reglab/statecodes huggingface dataset:
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 6 - Loans and Obligations Receivable › Section 40.606 - Acceleration of Repayment: Limitations

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An industrial loan company shall not be entitled to
					 accelerate repayment of any consumer loan:
(a) Upon failure of the borrower immediately
				  to pay any sum or sums advanced by the industrial loan company for itself or
				  the borrower for insurance premiums relating to the security;
(b) If the industrial loan company feels
				  insecure due to a change in the financial condition of the borrower;
				  or
(c) If any non-material
				  misstatement has been made by the borrower with reference to the borrower's
				  credit or financial standing.
1. Change
					 without regulatory effect renumbering former section
					 1159 to new section
					 40.606 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18358,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 6 - Loans and Obligations Receivable › Section 40.607 - Consumer Loan Balloon Payment

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Any periodic payment (including any
				  scheduled installment under a retail installment contract) that is more than
				  twice the amount of any other periodic payment will be considered a balloon
				  payment for purposes of Section
				  18206 of
				  the Financial Code.
(b) Any
				  consumer loan or obligation made or acquired which is secured by a motor
				  vehicle and is repayable in other than equal periodic payments shall have no
				  more than one balloon payment during the term of the loan or obligation. The
				  amount of the balloon payment shall not exceed the amount of the projected
				  residual value of the motor vehicle at the time the loan or obligation is made
				  for the corresponding loan or obligation repayment term as prescribed in the
				  most recent issue of any residual value guide approved by rule of the
				  Commissioner. The
Kelley Blue Book Residual Value Guide
is an
				  approved residual value guide for the purposes of Financial Code Section
				  18206 and
				  this rule.
1. Change
					 without regulatory effect renumbering former section
					 1162 to new section
					 40.607 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Sections
						18272 and
						18347,
						Financial Code. Reference: Sections
						18206 and
						18358,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 6 - Loans and Obligations Receivable › Section 40.608 - Closing Statement and Escrow Instructions

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
On any loan secured by real property in which loan proceeds
					 were disbursed to an independent escrow holder, an industrial loan company
					 shall retain a copy of the escrow instructions and the closing statement issued
					 by the escrow holder.
1. Change
					 without regulatory effect renumbering former section
					 1165 to new section
					 40.608 and adding new NOTE filed
					 8-19-97 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18029,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 6 - Loans and Obligations Receivable › Section 40.609 - Charges: Limited to Amounts Disbursed

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Except as otherwise provided in
				  Subdivisions (b), (c) and (d) of this section, an industrial loan company may
				  collect and receive charges only on that portion of the unpaid principal
				  balance actually disbursed to the borrower or on the borrower's behalf, and
				  only from the date of such disbursement.
(b) Charges on the account of any statutory
				  fees to be paid to a public officer may be collected and received from the date
				  of the loan, provided such fees are actually paid within a reasonable time
				  after the loan is made.
(c) Charges
				  on the amount of premium for insurance written in connection with a loan may be
				  collected and received only from the effective date of the insurance. However,
				  in the case of an extension of such insurance at the time of the refinance of a
				  loan, extending coverage to the new maturity of such refinance, charges upon
				  the premium may be collected and received from the date of such
				  refinance.
(d) Charges on a loan
				  secured by real property may be collected and received only from the date of
				  closing of the escrow, when the loan proceeds are disbursed by the escrow
				  holder.
1. Change
					 without regulatory effect renumbering and amending former section
					 1166 to new section
					 40.609 and adding new NOTE filed
					 8-19-97 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Sections
						18190 and
						18211-
						18212.2,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 6 - Loans and Obligations Receivable › Section 40.610 - Notary Fees

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An industrial loan company may not charge or collect from a
					 borrower any consideration for notary services unless such consideration is
					 actually paid to and retained by the notary public who rendered such services.
					 An industrial loan company may not directly or indirectly receive, participate
					 in or benefit from the consideration paid for said notary
					 services.
1. Change
					 without regulatory effect renumbering former section
					 1167 to new section
					 40.610 and adding new NOTE filed
					 8-19-97 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18215,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 6 - Loans and Obligations Receivable › Section 40.611 - Forms: Limitation on Distribution

