reglab/statecodes huggingface dataset:
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 30 - Credit Unions › Article 10 - Independent Audit › Section 30.1000 - Audit Reports

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) For
				  the purposes of Section
				  14252 of
				  the Financial Code, a credit union shall submit an audit report for a fiscal or
				  calendar year by filing with the Commissioner within 105 days after the end of
				  the fiscal or calendar year an audit report that complies with all of the
				  following:
(1) The audit report shall contain
				  the following audited financial statements of the credit union for or as of the
				  end of the year prepared in accordance with generally accepted accounting
				  principles:
(A) Statement of financial
				  condition.
(B) Statement of
				  income.
(C) Statement of retained
				  earnings.
(D) Statement of cash
				  flows.
(E) Any other financial
				  statement required by the Commissioner.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 30 - Credit Unions › Article 10 - Independent Audit › Section 30.1001 - Independent Accountant

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
For purposes of Section
					 30.1000, no accountant shall be
					 considered independent unless the accountant complies with Rule 101 of the
					 Rules of Professional Conduct of the American Institute of Certified Public
					 Accountants, including the interpretations issued thereunder, as of November
					 30, 2002, which is incorporated herein by reference.
1. Change
					 without regulatory effect renumbering former section
					 991 to new section
					 30.1001 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
2. Amendment of section and NOTE
					 filed 2-27-2003; operative 3-29-2003 (Register 2003, No.
					 9).
Note: Authority cited: Section
						14201,
						Financial Code. Reference: Section
						14252,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 1 - General Provisions › Section 40.1 - Scope

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
This Subchapter contains regulations relating to industrial
					 loan companies.
1. Change
					 without regulatory effect adding new subchapter 40, article 1 (sections
					 40.1-40.106) and section filed
					 8-19-97 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 97, No. 34). For prior history, see Register 83, No.
					 8.
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Division 7, Financial
						Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 1 - General Provisions › Section 40.2 - Citation

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) This Subchapter
				  shall be known and may be cited as the "Industrial Loan Regulations" or the
				  "Thrift and Loan Regulations."
(b)
				  The first unit of the number of each section in this Subchapter is "40."
				  However, in citing a section of this Subchapter, a person may omit the first
				  unit of the number of the section if it is clear that the person is referring
				  to a section of this Subchapter.
1. Change
					 without regulatory effect adding new section 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: Division 7, Financial
						Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 1 - General Provisions › Section 40.101 - Delayed Funds Availability

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  This section applies to all industrial loan companies which maintain offices in
				  this state for the acceptance of deposits insured by the Federal Deposit
				  Insurance Corporation.
(b) For the
				  purpose of this section, the following definitions apply:
(1) "Account" means investment certification
				  (thrift obligation) (other than a full paid investment certificate) on which
				  the account holder is permitted to make withdrawals by negotiable or
				  transferable instruments, payment orders of withdrawal, telephone transfers, or
				  other similar means for the purpose of making payments to third person or
				  others. "Account" includes a negotiable order of withdrawal draft
				  account.
(2) "Business day" means a
				  period of twenty four hours following the close of business, as the close of
				  business is determined by the industrial loan company. Such twenty-four hour
				  period shall not include Saturdays, Sundays or legal holidays.
(3) "Day of deposit" means the day on which a
				  holder transfers possession of an item to the depository industrial loan
				  company for deposit into his or her account. However, after the close of
				  business of the depository industrial loan company, the "day of deposit" shall
				  mean the next business day of the depository industrial loan company. For
				  purposes of determining the day of deposit of an automated teller machine
				  branch office, the depository industrial loan company shall establish and post
				  a cut-off time for the automated teller machine branch office and the cut-off
				  time shall be deemed the close of business for purpose of this rule.
(4) "Deposit" means sale of an investment
				  certificate (thrift obligation).
(5) "Depository industrial loan company"
				  means the industrial loan company which maintains the account insured by the
				  Federal Deposit Insurance Corporation into which an item is first
				  deposited.
(6) "Item" means a
				  check, negotiable order of withdrawal, share draft, warrant or money
				  order.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 1 - General Provisions › Section 40.101.5 - Other Business

