Chapter 8Enforcement Powers and Duties

Section § 90011

Explanation

This law gives the commissioner and the department the authority to investigate by using the same powers listed in another set of laws. They can issue subpoenas, which are legal orders requiring people to produce documents in a specified format or provide written reports or answers to questions.

The commissioner and the department shall have all the investigatory and subpoena powers set forth in Sections 11180 to 11191, inclusive, of the Government Code and any subpoena may further require a person to:
(a)CA Financial Code § 90011(a) Produce documentary material for inspection and copying or reproduction in the form or medium requested by the department.
(b)CA Financial Code § 90011(b) File written reports or answers to questions.
investigatory powers subpoena powers document production inspection copying reproduction department requests written reports answers to questions Government Code commissioner authority enforcement powers documentary material subpoena compliance information gathering
(Added by Stats. 2020, Ch. 157, Sec. 7. (AB 1864) Effective January 1, 2021.)

Section § 90012

Explanation

This law gives the department the power to take action against anyone who uses unfair, deceptive, or abusive practices in consumer financial matters. The department can help consumers by canceling or changing contracts, returning money or property, or providing restitution. They can also force businesses to pay for any unjust profits, compensate affected consumers, inform the public about violations, and limit business activities.

If someone breaks the law, they may face penalties. Fines can vary based on the severity and nature of the violation. Minor violations can cost $5,000 per day, while reckless violations may cost up to $25,000 per day. Knowing violations could lead to fines of up to $1,000,000 per day or 1% of total assets. When deciding on the penalty amount, factors like the violator's financial resources, the gravity of the violation, and past misconduct are considered. The department has the discretion to adjust or reduce penalties as needed.

With respect to the enforcement powers of the commissioner and the department under this division, all of the following apply:
(a)CA Financial Code § 90012(a) The department may take any action authorized by this law against a covered person or service provider who engages, has engaged, or proposes to engage in unfair, deceptive, or abusive practices with respect to consumer financial products or services.
(b)CA Financial Code § 90012(b) Relief under this section may include, but is not limited to, any of the following:
(1)CA Financial Code § 90012(b)(1) Rescission or reformation of contracts.
(2)CA Financial Code § 90012(b)(2) Refund of moneys or return of real property.
(3)CA Financial Code § 90012(b)(3) Restitution.
(4)CA Financial Code § 90012(b)(4) Disgorgement or compensation for unjust enrichment, with any disgorged amounts returned to the affected consumers, to the extent practicable.
(5)CA Financial Code § 90012(b)(5) Payment of damages or other monetary relief.
(6)CA Financial Code § 90012(b)(6) Public notification regarding the violation, including the costs of notification.
(7)CA Financial Code § 90012(b)(7) Limits on the activities or functions of the person.
(8)CA Financial Code § 90012(b)(8) Monetary penalties, as set forth more fully in paragraph (1) of subdivision (c).
(c)CA Financial Code § 90012(c) In any civil or administrative action brought pursuant to this division, the following penalties shall apply:
(1)CA Financial Code § 90012(c)(1) Any person that violates, through any act or omission, any provision of this division shall forfeit and pay a penalty pursuant to this subdivision.
(A)CA Financial Code § 90012(c)(1)(A) The penalty amounts are as follows:
(i)CA Financial Code § 90012(c)(1)(A)(i) For any violation of this division, rule or final order, or condition imposed in writing by the department, a penalty may not exceed the greater of either five thousand dollars ($5,000) for each day during which the violation or failure to pay continues, or two thousand five hundred dollars ($2,500) for each act or omission in violation.
(ii)CA Financial Code § 90012(c)(1)(A)(ii) Notwithstanding clause (i), for any reckless violation by a person of this division, rule or final order, or condition imposed by the department, a penalty may not exceed the greater of twenty-five thousand dollars ($25,000) for each day during which the violation continues, or ten thousand dollars ($10,000) for each act or omission in violation.
(iii)CA Financial Code § 90012(c)(1)(A)(iii) Notwithstanding clause (i) or (ii), for any knowing violation, by a person of this division, rule or final order, or condition imposed by the department, a penalty may not exceed the lesser of 1 percent of the person’s total assets, one million dollars ($1,000,000) for each day during which the violation continues, or twenty-five thousand dollars ($25,000) for each act or omission in violation.
(B)CA Financial Code § 90012(c)(1)(B) In determining the amount of any penalty assessed under this division, the department shall take into account mitigating factors and the appropriateness of the penalty with respect to all of the following:
(i)CA Financial Code § 90012(c)(1)(B)(i) The amount of financial resources of the person charged.
(ii)CA Financial Code § 90012(c)(1)(B)(ii) The good faith of the person charged.
(iii)CA Financial Code § 90012(c)(1)(B)(iii) The gravity of the violation.
(iv)CA Financial Code § 90012(c)(1)(B)(iv) The severity of the risks to or losses of the consumer, which may take into account the number of products or services sold or provided.
(v)CA Financial Code § 90012(c)(1)(B)(v) The history of previous violations.
(vi)CA Financial Code § 90012(c)(1)(B)(vi) Other matters as justice may require.
(C)CA Financial Code § 90012(c)(1)(C) The department may compromise, modify, or remit any penalty that may be assessed or has already been assessed.
unfair practices deceptive practices abusive practices consumer financial products rescission of contracts reformation of contracts refunds restitution unjust enrichment public notification of violations limitations on activities monetary penalties reckless violation knowing violation penalty assessment
(Added by Stats. 2020, Ch. 157, Sec. 7. (AB 1864) Effective January 1, 2021.)