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An industrial loan company shall not distribute to persons
					 who are not prospective borrowers forms or documents which are used in
					 connection with the making of loans and which are intended for distribution or
					 exhibition by said persons to prospective borrowers. This provision shall not
					 apply to:
1) a form used solely in the
				  procurement of preliminary credit information and not signed or to be signed by
				  the prospective borrower; or
2)
				  premium finance agreements.
1. Change
					 without regulatory effect renumbering former section
					 1168 to new section
					 40.611 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18347,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 6 - Loans and Obligations Receivable › Section 40.612 - Requirements for Loans Made or Obligations Acquired Pursuant to Sections 18210, 18265, 18266, and 18273 of the Financial Code

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The following kinds or classes of
				  personal property or collateral are hereby declared eligible as security for
				  loans or obligations:
(1) Motor
				  vehicles;
(2) Mobile
				  homes;
(3) Motor homes;
(4) Campers;
(5) Camper trailers;
(6) Personal property, used for carrying on a
				  business other than that property held for sale;
(7) Farm equipment;
(8) Investment Thrift Certificates of the
				  industrial loan company;
(9)
				  Livestock;
(10) Aircraft;
(11) Boats;
(12) Musical instruments;
(13) Insurance policies;
(14) Traded securities;
(15) Notes secured by deeds of trust on real
				  property which real property is reasonably insured against loss;
(16) Equipment and automobile leases;
				  and
(17) Other personal property or
				  collateral determined by the Commissioner upon written request to be similar in
				  nature to any of the above. This written request shall be submitted at least 5
				  business days before making a loan or purchasing an obligation secured by
				  personal property or collateral.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 6 - Loans and Obligations Receivable › Section 40.613 - Security Requirement for Loans Made Pursuant to Section 18208, Financial Code

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A loan secured by traded securities made pursuant to
					 Section
					 18208 of
					 the Financial Code shall during its entire term be secured by such securities
					 having a market value of not less than the amount owing on the loan. If at any
					 time during the term of the loan the value of such securities becomes less than
					 the amount owing on the loan, additional traded securities must be obtained in
					 an amount sufficient to bring the market value of all of the securities up to
					 an amount not less than the amount owing on the loan. If such additional traded
					 securities are not obtained within three (3) business days from the date that
					 the market value of such securities became less than the amount owing on the
					 loan, then a valuation reserve shall be established for the
					 deficiency.
1. Change
					 without regulatory effect renumbering former section
					 1170 to new section
					 40.613 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18208,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 6 - Loans and Obligations Receivable › Section 40.614 - Definition of Term "Traded Securities" in Section 18208, Financial Code

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The term "traded securities" as used in Section
					 18208 of
					 the Financial Code and in this Subchapter means a security which is either
					 listed or admitted to trading on a national securities exchange or which has a
					 substantial and active market and is subject to two-way quotations (i.e., both
					 bid and asked prices) regularly published by one or more broker-dealers in the
					 National Daily Quotation Service.
The term "traded securities" does not include stock which
					 is subject to any restrictions on sale or transfer.
1. Change
					 without regulatory effect renumbering and amending former section
					 1171 to new section
					 40.614 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18208,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 6 - Loans and Obligations Receivable › Section 40.615 - Collection Expenses

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Collection expenses under Section
					 18218(b)
					 of the Financial Code may be charged only when a bona fide attempt to liquidate
					 the entire loan balance is made. Collection expenses shall not be charged to a
					 borrower for the collection of past due payments or installments nor shall the
					 collection charge be made more than once on the unpaid principal balance of the
					 loan.
1. Change
					 without regulatory effect renumbering former section
					 1172 to new section
					 40.615 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18218(b),
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 6 - Loans and Obligations Receivable › Section 40.616 - Single Payment Loans Made Pursuant to Section 18207, Financial Code