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Any request by an industrial loan company for authorization
					 pursuant to Section
					 18344 of
					 the Financial Code shall be in writing and shall contain a detailed statement
					 of the business to which the request refers. Insurance sold in connection with
					 loans as provided by Sections
					 18290,
					 18294, and
					 18295 of
					 the Financial Code does not constitute "other business" under Section
					 18344 of
					 the Financial Code. However, any other insurance will require authorization to
					 engage in "other business."
1. Change
					 without regulatory effect renumbering former section
					 1107 to new section
					 40.101 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
2. Change without regulatory
					 effect renumbering duplicative section
					 40.101 to new section
					 40.101.5 (Register 97, No.
					 42).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Section
						18344,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 1 - General Provisions › Section 40.102 - Management Personnel: Notification of Changes

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
For purposes of Section
					 18345 of
					 the Financial Code, management personnel shall include supervisors, managers,
					 persons who make loans or purchase obligations and persons who may be in charge
					 of a place of business of an industrial loan company. The notification of
					 changes in personnel required by Section
					 18345 of
					 the Financial Code shall be on a form provided by the
					 Commissioner.
1. Change
					 without regulatory effect renumbering former section
					 1110 to new section
					 40.102 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Sections
						18345 and
						18347,
						Financial Code. Reference: Sections
						18345 and
						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 1 - General Provisions › Section 40.103 - Criminal Actions: Report to Commissioner

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An industrial loan company shall immediately report in
					 writing to the Commissioner any criminal action filed against such company or
					 its officers, directors or management personnel.
1. Change
					 without regulatory effect renumbering and amending former section
					 1112 to new section
					 40.103 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
						18117,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 1 - General Provisions › Section 40.104 - Report of Defalcation Required

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
It shall be the responsibility of an industrial loan
					 company to report promptly to the Commissioner any actual or alleged
					 defalcation, embezzlement or theft of a material amount by an officer, director
					 or employee of such industrial loan company.
1. Change
					 without regulatory effect renumbering former section
					 1113 to new section
					 40.104 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
						18117,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 1 - General Provisions › Section 40.105 - Management Fees

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An industrial loan company shall not accrue, pay, or
					 contract for the payment of a fee for management services performed by a parent
					 or affiliate without first submitting a copy of its management contract to the
					 Commissioner for nondisapproval. The management contract shall specify the
					 services to be performed and the amount of fees to be paid or the manner and
					 method of computing the fee. Any proposed change in the management contract
					 shall be submitted to the Commissioner for nondisapproval.
1. Change
					 without regulatory effect renumbering former section
					 1117 to new section
					 40.105, including amendment of
					 section and 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
						18020,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 1 - General Provisions › Section 40.106 - Impairment of Capital Defined: Section 18368(a), Financial Code

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
For purposes of Section
					 18368(a)
					 of the Financial Code capital is impaired when the minimum amount of capital
					 required by the Financial Code is reduced by a net deficit balance in the
					 company's surplus accounts.
1. Change
					 without regulatory effect renumbering former section
					 1119 to new section
					 40.106 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
						18368(a),
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 2 - Applications › Section 40.200 - Articles of Incorporation and Bylaws: Submission to Commissioner

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Before the
				  articles of incorporation of an industrial loan company or any proposed
				  amendments to the articles of incorporation are filed with the Secretary of
				  State, a draft of the articles or the proposed amendment shall be submitted to
				  the Commissioner for written approval.
(b) A draft of the bylaws of an individual
				  loan company or any proposed amendments to the bylaws shall be submitted to the
				  Commissioner for written approval before adoption.
(c) Within ten days after the articles of
				  incorporation or amendments thereto have been filed with the Secretary of
				  State, a copy of the articles or amendments showing the date of filing with the
				  Secretary of State shall be filed with the Commissioner. Within ten days after
				  the bylaws or amendments thereto have been adopted, a copy of the bylaws or
				  amendments showing the date of adoption shall be filed with the
				  Commissioner.
1. Change
					 without regulatory effect adding new article 2 (section
					 40.200) and renumbering and
					 amending former section
					 1125 to new section
					 40.200 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
						18101.5 and
						18102,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 3 - Books and Records › Section 40.300 - Books and Records: To be Maintained at Principal or Administrative Office in California

