California 2017-2018 Regular Session Status: Passed Assembly 2 D cosponsors

AB 2500 — California Financing Law: consumer loans: charges.

Last action — Read third time. Refused passage. (Ayes 27. Noes 30. Page 5657.).

Track this bill free

No card. One bill, free forever — alerts when it moves.

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

This bill died with 2017-2018 Regular Session. It reached “Passed Assembly” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.

This bill is no longer active — its legislative session has ended, so there is no live prognosis. It would have to be reintroduced in the current session to move again.

Summary

(1) The California Financing Law (CFL) provides for the licensure and regulation of finance lenders and brokers by the Commissioner of Business Oversight. The CFL prohibits anyone from engaging in the business of a finance lender or broker without obtaining a license. A willful violation of the CFL is a crime, except as specified. Under existing law, a licensee who lends any sum of money is authorized to contract for and receive charges at a maximum rate that does not exceed specified sums on the unpaid principal balance per month, ranging from 2 12% to 1%, based on the consumer loan amount, as specified. This provision, however, does not apply to any loan of a bona fide principal amount of $2,500 or more, as determined in accordance with a provision governing regulatory ceilings and evasion of the CFL. The CFL also authorizes a licensee, as an alternative to the above-described rate charges for consumer loan amounts, to instead contract for and receive charges at the greater of a rate not exceeding 1.6% per month on the unpaid principal balance or a rate not exceeding 56 of 1% per month, plus a specified percentage per month, as established by the Federal Reserve Bank of San Francisco, on advances to member banks under federal law, or if there is no single determinable rate, the closest counterpart of this rate. Under existing law, these provisions do not apply to a loan of a bona fide principal amount of $2,500 or more, as specified. The CFL authorizes a licensee to contract for and receive an administrative fee of a specified amount that varies with the bona fide principal amount of the loan, including authorizing a licensee to receive an administrative fee of $75 with respect to a loan of a bona fide principal amount in excess of $2,500. This bill would authorize a licensee, with respect to a loan of a bona fide principal amount of $2,500 or more but less than $5,000, to contract for or receive no more than moneys paid for specified insurance and for charges, inclusive of an administrative fee that does not exceed $75, which in the aggregate amount exceed an annual simple interest rate of 36%. The bill would also authorize a licensee, as an alternative to these provisions, to contract for or receive no more than moneys paid for an administrative fee that does not exceed $90 and for charges, which in the aggregate amount do not exceed an annual simple interest rate of 36% or the sum of 30.75% plus the United States Prime Rate. (2) Existing law prohibits licensees subject to the CFL from entering into a contract for a consumer loan that provides for a scheduled repayment of principal over more than the maximum terms set forth in relation to the respective size of the loan. Among other things, this provision prohibits a loan of $3,000 but less than $5,000 from exceeding a maximum term of 60 months and 15 days. This bill would increase the maximum principal loan amount under the above schedule to $10,000. The bill would also prohibit a licensee from entering into a contract for a consumer loan that is in excess of $2,500 but less than $10,000 that provides for a scheduled repayment of principal that is less than 12 months. By expanding the application of the CFL to cover more loans, the bill would expand the scope of an existing crime, thereby imposing a state-mandated local program. (3) The CFL requires a statement showing in clear and distinct terms specified information relating to the loan to be delivered to the buyer when it is made. This bill would also require each licensee, prior to disbursement of loan proceeds in connection with certain loans exceeding $2,500 but less than $10,000, to offer a free credit education program or seminar to each borrower in accordance with certain conditions. (4) The CFL requires a licensed finance lender to permit payment to be made in advance in any amount on any contract of any loan at any time and authorizes the licensee to apply that payment first to any agreed prepayment penalty. This bill would prohibit a licensee from charging, imposing, or receiving any penalty for the prepayment of a loan, except as specified, and would make conforming changes to that effect. The bill would also make certain moneys paid to, and commissions and benefits received by, a licensee in connection with a loan that a buyer separately authorized as optional subject to adjustment and rebate if a loan contract is paid in full, as prescribed. (5) The CFL defines charges for its purposes to include aggregate interest, fees, bonuses, commissions, brokerage, discounts, expenses, and other forms of costs charged, contracted for, or received by a licensee or any other person in connection with the investigating, arranging, negotiating, procuring, guaranteeing, making, servicing, collecting, and enforcing of a loan or forbearance of money, credit, goods, or things in action, or any other service rendered. Existing law also specifies that charges do not include, among other things, fees paid to a licensee for the privilege of participating in an open-end-credit program, which fees are to cover administrative costs and are imposed upon executing the open-end loan agreement and on annual renewal dates or anniversary dates. This bill would delete the above exception for fees paid to a licensee for the privilege of participating in an open-end credit program, as specified. (6) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.