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An industrial loan company shall not make a consumer or
					 other type of loan which is repayable by a single payment at maturity unless
					 the following conditions are met:
(a)
				  A determination must be made that the borrower has a specific reason and need
				  for a single payment loan rather than a loan repayable in accordance with the
				  terms provided by Section
				  18205 of
				  the Financial Code.
(b) The loan
				  application and credit investigation must demonstrate that the borrower intends
				  and will be able to pay the loan at maturity.
1. Change
					 without regulatory effect renumbering former section
					 1174 to new section
					 40.616 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18207,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 6 - Loans and Obligations Receivable › Section 40.617 - Refinance of Single Payment Loans

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Except for loans secured by 100 percent of the industrial
					 loan company's investment certificates, if a loan repayable by a single payment
					 is not fully paid at maturity, it may be refinanced or extended for a new term
					 not to exceed the original term of such loan, provided that at the time of
					 refinance or extension the charges due are collected. If such a loan is not
					 fully paid at the new or extended maturity date, it may not be refinanced
					 unless the following conditions are met:
(a) A new application shall be taken and an
				  appropriate credit investigation made. A determination shall be made that the
				  borrower will be able to adhere to the terms of the new loan;
(b) The new loan shall comply with the term
				  limitations and other provisions of Section
				  18205 of
				  the Financial Code;
(c) If the new
				  loan is a consumer loan, it shall be repayable by equal or substantially equal
				  periodic payments during its term. If the new loan is other than a consumer
				  loan, a determination must be made that the borrower will be able to pay any
				  final installment amounting to more than twice the amount of any other
				  scheduled installment.
1. Change
					 without regulatory effect renumbering former section
					 1175 to new section
					 40.617 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18207,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 6 - Loans and Obligations Receivable › Section 40.618 - Loan Secured by Assignment of Obligation Secured by Real Property

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The market value of the collateral obligation of such loan
					 must be at least 115% of the principal amount owing on the loan. The market
					 value of the underlying real property may be considered in determining the
					 market value of the collateral obligation.
1. Change
					 without regulatory effect renumbering former section
					 1176 to new section
					 40.618 and adding new NOTE filed
					 8-19-97 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18207,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 6 - Loans and Obligations Receivable › Section 40.619 - Reconveyance Fees

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) A
				  reconveyance fee shall not be charged in connection with the refinance of a
				  loan secured by real property if the same real property will secure the new
				  loan.
(b) A reconveyance fee
				  charged by an industrial loan company, its parent, or any of its affiliates is
				  a charge as defined in Section
				  18007 of
				  the Financial Code.
1. Change
					 without regulatory effect renumbering former section
					 1178 to new section
					 40.619 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18007,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 7 - Leases › Section 40.700 - Requirements for Lease Obligations

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The following kinds or classes of
				  property are hereby declared eligible for the purchasing, discounting or
				  origination of leases:
(1) Motor vehicles,
				  except mobile homes, motor homes, campers and camper trailers;
(2) Personal property used for carrying on a
				  business, other than property held for sale;
(3) Farm equipment; and
(4) Other property approved by the
				  Commissioner.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 7 - Leases › Section 40.701 - Application for Authorization

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An industrial loan company requesting the Commissioner's
					 consent to engage in the business of leasing as authorized by Section
					 18310 of
					 the Financial Code shall submit the following information:
(a) A detailed statement of the company's
				  proposed plan of leasing setting forth both the specific leasing business in
				  which the company proposes to engage at the outset and its proposed future
				  leasing program. Said statement should include, but is not limited to, the
				  following information:
(1) Type of equipment
				  subject to lease.
(2) Lease
				  agreements.
(3) Procedure for
				  perfecting liens.
(4) Terms and
				  maturities.
(5) Advance
				  payment/down payments.
(6)
				  Concluding options.
(7) Credit
				  requirements.
(8) Approval
				  authority.
(9) Collection
				  policy.
(10) Form and amount of
				  collateral and/or public liability insurance.
(11) Method for determination of
				  capitalization costs and residual value.
(12) Method for disposal of returned
				  equipment.
(13) Method for early
				  termination of lease.
(14) Method
				  by which income, depreciation, and tax credits will be treated on the company's
				  books.
(15) Any other pertinent
				  factors.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 7 - Leases › Section 40.702 - Maximum Terms and Final Payment for Motor Vehicle Leases