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An industrial loan company shall maintain at all times its
					 control books, accounts, and records in the State of California at the
					 principal or administrative office designated in writing to the
					 Commissioner.
1. Change
					 without regulatory effect adding new article 3 (sections
					 40.300-40.305), and renumbering
					 former section
					 1132 to new section
					 40.300, including amendment of
					 section and 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 3 - Books and Records › Section 40.301 - Books and Records: Standard for Keeping

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An industrial loan company shall maintain its books,
					 accounts and records in accordance with generally accepted accounting
					 principles ("GAAP"), the regulations of the Commissioner or the FDIC, and good
					 business practice. In the event that GAAP conflict with the regulations of the
					 Commissioner or the FDIC, the regulations of the Commissioner and the FDIC take
					 precedence over GAAP.
1. Change
					 without regulatory effect renumbering former section
					 1133 to new section
					 40.301 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 3 - Books and Records › Section 40.302 - Forms

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) An industrial
				  loan company shall not use a loan form unless and until it has determined that
				  such form is in compliance with applicable state and federal law.
(b) All printed matter contained in loan
				  forms used by an industrial loan company shall be in not less than 8-point
				  type, except that printed captions in "boxes" may be 6-point type.
(c) An industrial loan company is prohibited
				  from using a loan form after written notice of objection by the Commissioner to
				  such form has been delivered to such industrial loan company or its
				  representative.
(d) This section
				  does not apply to loans exempted from specified sections of the Industrial Loan
				  Law by Section
				  18191 of
				  the Financial Code.
1. Change
					 without regulatory effect renumbering former section
					 1134 to new section
					 40.302 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: Chapter 3 (commencing with Section
						18190) of Division 7 and Section
						18408,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 3 - Books and Records › Section 40.303 - Accounting for Real Property Held for Sale

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The title to any property acquired by
				  foreclosure or by deed in lieu of foreclosure must be in the name of the
				  industrial loan company, and the deed immediately recorded. The property shall
				  be accounted for in the appropriate real property held for sale account.
				  Subsidiary ledger accounts shall be maintained for each individual property. In
				  accounting for the property, the amount at which it shall be carried on the
				  books of the company shall include the following:
(1) The balance of all senior
				  liens.
(2) The principal loan
				  balance.
(3) Any amounts paid after
				  acquisition for real property taxes accrued prior to acquisition.
(4) Assessments due or delinquent at the time
				  of acquisition.
(5) Necessary costs
				  incurred in connection with acquisition of the property.
(6) Reconditioning costs and improvements
				  necessary for the preservation, sale or renting of the property. However,
				  ordinary maintenance costs should not be capitalized.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 3 - Books and Records › Section 40.305 - Accounting Records: Electronic Data Processing Systems

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The prior written consent of the Commissioner shall be
					 obtained before an industrial loan company adopts an electronic data processing
					 system or changes from one such system to another. Data submitted to the
					 Commissioner must include a full description of the system and a complete plan
					 of conversion. General guidelines for conversions are available upon request at
					 any office of the Department. Any material change in any electronic data
					 processing system that will result in altering or eliminating any reports or
					 records produced by the system shall not be implemented without the prior
					 written consent of the Commissioner.
1. Change
					 without regulatory effect renumbering former section
					 1138 to new section
					 40.305 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 4 - Reserves › Section 40.400 - Reserve for Losses