Bill Text

Action History

  1. Read third time. Refused passage. (Ayes 27. Noes 30. Page 5657.).

  2. Read third time and amended. Ordered to third reading. (Page 5363.)

  3. Read second time. Ordered to third reading.

  4. From committee: Do pass. (Ayes 11. Noes 3.) (May 25).

  5. In committee: Set, first hearing. Referred to APPR. suspense file.

  6. From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 0.) (April 2). Re-referred to Com. on APPR.

  7. Re-referred to Com. on B. & F.

  8. From committee chair, with author's amendments: Amend, and re-refer to Com. on B. & F. Read second time and amended.

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

  10. From printer. May be heard in committee March 17.

  11. Read first time. To print.

Sponsors

  • Mitchell · Cosponsor
  • Bloom · Cosponsor
  • Gonzalez Fletcher · Cosponsor
  • Bradford · Cosponsor
  • Chiu · Cosponsor
  • Chu · Cosponsor
  • Jones-Sawyer · Cosponsor
  • Ash Kalra · Primary
  • McCarty · Cosponsor
  • Ting · Cosponsor
  • Mia Bonta · Cosponsor
  • Mark Stone · Cosponsor

Sponsorship breakdown

Export CSV (upgrade) →

1 sponsors · 11 co-sponsors · 110 not signed on · 9 voted No

Sponsors (1)

Co-sponsors (11)

  • Mitchell
  • Bloom
  • Gonzalez Fletcher
  • Bradford
  • Chiu
  • Chu
  • Jones-Sawyer
  • McCarty
  • Ting
  • Bonta, Mia Democratic
  • Mark Stone

Not signed on (110)

110 members have not signed on to this bill.

Show all 110 →

"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

AB 2500 KALRA Assembly Third Reading

Failed 27 Yea · 30 Nay · 21 Other
Party YeaNayPresentNot Voting
Unaffiliated 2123013
Democratic 6306
Republican 0402
Total 2730021
% of votes cast 35%38%0%27%
How each member voted (78)
Member Party Vote
Acosta — Not Voting
Bigelow — Nay
Bloom — Yea
Brough — Not Voting
Harper — Nay
Jones-Sawyer — Yea
Low — Not Voting
Maienschein — Nay
Mathis — Nay
Melendez — Nay
Obernolte — Nay
Rendon — Yea
Santiago — Yea
Steinorth — Nay
Ting — Yea
Voepel — Not Voting
Weber — Yea
Eggman — Not Voting
Baker — Nay
Burke — Nay
Friedman — Yea
Gonzalez Fletcher — Yea
Kamlager-Dove — Yea
Kiley — Nay
Levine — Yea
Fong — Nay
Salas — Nay
Mayes — Nay
Gray — Nay
McCarty — Yea
Medina — Nay
Mullin — Yea
Rubio — Nay
Chau — Yea
Chiu — Yea
Chu — Yea
Cooley — Nay
Cunningham — Nay
Nazarian — Yea
Quirk — Yea
Rodriguez — Nay
Thurmond — Yea
Chávez — Not Voting
Cooper — Not Voting
Holden — Not Voting
O'Donnell — Not Voting
Waldron — Not Voting
Wood — Not Voting
Daly — Nay
Frazier — Nay
Gloria — Yea
Cristina Garcia — Not Voting
Eduardo Garcia — Not Voting
Jim Patterson — Nay
Mark Stone — Yea
Travis Allen — Nay
Wendy Carrillo — Yea
Aguiar-Curry, Cecilia M. Democratic Not Voting
Arambula, Joaquin Democratic Not Voting
Berman, Marc Democratic Yea
Bonta, Mia Democratic Yea
Caballero, Anna M. Democratic Nay
Calderon, Lisa Democratic Not Voting
Cervantes, Sabrina Democratic Nay
Gipson, Mike A. Democratic Not Voting
Grayson, Timothy S. Democratic Nay
Irwin, Jacqui Democratic Not Voting
Kalra, Ash Democratic Yea
Limón, Monique Democratic Yea
Muratsuchi, Al Democratic Yea
Quirk-Silva, Sharon Democratic Not Voting
Reyes, Eloise Gómez Democratic Yea
Chen, Phillip Republican Nay
Choi, Steven S. Republican Not Voting
Dahle, Megan Republican Nay
Flora, Heath Republican Nay
Gallagher, James Republican Not Voting
Lackey, Tom Republican Nay