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Each company shall annually submit, in duplicate, to the
					 Commissioner for nondisapproval, a schedule of:
(a) The maximum term of a motor vehicle lease
				  by make, model, year and cost; and
(b) The residual balance percentages it plans
				  to use with an explanation of how they were developed, how they will be
				  employed, and how frequently they will be revised.
1. Change
					 without regulatory effect renumbering former section
					 1179.2 to new section
					 40.702 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18314,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 7 - Leases › Section 40.703 - Limitation on Outstanding Lease Obligations

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Unless, in the opinion of the
				  Commissioner, a greater percentage is justified by an appropriate showing in
				  the company's first year projections, an industrial loan company during its
				  first 12 months of operating a leasing business shall not originate or purchase
				  direct lease obligations in an amount exceeding in aggregate 10% of the
				  company's net outstanding loan and obligations, including direct lease
				  obligations.
(b) After 12 months of
				  operating a direct leasing business, an industrial loan company may file a
				  request for authority to increase the aggregate amount of its outstanding
				  direct lease obligations which in no event shall exceed 20% of the company's
				  net outstanding loans and obligations, including direct lease
				  obligations.
(c) A request
				  submitted pursuant to subsection (b) shall be supported by the following:
(1) A statement including, but is not to be
				  limited to, information relating to the type of property leased; net income
				  realized from direct leasing operations; a budget showing the estimated income
				  and expense from the direct leasing operations for the next year; and whether
				  it proposes to lease the same type of property presently leased or whether it
				  plans to lease other types of property.
(2) A schedule showing the number and
				  aggregate amount of direct lease obligations held by the company. The schedule
				  shall show the number and amounts by types of property.
(3) A schedule of delinquent direct leases by
				  types of property and number of months delinquent.
(4) A schedule showing the number and total
				  amount of direct lease obligations which were charged off by the company. The
				  schedule shall show the type of property leased; original cost of property
				  leased; book value of equipment at the time of repossession; and any gain or
				  loss as a result of the sale of said equipment.
(5) Any other pertinent
				  factors.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 8 - Insurance › Section 40.800 - Insurance Premiums: Charge Before Effective Date

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
No insurance premium shall be charged to or collected from
					 a borrower prior to the effective date of such insurance. However, in the event
					 of refinancing of a loan, existing insurance may be extended to the maturity
					 date of the new loan and the additional premium may be charged to or collected
					 from the borrower at the time the loan is refinanced. The cost of the insurance
					 to replace the unexpired insurance shall not exceed the original premium cost
					 of such unexpired insurance. The cost of the insurance for the additional term
					 may be computed at rates currently in effect.
1. Change
					 without regulatory effect adding new article 8 (sections
					 40.800-40.815) and renumbering
					 former section
					 1186 to new section
					 40.800 and adding new NOTE filed
					 8-19-97 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18294,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 8 - Insurance › Section 40.801 - Insurance

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An industrial loan company shall not sell any type of
					 insurance in connection with a loan not specifically permitted to be sold by
					 these rules unless and until the Commissioner has notified the company in
					 writing that the sale of the insurance is permitted.
1. Change
					 without regulatory effect renumbering former section
					 1187 to new section
					 40.801 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18294,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 8 - Insurance › Section 40.802 - Insurance Which May be Required and Sold

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The following types of insurance may be
				  required and sold by industrial loan companies:
(1) Material damage insurance on motor
				  vehicles (including motorcycles, mobile homes and other vehicles licensed by
				  the Department of Motor Vehicles), boats and aircraft may be required and sold
				  subject to the following requirements:
(A)
				  The amount of the annual premium shall not exceed one-third of the principal
				  amount of the loan exclusive of any insurance premium or one-third of the
				  reasonable value of the collateral insured;
(B) The insurance shall contain a deductible
				  clause of $50 or more;
(C) The
				  principal amount of the loan or loan balance, exclusive of any insurance
				  premiums, shall be $500 or more; and
(D) The reasonable value of the collateral
				  insured shall be $500 or more.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 8 - Insurance › Section 40.803 - Insurance Which May Not be Required, but May be Sold

