California 2013-2014 Regular Session Status: Enacted

SB 896 — Finance lenders: nonprofit organizations: zero-interest, low-cost loans: exemptions.

Last action — Chaptered by Secretary of State. Chapter 190, Statutes of 2014.

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  1. ✓
    Introduced
  2. ✓
    In Committee
  3. ✓
    Passed Senate
  4. ✓
    Passed Assembly
  5. ✓
    To Executive
  6. 6
    Enacted

This bill has been enacted into law. Introduced January 13, 2014. Enacted.

Prognosis

Likely to advance 72% · moderate confidence

Where this bill stands today.

Odds of enactment

High

How often bills like it became law.

  • Enacted

    Current position in the legislative process.

  • 2 sponsors

    1 primary, 1 co-sponsors signed on.

  • Cleared a recorded vote

    Passed 6 recorded votes so far.

Prognosis reads this bill's own signals — stage, sponsorship breadth, committee status, recorded votes and cross-state momentum. Odds come from a model trained on which bills have become law.

Summary

Existing law, the California Finance Lenders Law, provides for the licensure and regulation of finance lenders and brokers by the Commissioner of Business Oversight who is the chief officer of the Department of Business Oversight. Existing law prohibits a person from engaging in the business of a finance lender or broker without obtaining a license from the commissioner. Under existing law, a finance lender includes any person who is engaged in the business of making consumer loans or making commercial loans and the business of making those loans includes lending money and taking, in the name of the lender, or in any other name, in whole or in part, as security for a loan, any contract or obligation involving the forfeiture of rights in or to personal property, the use and possession of which property is retained by other than the mortgagee or lender, or any lien on, assignment of, or power of attorney relative to wages, salary, earnings, income, or commission. Under existing law, a broker includes any person who is engaged in the business of negotiating or performing any act as broker in connection with loans made by a finance lender. Existing law makes certain persons and entities exempt from, or not subject to, the law if certain requirements are met. In any proceeding, under this law, the burden of proving an exemption is upon the person or entity claiming it. This bill would make exempt from this law a nonprofit organization that facilitates one or more zero-interest, low-cost loans with a minimum principal amount upon origination of $250 and a maximum principal amount upon origination of $2,500 if certain requirements are met, including, among other things, that the organization is exempt from federal income taxes, no part of the net earnings of the organization inures to the benefit of private persons, and that the loan terms meet certain requirements. The bill would authorize any organization wishing to operate pursuant to an exemption to file a specified application with, and pay a fee in an amount to be determined by, the commissioner. The bill would authorize the commissioner to refuse to grant an exemption, or to suspend or revoke an exemption, if he or she makes a specified finding and finds that such action is in the best interests of the public. The bill would require an organization granted an exemption, referred to as an exempt organization, to, among other things, offer a borrower a credit education program or seminar at no cost to the borrower, report each borrower's payment performance to at least one consumer reporting agency, and underwrite each loan and ensure that a loan is not made if the organization determines that the borrower's total monthly debt service payments exceeds a specified amount. This bill would make the law inapplicable to a nonprofit organization that partners with an exempt organization for the purpose of facilitating zero-interest, low-cost loans, if certain requirements are met, including, but not limited to, that this nonprofit organization, to be known as the partnering organization, meet specified requirements for federal income tax exemption, that no part of the net earnings of the organization shall inure to the benefit of private persons, and that the loan terms meet certain requirements. The bill would require the partnership of each exempt organization and each partnering organization to be formalized through a specified written agreement to be provided to the commissioner upon his or her request. The bill would require each exempt organization to provide the commissioner with notice and certain information upon entering into a written agreement with a partnering organization. Upon a determination that a partnering organization has acted in violation of certain requirements, the bill would authorize the commissioner to, among other things, disqualify that partnering organization from facilitating zero-interest, low-cost loans, bar that partnering organization from performing services at one or more specific locations, terminate a written agreement, and prohibit the use of that partnering organization by all organizations granted exemptions if the commissioner determines it is in the public interest. The bill would authorize the commissioner to examine each exempt organization and each partnering organization for compliance with these provisions upon reasonable notice. The bill would require any examined organization to make available to the commissioner all books and records requested by the commissioner. The bill would require the cost of any such examination to be paid by the exempt organization. The bill would require every exempt organization whose exemption is approved to file an annual report with the commissioner on or before March 15 containing specified information. The bill would also require an exempt organization to include information regarding the loans facilitated by a partnering organization in this annual report. On or before July 1 annually, the bill would require the commissioner to post a report on the department's Internet Web site that summarizes information relating to exempt organizations, partnering organizations, and the facilitation of these zero-interest, low-cost loans including that information compiled by the commissioner from the annual reports submitted by the exempt organizations. Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest. This bill would make legislative findings to that effect.