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Except as permitted in writing by the Commissioner, an
					 industrial loan company shall establish and maintain a reserve for losses for
					 loans made, obligations purchased and net receivable from contracts of sale of
					 foreclosed real property in accordance with generally accepted accounting
					 principles ("GAAP"). The Commissioner may require a reserve for losses in
					 addition to the reserve required by GAAP whenever an examination of the books
					 and records of the industrial loan company indicate that the reserves are
					 inadequate.
Any other method or variation of the above shall not be
					 used without the written consent of the Commissioner. A request for variation
					 must show that the resulting reserve for losses will at least equal or exceed
					 the method provided in this section.
1. Change
					 without regulatory effect adding new article 4 (sections
					 40.400-40.407) and renumbering
					 former section
					 1140 to new section
					 40.400 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
						18343,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 4 - Reserves › Section 40.401 - Charge-off of Receivables

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  Receivables in default shall be charged to the reserve for losses if they fall
				  within the following classifications:
(1)
				  Accounts repayable monthly on which no full monthly contractual payments have
				  been made within the past 180 days, unless the borrower has filed a petition
				  under either Chapter 11 or Chapter 13 of the Bankruptcy Code and the plan
				  provides for payment of the account.
(2) Accounts repayable at maturity by a
				  single payment which are not paid in full within 180 days after the maturity
				  date of the account.
(3) Accounts
				  repayable by other than monthly payments or a single payment on which no full
				  contractual payment has been made within 180 days from the due date of the
				  first past due and unpaid installment.
(4) Accounts which the industrial loan
				  company has recognized as uncollectible.
(5) Flooring account balances which are
				  unpaid 90 days after maturity or on which no agreed curtailment payment has
				  been made within the past 90 days.
(6) Factoring account balances which are
				  unpaid 90 days after maturity or on which no contractual payment has been made
				  within the past 90 days.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 4 - Reserves › Section 40.402 - Control of Accounts Charged-off

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Accounts charged-off on which the industrial loan company
					 intends to pursue collection efforts or expects to realize further recoveries
					 shall be posted to a control account. Charge-offs shall remain in the control
					 account for as long as any recoveries are being made or
					 contemplated.
1. Change
					 without regulatory effect renumbering former section
					 1143 to new section
					 40.402 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
						18343,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 4 - Reserves › Section 40.403 - Recoveries on Accounts Charged-off

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Such recoveries must be credited to the reserve for losses
					 account and not recorded as gross income.
1. Change
					 without regulatory effect renumbering former section
					 1144 to new section
					 40.403 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
						18343,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 4 - Reserves › Section 40.404 - Restoration of Accounts Charged-off

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A charged-off account may be restored as a corporate asset
					 by refinance or otherwise only when at least three regular or revised monthly
					 payments have been received within the preceding 90 days and there is evidence
					 that the debtor will continue to adhere to the new terms of repayment. Any
					 amount restored must be credited to the reserve for losses account and not
					 recorded as gross income.
1. Change
					 without regulatory effect renumbering former section
					 1145 to new section
					 40.404 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
						18343,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 4 - Reserves › Section 40.405 - Extensions, Refinances, or Revisions

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Accounts that are delinquent thirty (30) days or more shall
					 not be extended, refinanced or revised unless there is evidence that the debtor
					 will be able to adhere to the terms of the refinanced loans or revised
					 terms.
1. Change
					 without regulatory effect renumbering former section
					 1146 to new section
					 40.405 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 4 - Reserves › Section 40.406 - Unearned Income

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An industrial loan company shall employ a system which
					 provides a current, reasonable accounting of its unearned charges and discount
					 for loans made and obligations purchased. Acquisition costs shall not be taken
					 into income. An industrial loan company that does not maintain a perpetual
					 inventory of unearned income shall take an inventory or test the accuracy of
					 its unearned income in accordance with generally accepted accounting procedures
					 at least once each year. Any understatement of unearned income disclosed by
					 such inventory or test shall be adjusted on the records of the industrial loan
					 company.
1. Change
					 without regulatory effect renumbering former section
					 1147 to new section
					 40.406 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
						18343,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 4 - Reserves › Section 40.407 - Fees Paid in Connection with a Loan

