissioners representatives incurred during any investigation or examination made at the licensees location outside this state.

(2)A licensee located outside this state is not required to maintain books and records regarding licensed loans or licensed commercial financing transactions separate from those for other loans or other commercial financing transactions if the licensed loans or licensed commercial financing transactions can be readily identified.

(a)Each finance lender, broker, commercial financing provider, commercial financing broker, or program administrator licensee shall pay to the commissioner its pro rata share of all costs and expenses, including the costs and expenses associated with the licensing of mortgage loan originators it employs, reasonably incurred in the administration of this division, as estimated by the commissioner, for the ensuing year and any deficit actually incurred or anticipated in the administration of the program in the year in which the assessment is made. The pro rata share shall be the proportion that a licensees gross income bears to the aggregate gross income of all licensees as shown by the annual financial reports to the commissioner, for the costs and expenses remaining after the amount assessed pursuant to subdivision (c).

(b)On or before September 30th in each year, the commissioner shall notify each licensee of the amount assessed and levied against it and that amount shall be paid by October 31. If payment is not made by October 31, the commissioner shall assess and collect a penalty, in addition to the assessment, of 1 percent of the assessment for each month or part of a month that the payment is delayed or withheld.

(c)In the levying and collection of the assessment, a licensee shall neither be assessed for nor be permitted to pay less than two hundred fifty dollars ($250) per licensed location per year.

(d)If a licensee fails to pay the assessment on or before the October 31st, the commissioner may by order summarily suspend or revoke the certificate issued to the licensee. If, after an order is made, a request for a hearing is filed in writing within 30 days, and a hearing is not held within 60 days thereafter, the order is deemed rescinded as of its effective date. During any period when its certificate is revoked or suspended, a finance lender, broker, commercial financing provider, commercial financing broker, or program administrator licensee and any mortgage loan originator licensee employed by the finance lender or broker shall not conduct business pursuant to this division except as may be permitted by order of the commissioner. However, the revocation, suspension, or surrender of a certificate shall not affect the powers of the commissioner as provided in this division.

(e)The commissioner shall, by rule, establish the timelines, fees, and assessments applicable to applicants for original mortgage loan originator licenses, license renewals, and license changes under this division.

(f)Notwithstanding subdivisions (a) to (e), inclusive, the commissioner may by rule require licensees to pay assessments through the Nationwide Mortgage Licensing System and Registry.

(a)Upon reasonable notice and opportunity to be heard, the commissioner may deny the application for a finance lender, broker, commercial financing provider, commercial financing broker, or program administrator license for any of the following reasons:

(1)A false statement of a material fact has been made in the application.

(2)The applicant or an officer, director, general partner, person responsible for the applicants lending or financing activities or administering PACE programs for the applicant in this state, or person owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant has, within the last 10 years, been convicted of or pleaded nolo contendere to a crime, or committed an act involving dishonesty, fraud, or deceit, if the crime or act is substantially related to the qualifications, functions, or duties of a person engaged in business in accordance with this division.

(3)The applicant or an officer, director, general partner, person responsible for the applicants lending or financing activities or administering PACE programs for the applicant in this state, or person owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant has violated any provision of this division or the rules thereunder or any similar regulatory scheme of the State of California or a foreign jurisdiction.

(4)The applicant employs a mortgage loan originator who is not licensed, or has not initiated an application to become licensed, pursuant to this division.

(b)The application shall be considered withdrawn within the meaning of this section if the applicant fails to respond to a written notification of a deficiency in the application within 90 days of the date of the notification.

(c)The commissioner shall, within 60 days from the filing of a full and complete application for a license with the fees, either issue a license or file a statement of issues prepared in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

(a)A licensee shall maintain a surety bond in accordance with this subdivision in a minimum amount of twenty-five thousand dollars ($25,000). The bond shall be payable to the commissioner and issued by an insurer authorized to do business in this state. An original surety bond, including any and all riders and endorsements executed subsequent to the effective date of the bond, shall be filed with the commissioner within 10 days of execution. For licensees with multiple licensed locations, only one surety bond is required. The bond shall be used for the recovery of expenses, fines, and fees levied by the commissioner in accordance with this division or for losses or damages incurred by borrowers borrowers, recipients, or consumers as the result of a licensees noncompliance with the requirements of this division.