Bill Text

Action History

  1. Chaptered by Secretary of State. Chapter 190, Statutes of 2014.

  2. Approved by the Governor.

  3. Enrolled and presented to the Governor at 3 p.m.

  4. In Senate. Ordered to engrossing and enrolling.

  5. Read third time. Passed. (Ayes 75. Noes 0. Page 5848.) Ordered to the Senate.

  6. Read second time. Ordered to third reading.

  7. From committee: Do pass. (Ayes 16. Noes 0.) (July 2).

  8. From committee: Do pass and re-refer to Com. on APPR. (Ayes 12. Noes 0.) (June 23). Re-referred to Com. on APPR.

  9. Referred to Com. on B. & F.

  10. In Assembly. Read first time. Held at Desk.

  11. Read third time. Passed. (Ayes 33. Noes 0. Page 3494.) Ordered to the Assembly.

  12. Read second time. Ordered to third reading.

  13. Ordered to second reading.

  14. Read third time and amended.

  15. Read second time. Ordered to third reading.

  16. From committee: Do pass. (Ayes 6. Noes 0. Page 3277.) (April 28).

  17. Set for hearing April 28.

  18. From committee: Do pass and re-refer to Com. on APPR. (Ayes 9. Noes 0. Page 3161.) (April 9). Re-referred to Com. on APPR.

  19. Set for hearing April 9.

  20. From committee with author's amendments. Read second time and amended. Re-referred to Com. on B. & F.I.

  21. Referred to Com. on B. & F.I.

  22. From printer. May be acted upon on or after February 13.

  23. Introduced. Read first time. To Com. on RLS. for assignment. To print.

Sponsors

  • Correa · Primary
  • Hill · Cosponsor

Sponsorship breakdown

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1 sponsors · 1 co-sponsors · 120 not signed on

Sponsors (1)

  • Correa

Co-sponsors (1)

  • Hill

Not signed on (120)

120 members have not signed on to this bill.

