This chapter may be cited as the “Unruh Act.”
Retail Installment SalesGeneral Provisions
Section § 1801
This section simply states that the chapter is called the “Unruh Act.”
Unruh Act chapter citation California law name
Section § 1801.1
This law says that if a buyer tries to give up their rights under the rules of this chapter, it won't count. It's against public policy and can't be enforced.
Any waiver by the buyer of the provisions of this chapter shall be deemed contrary to public policy and shall be unenforceable and void.
waiver buyer rights public policy
Section § 1801.2
This section basically says that if any part of this law is found to be unconstitutional or invalid, the rest of the law will still stand and not be affected. It also means that just because a part of the law doesn't work for one person or situation, it doesn’t mean it won’t work for others.
If any provisions of this chapter or the application thereof to any person or circumstances is held unconstitutional, the remainder of the chapter and the application of such provision to other persons or circumstances shall not be affected thereby.
unconstitutional provision validity of law law application
Section § 1801.4
This law section explains that certain types of contracts are not covered by the rules in this chapter. Specifically, it doesn't apply to contracts for building or selling an entire home or commercial/industrial structures, selling land or a property lot, selling federally registered aircraft, or selling expensive vessels (boats) worth over $25,000.
The provisions of this chapter shall not apply to any contract or series of contracts providing for: (a) the construction, sale, or construction and sale of an entire residence, including a mobilehome, or all or part of a structure designed for commerical or industrial occupancy, with or without a parcel of real property or an interest therein, (b) for the sale of a lot or parcel of real property, including any site preparation incidental to such sale, (c) the sale of any aircraft required to be registered under the Federal Aviation Act of 1958, or (d) the sale of any vessel as defined in subdivision (a) of Section 9840 of the Vehicle Code if the
cash price of such vessel, including accessories and equipment sold in conjunction therewith, exceeds twenty-five thousand dollars ($25,000).
real estate transactions home construction contracts commercial structure sale
Section § 1801.5
This law section allows for the information required in retail installment contracts to be disclosed using methods or terms from Regulation Z (a federal set of rules regarding disclosures in lending). There are exceptions, such as a specific paragraph in Regulation Z that can't be used, and any disclosure must also meet certain local conditions. Additionally, there's no restriction against including extra information if Regulation Z allows it.
Notwithstanding any other provision of this chapter to the contrary, any information required to be disclosed in a retail installment contract or other document under this chapter may be disclosed in any manner, method, or terminology required or permitted under Regulation Z, as in effect at the time such disclosure is made, except that permitted by paragraph (2) of subdivision (c) of Section 226.18 of Regulation Z, provided that all of the requirements and limitations set forth in subdivision (b) of Section 1803.3 are satisfied. Nothing contained in this chapter shall be deemed to prohibit the disclosure in such contract or other document of
additional information required or permitted under Regulation Z, as in effect at the time such disclosure is made.
retail installment contract disclosure methods Regulation Z
Section § 1801.6
This law is about clarifying how credit transactions are classified in California, focusing on whether they are loans or credit sales. It sets clear rules for when the Unruh Act does not apply, particularly in transactions involving supervised financial organizations loaning money for buying goods or services. If the lender and seller are related or share profits and losses, the Unruh Act could apply. The law also defines 'supervised financial organization' and sets limits on fees like loan commissions for these transactions. Additionally, it outlines what does not count as sharing profits, such as reasonable commissions and indemnifications for loan losses.
(a)CA Civil Law Code § 1801.6(a) The Legislature finds that the decisional law of this state regarding the characterization of credit transactions as either loans or credit sales has been made unclear by the holding in King v. Central Bank, 18 Cal. 3d 840. It is the purpose of subdivision (b) to clarify such law by establishing standards for determining whether a transaction is subject to the Unruh Act. However, subdivision (b) is not intended to abrogate the judicial principle that the substance of a transaction rather than its form is determinative of its characterization as a loan or credit sale as exemplified by such decisions as Verbeck v. Clymer,
202 Cal. 557, Milana v. Credit Discount Co., 27 Cal. 2d 335, and Boerner v. Colwell Co., 21 Cal. 3d 37. Subdivision (b) also is not intended to abrogate the decision in Morgan v. Reasor Corp., 69 Cal. 2d 881, to the extent such decision has not been modified by Chapter 554 of the Statutes of 1969 or other legislative amendments to the Unruh Act.
(b)CA Civil Law Code § 1801.6(b) The provisions of this chapter shall not apply to any transaction in the form of a loan made by a supervised financial organization to a buyer of goods or services where all or a portion of the loan proceeds are used to purchase such goods or services, whether or not the seller of such goods or services arranges the loan or participates in the preparation of the loan documents, unless the supervised financial organization and the seller:
(1)CA Civil Law Code § 1801.6(b)(1) Are related by common ownership and control and the relationship was a material factor in the
loan transaction; or
(2)CA Civil Law Code § 1801.6(b)(2) Share in the profits and losses of either or both the sale and the loan.
(c)CA Civil Law Code § 1801.6(c) For purposes of this section:
(1)CA Civil Law Code § 1801.6(c)(1) The term “supervised financial organization” means a person organized, chartered, or holding a license or authorization certificate to make loans pursuant to the laws of this state or the United States who is subject to supervision by an official or agency of this state or the United States.
(2)CA Civil Law Code § 1801.6(c)(2) Receipt of a loan commission, brokerage or referral fee by a seller from a supervised financial organization shall not constitute a sharing of profits of the supervised financial organization, provided that such payment (i) is reasonable under the circumstances existing at the time the loan is consummated, and (ii) is not
refundable or is wholly or partly refundable only if the loan is voluntarily paid in full prior to its scheduled maturity. For purposes of this paragraph, a loan commission, brokerage or referral fee not exceeding the greater of 1 percent of the amount financed (as that term is defined by Regulation Z with respect to loans), or twenty dollars ($20), is reasonable under the circumstances existing at the time the loan is consummated.
(3)CA Civil Law Code § 1801.6(c)(3) Payment of money by a seller to a supervised financial organization pursuant to an actual or alleged contractual or statutory obligation to indemnify a supervised financial organization for losses incurred as a result of the assertion by a buyer of claims or defenses with respect to goods or services purchased with loan proceeds shall not constitute participation in or sharing of loan losses by the seller.
Unruh Act credit transactions loans
Section § 1801.7
This law states that the rules in this chapter do not affect premium finance agreements made by industrial loan companies under specific financial regulations.
The provisions of this chapter shall not apply to any premium finance agreement entered into by an industrial loan company pursuant to Chapter 8 (commencing with Section 18560) of Division 7 of the Financial Code.
premium finance agreements industrial loan company Financial Code Division 7