Section § 90013

Explanation

This law allows California's department to take legal action if someone breaks financial rules or orders. They can go to the superior court to stop the misconduct and ensure compliance. The court can issue various orders like an injunction or appoint a person to oversee the defendant's assets.

If public interest is involved, the commissioner can seek extra relief or penalties as described in related laws. The department can also recover costs if it wins the case. However, this law doesn't allow for punitive damages.

The department may bring a civil action in accordance with the following:
(a)CA Financial Code § 90013(a) If a person violates any provision of this division, rule or final order, or condition imposed in writing by the department, the department may bring an action in the name of the People of the State of California in the superior court to enjoin the acts or practices or to enforce compliance with this law or any rule or order herein under. Upon a proper showing, a permanent or preliminary injunction, restraining order, or writ of mandate shall be granted and a receiver, monitor, conservator, or other designated fiduciary or officer of the court may be appointed for the defendant or the defendant’s assets, or any other ancillary relief may be granted as appropriate. A receiver, monitor, conservator, or other designated fiduciary or officer of the court appointed by the superior court pursuant to this section may, with the approval of the court, exercise any or all of the powers of the defendant’s officers, directors, partners, trustees, or persons who exercise similar powers and perform similar duties, including the filing of a petition for bankruptcy. No action at law or in equity may be maintained by any party against the commissioner, or a receiver, monitor, conservator, or other designated fiduciary or officer of the court, by reason of their exercising these powers or performing these duties pursuant to the order of, or with the approval of, the superior court.
(b)CA Financial Code § 90013(b) If the commissioner determines it is in the public interest, the commissioner may include in any action authorized by subdivision (a) a claim for ancillary relief, including, but not limited to, those listed in subdivision (b) of Section 90012 and a claim for penalties as stated in subdivision (c) of Section 90012. The court shall have jurisdiction to award additional relief.
(c)CA Financial Code § 90013(c) In any action brought by the department, the department may recover its costs in connection with prosecuting the action if the department is the prevailing party in the action.
(d)CA Financial Code § 90013(d) This section shall not be construed to authorize the imposition of exemplary or punitive damages.
civil action injunction receiver monitor conservator fiduciary ancillary relief public interest penalties cost recovery superior court financial rules enforcement compliance enforcement financial misconduct California department powers
(Added by Stats. 2020, Ch. 157, Sec. 7. (AB 1864) Effective January 1, 2021.)

Section § 90014

Explanation

This law sets a time limit for starting a lawsuit about financial violations. Generally, you can't sue more than four years after discovering the problem. However, if the issue involves specific consumer financial laws, the time frame from that particular law applies instead. Additionally, the governing department has the authority to get involved in these cases as permitted by the respective consumer financial law.

The following limitations apply to actions brought under this division:
(a)CA Financial Code § 90014(a) Except as otherwise permitted by law or equity, including provisions under any consumer financial law, no civil action may be brought under this division more than four years after the date of discovery of the violation to which an action relates.
(b)CA Financial Code § 90014(b) In any action arising solely under a California or federal consumer financial law, both:
(1)CA Financial Code § 90014(b)(1) The limitations period under that consumer financial law shall apply, and not the period under subdivision (a).
(2)CA Financial Code § 90014(b)(2) The department may commence, defend, or intervene in the action in accordance with the requirements of that provision of law, as applicable.
limitations period consumer financial law civil action violation discovery lawsuit time limit financial violations department intervention federal consumer financial law California consumer law four-year limit legal exceptions commence action defend or intervene time frame for lawsuits consumer protection
(Added by Stats. 2020, Ch. 157, Sec. 7. (AB 1864) Effective January 1, 2021.)