Official roll call →

Do pass.

Passed 11 Yea · 3 Nay · 3 Other
Party YeaNayPresentNot Voting
Unaffiliated 9301
Democratic 2001
Republican 0001
Total 11303
% of votes cast 65%18%0%18%
How each member voted (17)
Member Party Vote
Bloom — Yea
Brough — Not Voting
Eggman — Yea
Chau — Yea
Gonzalez Fletcher — Yea
Friedman — Yea
Nazarian — Yea
Fong — Nay
Obernolte — Nay
Quirk — Yea
Bigelow — Nay
Eduardo Garcia — Yea
Wendy Carrillo — Yea
Bonta, Mia Democratic Yea
Calderon, Lisa Democratic Not Voting
Reyes, Eloise Gómez Democratic Yea
Gallagher, James Republican Not Voting

Official roll call →

Do pass and be re-referred to the Committee on [Appropriations]

Passed 7 Yea · 0 Nay · 4 Other
Party YeaNayPresentNot Voting
Unaffiliated 3002
Democratic 4000
Republican 0002
Total 7004
% of votes cast 64%0%0%36%
How each member voted (11)
Member Party Vote
Acosta — Not Voting
Weber — Yea
Burke — Not Voting
Gonzalez Fletcher — Yea
Mark Stone — Yea
Calderon, Lisa Democratic Yea
Cervantes, Sabrina Democratic Yea
Grayson, Timothy S. Democratic Yea
Limón, Monique Democratic Yea
Chen, Phillip Republican Not Voting
Choi, Steven S. Republican Not Voting

Official roll call →

Subjects

taxation finance
Cross-referencing the record. Reading this bill against every other bill in the corpus by meaning, not keywords. Only the first open is slow. It’s instant for you after this. Matching · Ranking · Engrossing

