The California Financing Law enjoins anyone from engaging in the business of a finance broker without a license from the Commissioner of Business Oversight. Cal. Fin. Code § 22100(a). The CFL, however, defines "broker" in a decidedly unhelpful manner:
"'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."
Cal. Fin. Code § 22004. The statute suffers from two significant defects. The first is its indeterminancy - who else does it include? The second is its circularity - a broker is a person negotiating or performing any act as broker in connection with a loan made by a CFL lender.
Assembly member Monique Limón recently introduced a bill, AB 642, that would address the second of these defects by specifying in detail the acts constituting someone a broker. These would include:
Although more specific in defining the acts constituting brokerage activity, the bill may actually expand the definition of broker. Because the author chairs the Assembly Banking and Finance Committee, I expect that it will at least make it out of that committee.