A Critical Prepositional Phrase Is Missing From This California Statute

It is a peculiar hubris of California's legislators that they often presume to extend the application of the state's laws beyond its legal borders.  Corporations Code Section 2115, for example, presumes to apply multiple provisions of the California Corporations Code to foreign corporations to the exclusion of the laws of their states of incorporation.  While the Delaware Supreme Court famously refused to apply the statute, California's appellate courts have yet to agree.  Compare VantagePoint Venture Partners 1996 v. Examen, Inc., 871 A.2d 1108 (2005) and Wilson v. Louisiana-Pacific Resources, Inc., 138 Cal. App. 3d 216 (1982).  

Some California laws do not even deign to include a geographical tether to the state.  California's Financing Law, for example, provides only:

No person shall engage in the business of a finance lender or broker without obtaining a license from the commissioner.

Cal. Fin. Code § 22100(a).  Noticeably absent is the prepositional phrase "in this state".   Without this phrase, the statute literally applies to anyone "engaged in the business" regardless of location of the person or the person's business.  Clearly, that is absurd, but the statute provides no hint as to what nexus to California is required.  In a 2016 letter, the California Department of Business Oversight (aka Department of Financial Protection & Innovation) recognized that some connection to California is required but provided little in the way of definitive guidance:

Whether a lender or broker is doing business in California is based on the lending or brokering activity conducted in this state. [Fn. See People v. Fairfax Family Fund (1964) 235 Cal.App.2d 881].  Lending to California citizens, or brokering loans on behalf of California citizens, are facts suggesting the lending or brokering activity is occurring in this state.  We would look at other factors, such as whether a lender or broker solicits borrowers in California (directly or indirectly), and whether brokering on behalf of California borrowers is of a continuous nature.  If the lender or broker's business activity has sufficient contact with California, then licensure would be required.

The legislature is capable of setting boundaries.  The California Corporate Securities Law of 1968, for example, includes an elaborate definition of the phrase "in this state" in Section 25008 of the Corporations Code.