Frequently asked questions

What does AB 2500 do?
(1) The California Financing Law (CFL) provides for the licensure and regulation of finance lenders and brokers by the Commissioner of Business Oversight. The CFL prohibits anyone from engaging in the business of a finance lender or broker without obtaining a license. A willful violation of the CFL is a crime, except as specified. Under existing law, a licensee who lends any sum of money is authorized to contract for and receive charges at a maximum rate that does not exceed specified sums on the unpaid principal balance per month, ranging from 2 12% to 1%, based on the consumer loan amount, as specified. This provision, however, does not apply to any loan of a bona fide principal amount of $2,500 or more, as determined in accordance with a provision governing regulatory ceilings and evasion of the CFL. The CFL also authorizes a licensee, as an alternative to the above-described rate charges for consumer loan amounts, to instead contract for and receive charges at the greater of a rate not exceeding 1.6% per month on the unpaid principal balance or a rate not exceeding 56 of 1% per month, plus a specified percentage per month, as established by the Federal Reserve Bank of San Francisco, on advances to member banks under federal law, or if there is no single determinable rate, the closest counterpart of this rate. Under existing law, these provisions do not apply to a loan of a bona fide principal amount of $2,500 or more, as specified. The CFL authorizes a licensee to contract for and receive an administrative fee of a specified amount that varies with the bona fide principal amount of the loan, including authorizing a licensee to receive an administrative fee of $75 with respect to a loan of a bona fide principal amount in excess of $2,500. This bill would authorize a licensee, with respect to a loan of a bona fide principal amount of $2,500 or more but less than $5,000, to contract for or receive no more than moneys paid for specified insurance and for charges, inclusive of an administrative fee that does not exceed $75, which in the aggregate amount exceed an annual simple interest rate of 36%. The bill would also authorize a licensee, as an alternative to these provisions, to contract for or receive no more than moneys paid for an administrative fee that does not exceed $90 and for charges, which in the aggregate amount do not exceed an annual simple interest rate of 36% or the sum of 30.75% plus the United States Prime Rate. (2) Existing law prohibits licensees subject to the CFL from entering into a contract for a consumer loan that provides for a scheduled repayment of principal over more than the maximum terms set forth in relation to the respective size of the loan. Among other things, this provision prohibits a loan of $3,000 but less than $5,000 from exceeding a maximum term of 60 months and 15 days. This bill would increase the maximum principal loan amount under the above schedule to $10,000. The bill would also prohibit a licensee from entering into a contract for a consumer loan that is in excess of $2,500 but less than $10,000 that provides for a scheduled repayment of principal that is less than 12 months. By expanding the application of the CFL to cover more loans, the bill would expand the scope of an existing crime, thereby imposing a state-mandated local program. (3) The CFL requires a statement showing in clear and distinct terms specified information relating to the loan to be delivered to the buyer when it is made. This bill would also require each licensee, prior to disbursement of loan proceeds in connection with certain loans exceeding $2,500 but less than $10,000, to offer a free credit education program or seminar to each borrower in accordance with certain conditions. (4) The CFL requires a licensed finance lender to permit payment to be made in advance in any amount on any contract of any loan at any time and authorizes the licensee to apply that payment first to any agreed prepayment penalty. This bill would prohibit a licensee from charging, imposing, or receiving any penalty for the prepayment of a loan, except as specified, and would make conforming changes to that effect. The bill would also make certain moneys paid to, and commissions and benefits received by, a licensee in connection with a loan that a buyer separately authorized as optional subject to adjustment and rebate if a loan contract is paid in full, as prescribed. (5) The CFL defines charges for its purposes to include aggregate interest, fees, bonuses, commissions, brokerage, discounts, expenses, and other forms of costs charged, contracted for, or received by a licensee or any other person in connection with the investigating, arranging, negotiating, procuring, guaranteeing, making, servicing, collecting, and enforcing of a loan or forbearance of money, credit, goods, or things in action, or any other service rendered. Existing law also specifies that charges do not include, among other things, fees paid to a licensee for the privilege of participating in an open-end-credit program, which fees are to cover administrative costs and are imposed upon executing the open-end loan agreement and on annual renewal dates or anniversary dates. This bill would delete the above exception for fees paid to a licensee for the privilege of participating in an open-end credit program, as specified. (6) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.
Who sponsors AB 2500?
AB 2500 is sponsored by Mitchell, Bloom, Gonzalez Fletcher, Bradford, Chiu, Chu, Jones-Sawyer, Kalra, Ash (Democratic), McCarty, Ting, Bonta, Mia (Democratic), and Mark Stone.
What is the current status of AB 2500?
This bill died with 2017-2018 Regular Session. It reached “Passed Assembly” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
Where can I track AB 2500?
Track AB 2500 free on One Click Politics — get push/email alerts when it moves.

Make your voice heard on AB 2500

Find the representatives who decide this bill and tell them where you stand — for yourself, or mobilize your whole list in one click with One Click Politics advocacy software.

Find my representatives → Run a campaign

Stay ahead of AB 2500

Last checked for changes 3 months ago · updated continuously

One Click Politics tracks every bill in Congress and all 50 states.

Track this bill →