(b)When an action is commenced on a licensees bond, the commissioner may require the filing of a new bond. Immediately upon recovery of any action on the bond, the licensee shall file a new bond. Failure to file a new bond within 10 days of the recovery on a bond, or within 10 days after notification by the commissioner that a new bond is required, constitutes sufficient grounds for the suspension or revocation of the license.

(c)The commissioner may by rule require a higher bond amount for a licensee who employs one or more mortgage loan originators and who makes or arranges residential mortgage loans, based on the dollar amount of residential mortgage loans originated by that licensee and any mortgage loan originators employed by that licensee. Every mortgage loan originator employed by the licensee shall be covered by the surety bond.

(a)A finance lender license, broker license, commercial financing provider license, commercial financing broker license, program administrator license, and the license of every mortgage loan originator employed by a lender or finance broker, along with any currently effective order of the commissioner approving a different name pursuant to Section 22155, shall be conspicuously posted in the place of business authorized by the license.

(b)A license is not transferable or assignable. A license issued to a partnership or a limited partnership is not transferred or assigned within the meaning of this section by the death, withdrawal, or admission of a partner, general partner, or limited partner, unless the death, withdrawal, or admission dissolves the partnership to which the license was issued.

(a)A finance lender, broker, commercial financing provider, commercial financing broker, or program administrator licensee shall maintain only one place of business under a duplicate or original license issued pursuant to Section 22101 or 22102. The commissioner may issue more than one license to the same licensee upon compliance with all the provisions of this division governing an original issuance of a license.

(a)If a finance lender, broker, commercial financing provider, commercial financing broker, or program administrator licensee seeks to change its place of business to a street address other than that designated in its license, the licensee shall provide notice to the commissioner at least 10 days before the change. The commissioner shall notify the licensee within 10 days if the commissioner disapproves the change, and if the commissioner does not notify the licensee of disapproval within 10 days, the change in address shall be deemed approved. The commissioner may require an applicant to submit its application to change its place of business through the Nationwide Mortgage Licensing System and Registry.

(b)If notice is not given at least 10 days before the change of a street address of a place of business, as required by subdivision (a), or notice is not given at least 10 days before engaging in business at a new location, as required by Section 22102, the commissioner may assess a civil or administrative penalty on the licensee not to exceed five hundred dollars ($500).

(a)Subject to Section 22157.1, a licensee shall not conduct the business of making loans or commercial financing transactions or administering a PACE program under this division within any office, room, or place of business in which any other business is solicited or engaged in, or in association or conjunction therewith, except as is authorized in writing by the commissioner upon the commissioners finding that the character of the other business is such that the granting of the authority would not facilitate evasions of this division or of the rules and regulations made pursuant to this division. An authorization, once granted, remains in effect until revoked by the commissioner. The commissioner may authorize the other business through the Nationwide Mortgage Licensing System and Registry.

(b)The products or services of an affiliated corporation of the licensee that is a supervised financial institution, or a parent or subsidiary of a supervised financial institution that is an affiliate of the licensee, may be provided, offered, or sold at the licensed location of the licensee without authorization by the commissioner pursuant to subdivision (a) if both of the following are met:

(1)The activity is not prohibited by, or in violation of, the laws applicable to the affiliate or supervised financial institution.

(2)The products and services are not offered and sold in a manner that restricts the ability of the borrower borrower, recipient, or customer to individually select or reject a product or service that is offered.

(c)The following definitions govern the construction of this section:

(1)Affiliated or affiliate means the following: A corporation is an affiliate of, or a corporation is affiliated with, another specified corporation if it directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the other specified corporation.

