The California Financing Law (CFL) generally regulates loans made by finance lenders, brokers, and program administrators. The CFL authorizes licensees who make a consumer loan to contract for and receive charges with blended rates based on the amount of the money loaned, up to loans of a bona fide principal amount of less than $2,500. The CFL provides that a willful violation of any of its provisions a crime. This bill would instead prohibit a licensee who lends any sum of money less than $2,500 from contracting for or receiving charges at a rate exceeding an annual percentage rate set forth in, and calculated by, specified federal laws and regulations as in effect on January 1, 2026. By expanding a crime, this bill would impose a state-mandated local program. The California Deferred Deposit Transaction Law (CDDTL) generally regulates deferred deposit transactions. The CDDTL prohibits the fee for a deferred deposit transaction from exceeding 15% of the face amount of the check. The CDDTL provides that a willful violation of any of its provisions is crime. This bill would instead prohibit the total amount charged to a customer for a deferred deposit transaction from exceeding the annual percentage rate set forth in, and calculated by, specified federal laws and regulations as in effect on January 1, 2026. By expanding a crime, this bill would impose a state-mandated local program. 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.
Existing law regulates the issuance, use, and processing of credit cards and credit card transactions. Existing law, the Areias Credit Card Full Disclosure Act of 1986, requires a credit card issuer, with each billing statement provided to a cardholder in this state, to provide certain information on the front of the first page of the billing statement. This bill would regulate offers for a medical credit card, which the bill would define as a credit card issued under an open-end or closed-end plan offered specifically for the payment of medical services, products, or devices. Specifically, the bill would require an entity that offers a medical credit card to provide a clear and conspicuous disclosure to an individual stating that the product is a credit card and not a payment plan. The bill would require the disclosure to include the annual percentage rate applicable to the medical credit card. The bill would require the entity to obtain the individual's express written consent, as evidenced by a signature, acknowledging that the individual has received the disclosure and understands that the medical credit card is a credit card and is not a payment plan. Existing law, the Consumer Credit Reporting Agencies Act, defines and regulates consumer credit reports and consumer credit reporting agencies. Existing law regulates the treatment of medical debt in this regard by, among other things, prohibiting a consumer credit reporting agency from making any consumer credit report containing medical debt information, prohibiting a person who uses a consumer credit report in connection with a credit transaction from using medical debt as a negative factor when making a credit decision, and prohibiting a person from furnishing information regarding a medical debt to a consumer credit reporting agency. Existing law makes a violation of certain provisions related to medical debt by a person holding a license or permit issued by the state to be deemed a violation of the law governing that license or permit. Existing law, the Investigative Consumer Reporting Agencies Act, defines and regulates investigative consumer reports and investigative consumer reporting agencies. Existing law prohibits an investigative consumer reporting agency from making or furnishing any investigative consumer report containing specified items of information, including medical debt. Existing law defines "medical debt" for the purposes of the Consumer Credit Reporting Agencies Act and the Investigative Consumer Reporting Agencies Act as a debt owed by a consumer to a person whose primary business is providing medical services, products, or devices, or to the person's agent or assignee, for the provision of medical services, products, or devices, as specified. This bill would, instead, define "medical debt" for these purposes as a debt related to, in whole or in part, a transaction, account, or balance arising from a medical service, product, or device, except as provided. By changing the scope of what is considered medical debt, and because certain violations of the Consumer Credit Reporting Agencies Act are deemed a violation of a licensing statute and the violation of some licensing statutes is a crime, this bill would impose a state-mandated local program. This bill would prohibit a consumer credit reporting agency from making a consumer credit report that contains information from a medical credit card for a purchase made at specified medical facilities, including a general acute care hospital, a special hospital, or a pharmacy. 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.