Show all 120 →

"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Votes

SB 896 Correa Senate Third Reading By DICKINSON

Passed 75 Yea · 0 Nay · 4 Other
Party YeaNayPresentNot Voting
Unaffiliated 68004
Democratic 4000
Republican 3000
Total 75004
% of votes cast 95%0%0%5%
How each member voted (79)
Member Party Vote
Achadjian — Yea
Alejo — Yea
Ammiano — Yea
Bloom — Yea
Bradford — Yea
Brown — Yea
Buchanan — Yea
Linder — Yea
Maienschein — Yea
Mansoor — Not Voting
Nazarian — Yea
Pan — Yea
Ridley-Thomas — Yea
Wagner — Yea
Wieckowski — Yea
Yamada — Yea
Allen — Yea
Lowenthal — Yea
Frazier — Yea
Gomez — Yea
Garcia — Yea
Gray — Yea
Atkins — Yea
Fong — Yea
Campos — Yea
Chesbro — Yea
Bonilla — Yea
Hagman — Yea
Harkey — Yea
Holden — Yea
Jones-Sawyer — Yea
Levine — Yea
Logue — Yea
Bocanegra — Yea
Medina — Yea
John A. Pérez — Yea
Melendez — Yea
Salas — Yea
Mullin — Yea
Bigelow — Yea
Chávez — Yea
Cooley — Yea
Dababneh — Yea
Daly — Yea
Eggman — Yea
Nestande — Yea
Olsen — Yea
Perea — Yea
Quirk — Yea
Rendon — Yea
Rodriguez — Yea
Skinner — Yea
Ting — Yea
Waldron — Yea
Weber — Yea
Wilk — Yea
Williams — Yea
Gorell — Not Voting
Chau — Yea
Conway — Yea
Donnelly — Not Voting
Dickinson — Yea
Fox — Yea
Gatto — Yea
Gordon — Yea
Hall — Yea
Beth Gaines — Yea
Jim Patterson — Not Voting
Lorena Gonzalez — Yea
Mark Stone — Yea
Roger Hernández — Yea
V. Manuel Pérez — Yea
Bonta, Mia Democratic Yea
Calderon, Lisa Democratic Yea
Muratsuchi, Al Democratic Yea
Quirk-Silva, Sharon Democratic Yea
Dahle, Megan Republican Yea
Grove, Shannon Republican Yea
Jones, Brian W. Republican Yea

Official roll call →

Do pass.

Passed 16 Yea · 0 Nay · 1 Other
Party YeaNayPresentNot Voting
Unaffiliated 14001
Republican 1000
Democratic 1000
Total 16001
% of votes cast 94%0%0%6%
How each member voted (17)
Member Party Vote
Bradford — Yea
Linder — Yea
Wagner — Yea
Gatto — Yea
Bocanegra — Yea
Gomez — Yea
Lowenthal — Yea
Campos — Yea
Holden — Yea
Bigelow — Yea
Donnelly — Not Voting
Eggman — Yea
Pan — Yea
Quirk — Yea
Ridley-Thomas — Yea
Calderon, Lisa Democratic Yea
Jones, Brian W. Republican Yea

Official roll call →

3rd Reading

Passed 33 Yea · 0 Nay · 7 Other
Party YeaNayPresentNot Voting
Unaffiliated 31006
Democratic 2001
Total 33007
% of votes cast 83%0%0%18%
How each member voted (40)
Member Party Vote
Anderson — Yea
Block — Yea
Lara — Yea
Liu — Yea
Nielsen — Not Voting
Pavley — Yea
Steinberg — Yea
Torres — Not Voting
Evans — Yea
Wright — Not Voting
Wyland — Yea
Mitchell — Yea
De León — Yea
Cannella — Not Voting
Galgiani — Yea
Hernandez — Yea
Hill — Yea
Hueso — Yea
Huff — Yea
Corbett — Yea
Beall — Yea
Correa — Yea
Knight — Yea
Leno — Yea
Lieu — Yea
Monning — Yea
Morrell — Yea
Roth — Yea
Vidak — Yea
Walters — Yea
Wolk — Yea
DeSaulnier — Not Voting
Fuller — Yea
Yee — Not Voting
Hancock — Yea
Beth Gaines — Yea
Bill Berryhill — Yea
Calderon, Lisa Democratic Not Voting
Jackson, Corey A. Democratic Yea
Padilla, Stephen C. Democratic Yea

Official roll call →

Do pass.