(2)Supervised financial institution means any commercial bank, industrial bank, credit card bank, trust company, savings and loan association, savings bank, credit union, California finance lender, residential mortgage lender or servicer, or insurer, provided that the institution is subject to supervision by an official or agency of this state or of the United States.

(a)Subject to Section 22157.1, a finance lender, broker, commercial financing provider, commercial financing broker, mortgage loan originator, or program administrator licensee shall not transact the business licensed or make any loan or commercial financing transaction or administer any PACE program provided for by this division under any other name or at any other place of business than that named in the license except pursuant to a currently effective written order of the commissioner authorizing the other name or other place of business. The commissioners order, while effective, shall be deemed to amend the original license issued pursuant to Section 22105 or 22109.1. Notwithstanding any provision of this section, a finance lender, program administrator, broker, or mortgage loan originator licensee may make any loan and engage in any other business provided for by this division, other than the business described in subdivision (b) of Section 22154, at a place other than the licensed location under either of the following conditions:

(1)The borrower or recipient requests, either orally or in writing, that a loan or commercial financing transaction be initiated or made at a location other than the licensees licensed location. The use by the licensee of a preprinted solicitation form returned to the licensee by the borrower or recipient shall not constitute a request by the borrower or recipient that a loan or commercial financing transaction be initiated or made at a location other than the licensees licensed location.

(2)The licensee makes a solicitation or advertises for, or makes an offer of, a loan loan, commercial financing transaction, or assessment contract displayed on home pages or similar methods by the licensee on the internet, the World Wide Web, or similar proprietary or common carrier electronic systems, and the prospective borrower borrower, recipient, or property owner may transmit information over these electronic systems to the licensee in connection with the licensees offer to make a loan loan, commercial financing transaction, or assessment contract.

(a)Finance lender, broker, commercial financing provider, commercial financing broker, program administrator, and mortgage loan originator licensees shall keep and use in their business, books, accounts, and records which will enable the commissioner to determine if the licensee is complying with the provisions of this division and with the rules and regulations made by the commissioner. On any loan secured by real property in which loan proceeds were disbursed to an independent escrowholder, the licensee shall retain records and documents as set forth by rules of the commissioner adopted pursuant to Section 22150. Upon request of the commissioner, licensees shall file an authorization for disclosure to the commissioner of financial records of the licensed business pursuant to Section 7473 of the Government Code.

(a)Finance lender, broker, commercial financing provider, commercial financing broker, and mortgage loan originator licensees shall preserve their books, accounts, and records, if any, for at least three years after making the final entry on any loan or commercial financing transaction recorded therein.

(b)Except as otherwise specified by applicable law, including paragraph (3) of subdivision (b) of Section 5913 of the Streets and Highways Code, program administrator licensees shall preserve their books, accounts, and records for at least three years after the extinguishment of a PACE assessment is recorded therein.

(a)For purposes of this section:

(1)Encrypted has the same meaning as provided in paragraph (4) of subdivision (i) of Section 1798.82 of the Civil Code.

(2)Remote location means a personal residence or a temporary, nonpublic location not owned or leased by the licensee or an affiliate of the licensee that is not simultaneously accessible by anyone other than a single employee and individuals who maintain a common household with the employee.

(b)A licensee may designate an employee, when acting within the scope of employment, to perform work on the licensees behalf at a remote location if the licensee does all of the following:

(1)Prohibits in-person consumer interactions, including the physical receipt of cash or other monetary value or the disbursement of loan or commercial financing transaction proceeds, at a remote location and does not designate a remote location to the public as a business location.

(2)Prohibits records required pursuant to Section 22156 from being physically mailed to, shipped to, or stored at a remote location except for storage on an encrypted device or encrypted media.

(3)Prohibits the physical receipt of mail related to the licensees licensed business at a remote location.

(4)Prohibits a consumers personal information from being physically stored at a remote location except for storage on an encrypted device or encrypted media.