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Fees paid in connection with a loan shall
				  not be recognized as income at a rate greater than would be permitted by the
				  "Rule of 78's" (sum-of-the-digits method), notwithstanding that the loan may
				  have been paid prior to maturity by rewriting, extending, or amending the same
				  or by a new loan made by the industrial loan company. However, fees paid in
				  connection with a loan may be recognized as income when the loan is otherwise
				  paid.
(b) "Fees paid in connection
				  with a loan," for the purposes of this section, includes all charges as defined
				  in Sections
				  18007 and
				  18008 of
				  the Financial Code, except charges precomputed or earned by the agreed rate of
				  charge, appraisal fees, escrow fees, and fees to be paid to a public
				  officer.
1. Change
					 without regulatory effect renumbering former section
					 1148 to new section
					 40.407 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
						18343,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 5 - Investment Certificates › Section 40.500 - Certificate Ratio

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A ratio of certificates to capital and surplus restricted
					 as to payment of cash dividends under section
					 18319 of
					 the Financial Code, of 20 to 1 will ordinarily be granted to established
					 companies with records of sound performance. The Commissioner may, in other
					 cases, limit the ratio of certificates to capital and surplus to a ratio of
					 less than 20 to 1 if in his or her judgment the lower ratio is necessary in the
					 public interest. In determining the ratio to be permitted, the Commissioner may
					 consider (together with all relevant attendant circumstances) one or all of the
					 following items:
(a) The length of
				  time the company has been in operation.
(b) Ratio of losses to volume of loans made
				  and contracts purchased.
(c) The
				  creation and maintenance of adequate reserve for losses.
(d) Charge-off of uncollectible
				  accounts.
(e) The amount or growth
				  of undivided profits and/or earned surplus.
(f) Diversification of character and source
				  of loans made and contracts purchased.
(g) Creation and maintenance of adequate
				  internal controls.
(h) Sound and
				  efficient management.
1. Change
					 without regulatory effect adding new article 5 (sections
					 40.500-40.503) and renumbering and
					 amending former section
					 1150 to new section
					 40.500 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
Note: Authority cited: Sections
						18315 and
						18347,
						Financial Code. Reference: Section
						18319,
						Financial Code.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 5 - Investment Certificates › Section 40.501 - Certificate Ratio: Application and Criteria for Increasing Ratio Under Section 18320 of the Financial Code

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The application filed by an industrial
				  loan company for authority to increase its ratio of certificates to capital and
				  surplus restricted as to payment of cash dividends pursuant to subdivisions
				  (b), (c) and (d) of Section
				  18320 of
				  the Financial Code shall be accompanied by the following documents:
(1) A balance sheet as of the month end prior
				  to the date of filing;
(2) An
				  income statement for the current calendar year and the prior year if the
				  current period is less than six months;
(3) Monthly income statements for the six
				  months prior to the date of filing;
(4) An analysis of the reserve for losses for
				  the current calendar year showing the balance at the beginning of the year and
				  all additions and charges to the reserve. If the period covered is less than
				  four months, the analysis should include the prior calendar year; and
(5) Any other report or schedules required 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 5 - Investment Certificates › Section 40.502 - Repurchase Provision

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  The investment certificates of an industrial loan company issued before May 29,
				  1991, shall contain a provision that the investment certificate may be
				  repurchased within 30 days after, and shall be repurchased within 6 months of,
				  the first of the month following the date upon which the owner or the owner's
				  agent submits to the industrial loan company a written demand for
				  repurchase.
(b) The investment
				  certificates of an industrial loan company issued on or after May 29, 1991,
				  shall contain a provision that the company shall repurchase the certificate
				  upon the written request of the owner or owner's agent, subject to the
				  company's rights:
(1) to defer payment for a
				  period of 30 days after the first of the month following the date upon which
				  the request for repurchase is received; and
(2) to limit the aggregate amount of
				  repurchases in any one calendar month to an amount not exceeding the company's
				  net receipts of the previous month. The provision shall also state that
				  certificates will be repurchased in the order in which they are presented for
				  payment and that, notwithstanding the amount of the company's net receipts of
				  the previous month, the company must repurchase the certificates within 6
				  months of the first of the month following the receipt of the written demand
				  for repurchase.
California Code of Regulations › Title 10 - Investment › Chapter 1 - Commissioner of Business Oversight, Division of Financial Institutions › Subchapter 40 - Industrial Loans › Article 5 - Investment Certificates › Section 40.503 - Form and Amount of Fidelity Bond