Passed 6 Yea · 0 Nay · 1 Other
Party YeaNayPresentNot Voting
Unaffiliated 5001
Democratic 1000
Total 6001
% of votes cast 86%0%0%14%
How each member voted (7)
Member Party Vote
Hill — Yea
Lara — Yea
Steinberg — Yea
De León — Yea
Walters — Not Voting
Beth Gaines — Yea
Padilla, Stephen C. Democratic Yea

Official roll call →

Subjects

finance
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Frequently asked questions

What does SB 896 do?
Existing law, the California Finance Lenders Law, provides for the licensure and regulation of finance lenders and brokers by the Commissioner of Business Oversight who is the chief officer of the Department of Business Oversight. Existing law prohibits a person from engaging in the business of a finance lender or broker without obtaining a license from the commissioner. Under existing law, a finance lender includes any person who is engaged in the business of making consumer loans or making commercial loans and the business of making those loans includes lending money and taking, in the name of the lender, or in any other name, in whole or in part, as security for a loan, any contract or obligation involving the forfeiture of rights in or to personal property, the use and possession of which property is retained by other than the mortgagee or lender, or any lien on, assignment of, or power of attorney relative to wages, salary, earnings, income, or commission. Under existing law, a broker includes any person who is engaged in the business of negotiating or performing any act as broker in connection with loans made by a finance lender. Existing law makes certain persons and entities exempt from, or not subject to, the law if certain requirements are met. In any proceeding, under this law, the burden of proving an exemption is upon the person or entity claiming it. This bill would make exempt from this law a nonprofit organization that facilitates one or more zero-interest, low-cost loans with a minimum principal amount upon origination of $250 and a maximum principal amount upon origination of $2,500 if certain requirements are met, including, among other things, that the organization is exempt from federal income taxes, no part of the net earnings of the organization inures to the benefit of private persons, and that the loan terms meet certain requirements. The bill would authorize any organization wishing to operate pursuant to an exemption to file a specified application with, and pay a fee in an amount to be determined by, the commissioner. The bill would authorize the commissioner to refuse to grant an exemption, or to suspend or revoke an exemption, if he or she makes a specified finding and finds that such action is in the best interests of the public. The bill would require an organization granted an exemption, referred to as an exempt organization, to, among other things, offer a borrower a credit education program or seminar at no cost to the borrower, report each borrower's payment performance to at least one consumer reporting agency, and underwrite each loan and ensure that a loan is not made if the organization determines that the borrower's total monthly debt service payments exceeds a specified amount. This bill would make the law inapplicable to a nonprofit organization that partners with an exempt organization for the purpose of facilitating zero-interest, low-cost loans, if certain requirements are met, including, but not limited to, that this nonprofit organization, to be known as the partnering organization, meet specified requirements for federal income tax exemption, that no part of the net earnings of the organization shall inure to the benefit of private persons, and that the loan terms meet certain requirements. The bill would require the partnership of each exempt organization and each partnering organization to be formalized through a specified written agreement to be provided to the commissioner upon his or her request. The bill would require each exempt organization to provide the commissioner with notice and certain information upon entering into a written agreement with a partnering organization. Upon a determination that a partnering organization has acted in violation of certain requirements, the bill would authorize the commissioner to, among other things, disqualify that partnering organization from facilitating zero-interest, low-cost loans, bar that partnering organization from performing services at one or more specific locations, terminate a written agreement, and prohibit the use of that partnering organization by all organizations granted exemptions if the commissioner determines it is in the public interest. The bill would authorize the commissioner to examine each exempt organization and each partnering organization for compliance with these provisions upon reasonable notice. The bill would require any examined organization to make available to the commissioner all books and records requested by the commissioner. The bill would require the cost of any such examination to be paid by the exempt organization. The bill would require every exempt organization whose exemption is approved to file an annual report with the commissioner on or before March 15 containing specified information. The bill would also require an exempt organization to include information regarding the loans facilitated by a partnering organization in this annual report. On or before July 1 annually, the bill would require the commissioner to post a report on the department's Internet Web site that summarizes information relating to exempt organizations, partnering organizations, and the facilitation of these zero-interest, low-cost loans including that information compiled by the commissioner from the annual reports submitted by the exempt organizations. Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest. This bill would make legislative findings to that effect.
Who sponsors SB 896?
SB 896 is sponsored by Correa and Hill.
What is the current status of SB 896?
This bill has been enacted into law. Introduced January 13, 2014. Enacted.
Where can I track SB 896?
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