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The following types of insurance may not
				  be required, but may be sold at the borrower's request:
(1) The types of insurance described in
				  Subdivisions (a) and (b) of section
				  40.802 of this Chapter,
				  notwithstanding the limitations and requirements contained therein.
(2) Property damage, public liability,
				  uninsured motorist, towing and labor, medical payments, and other types of
				  insurance on motor vehicles (including motorcycles, mobile homes and other
				  vehicles licensed by the Department of Motor Vehicles), boats, and
				  aircraft.
(3) Theft, flood damage,
				  and other types of insurance on household goods, business equipment, and other
				  types of tangible personal property.
(4) Homeowner liability
				  insurance.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 8 - Insurance › Section 40.804 - Coverage of Insurance: Limitation

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Subject to the provisions of Subsection
				  (b), fire insurance on household goods, if the resulting coverage would exceed
				  the lesser of the principal amount of the loan or the balance of the loan at
				  the time the insurance is sold, rounded to the next $500, shall not be
				  required, but may be sold if supported by a statement signed by at least one
				  borrower to the effect that the insurance was purchased at the request of said
				  borrower and was not a prerequisite to obtaining the loan.
(b) Insurance on any property securing a loan
				  shall not be required or sold if the resulting coverage would exceed the
				  reasonable value of said property as established by a bona fide written
				  appraisal, a statement of replacement value signed by the borrower, a recent
				  sales invoice, or other evidence acceptable to the Commissioner.
(c) A statement of replacement value of
				  household goods signed by a borrower as provided in subsection (b) shall
				  contain the following statement in type not smaller than 8-point bold face
				  type: "COLLATERAL FIRE INSURANCE COVERAGE ON HOUSEHOLD GOODS MAY NOT BE
				  REQUIRED IN EXCESS OF THE LESSER OF THE PRINCIPAL AMOUNT OF THE LOAN OR THE
				  BALANCE OF THE LOAN AT THE TIME THE INSURANCE IS SOLD, ROUNDED TO THE NEXT
				  $500."
1. Change
					 without regulatory effect renumbering former section
					 1190 to new section
					 40.804 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18294. Financial
						Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 8 - Insurance › Section 40.805 - Term of Insurance: Limitation

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The sale of insurance on motor vehicles
				  (including motorcycles, mobile homes, and other vehicles licensed by the
				  Department of Motor Vehicles), boats and aircraft for periods of more than one
				  year, or for periods of less than one year unless the premium is a pro rata
				  portion of the annual premium, will ordinarily be considered
				  unreasonable.
(b) Insurance on real
				  property, household goods, business equipment, and other types of tangible
				  personal property shall not be required or sold if the term would exceed either
				  the period for which such insurance is customarily sold or the term of the
				  loan. For the purposes of this subsection, a loan term involving a fractional
				  part of a year may be considered as extending through a full year.
1. Change
					 without regulatory effect renumbering former section
					 1190.1 to new section
					 40.805 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18294,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 8 - Insurance › Section 40.806 - Prohibition Against Duplicate Insurance

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) An industrial loan company shall neither
				  sell nor require the purchase of insurance on any property securing a loan if
				  existing insurance is reasonably sufficient to protect the industrial loan
				  company and the borrower.
(b) An
				  industrial loan company shall take reasonable precautions to prevent the sale
				  of insurance which would result in duplicate coverage.
(c) Each loan file shall contain a document
				  evidencing the steps taken to prevent duplicate insurance coverage. Said
				  document shall include:
(1) The loan
				  number;
(2) The name of the
				  borrower;
(3) The security for the
				  loan;
(4) A statement whether or
				  not insurance, including homeowner insurance, is in effect, and if so,
(A) The amount of coverage;
(B) The effective date of coverage;
(C) The term of coverage; and
(D) The name of agent.
(5) A notice that the borrower may purchase
				  insurance from any licensed insurance agent and is not required to purchase
				  insurance from the lender; and
(6)
				  The signature of the officer or employee closing the loan and the signature of
				  the borrower.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 8 - Insurance › Section 40.807 - Vendors Single Interest Insurance and Participating Deductible Coverage Insurance