(5)Provides an employee working at a remote location with appropriate equipment, which may include encrypted devices, virtual private networks, and similar technology, to perform work and safeguard licensee records and consumer personal information.

(6)Adopts and adheres to appropriate, as determined by the department, written policies and procedures to supervise and maintain appropriate control over the work of employees at remote locations and safeguard the licensees records and consumer personal information in connection with work at a remote location, including, but not limited to, all of the following elements:

(A)Employee data security training.

(B)Maintenance of security logs of remote logins.

(C)Procedures designed to detect suspicious logins or attempted logins and to suspend access by potentially compromised accounts or equipment.

(D)Data breach response procedures.

(7)(A)Records telephone calls with consumers conducted from a remote location to the same extent as telephone calls with consumers conducted from licensed locations.

(B)This paragraph does not require telephone call recording if the licensee does not do so in the normal course of business for the employee or business in question.

(8)All books, records, and persons that the commissioner is entitled to examine, inspect, or interview shall be made available to the commissioner at a licensed location.

(a)(1)Each finance lender, broker, commercial financing provider, commercial financing broker, and program administrator licensee shall file an annual report with the commissioner, on or before March 15th, giving the relevant information that the commissioner reasonably requires concerning the business and operations conducted by the licensee or authorized by the program administrator licensee within the state during the preceding calendar year for each licensed place of business. The individual annual reports filed pursuant to this section shall be made available to the public for inspection except, upon request in the annual report to the commissioner, the balance sheet contained in the annual report of a sole proprietor or any other nonpublicly traded person. Nonpublicly traded person for purposes of this section means persons with securities owned by 35 or fewer individuals. The report shall be made under oath and in the form prescribed by the commissioner.

(b)A licensee shall make other special reports that may be required by the commissioner.

(c)The commissioner may require a licensee that employs one or more mortgage loan originators to submit to the Nationwide Mortgage Licensing System and Registry reports of condition, which shall be in the form and shall contain the information as the Nationwide Mortgage Licensing System and Registry may require.

(d)The commissioner may by rule or order require a mortgage loan originator to submit reports of condition to the Nationwide Mortgage Licensing System and Registry, in lieu of the reports of condition required of his or her the mortgage loan originators employer pursuant to subdivision (c).

(a)A person subject to this division shall not do any of the following:

(1)Make a materially false or misleading statement or representation to a borrower or recipient about the terms or conditions of that borrowers loan, loan or that recipients commercial financing transaction when making or brokering the loan. loan or commercial financing transaction.

(2)Make a materially false or misleading statement or representation to a property owner about the terms or conditions of an assessment contract.

(3)Advertise, print, display, publish, distribute, or broadcast, or cause or permit to be advertised, printed, displayed, published, distributed, or broadcast in any manner, any statement or representation with regard to the business subject to the provisions of this division, including the rates, terms, or conditions for making or negotiating loans, making or negotiating commercial financing transactions, or for making or negotiating assessment contracts, that is false, misleading, or deceptive, or that omits material information that is necessary to make the statements not false, misleading, or deceptive, or in the case of a licensee, that refers to the supervision of the business by the state or any department or official of the state.

(4)Commit an act in violation of Section 1695.13 of the Civil Code.

(5)Engage in any act in violation of Section 17200 of the Business and Professions Code.

(6)Knowingly misrepresent, circumvent, or conceal, through subterfuge or device, any material aspect or information regarding a transaction to which the person is a party.

(7)Commit an act that constitutes fraud or dishonest dealings.

(a)A finance lender, broker, commercial financing provider, commercial financing broker, or mortgage loan originator licensee shall not place an advertisement disseminated primarily in this state for a loan or commercial financing transaction unless the licensee discloses in the printed text of the advertisement, or in the oral text in the case of a radio or television advertisement, the license under which the loan or commercial financing transaction would be made or arranged.

(b)A program administrator licensee shall not place an advertisement disseminated primarily in this state for an assessment contract unless the licensee discloses in the printed text of the advertisement, or in the oral text in the case of a radio or television advertisement, the license under which the assessment contract would be administered.