Section § 90015

Explanation

The law allows the California Department of Financial Protection and Innovation to hold hearings and make rulings on individuals to make sure they follow certain laws and rules. These hearings should follow specific procedures, and the department has the power to assess penalties if necessary.

If someone breaks or might break financial rules, the department can order them to stop. If they don’t request a hearing within 30 days of this order, it becomes final. The department can also pursue additional actions in court if they think the rules have been broken, especially involving consumer financial products.

If someone continues to violate financial rules, their license or registration can be taken away after a hearing. If the department's rulings aren't followed, they can ask a court to enforce these orders. A court hearing will be set to see if a judgment should be made against the violator. Violators can't bring up defenses they could have used in earlier hearings during this court hearing.

The court can enforce judgments that make the violator stop their actions or impose financial penalties.

(a)CA Financial Code § 90015(a) The department may conduct hearings and adjudication proceedings with respect to any person in order to ensure or enforce compliance with both of the following:
(1)CA Financial Code § 90015(a)(1) The provisions of this division, including any rule, final order, or condition imposed by the department, under this division.
(2)CA Financial Code § 90015(a)(2) Any other law that the department is authorized to enforce and any regulations or order prescribed thereunder, unless that law specifically limits the department from conducting a hearing or adjudication proceeding and only to the extent of that limitation.
(b)CA Financial Code § 90015(b) All hearings provided for in this division shall be conducted in accordance with the administrative adjudication provisions of the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and the commissioner shall have all the powers granted therein.
(c)CA Financial Code § 90015(c) After notice and an opportunity to be heard, the commissioner may, by order, assess penalties under subdivision (c) of Section 90012.
(d)Copy CA Financial Code § 90015(d)
(1)Copy CA Financial Code § 90015(d)(1) If, in the opinion of the department, any person engages, has engaged, or proposes to engage in any activity prohibited by Section 90003 or 90004, or an activity, act, practice, or course of business that violates a law, rule, order, or any condition imposed in writing on the person by the department, the department may issue an order directing the person to desist and refrain from engaging in the activity, act, practice, or course of business.
(2)CA Financial Code § 90015(d)(2) If that person fails to file a written request for a hearing within 30 days from the date of service of the order, the order shall be deemed a final order of the commissioner.
(e)CA Financial Code § 90015(e) If any person engages, has engaged, or proposes to engage in any activity prohibited by Section 90003 or 90004, or an activity, act, practice, or course of business that violates a law, rule, order, or any condition imposed in writing on the person by the department, with respect to consumer financial products, the department may include in any administrative action authorized under this section, a claim for ancillary relief as set forth in subdivision (b) of Section 90012. The court shall have jurisdiction to award additional relief.
(f)CA Financial Code § 90015(f) If, in the opinion of the department, any covered person or service provider is engaging, has engaged, or proposes to engage in an activity, act, practice, or course of business that violates a law, rule, order, or any condition imposed in writing on the person by the department, the department may, after notice and an opportunity for a hearing, suspend or revoke the license or registration of the covered person or service provider.
(g)CA Financial Code § 90015(g) After the exhaustion of the review procedures provided for in this section, the commissioner may apply to the appropriate superior court for an order compelling the cited licensee or person to comply with the orders of the commissioner.
(1)CA Financial Code § 90015(g)(1) The application shall include a certified copy of the final order of the commissioner.
(2)CA Financial Code § 90015(g)(2) Upon the filing of the application, the superior court shall set a date for a hearing for an order to show cause why judgment should not be entered, which shall be set not less than 30 calendar days from the date the application is filed.
(3)CA Financial Code § 90015(g)(3) The commissioner shall serve a copy of the application and final order along with notice of the hearing to all entities or persons cited in the order against whom a civil judgment is sought not less than 15 calendar days before the date set for the hearing. Service of the application shall be pursuant to the methods specified by Article 3 (commencing with Section 415.10) of Chapter 4 of Title 5 of Part 2 of the Code of Civil Procedure for service of summons.
(4)CA Financial Code § 90015(g)(4) The court shall consider the filing of a certified copy of the final order of the commissioner and the proof of service of the application and notice of the hearing on the persons or entities against whom the judgment is sought, a sufficient prima facie showing to warrant the issuance of the civil judgment and order at the hearing. The respondent bears the burden of showing by affirmative evidence at the hearing why the order of the commissioner is not final, or why the timely notice of application and hearing was not provided to avoid judgment being entered by the superior court. Any method of service authorized by laws under which the final order was issued, including those methods under Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code is considered valid service for the purposes of determining whether the order of the commissioner is final.
(5)CA Financial Code § 90015(g)(5) The respondent shall not be allowed to raise any defenses or present any evidence at the hearing on the application that had been or could have been raised by the respondent at an administrative hearing to challenge the commissioner’s order, or in an appeal or writ from such proceedings.
(6)CA Financial Code § 90015(g)(6) The judgment issued pursuant to paragraph (4) of this subdivision may be for injunctive relief or payment of ancillary relief or penalties. The judgment may be enforced by the court pursuant to the procedures authorized for any other civil judgment.
financial compliance hearings adjudication procedures administrative adjudication penalty assessment financial violations consumer financial products license suspension license revocation superior court enforcement civil judgment injunctive relief ancillary relief financial penalties hearing procedures departmental orders
(Added by Stats. 2020, Ch. 157, Sec. 7. (AB 1864) Effective January 1, 2021.)

