Article 2 - Application for Licensure

California Financial Code — §§ 100007-100014

Sections (7)

Amended by Stats. 2021, Ch. 77, Sec. 6. (AB 137) Effective July 16, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.

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. An application shall include the location of the applicant’s principal place of business and all branch office locations.

(b)(1) An application fee, of three hundred fifty dollars ($350), and an investigation fee, the amount of which shall be determined by the department, to cover any costs incurred in processing an application, including a fingerprint processing and criminal history record check under Section 100009. 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amount for the criminal history record check, and the application fee are not refundable if an application is denied or withdrawn.

(2)The fees assessed pursuant to this subdivision shall be billed and collected by the commissioner at the time of initial application.

(c)A sample of the initial letter required pursuant to Section 1692g of Title 15 of the United States Code that the licensee will use in correspondence with California consumers.

§ 100008

Repealed and added by Stats. 2023, Ch. 198, Sec. 10. (SB 152) Effective September 13, 2023.

(a)The commissioner shall require a background investigation of each applicant by means of a Federal Bureau of Investigation criminal history record check of the individuals subject to investigation under Section 100009 and shall require the submission of fingerprints for each individual subject to investigation under Section 100009.

(b)If the applicant is a partnership, corporation, limited liability company, trust, estate, cooperative, association, or other business organization, the commissioner shall require a Federal Bureau of Investigation criminal history record check, including the submission of fingerprints, for each individual described in Section 100009.

(c)Notwithstanding any other provision of law, the Nationwide Multistate Licensing System Registry may be used as a channeling agent between the United States Department of Justice and the commissioner for purposes of requesting and distributing information for the background investigations described in this section.

(d)(1) An applicant shall not be denied a license on the basis of a criminal conviction, or on the basis of acts underlying a criminal conviction, if the convicted person has obtained a certificate of rehabilitation under Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code or has been granted clemency or a pardon by a state or federal executive.

(2)An applicant shall not be denied a license on the basis of a conviction that has been dismissed pursuant to Section 1203.4, 1203.4a, 1203.41, or 1203.425 of the Penal Code. An applicant who has a conviction that has been dismissed pursuant to Section 1203.4, 1203.4a, or 1203.41 of the Penal Code shall provide the commissioner with proof of the dismissal if it is not reflected in the applicant’s criminal history record report.

(3)An applicant shall not be denied a license on the basis of an arrest that resulted in a disposition other than a conviction, including an arrest that resulted in an infraction, citation, or juvenile adjudication.

(4)An applicant may be denied a license on the grounds that the applicant knowingly made a false statement of fact that is required

to be revealed in the application for the license. An applicant shall not be denied a license based solely on an applicant’s failure to disclose a fact that would not have been cause for denial of the license had it been disclosed.

(5)If an applicant is denied a license based solely or in part on conviction history, the applicant shall be notified in writing of all of the following:

(A)The denial or disqualification of licensure.

(B)The procedure for the applicant to challenge the decision or to request reconsideration.

(C)That the applicant has the right to appeal the decision.

(D)The processes to

request a copy of the applicant’s complete conviction history and to question the accuracy or completeness of the record.

§ 100009

Amended by Stats. 2023, Ch. 198, Sec. 11. (SB 152) Effective September 13, 2023.

(a)(1) Upon the filing of an application for a license pursuant to Section 100007 and the payment of the fees, if the applicant is a partnership, the commissioner shall investigate all of the following:

(A) The applicant.

(B) The applicant’s managing partners and supervising partners, as defined in the partnership agreement.

(C) Any individual owning or controlling, directly or indirectly, 10 percent or more of the outstanding interests in the applicant.

(D) Any individual

responsible for the conduct of the applicant’s debt collection activities or policies in this state.

(2)Upon the filing of an application for a license pursuant to Section 100007 and the payment of the fees, if the applicant is a corporation, trust, limited liability company, or association, including an unincorporated organization, the commissioner shall investigate all of the following:

(A)The applicant.

(B)Any principal officer of the applicant.

(C)The applicant’s board of directors.

(D)Any trustee of the applicant.

(E)Any managing member of the applicant if the applicant is a limited liability company.

(F)Any individual owning or controlling, directly or indirectly, 10 percent or more of the outstanding equity securities in the applicant.

(G)Any individual responsible for the conduct of the applicant’s debt collection activities or policies in this state.

(b)Upon the filing of an application for a license pursuant to Section 100007 and the payment of the fees, the commissioner

shall investigate the individual responsible for the debt collection activity of the licensee at the location described in the application. The investigation may be limited to information that was not included in prior applications filed pursuant to this division.

(c)For the purposes of this section, “principal officers” means a president, chief executive officer, chief operating officer, treasurer, and chief financial officer, as may be applicable, and any other officer with direct decisionmaking responsibility for the applicant’s debt collection activities or policies in this state.

§ 100011

Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.

(a)When the application is complete, including the information from the Department of Justice, and the commissioner determines that the applicant has satisfied the requirements set forth in this division and does not find facts constituting reasons for denial, the commissioner shall issue and deliver a license to the applicant.

(b)If the commissioner determines that the requirements have not been satisfied, after notice and an opportunity for a hearing, the commissioner may deny the

application and shall provide a written explanation for the denial.

§ 100012

Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.

(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)After notice and an opportunity for a hearing 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, other than traffic violations, 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, provided that a written notice of a material omission shall first be sent to the applicant with an opportunity to correct the omission prior to the applicant’s denial.

(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 by final judgment in a civil action under Title 1.6C (commencing with Section 1788) or Title 1.6C.5 (commencing with Section 1788.50) of Part 4 of Division 3 of the Civil Code, 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.

(8)The commissioner may adopt regulations specifying the

factors that the commissioner will consider in denying a license, including, but not limited to, the harm to the consumer, the frequency of prior violations, and the number of prior disciplinary actions taken against the licensee in California or in other states.

§ 100013

Amended by Stats. 2022, Ch. 569, Sec. 12. (AB 156) Effective September 27, 2022.

(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 may 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.

§ 100014

Added by Stats. 2020, Ch. 163, Sec. 3. (SB 908) Effective January 1, 2021. Operative January 1, 2022, pursuant to Sec. 100000.5.

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