(a)The commissioner may require that rates of charge, if stated by a licensee, be stated fully and clearly in the manner that the commissioner deems necessary to prevent misunderstanding by prospective borrowers borrowers, recipients, or property owners.

(a)If any person engaged in the business regulated by this division refers in any advertising to rates of interest, charges, or cost of loans loans, commercial financing transactions, or assessment contracts, the commissioner shall require that the rates, charges, or costs are stated fully and clearly in the manner that he or she the commissioner deems necessary to give adequate information to prospective borrowers or property owners. If the rates or costs advertised do not apply to loans or assessment contracts of all classes made or negotiated by the person, this fact shall be clearly indicated in the advertisement.

(a)The commissioner may, after appropriate notice and opportunity for hearing, suspend for a period not to exceed 12 months or bar a person from any position of employment with a licensee if the commissioner finds that the person has willfully used or claimed without authority a designation or certification of special education, practice, or skill that the person has not attained, or willfully held out to the public a confusingly similar designation or certification for the purpose of misleading the public regarding his or her the persons qualifications or experience.

(b)Within 15 days from the date of a notice of intention to issue an order pursuant to subdivision (a), the person may request a hearing under the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code). Upon receiving a request, the matter shall be set for hearing to commence within 30 days after receipt unless the person subject to this division consents to a later date. If no hearing is requested within 15 days after the mailing or service of the notice and none is ordered by the commissioner, the failure to request a hearing shall constitute a waiver of the right to a hearing.

(c)Upon receipt of a notice of intention to issue an order pursuant to subdivision (a), the person who is the subject of the proposed order is immediately prohibited from engaging in any activities subject to licensure under this division.

(d)Persons suspended or barred under this section are prohibited from participating in any business activity of a licensed finance lender, broker, commercial financing provider, commercial financing broker, program administrator, or mortgage loan originator, and from engaging in any business activity on the premises where a licensed finance lender, broker, commercial financing provider, commercial financing broker, program administrator, or mortgage loan originator is conducting its business. This subdivision does not prohibit suspended or barred persons from having their personal transactions processed by a licensed finance lender, broker, commercial financing provider, commercial financing broker, mortgage loan originator, or program administrator.

(a)The commissioner may, after appropriate notice and opportunity for hearing, by order, censure or suspend for a period not exceeding 12 months, or bar a person, including a mortgage loan originator, from any position of employment with, or management or control of, any finance lender, broker, commercial financing provider, commercial financing broker, program administrator, or any other person, if the commissioner finds either of the following:

(1)That the censure, suspension, or bar is in the public interest and that the person has committed or caused a violation of this division or rule or order of the commissioner, which violation was either known or should have been known by the person committing or causing it or has caused material damage to the finance lender, broker, commercial financing provider, commercial financing broker, program administrator, or mortgage loan originator, or to the public.

(2)That the person has been convicted of or pleaded nolo contendere to any crime, or has been held liable in any civil action by final judgment, or any administrative judgment by any public agency, if that crime or civil or administrative judgment involved any offense involving dishonesty, fraud, or deceit, or any other offense reasonably related to the qualifications, functions, or duties of a person engaged in the business in accordance with the provisions of this division.

(b)Within 15 days from the date of a notice of intention to issue an order pursuant to subdivision (a) or (b), the person may request a hearing under the Administrative Procedure Act (Chapter 4.5 (commencing with Section 11400) of Part 1 of Division 3 of Title 2 of the Government Code). Upon receipt of a request, the matter shall be set for hearing to commence within 30 days after such receipt unless the person subject to this division consents to a later date. If no hearing is requested within 15 days after the mailing or service of such notice and none is ordered by the commissioner, the failure to request a hearing shall constitute a waiver of the right to a hearing.

(c)Upon receipt of a notice of intention to issue an order pursuant to this section, the person who is the subject of the proposed order is immediately prohibited from engaging in any activities subject to licensure under the law.