Section § 90016

Explanation

This law section states that the commissioner is not allowed to hire or hand over their enforcement powers to a private attorney. In other words, enforcing the rules must be done by the commissioner themselves and not by an outside lawyer.

The commissioner shall not outsource or delegate enforcement authority under this division to a private attorney.
commissioner enforcement authority outsourcing delegation restrictions private attorney enforcement powers delegation limits government enforcement regulatory powers legal authority restraint private legal representation public official duties enforcement exclusivity law enforcement delegation regulatory compliance
(Added by Stats. 2020, Ch. 157, Sec. 7. (AB 1864) Effective January 1, 2021.)

Section § 90017

Explanation

This section outlines the cooperation between the department and the Attorney General in civil actions. The department can make agreements with the Attorney General, but these cannot restrict the Attorney General's powers or consumer rights under laws like the Unfair Competition Law. If the department finds evidence of possible criminal activities, they must pass it to the Attorney General. Additionally, this section does not limit the department's ability to work with other regulatory or law enforcement bodies. Local prosecutors, like district attorneys, can still pursue legal actions independently in certain cases.

In regard to cooperation with the Attorney General, the following provisions apply:
(a)CA Financial Code § 90017(a) The department may enter into an agreement with the Attorney General with respect to civil actions by each agency.
(b)CA Financial Code § 90017(b) A provision of this division, any regulation or order made under the authority of this division, or any agreement under this subdivision shall not do any of the following:
(1)CA Financial Code § 90017(b)(1) Limit the powers or authorities of the Attorney General, including, but not limited to, the Attorney General’s ability to prosecute violations of civil or criminal laws.
(2)CA Financial Code § 90017(b)(2) Limit the rights of any consumer, or the obligations of any covered person or service provider, under the Unfair Competition Law, the False Advertising Law, or any consumer financial law.
(c)Copy CA Financial Code § 90017(c)
(1)Copy CA Financial Code § 90017(c)(1) If the department obtains evidence that a person has engaged in conduct that may constitute a violation of criminal law, the department shall transmit that evidence to the Attorney General.
(2)CA Financial Code § 90017(c)(2) This subdivision shall not affect any other authority of the department to disclose information.
(d)Copy CA Financial Code § 90017(d)
(1)Copy CA Financial Code § 90017(d)(1) This section shall not be construed to limit the authority of the department under this division to cooperate with any regulatory or law enforcement body.
(2)CA Financial Code § 90017(d)(2) The department shall notify other regulatory agencies that will be impacted by the department’s actions under this division.
(e)CA Financial Code § 90017(e) Nothing in this division shall limit the ability of any district attorney or any city attorney lawfully permitted pursuant to Section 17204 of the Business and Professions Code to bring actions or obtain relief pursuant to Chapter 5 (commencing with Section 17200) of Part 2 of Division 7 of the Business and Professions Code. Remedies sought and obtained by district attorneys and city attorneys pursuant to Chapter 5 (commencing with Section 17200) of Part 2 of Division 7 of the Business and Professions Code shall be cumulative to remedies set forth in this division.
Attorney General cooperation civil actions evidence of criminal conduct consumer rights Unfair Competition Law False Advertising Law consumer financial law regulatory body cooperation law enforcement collaboration district attorney authority city attorney actions Section 17204 cumulative remedies Business and Professions Code Prosecutorial powers
(Added by Stats. 2020, Ch. 157, Sec. 7. (AB 1864) Effective January 1, 2021.)