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) An industrial loan company that sells and
				  issues investment certificates or has investment certificates outstanding shall
				  file with the Commissioner a fidelity bond providing fidelity coverage on each
				  officer, director, and employee in accordance with the requirements of this
				  section and section
				  18346 of
				  the Financial Code.
(b) A bond must
				  include in its definition as employee, either in the body of the bond or by
				  rider, the following: Each natural person, partnership or corporation
				  authorized by written agreement with the insured to perform services as
				  electronic data processor of checks or other accounting records of the insured,
				  herein called Processor, shall, while performing these services, be deemed to
				  be an Employee as defined in this bond. Each such Processor and the partners,
				  officers and employees of the Processor shall, collectively, be deemed to be
				  one Employee for all the purposes of this bond.
(c) A bond may be subject to cancellation on
				  30 days notice, provided the bond carries a rider or condition to the effect
				  that it is subject to cancellation by the surety or insured 30 days after
				  written notice to the Commissioner of Business Oversight of intention to
				  cancel.
(d) Unless the Commissioner
				  for good cause, in writing, has found that a different amount of coverage would
				  be in the public interest, minimum fidelity coverage shall be maintained in
				  accordance with the requirements of the Federal Deposit Insurance Corporation
				  ("FDIC").
(e) The bond coverage may
				  contain provision for a deductible amount from any loss which, except for the
				  deductible provision, would be recoverable from the insurer. A deductible
				  provision shall not be in excess of ten percent (10%) of the required minimum
				  bond coverage unless authorized by the Commissioner in writing.
1. Change
					 without regulatory effect renumbering and amending former section
					 1154 to new section
					 40.503 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
2. Change without regulatory
					 effect amending subsection (c) and NOTE filed 8-21-2019 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 2019, No. 34).
Note: Authority cited: Sections
						326 and
						18347,
						Financial Code. Reference: Sections
						321,
						18346 and
						18346.1,
						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 40.600 - Statement of Loan or Documents Used to Comply with Financial Code: Form: Contents

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In addition to the specific requirements of Sections
					 18231,
					 18300 and
					 18301 of
					 the Financial Code, the statement of loan form shall contain at least the
					 following and may consist of more than one document:
(a) The name and license number of the
				  industrial loan company, address of the office where the loan was made, and the
				  name of the person who closed the loan;
(b) A statement in not less than 12-point
				  boldface capital letters
FOR INFORMATION CONTACT THE DEPARTMENT OF BUSINESS
					 OVERSIGHT, STATE OF CALIFORNIA
(c) A statement that the loan is made
				  pursuant to the Industrial Loan Law, division 7 of the Financial
				  Code.
1. Change
					 without regulatory effect adding new article 6 (sections
					 40.600-40.619) and renumbering and
					 amending former section
					 1155 to new section
					 40.600 filed 8-19-97 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 97, No. 34).
2. Change without regulatory
					 effect amending subsection (b) and NOTE filed 8-21-2019 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 2019, No. 34).
Note: Authority cited: Section
						18347,
						Financial Code. Reference: Sections
						321,
						18231,
						18300 and
						18301,
						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 40.601 - Dealer Credit File