(d)Persons suspended or barred under this section are prohibited from participating in any business activity of a finance lender, broker, commercial financing provider, commercial financing broker, program administrator, or mortgage loan originator, and from engaging in any business activity on the premises where a finance lender, broker, commercial financing provider, commercial financing broker, program administrator, or mortgage loan originator is conducting business.

(a)Finance lender, broker, commercial financing provider, commercial financing broker, and program administrator licenses issued under this division shall remain in effect until they are surrendered, revoked, or suspended.

(b)Mortgage loan originator licenses issued under this division shall be renewed annually upon the payment of an annual assessment, and, if renewed by the licensee, shall remain in effect until they are surrendered, revoked, or suspended.

(c)Surrender of a license becomes effective 30 days after receipt of an application to surrender the license or within a shorter period of time that the commissioner may determine, unless a revocation or suspension proceeding is pending when the application is filed or a proceeding to revoke or suspend or to impose conditions upon the surrender is instituted within 30 days after the application is filed. If a proceeding is pending or instituted, surrender of a license becomes effective at the time and upon the conditions that the commissioner determines.

(a)For the purpose of discovering violations of this division or securing information required by him or her the commissioner in the administration and enforcement of this division, the commissioner may at any time investigate the loans, commercial financing transactions, assessment contracts, and business, and examine the books, accounts, records, and files used in the business, of every person engaged in the business of a finance lender, broker, commercial financing provider, commercial financing broker, or program administrator, whether the person acts or claims to act as principal or agent, or under or without the authority of this division. For the purpose of examination, the commissioner and his or her the commissioners representatives shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of all these persons.

(a)(1)Whenever, in the opinion of the commissioner, any person is engaged or has engaged in business as a finance lender, broker, commercial financing provider, commercial financing broker, program administrator, or mortgage loan originator, as defined in this division, without a license from the commissioner, or any licensee is violating or has violated any provision of this division, any provision of an order, or any regulation adopted pursuant to this division, the commissioner may order that person or licensee to desist and to refrain from engaging in the business or further continuing that violation. In addition, the commissioner may include a claim for ancillary relief. The ancillary relief may include, but not be limited to, refunds, restitution or disgorgement, or damages on behalf of the persons injured by the act or practice constituting the subject matter of the action. If, within 30 days after the order is served, a written request for a hearing is filed and no hearing is held within 30 days thereafter, the order is rescinded. For purposes of this section, licensee includes a mortgage loan originator.

(b)Notwithstanding subdivision (a), if, after an investigation, the commissioner has reasonable grounds to believe that a person is conducting or has conducted business in an unsafe or injurious manner, the commissioner shall, by written order addressed to that person, direct the discontinuance of the unsafe or injurious practices. The order shall be effective immediately, immediately but shall not become final except in accordance with the provisions of Section 22717.

(a)The commissioner shall suspend or revoke any license, upon notice and reasonable opportunity to be heard, if the commissioner finds any of the following:

(1)The licensee has failed to comply with any demand, ruling, or requirement of the commissioner made pursuant to and within the authority of this division.

(2)The licensee has violated any provision of this division or any rule or regulation made by the commissioner under and within the authority of this division.

(3)A fact or condition exists that, if it had existed at the time of the original application for the license, reasonably would have warranted the commissioner in refusing to issue the license originally.

(4)There has been repeated failure by the finance lender, when making or negotiating loans, to take into consideration in determining the size and duration of loans, the financial ability of the borrower to repay the loan in the time and manner provided in the loan contract, or to refinance the loan at maturity.

(5)There has been repeated failure by the program administrator, when administering assessment contracts, to take into consideration in determining the size and duration of the assessment contracts, the property owners ability to meet the annual PACE obligations in the time and manner provided in the contract.

(b)A master license shall not be suspended or revoked pursuant to this section as a result of any action or failure to act by a subsidiary licensee unless grounds exist for the suspension or revocation of the master license pursuant to this section. An order suspending or revoking a license or imposing sanctions against a licensee shall not affect other licensed locations unless expressly stated in the order.

