The California Finance Lenders Law, Financial Code § 22000 et seq., currently requires licensing of finance lenders and brokers. A finance lender is defined as any person who is engaged in the business of making consumer loans or making commercial loans. Cal. Fin. Code § 22009. The business of making consumer loans or commercial loans may include 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. Id. On Valentine's Day, California Senator Bill Dodd introduced legislation that will, if enacted, would prohibit any person from engaging in the business without a license from the Commissioner of Business Oversight. The bill, SB 297, defines a finder as any person who helps facilitate a loan subject to the CFLL by performing one or more of the following activities:
A finder would not include a person who: (a) is not engaged in the business of a broker or a finder, and whose activities in connection with the referral of loans subject to the CFLL are performed on no more than an occasional basis, not to exceed five times in any calendar year; (b) disseminates, places, posts, or distributes advertising or promotional information or materials pertaining to loans on behalf of licensees and does not engage in the activities of a broker or a finder; or (c) provides financial education or information of a general nature to a prospective borrower.
SB 297 is now awaiting committee assignment. Under the legislature's rules, the legislature cannot take action on the bill until on or after March 16, 2017.