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An industrial loan company shall ordinarily maintain a
					 credit file with respect to each dealer from whom obligations are acquired,
					 with or without recourse. Such credit file shall contain information
					 appropriate to the value and type of business done with such dealer. Such
					 credit file shall include an annual balance sheet and income statement. A
					 written agreement with the dealer should be executed and should include
					 provisions for contingent liability for obligations purchased, and dealer
					 reserve and withholds. With respect to nonrecourse transactions, however, a
					 credit file on the dealer will not be required where a company has made a
					 proper direct check of the obligation with the primary obligor, by prompt
					 notification or otherwise, and has obtained proper credit information on the
					 primary obligor. In such case the account file must contain written evidence,
					 by memorandum or otherwise, substantiating that such check has been made. In
					 cases where a credit file is required, such information shall be kept
					 reasonably current to the extent feasible. The information required by this
					 rule shall be retained in the files, as to each dealer and account, as long as
					 there is a balance outstanding on the same.
1. Change
					 without regulatory effect renumbering former section
					 1156 to new section
					 40.601 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
						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 40.602 - Diversification of Receivables

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An industrial loan company shall limit the volume of
					 obligations purchased from one person or business entity and diversify the
					 loans it makes and obligations it acquires as to the types of debtors and types
					 of collateral so as to minimize the exposure to possible loss. The Commissioner
					 may require a company to reduce its outstanding loans made to a specific type
					 of debtor or secured by a specific type of collateral or reduce the volume of
					 obligations purchased from one person or business entity in order to reduce the
					 exposure to possible loss.
1. Change
					 without regulatory effect renumbering and amending former section
					 1157 to new section
					 40.602 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
						18272,
						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 40.603 - Factoring and Accounts Receivable Financing

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
No industrial loan company which has investment
					 certificates outstanding shall engage in factoring or accounts receivable
					 financing with any borrower or client unless all of the following requirements
					 are met:
(a) It shall have within its
				  organization as officer or employee at least one person possessing no less than
				  five years of responsible experience in factoring or accounts receivable
				  financing.
(b) It shall establish a
				  program for field audits or examinations of client borrowers to establish the
				  validity, quality, and quantity of the collateral assigned to it as security,
				  and shall conduct such an audit or examination of each client borrower at least
				  once every three months.
(c) It
				  shall require that all payments be made to a lock box or a post office box
				  which is under its control and management if the accounts receivable debtor is
				  not notified of the assignment of its account to the industrial loan company
				  (nonnotification), unless the amount advanced to the client borrower is less
				  than $20,000 and is also secured 100% by real property or personal property of
				  a kind or class listed in Section
				  40.612 of these regulations and it
				  requires that any payments made to the client borrower be forwarded in kind to
				  it.
1. Change
					 without regulatory effect renumbering and amending former section
					 1157.1 to new section
					 40.603 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
						18190,
						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 40.604 - Service Contracts

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  No industrial loan company which has investment certificates outstanding shall
				  purchase service contracts from dealers if such contracts exceed in the
				  aggregate 10 percent of the net receivables outstanding. Service contracts
				  purchased from any one dealer, its parent, and its affiliates shall not exceed
				  in the aggregate 5 percent of the net receivables outstanding.
(b) For the purposes of this section:
(1) "Dealer" is defined to mean any person
				  who provides lessons or services, including, for example, a dance studio or
				  health spa; and
(2) "Service
				  contract" is defined to mean a contract obligating a dealer to provide lessons
				  or services, not in connection with the sale of household goods or commercial
				  goods, for a stated period of time in consideration of a promise to pay a
				  stated sum.
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 40.605 - Reports of Collections

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An industrial loan company shall request in writing that
					 any person, to whom as agent or otherwise an account is referred for collection
					 and who receives any sum from a borrower in connection with the collection of
					 such account, report to such industrial loan company in writing within not less
					 than 30 days of the receipt of such sum the gross sum received and the date of
					 the receipt thereof, provided, that if such account is referred or assigned
					 pursuant to an express contract such contract shall specify that the report
					 contemplated by this section must be given.
1. Change
					 without regulatory effect renumbering former section
					 1158 to new section
					 40.605 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
						18029,
						Financial Code.