(a)For purposes of this section, the following terms have the following meanings:

(1)Commercial broker means any person who is involved in commercial financing and engaged in the business of performing any of the following acts in connection with commercial loans made by a commercial finance lender, unless that person is otherwise exempt from this section:

(A)Transmitting confidential data about a prospective borrower to a commercial finance lender with the expectation of compensation, in connection with making a referral.

(B)Making a referral to a commercial finance lender under an agreement with the commercial finance lender that a prospective borrower referred by the person to the commercial finance lender meets certain criteria involving confidential data.

(C)Participating in any loan negotiation between a commercial finance lender and prospective borrower.

(D)Counseling, advising, or making recommendations to a prospective borrower about a loan based on the prospective borrowers confidential data.

(E)Participating in the preparation of any loan documents, including loan applications, other than providing a prospective borrower blank copies of loan documents. Transmitting information that is not confidential data to a commercial finance lender at the request of a prospective borrower shall not, by itself, constitute participation in the preparation of loan documents within the meaning of this paragraph.

(F)Communicating to a prospective borrower a commercial finance lenders loan approval decisions.

(G)Charging a fee to a prospective borrower for any services related to a prospective borrowers application for a loan from a commercial finance lender.

(2)(A)Commercial financing means an accounts receivable purchase transaction, including factoring, asset-based lending transaction, commercial loan, commercial open-end credit plan, or lease financing transaction intended by the recipient for use primarily for other than personal, family, or household purposes.

(B)For purposes of determining whether financing is commercial financing within the meaning of this section, the provider may rely on any written statement of intended purposes signed by the recipient. The statement may be a separate statement signed by the recipient or may be contained in a loan application or other document signed by the recipient. The provider shall not be required to ascertain that the proceeds of the commercial financing are used in accordance with the statement of intended purposes.

(3)Commercial finance lender means an entity whose business operates, consistent with paragraph (2), to provide commercial financing, including, but not limited to, providing a borrower with a commercial loan or a commercial open-end credit plan.

(4)Commercial loan means a loan of a principal amount of five thousand dollars ($5,000) or more, or any loan under an open-end credit plan, the proceeds of which are intended by the recipient for use primarily for other than personal, family, or household purposes.

(5)Commercial open-end credit plan means a providers plan for making open-end loans pursuant to a loan agreement that sets forth the terms and conditions governing the use of the open-end credit program, and provides that:

(A)The recipient may use the open-end credit program to obtain money, goods, labor, or services or credit, and the provider makes open-end loans to the recipient for the purpose of paying money to, or at the direction of, the recipient or paying obligations that the recipient creates through use of the open-end credit program.

(B)The amount of each advance and the charges and other permitted costs are debited to an account.

(C)The charges are computed from time to time on the unpaid balances of the recipients account, excluding from the computation any unpaid charges other than permitted fees, costs, and expenses.

(D)The recipient can pay the account in full at any time.

(b)A person who provides commercial brokerage services to a borrower in a commercial loan transaction by soliciting lenders or otherwise negotiating a commercial loan, shall be licensed by the Commissioner of Financial Protection and Innovation in accordance with this division.

(c)(1)A person who provides commercial brokerage services to a borrower in a commercial loan transaction by soliciting lenders or otherwise negotiating a commercial loan, is the fiduciary of the borrower, and any violation of the persons fiduciary responsibility shall be a violation of this section. A commercial broker who arranges a commercial loan owes this fiduciary responsibility to the borrower regardless of whomever else the commercial broker may be acting as an agent for in the course of the loan transaction.

(2)This fiduciary responsibility includes the duty to exercise the utmost honesty, absolute candor, integrity, and unselfishness toward the borrower. This fiduciary responsibility includes a requirement that the commercial broker place the economic interest of the borrower ahead of their own economic interest, that they not compete with the borrower, and that they act at all times in the best interests of the borrower to the exclusion of all other interests, including interests that could benefit the agent or others.