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  The premiums for vendors single interest insurance shall not be charged to
				  borrowers.
(b) The sale of any
				  participating deductible coverage insurance shall be considered unreasonable
				  unless, in addition to complying with the other applicable provisions of these
				  rules, the following terms and conditions are satisfied:
(1)
(A) The
				  borrower voluntarily requests participating deductible coverage insurance in
				  lieu of standard dual coverage insurance after having been given an opportunity
				  to purchase standard dual coverage insurance from an insurance agent of the
				  industrial loan company, or
(B) The
				  industrial loan company provides written notice to the borrower stating that
				  the industrial loan company intends to procure participating deductible
				  coverage insurance if standard dual coverage insurance is not obtained and
				  presented to it prior to the expiration of 15 days after the proper mailing or
				  hand delivery of the notice, and that the cost of the insurance will be added
				  to the borrower's account and may bear interest if not paid
				  immediately.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 8 - Insurance › Section 40.808 - Sales of Insurance

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Nothing in these regulations shall be construed to
					 authorize the sale of insurance by any person other than one who holds a valid
					 license from the Insurance Commissioner authorizing such person to act in such
					 capacity.
1. Change
					 without regulatory effect renumbering former section
					 1190.5 to new section
					 40.808 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18294,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 8 - Insurance › Section 40.810 - Prohibition Against Requirement of Particular Agent or Broker

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An industrial loan company which requires or solicits
					 insurance in connection with a loan shall comply with Article 5.5 of Chapter 1
					 of Part 2 of Division 1 of the Insurance Code.
1. Change
					 without regulatory effect renumbering former section
					 1192 to new section
					 40.810 and adding new NOTE filed
					 8-19-97 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 8 - Insurance › Section 40.811 - Refund of Policy Fees Charged with Household Fire Insurance Policies

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
When household fire insurance has been sold by an
					 industrial loan company and it is subsequently canceled, the policy fee, if
					 any, must be considered part of the premium when any cancellation refund is
					 computed.
1. Change
					 without regulatory effect renumbering former section
					 1193 to new section
					 40.811 and adding new NOTE filed
					 8-19-97 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18294,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 8 - Insurance › Section 40.812 - Requirement of Cancellation of Existing Insurance Prohibited

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An industrial loan company shall not, as a condition
					 precedent to the making of a loan, require a borrower to cancel any existing
					 insurance. The borrower shall have sole discretion as to whether existing
					 insurance shall be maintained or canceled.
1. Change
					 without regulatory effect renumbering former section
					 1194 to new section
					 40.812 and adding new NOTE filed
					 8-19-97 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 8 - Insurance › Section 40.813 - Adjustment of Insurance Claims: Limitations

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Neither an industrial loan company, a company affiliated
					 with such industrial loan company, nor officers, directors or employees of such
					 industrial loan company or affiliate, shall act as adjuster of, or in any
					 manner exercise control or supervision over the adjustment of any insurance
					 claim relating to property securing a loan made by such industrial loan company
					 in any case where there is a direct or indirect financial benefit to such
					 industrial loan company, affiliated company, or the officers, directors, or
					 employees of such industrial loan company or affiliate, as a result of such
					 insurance claim. This prohibition shall not extend, however, to the duly
					 constituted claims or adjustment department or division of a licensed insurance
					 carrier, nor shall it apply where the loss is adjusted by a staff adjuster of
					 the carrier or an independent individual adjuster or attorney at
					 law.
1. Change
					 without regulatory effect renumbering former section
					 1195 to new section
					 40.813 and adding new NOTE filed
					 8-19-97 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 8 - Insurance › Section 40.814 - Requirement of Notice to Borrower in Event of Increase of an Insurance Premium