Existing constitutional law establishes the First Amendment right of freedom of speech. Existing case law, including Citizens United v. Federal Election Commission (2010) 558 U.S. 310 and other judicial precedents, establishes that corporate entities have First Amendment rights to engage in political speech and places limits on the suppression of political speech. Existing law regulates the formation and operation of various types of business and nonprofit entities, including corporations, nonprofit corporations, limited liability corporations, limited partnerships, limited liability partnerships, and unincorporated associations and sets forth their powers and duties. Existing law requires the Secretary of State to receive and process corporate and nonprofit entity filings, maintain records of those filings, and perform related duties. This bill would redefine the powers of artificial persons, as defined, organized under the Corporations Code to specify that those powers do not include political spending power, as defined. The bill would revoke all powers, privileges, and capacities previously granted to corporations under state law and provide that a corporation operating under the jurisdiction of this state possesses only those powers, privileges, and capacities specifically granted in the Corporations Code. The bill would declare void any act undertaken by a corporation beyond the scope of its granted powers, and would require that corporation to forfeit all granted powers. The bill would authorize reinstatement of granted powers after, among other things, disgorgement of all money used in the exercise of political spending power. The bill would authorize the Secretary of State to adopt rules regarding, among other things, reinstatement of forfeited powers. The bill would authorize the Attorney General with authority to enforce its provisions. This bill would make its provisions severable and would further specify the intent and preference of the Legislature that corporations hold no powers at all, rather than be vested with political spending power. The bill would make related findings and declarations.
Existing law requires the Treasurer to invest, or deposit into banks and other financial institutions, specified state moneys designated as surplus as a part of the Pooled Money Investment Account and determined to be available for that purpose by the Pooled Money Investment Board. Existing law generally requires banks and other financial institutions to deposit with the Treasurer securities in a value at least 10% in excess of the amount deposited with the institution to be eligible to receive deposits of state funds, except as specified. This bill would create within the Pooled Money Investment Account the Community Reinvestment Account from which deposits shall be made to institutions that meet specified performance standards including verified small business lending in underserved census tracts and first-time or first-generation home buyer lending. The bill would require the Treasurer to transfer $4 billion from the Pooled Money Investment Account to the Community Reinvestment Account. Because the moneys invested and reinvested as part of the Pooled Money Investment Account are continuously appropriated, this bill would make an appropriation. Notwithstanding the above-described securities requirement, this bill would instead require securities, for a deposit from the Community Reinvestment Account or under the Small Business Lending Time Deposit Program, to be in an amount in value of at least 90% of the amount deposited with the institution. The bill would require the Treasurer to deposit moneys from the Community Reinvestment Account with qualified institutions that have committed to specified lending activities, including, among other things, that at least 50% of the moneys from the account are used for affordable housing lending, as defined and specified. The bill would require institutions that receive deposits from the Community Reinvestment Account to submit quarterly, nonidentifying, performance reports to the Treasurer and the Treasurer to publish the data it receives in a publicly available report.
Existing law, the Uniform Commercial Code (UCC) , provides that, unless displaced by the particular provisions of the UCC, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, and other validating or invalidating cause supplement the UCC. Existing law generally regulates fund transfers, including by prescribing rules applicable to a transfer pursuant to a security procedure for the detection of error to a beneficiary not intended by the sender. This bill would similarly specify that those fund transfer provisions do not displace those principles of law and equity. Existing law requires all officers and employees of a financial institution to report known or suspected instances of financial abuse of an elder or dependent adult, as specified. Existing law imposes a civil penalty for violation of this prohibition in an amount not exceeding $1,000 or, if the failure to report is willful, a civil penalty not exceeding $5,000, as specified. This bill would increase those civil penalties to $10,000 and $50,000, respectively, and would additionally authorize an elder or dependent adult who suffers financial abuse because of the noncompliance to recover those civil penalties. This bill would also enact various provisions related to protecting a victim of abuse of an elder or dependent adult with respect to a fraudulently induced transaction, defined as an "injured consumer," including by limiting the liability of an injured consumer for a fraudulently induced transaction to the lesser of $50 or the amount of money or value of property or services obtained in the fraudulently induced transaction before the financial institution has notice that, or a reasonable basis to believe that, a fraudulently induced transaction involving the injured consumer's account has been, or may be, effected, as prescribed. This bill would also require a financial institution that, within 60 days of transmitting to a consumer certain required documentation related to the consumer's account, receives oral or written notice in which the consumer, among other things, indicates the consumer's belief that the consumer is an injured consumer, to investigate, as prescribed, the alleged reasons and determine whether the consumer is an injured consumer within 10 business days. This bill would authorize an injured consumer to bring a civil action against a noncompliant financial institution, as prescribed.
