Article 2 - Application for License

California Financial Code — §§ 28112-28124

Sections (8)

Amended by Stats. 2020, Ch. 154, Sec. 4. (AB 376) Effective January 1, 2021.

An applicant shall apply for a license by submitting all of the following to the commissioner:

(a)A completed application for a license in a form prescribed by the commissioner and signed under penalty of perjury.

(b)The sum of one hundred dollars ($100) as a fee for investigating the application, plus the cost of fingerprint processing and the criminal history record check under Section 28116, and three hundred dollars ($300) as an application fee. The investigation fee, including the amount for the criminal history record check, and the application fee are not refundable if an application is denied or withdrawn.

(c)Audited financial statements prepared in accordance with generally accepted accounting principles and acceptable to the commissioner that indicate a net worth of at least two hundred fifty thousand dollars ($250,000).

(d)Subject to the commissioner’s discretion, an applicant or licensee that is a wholly owned subsidiary of a public holding company required to comply with the reporting requirements of the Securities and Exchange Commission may satisfy the requirement of subdivision (c) by submitting the annual consolidated audited financial statements filed with the Securities and Exchange Commission, including consolidating financial statements of the subsidiary.

§ 28114

Amended by Stats. 2018, Ch. 379, Sec. 7. (AB 38) Effective January 1, 2019.

(a)The commissioner shall submit to the Department of Justice fingerprint images and related information required by the Department of Justice of every applicant for a license for purposes of obtaining information as to the existence and content of a record of state or federal convictions, state or federal arrests, and information as to the existence and content of a record of state or federal arrests for which the Department of Justice establishes that the person is free on bail or on his or her own recognizance pending trial or appeal.

(b)When received, the Department of Justice shall transmit fingerprint images and related information received pursuant to this section to the

Federal Bureau of Investigation for the purpose of obtaining a federal criminal history records check. The Department of Justice shall review the information returned from the Federal Bureau of Investigation and compile and disseminate a response to the commissioner.

(c)The Department of Justice shall provide a response to the commissioner pursuant to paragraph (1) of subdivision (p) of Section 11105 of the Penal Code.

(d)The commissioner shall request from the Department of Justice subsequent arrest notification service, as provided pursuant to Section 11105.2 of the Penal Code, for the license applicant described in subdivision (a).

(e)The Department of Justice shall charge a fee, payable by the applicant,

sufficient to cover the costs of processing the requests pursuant to this section.

§ 28116

Amended by Stats. 2018, Ch. 379, Sec. 8. (AB 38) Effective January 1, 2019.

(a)Upon the filing of an application for a license pursuant to Section 28112 and the payment of the fees, the commissioner shall investigate the applicant and its general partners and individuals owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or any individual responsible for the conduct of the applicant’s servicing activities in this state, if the applicant is a partnership. If the applicant is a corporation, trust, limited liability company, or association, including an unincorporated organization, the commissioner shall investigate the applicant, its principal officers, directors, trustee, managing members, and individuals owning or controlling, directly or indirectly, 10 percent or more of the

outstanding equity securities or any individual responsible for the conduct of the applicant’s servicing activities in this state.

(b)Upon the filing of an application for a license pursuant to Section 28128 and the payment of the fees, the commissioner shall investigate the individual responsible for the servicing activity of the licensee at the new location described in the application. The investigation may be limited to information that was not included in prior applications filed pursuant to this division. If the commissioner determines that the applicant has satisfied this division and does not find facts constituting reasons for denial, the commissioner shall issue and deliver a license to the applicant.

(c)For the purposes of this section, “principal officers” shall mean

president, chief executive officer, treasurer, and chief financial officer, as may be applicable, and any other officer with direct responsibility for the conduct of the applicant’s servicing activities in this state.

§ 28117

Added by Stats. 2018, Ch. 379, Sec. 9. (AB 38) Effective January 1, 2019.

(a)Before an applicant is issued a license, the applicant shall file with the commissioner, in such form as the commissioner may require, an appointment irrevocably appointing the commissioner to be the applicant’s or licensee’s attorney, to receive service of any lawful process in any noncriminal judicial or administrative proceeding against the applicant or licensee, or any of its successors, that arises under this division or under any regulation or order issued under this division after such appointment has been filed, with the same force and validity as if served personally on the applicant, licensee, or successor.

(b)Service may be made by leaving a copy of

the process at any office of the commissioner, but that service is not effective unless (1) the party making that service, who may be the commissioner, sends notice of service and a copy of the process by registered or certified mail to the party served at its last address on file with the commissioner, and (2) an affidavit of compliance with this section by the party making service is filed in the case on or before the return date, if any, or within such further time as the court, in the case of a judicial proceeding, or the administrative agency, in the case of an administrative proceeding, allows.

§ 28118

Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.

The commissioner shall, when the application is complete, including having received the information from the Department of Justice, either grant a license pursuant to this division or provide a written explanation for the denial.

§ 28120

Amended by Stats. 2018, Ch. 379, Sec. 10. (AB 38) Effective January 1, 2019.

(a)The proceedings for a denial of a license shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

(b)The commissioner may deny an application for a license for any of the following reasons:

(1)A false statement of a material fact has been made in the application.

(2)The applicant or any principal officer, director, general partner, managing member, or individual owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity

securities of the applicant, within the last 10 years has (A) been convicted of, or pleaded nolo contendere to, a crime or (B) committed any act involving dishonesty, fraud, or deceit, if the crime or act is substantially related to the qualifications, functions, or duties of a person engaged in business in accordance with this division.

(3)The applicant or any principal officer, director, general partner, managing member, or individual owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant, has violated, or is not in material compliance with this division, or an order or rule of the commissioner.

(4)A material requirement for issuance of a license has not been met.

(5)The applicant or any principal officer, director, general partner, managing member, or individual owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant, has violated this division or the rules thereunder, or any similar regulatory scheme of this or a foreign jurisdiction.

(6)The applicant or any principal officer, director, general partner, managing member, or individual owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant, has been held liable in any civil action by final judgment or any administrative judgment by any public agency within the past seven years.

(7)The commissioner, based on its investigation of the applicant, is unable to find that the financial responsibility, criminal records, experience, character, and general fitness of the applicant and its general partners, managing members, principal officers and directors, and individuals owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests or equity securities of the applicant, support a finding that the business will be operated honestly, fairly, efficiently, and in accordance with the requirements of this division.

§ 28122

Amended by Stats. 2018, Ch. 379, Sec. 11. (AB 38) Effective January 1, 2019.

(a)The commissioner may deem an application for a license abandoned if the applicant fails to respond to any request for information required by the commissioner or department during an investigation of the application.

(b)The commissioner shall notify the applicant, in writing, that if the applicant fails to submit responsive information within 60 days from the date the commissioner sent the written request for information, the commissioner shall deem the application abandoned.

(c)An application fee paid prior to the date an application is deemed abandoned shall not be refunded. Abandonment of an application

pursuant to this subdivision shall not preclude the applicant from submitting a new application and fee for a license.

§ 28124

Added by Stats. 2016, Ch. 824, Sec. 2. (AB 2251) Effective January 1, 2017. Operative July 1, 2018, pursuant to Section 28182.

A license shall remain effective until the license is either suspended or revoked by the commissioner or surrendered by the licensee.