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If an insurance premium is increased subsequent to the sale
					 of the insurance in connection with a loan, the industrial loan company shall
					 notify the borrower in writing of the increase. The notice to the borrower
					 shall state the reason for the increase, the amount of the additional premium,
					 any change in terms and the amount of any additional charges. If the increase
					 is not due to any fault of the borrower, the notice shall give the borrower the
					 option of providing insurance and state that, if the option is exercised, the
					 borrower will receive a pro rata refund of the premium for the insurance
					 previously placed.
1. Change
					 without regulatory effect renumbering former section
					 1197 to new section
					 40.814 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Sections
						18290 and
						18294,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 8 - Insurance › Section 40.815 - Reasonable Cause: Right to Approve or Disapprove of the Issuer Selected to Underwriter Insurance

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  Any person engaged in the business of financing the purchase of real or
				  personal property or of lending money on the security of real or personal
				  property and the trustee, director, officer, agent or other employee or
				  affiliate of any such person shall have the right to approve or disapprove, for
				  reasonable cause, the insurer selected to underwrite any insurance required by
				  the contract of sale or deed of trust or other loan agreement. This regulation
				  includes insurance covering damage to or destruction of real or personal
				  property and it includes title insurance.
(b) Reasonable cause is defined as the
				  failure of the insurer to:
(1) Be licensed by
				  the State of California to transact the line of insurance afforded.
(2) Provide the insurance in conformity with
				  all requirements of the California Insurance Code and the Regulations issued
				  thereunder.
(3) Afford the
				  customary coverage required by the lender for the class of property involved
				  including the loss payable endorsement required by the lender.
(4) Provide, at the option of the lender,
				  coverage equal to the lesser of the market value or the replacement value of
				  the property or the agreed value when the property insured is real property, or
				  the actual cash value of the property when the property is personal
				  property.
(5) Provide coverage with
				  a deductible not exceeding $100 or 1% of the amount of insurance, whichever is
				  greater. If the custom of the insurance business is to afford a higher
				  deductible in conjunction with the coverage provided (including the deductibles
				  used in conjunction with earthquake insurance), the insurer may provide such
				  higher deductible.
(6) Deliver
				  evidence of insurance to the lender which includes those provisions of the
				  contract which have a bearing on the coverage afforded the property securing
				  the loan.
Notwithstanding any other provisions of these regulations,
					 the California FAIR Plan Association shall not be rejected as an
					 insurer.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 9 - Credit Insurance › Section 40.900 - Limitation on Soliciting Sale of Credit Insurance

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) An industrial loan company shall not
				  offer or sell credit insurance in any manner which restricts a borrower's
				  ability to voluntarily select or reject credit life or credit disability
				  insurance or both.
(b) An
				  industrial loan company shall use a written form (which may be separate from or
				  incorporated in the loan documents), which shall be signed or initialed by each
				  of the insured borrowers. The form must be substantially as follows:
"Sign or initial
Loan No.
							 ___________________________
your election
___________________________
I want credit life
							 insurance.
___________________________
I do not want credit life
							 insurance.
___________________________
I want credit disability
							 insurance.
___________________________
I do not want credit disability
							 insurance."
1. Change
					 without regulatory effect adding new article 9 (sections
					 40.900-40.906) and renumbering
					 former section
					 1201 to new section
					 40.900 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18290,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 9 - Credit Insurance › Section 40.901 - Limitation on Sale of Credit Disability Insurance

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) An industrial loan company shall not sell
				  credit disability insurance, as prohibited by current regulations of the
				  Department of Insurance, to a borrower who is a member of the Armed Forces of
				  the United States.
(b) An
				  industrial loan company shall not sell credit disability insurance to any other
				  borrower as prohibited by current regulations of the Department of
				  Insurance.
1. Change
					 without regulatory effect renumbering former section
					 1202 to new section
					 40.901 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18290,
						Financial Code.