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CALIFORNIA CORPORATE & SECURITIES LAW

Another Foolish Inconsistency – This Time For Broker-Dealers

Yesterday’s post chided Glass, Lewis & Co., LLC for its inconsistent positions on majority rule.  Today’s post tackles a foolish inconsistency in the California Codes.  Section 25217(c) of the California Corporations Code provides: A broker-dealer licensed under this chapter making loans to its customers which are subject to the provisions of Division 9 (commencing with…

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Does The California Finance Lenders Law Prohibit “Table Funding”?

A loan is “table funded” when at settlement it is contemporaneously assigned to the person that provides the funds.  Is table funding an illegal business practice under the California Finance Lenders Law?  The Fourth District Court of Appeal has its doubts: Preciado premises these claims on an assertion table funding is an illegal business practice…

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Consumer Loan, Commercial Loan or Neither?

The California Finance Lenders Law imposes a licensing requirement on persons engaged in the business of a finance lender.  Cal. Fin. Code § 22100(a).  Chapter 2 of the CFLL imposes a host of requirements on “consumer loans” and Chapter 3 imposes a few requirements on “commercial loans”.  Thus, it is important for a finance lender…

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Finance Lenders Annual Report Deadline Is Nigh

Lenders and brokers licensed under the California Finance Lenders Law must file an annual report by the Ides of March (i.e., March 15) of each year.  Cal. Fin. Code § 22159.  This is a hard deadline and the Department of Business Oversight does not grant extensions.  The consequences of failure to the file the report can…

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Bill Introduced To Require Registration Of Finders Under The California Finance Lenders Law

The California Finance Lenders Law, Financial Code § 22000 et seq., currently requires licensing of finance lenders and brokers.  A finance lender is defined as any person who is engaged in the business of making consumer loans or making commercial loans. Cal. Fin. Code § 22009.  The business of making consumer loans or commercial loans may include…

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Commissioner Finds Funding Is Not A Sine Qua Non For Lender Status

The California Department of Business Oversight administers and enforces the California Finance Lenders Law, Cal. Fin. Code § 22000 et seq.  The CFLL prohibits any person from engaging in the business of a “finance lender” without a license, unless otherwise exempt.  Cal. Fin. Code § 22100(a).  The CFLL provides the following definition of “finance lender”:…

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Legislature (Re)Enacts A Maximum De Minimis Finance Lenders Law Exemption

The California Finance Lenders Law defines a “finance lender” as anyone that is engaged in the business of making consumer loans or making commercial loans.  Cal. Fin. Code § 22009.  Knowing the definition of “finance lender” is important because California imposes a license requirement on anyone engaged in the business of a finance lender. Cal. Fin.…

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Court Of Appeal Holds “May” Does Not Mean “May Only”

California requires persons who are engaged in the business of making consumer loans or commercial loans to be licensed under the Finance Lenders Law, unless exempt.  Cal. Fin. Code § 22100.  The CFLL includes the following: A licensee may sell promissory notes evidencing the obligation to repay loans made by the licensee pursuant to this…

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Bill Would Authorize Payments For Commercial Loan Referrals

California State Senator Marty Block has introduced a bill, SB 197, that would authorize a licensed finance lender to compensate an unlicensed person or company in connection with the referral of one or more prospective borrowers to the licensee for a commercial loan.  Compensation would be authorized only if several conditions are met.  For example, the referral must lead…

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