(a)For purposes of this section, the following terms have the following meanings:

(1)Commercial broker means any person who is involved in commercial financing and engaged in the business of performing any of the following acts in connection with commercial loans made by a commercial finance lender, unless that person is otherwise exempt from this section:

(A)Transmitting confidential data about a prospective borrower to a commercial finance lender with the expectation of compensation, in connection with making a referral.

(B)Making a referral to a commercial finance lender under an agreement with the commercial finance lender that a prospective borrower referred by the person to the commercial finance lender meets certain criteria involving confidential data.

(C)Participating in any loan negotiation between a commercial finance lender and prospective borrower.

(D)Counseling, advising, or making recommendations to a prospective borrower about a loan based on the prospective borrowers confidential data.

(E)Participating in the preparation of any loan documents, including loan applications, other than providing a prospective borrower blank copies of loan documents. Transmitting information that is not confidential data to a commercial finance lender at the request of a prospective borrower shall not, by itself, constitute participation in the preparation of loan documents within the meaning of this paragraph.

(F)Communicating to a prospective borrower a commercial finance lenders loan approval decisions.

(G)Charging a fee to a prospective borrower for any services related to a prospective borrowers application for a loan from a commercial finance lender.

(2)(A)Commercial financing means an accounts receivable purchase transaction, including factoring, asset-based lending transaction, commercial loan, commercial open-end credit plan, or lease financing transaction intended by the recipient for use primarily for other than personal, family, or household purposes.

(B)For purposes of determining whether financing is commercial financing within the meaning of this section, the provider may rely on any written statement of intended purposes signed by the recipient. The statement may be a separate statement signed by the recipient or may be contained in a loan application or other document signed by the recipient. The provider shall not be required to ascertain that the proceeds of the commercial financing are used in accordance with the statement of intended purposes.

(3)Commercial finance lender means an entity whose business operates, consistent with paragraph (2), to provide commercial financing, including, but not limited to, providing a borrower with a commercial loan or a commercial open-end credit plan.

(4)Commercial loan means a loan of a principal amount of five thousand dollars ($5,000) or more, or any loan under an open-end credit plan, the proceeds of which are intended by the recipient for use primarily for other than personal, family, or household purposes.

(5)Commercial open-end credit plan means a providers plan for making open-end loans pursuant to a loan agreement that sets forth the terms and conditions governing the use of the open-end credit program, and provides that:

(A)The recipient may use the open-end credit program to obtain money, goods, labor, or services or credit, and the provider makes open-end loans to the recipient for the purpose of paying money to, or at the direction of, the recipient or paying obligations that the recipient creates through use of the open-end credit program.

(B)The amount of each advance and the charges and other permitted costs are debited to an account.

(C)The charges are computed from time to time on the unpaid balances of the recipients account, excluding from the computation any unpaid charges other than permitted fees, costs, and expenses.

(D)The recipient can pay the account in full at any time.

(b)A person who provides commercial brokerage services to a borrower in a commercial loan transaction by soliciting lenders or otherwise negotiating a commercial loan, shall be licensed by the Commissioner of Financial Protection and Innovation in accordance with this division.

(c)(1)A person who provides commercial brokerage services to a borrower in a commercial loan transaction by soliciting lenders or otherwise negotiating a commercial loan, is the fiduciary of the borrower, and any violation of the persons fiduciary responsibility shall be a violation of this section. A commercial broker who arranges a commercial loan owes this fiduciary responsibility to the borrower regardless of whomever else the commercial broker may be acting as an agent for in the course of the loan transaction.

(2)This fiduciary responsibility includes the duty to exercise the utmost honesty, absolute candor, integrity, and unselfishness toward the borrower. This fiduciary responsibility includes a requirement that the commercial broker place the economic interest of the borrower ahead of their own economic interest, that they not compete with the borrower, and that they act at all times in the best interests of the borrower to the exclusion of all other interests, including interests that could benefit the agent or others.